I wrote today about everything I could find on salvaging items in diablo 3, and I'd like to discuss with you how you believe this will effect the economy.
For starters, this will take gold out of the economy. Why? Because players used to sell the items for gold and now they'll be getting materials instead. Next, I beleive that many items will appear on the gold auction house that could be salvaged for profit. This will create an opportunity to take advantage of ignorant farmers, get cheap mats, and then create more sellable items.
I have not heard if the cube will need to be upgraded, if player level will matter, or how item level will effect the number and type of materials salvaged.
I don't think that gold will be taken out of the economy because it will be needed for many things, such as expanding your stash, crafting recipes, auction house, etc. Also, most of the items that you will find will likely only produce crafting materials that will be so abundant in the economy that they are practically worthless. With an incredibly easy way to sell those items for gold in the field, there will be very little incentive to salvage them instead. There is a possibility that they will add some rare crafting materials that could be salvaged from more common items, but very infrequently. In this case, it would be like gambling, but I imagine most would just go for the gold.
I do suppose there will be some items of higher "quality" that are fairly useless as far as equipment goes and would be more useful for salvaging. I am sure that some people will be unaware of this and just throw them on the auction house. However, the market will eventually set a price on those items based on the value of the salvaged materials. I assume most people will check the market value of the items they place on the auction house, but there will be a few people that will place items willy nilly and there will be profit to be made there by experienced players.
I don't think that gold will be taken out of the economy because it will be needed for many things, such as expanding your stash, crafting recipes, auction house, etc. Also, most of the items that you will find will likely only produce crafting materials that will be so abundant in the economy that they are practically worthless. With an incredibly easy way to sell those items for gold in the field, there will be very little incentive to salvage them instead. There is a possibility that they will add some rare crafting materials that could be salvaged from more common items, but very infrequently. In this case, it would be like gambling, but I imagine most would just go for the gold.
I do suppose there will be some items of higher "quality" that are fairly useless as far as equipment goes and would be more useful for salvaging. I am sure that some people will be unaware of this and just throw them on the auction house. However, the market will eventually set a price on those items based on the value of the salvaged materials. I assume most people will check the market value of the items they place on the auction house, but there will be a few people that will place items willy nilly and there will be profit to be made there by experienced players.
-Gerahben
I disagree with "few." I believe that many, many players will improperly post items over snd over again on the gold auction house. They'll get some gold and be fine with it. Yes others will post correctly, but enough ignorant players will post for arbitrarily determined prices.
People want gold asap, they will post too low in order to see items sell faster.
I disagree with you as well. Especially in the first few months there will be greatly varied prices of items on the auction house until players become more accustomed to the drop/salvaging rates of items. Salvaging an item already removes gold from the economy.
I don't think the cube will need to be upgraded, I'm hoping that player level will matter when it comes to salvaging and that there will be a tiered effect for the salvaged materials, similar to WoW (oh noes!).
Hmmm, it's very tough to say at this point, but if it's done correctly, the player who likes crafting should be incentivised to make great items using the crafting system, while players who don't like crafting should be incentivised to just grab the gold. Either way, the crafter will end up selling the items she makes to return gold. It's still very early and I imagine a lot more details will come during beta.
Just to clarify my statement: I thought at first the original post was suggesting that gold will be taken out of the economy as in inflation will cause it to be useless. Now I see that it was suggesting that the supply of gold will be reduced by salvaging, which I certainly agree with.
Also, I agree that it may be more than a few players that post carelessly on the auction house. I just took a glance at the Bnet forums and it makes me sad for humanity.
There are really too many unknows at this point to know how valuable gold may or may not end up being.
1. We dont know how many gold inputs there will be in the economy. We do know of a few, obviously there will be gold from monsters we kill, though we don't know how much. Hopefully at lvl 60 there wont be thousands dropping every kill making it useless like it was in D2. There likely will also be gold given for completing quests. The last way gold will be created is by vendoring unwanted items either in town or with the cauldron.
