A topic of hot debate recently on the official diablo3 forums is whether Diablo 3 is considered an MMO, or if it remains as just an RPG with the option to play co-op with a few of your buddies. There really isn’t a simple answer that is the correct answer without really understanding the distinction between what is considered a Massively Multiplayer Online Role Playing game, and what is considered just a Role Playing Game. There are some games that very obviously define one of the categories, such as Diablo 1 being a Role Playing Game, and World of Warcraft being an MMO.
The reason these are so obvious in their respective genres is due to the scope of multiplayer; sure they both allow for an online version of the game, but the scope of how many people you will encounter online really defines the game and it’s genre. Take for example the way Diablo 2 played on Battlenet which is the infamous way to play the entire game online with random people in the servers. There are times that you can encounter many different people around you, form a friends list, and socialize with people you have met online in the servers. This makes the game more of an MMO, with the offering of many different people online that you encounter. If you look at a game like Guild Wars, where the game is advertised as an MMO, the actual adventuring out of the large cities is all in a personal instance, where you do not see others than who are out of your group.
Despite this fact, Guild Wars is largely considered an MMO, and remains as one of the true hybrids between single and multiplayer. Diablo 3 is offering a very similar approach in regards to the way the game is structured like a hybrid. The auction house, a place where the entire server of people can list items ties all of the individual instances together, much like the way Guild Wars has a global economy through the major cities and towns.