2. What gold sinks will exist and how effective will they be? Gold sinks serve two purposes. For one, they remove gold from the economy helping to slow down and counter inflation from getting out of control. Second, they give gold value. In order for gold to be a viable trading medium, it has to have value. Using it as an intermediate for trading items gives some value, but not enough on its own. Gold sinks will provide more value. The need to repair your gear is a value add to gold, since you now NEED gold just to play the game, though this is likely a very small amount. Adding tabs to the stash will probably be a rather large gold sink as each tab will likely be considerably more expensive then the last. This is an excellent gold sink with one drawback. Once you unlock all the tabs, the sink is effectively removed from the game for you, the longer the game is out, the more people will have the tabs and the less value this will add to gold. Crafting will also be a large, probably never ending gold sink as people will always be crafting new items to try to get that perfectly rolled piece of gear. Since each piece will require gold to craft in addition to crafting mats, this should be a very steady gold sink, with real tangible value. Will there be more gold sinks? I hope so!
There are really too many unknows at this point to know how valuable gold may or may not end up being.
1. We dont know how many gold inputs there will be in the economy. We do know of a few, obviously there will be gold from monsters we kill, though we don't know how much. Hopefully at lvl 60 there wont be thousands dropping every kill making it useless like it was in D2. There likely will also be gold given for completing quests. The last way gold will be created is by vendoring unwanted items either in town or with the cauldron.
2. What gold sinks will exist and how effective will they be? Gold sinks serve two purposes. For one, they remove gold from the economy helping to slow down and counter inflation from getting out of control. Second, they give gold value. In order for gold to be a viable trading medium, it has to have value. Using it as an intermediate for trading items gives some value, but not enough on its own. Gold sinks will provide more value. The need to repair your gear is a value add to gold, since you now NEED gold just to play the game, though this is likely a very small amount. Adding tabs to the stash will probably be a rather large gold sink as each tab will likely be considerably more expensive then the last. This is an excellent gold sink with one drawback. Once you unlock all the tabs, the sink is effectively removed from the game for you, the longer the game is out, the more people will have the tabs and the less value this will add to gold. Crafting will also be a large, probably never ending gold sink as people will always be crafting new items to try to get that perfectly rolled piece of gear. Since each piece will require gold to craft in addition to crafting mats, this should be a very steady gold sink, with real tangible value. Will there be more gold sinks? I hope so!
Well said, the more gold sinks te better!
It's fun to speculate, I hope no one feels hurt when people disagree over this stuff.
It all boils down to supply and demand. If there is a bigger supply of gold than the demand, the price will go down. If there's less supply than is demanded, the demand and price will go up.
It all boils down to supply and demand. If there is a bigger supply of gold than the demand, the price will go down. If there's less supply than is demanded, the demand and price will go up.
Sounds off to me. Sounds like you're applying supply and demand laws to currency when it applies to goods. If you increase the supply of currency(gold) this is inflation, causing prices to go up, not down. This is because the currency loses value if too much of it exists. Think about it this way, if the government printed 100 billion dollars tomorrow, and gave it all away to people, would this make everyone richer all of the sudden? Of course not, since that printed money would have zero value, prices will just go up to compensate.
Sounds off to me. Sounds like you're applying supply and demand laws to currency when it applies to goods. If you increase the supply of currency(gold) this is inflation, causing prices to go up, not down. This is because the currency loses value if too much of it exists. Think about it this way, if the government printed 100 billion dollars tomorrow, and gave it all away to people, would this make everyone richer all of the sudden? Of course not, since that printed money would have zero value, prices will just go up to compensate.
Supply and demand works with currency too. In your example, printing $100,000,000,000 dollars would vastly increase supply, which would adjust prices downward (i.e. make the good, money, less valuable). Therefore, whatever cost $10 yesterday would probably cost $30 (or more) after the printing, hence, inflation.
Basically, inflation exists precisely BECAUSE of supply and demand.
Sounds off to me. Sounds like you're applying supply and demand laws to currency when it applies to goods. If you increase the supply of currency(gold) this is inflation, causing prices to go up, not down. This is because the currency loses value if too much of it exists. Think about it this way, if the government printed 100 billion dollars tomorrow, and gave it all away to people, would this make everyone richer all of the sudden? Of course not, since that printed money would have zero value, prices will just go up to compensate.
Supply and demand works with currency too. In your example, printing $100,000,000,000 dollars would vastly increase supply, which would adjust prices downward (i.e. make the good, money, less valuable). Therefore, whatever cost $10 yesterday would probably cost $30 (or more) after the printing, hence, inflation.
Basically, inflation exists precisely BECAUSE of supply and demand.
Bingo. The real trick is applying this knowledge to game trends and player activities.
Sounds off to me. Sounds like you're applying supply and demand laws to currency when it applies to goods. If you increase the supply of currency(gold) this is inflation, causing prices to go up, not down. This is because the currency loses value if too much of it exists. Think about it this way, if the government printed 100 billion dollars tomorrow, and gave it all away to people, would this make everyone richer all of the sudden? Of course not, since that printed money would have zero value, prices will just go up to compensate.
Supply and demand works with currency too. In your example, printing $100,000,000,000 dollars would vastly increase supply, which would adjust prices downward (i.e. make the good, money, less valuable). Therefore, whatever cost $10 yesterday would probably cost $30 (or more) after the printing, hence, inflation.
Basically, inflation exists precisely BECAUSE of supply and demand.
Sounds like we're both saying the same thing lol. Where you lost me was saying that it would adjust prices downward, i thought you meant something that was $10 yesterday would cost $5 tomorrow which obviously wouldn't make sense.
So misunderstandings aside, apparently we both agree =P
Sounds off to me. Sounds like you're applying supply and demand laws to currency when it applies to goods. If you increase the supply of currency(gold) this is inflation, causing prices to go up, not down. This is because the currency loses value if too much of it exists. Think about it this way, if the government printed 100 billion dollars tomorrow, and gave it all away to people, would this make everyone richer all of the sudden? Of course not, since that printed money would have zero value, prices will just go up to compensate.
Supply and demand works with currency too. In your example, printing $100,000,000,000 dollars would vastly increase supply, which would adjust prices downward (i.e. make the good, money, less valuable). Therefore, whatever cost $10 yesterday would probably cost $30 (or more) after the printing, hence, inflation.
Basically, inflation exists precisely BECAUSE of supply and demand.
I'm glad that now, as players, we have a tool that will let us leverage that information better. I fully look forward to trying to maximize my in game earnings using the auction houses (either for gold or real money).
I think they intend to keep gold a valuable resource, however, I'm not sure how hard they're willing to try if the RMAH is a success.
Simply because inflation will most likely drive goods to the RMAH and thus means more profit for them. Given enough gold sinks and a larger GAH user-base then a RMAH user-base I assume they're willing to try and will implant more and bigger gold sinks in patches and expansions.
What I'm wondering however is, in the, unlikely, event of gold deflation, will the economy grind to a halt?
I doubt it. If gold ever deflated that badly that the economy was grinding to a halt, Blizzard could just up the supply of gold from drops slowly until things are where they want them to be again. Plus items being sold for real money will always have their own value since people will put money into the system independent from gold.
I think they intend to keep gold a valuable resource, however, I'm not sure how hard they're willing to try if the RMAH is a success.
Simply because inflation will most likely drive goods to the RMAH and thus means more profit for them. Given enough gold sinks and a larger GAH user-base then a RMAH user-base I assume they're willing to try and will implant more and bigger gold sinks in patches and expansions.
What I'm wondering however is, in the, unlikely, event of gold deflation, will the economy grind to a halt?
If gold became too difficult to acquire then it would become more valuable and items would sell for less.
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For starters, this will take gold out of the economy. Why? Because players used to sell the items for gold and now they'll be getting materials instead. Next, I beleive that many items will appear on the gold auction house that could be salvaged for profit. This will create an opportunity to take advantage of ignorant farmers, get cheap mats, and then create more sellable items.
I have not heard if the cube will need to be upgraded, if player level will matter, or how item level will effect the number and type of materials salvaged.
Your thoughts?
I do suppose there will be some items of higher "quality" that are fairly useless as far as equipment goes and would be more useful for salvaging. I am sure that some people will be unaware of this and just throw them on the auction house. However, the market will eventually set a price on those items based on the value of the salvaged materials. I assume most people will check the market value of the items they place on the auction house, but there will be a few people that will place items willy nilly and there will be profit to be made there by experienced players.
-Gerahben
I disagree with "few." I believe that many, many players will improperly post items over snd over again on the gold auction house. They'll get some gold and be fine with it. Yes others will post correctly, but enough ignorant players will post for arbitrarily determined prices.
People want gold asap, they will post too low in order to see items sell faster.
I disagree with you as well. Especially in the first few months there will be greatly varied prices of items on the auction house until players become more accustomed to the drop/salvaging rates of items. Salvaging an item already removes gold from the economy.
I don't think the cube will need to be upgraded, I'm hoping that player level will matter when it comes to salvaging and that there will be a tiered effect for the salvaged materials, similar to WoW (oh noes!).
Edit: Separated my reply and thoughts.
Also, I agree that it may be more than a few players that post carelessly on the auction house. I just took a glance at the Bnet forums and it makes me sad for humanity.
-Gerahben
1. We dont know how many gold inputs there will be in the economy. We do know of a few, obviously there will be gold from monsters we kill, though we don't know how much. Hopefully at lvl 60 there wont be thousands dropping every kill making it useless like it was in D2. There likely will also be gold given for completing quests. The last way gold will be created is by vendoring unwanted items either in town or with the cauldron.
2. What gold sinks will exist and how effective will they be? Gold sinks serve two purposes. For one, they remove gold from the economy helping to slow down and counter inflation from getting out of control. Second, they give gold value. In order for gold to be a viable trading medium, it has to have value. Using it as an intermediate for trading items gives some value, but not enough on its own. Gold sinks will provide more value. The need to repair your gear is a value add to gold, since you now NEED gold just to play the game, though this is likely a very small amount. Adding tabs to the stash will probably be a rather large gold sink as each tab will likely be considerably more expensive then the last. This is an excellent gold sink with one drawback. Once you unlock all the tabs, the sink is effectively removed from the game for you, the longer the game is out, the more people will have the tabs and the less value this will add to gold. Crafting will also be a large, probably never ending gold sink as people will always be crafting new items to try to get that perfectly rolled piece of gear. Since each piece will require gold to craft in addition to crafting mats, this should be a very steady gold sink, with real tangible value. Will there be more gold sinks? I hope so!
Well said, the more gold sinks te better!
It's fun to speculate, I hope no one feels hurt when people disagree over this stuff.
Sounds off to me. Sounds like you're applying supply and demand laws to currency when it applies to goods. If you increase the supply of currency(gold) this is inflation, causing prices to go up, not down. This is because the currency loses value if too much of it exists. Think about it this way, if the government printed 100 billion dollars tomorrow, and gave it all away to people, would this make everyone richer all of the sudden? Of course not, since that printed money would have zero value, prices will just go up to compensate.
Supply and demand works with currency too. In your example, printing $100,000,000,000 dollars would vastly increase supply, which would adjust prices downward (i.e. make the good, money, less valuable). Therefore, whatever cost $10 yesterday would probably cost $30 (or more) after the printing, hence, inflation.
Basically, inflation exists precisely BECAUSE of supply and demand.
Bingo. The real trick is applying this knowledge to game trends and player activities.
Sounds like we're both saying the same thing lol. Where you lost me was saying that it would adjust prices downward, i thought you meant something that was $10 yesterday would cost $5 tomorrow which obviously wouldn't make sense.
So misunderstandings aside, apparently we both agree =P
I'm glad that now, as players, we have a tool that will let us leverage that information better. I fully look forward to trying to maximize my in game earnings using the auction houses (either for gold or real money).
I doubt it. If gold ever deflated that badly that the economy was grinding to a halt, Blizzard could just up the supply of gold from drops slowly until things are where they want them to be again. Plus items being sold for real money will always have their own value since people will put money into the system independent from gold.
If gold became too difficult to acquire then it would become more valuable and items would sell for less.