I read PhrozenDragon's article and he did list a few of the major drawbacks but I find one very important one that he missed (I think) is Market Manipulation. What will start to happen, because all items can be bought locally from a single point (the AH) is that people with large amounts of money (companies in China seeking profit in eg.) will use their buying power to wipe a high demand item off the market by outbidding everyone regardless and then sell for ridiculous prices. They can do this with gold OR cash. This doesn't even have to happen to high end items. And eventually intentional over-farming (BOTS or people, labor is cheap in Asia, very cheap). I get that there will always be 3rd parties trying to make money from such a popular game, but the AH makes it more accesible, more abundant and easier for these 3rd party companies to RUIN gameplay for people seeking a great gaming experience. If you leave the market to d2-esque trading or some middle ground in stead of one giant market, it will reduce the manipulation of items being sold/bought and profiteering. Although if I were a blizzard shareholder I would certainly want this system in the game, it is a good profit model - thats why I doubt you will see too many free trades.
I personally think, if Diablo is truly going for the gaming experience, they can do better than the RMAH.
Fictional example:
Sword of Leet usually goes for $10. Malevolent company X buys all Swords of Leet on the market and lists them for $1000.
I find a Sword of Leet, list it for $900. Either company X buys it and relists for $1000 or someone else buys it. I get $900 either way.
Eventually company X can't hold the manipulation.
Market manipulation is not a problem when anyone can find any item with some luck. It's not like the OPEC, which can manipulate oil prices only because most of the countries with oil resources belong to the organization essentially creating a monopolistic supply of oil.
There is a market price and to drive it up, reducing supply will work. It may not be so drastic as the example listed but regardless it is easily doable with a bit of money. If I am buying out the market at 10$ and I have to buy your one 900$ sword to keep the market price up it does not effect the avg. price so much if my volume is high, which I am guessing it would be. Even so if I wanted to retain market prices I would still be making a profit on your 900$ dollar sword. This increases YOUR gain for the sword, but it creates a very very messy economy.
Of course you wouldn't want to hold a manipulation for extended times but with MANY companies doing this, it can turn in to a very 'not so fun' environment. Market manipulation is abundant in the real world, in example it only takes an average 3 million USD to manipulate Sri Lankan markets, it is not just a problem with oil.
Much like an earlier poster who talked about WoW's "auction-pvp", there are some of us who will use the AH in D3 for the fun of it. I will play the game to kill mobs, hell yeah! but I will also get a TON of mileage out of that evil "Market Manipulation".
I 'know a guy' who bought a truck and two jetskiis by selling WoW gold. There it was illicit and against the EULA but.... Here in D3 it will be sanctioned and will support Blizzard.
ETA: You just posted again so this is in reply to your page 5 post.
Much like an earlier poster who talked about WoW's "auction-pvp", there are some of us who will use the AH in D3 for the fun of it. I will play the game to kill mobs, hell yeah! but I will also get a TON of mileage out of that evil "Market Manipulation".
I 'know a guy' who bought a truck and two jetskiis by selling WoW gold. There it was illicit and against the EULA but.... Here in D3 it will be sanctioned and will support Blizzard.
ETA: You just edited your post so this is no longer in reply.
There is a market price and to drive it up, reducing supply will work. It may not be so drastic as the example listed but regardless it is easily doable with a bit of money. If I am buying out the market at 10$ and I have to buy your one 900$ sword to keep the market price up it does not effect the avg. so much if my volume is high, which I am guessing it would be. Even so if I wanted to retain market prices I would still be making a profit on your 900$ dollar sword.
Of course you wouldn't want to hold a manipulation for extended times but with MANY companies doing this, it can turn in to a very 'not so fun' environment. Market manipulation is abundant in the real world, in example it only takes an average 3 million USD to manipulate Sri Lankan markets, it is not just a problem with oil.
I don't think there is any profit to be had in manipulating the market the way you describe. In a functional market the price will be exactly at the level where supply and demand meet. If the price is increased, less people buy the item since they think the price is too high and although the price is higher, units sold is lower, resulting in less profit.
And since the company will have no way of controlling the supply (items are found all the time), they only stand to lose money since they have to buy off everyone undercutting them.
Real world is more complex with lots of imperfect qualities but D3 market is as close to a perfect market there is. It is far, far, less susceptible to manipulation.
There certainly would be for inelastic markets. It happened in WoW. You can even pull of more common high demand items. Like Copper Bars in WoW (or wtv they were called).
And in RW markets there are far more external factors that are impossible to take in to account. In a more perfect market in D3, manipulation is far easier, because the outcome is far more foreseeable.
In essence when you sell an item in the cash AH, you are working for Blizzard to sell a piece of their intellectual property for them. They reap the benefit on any and all transactions which occur with real money.
How can no one see the benefit the players get? Blizzard naturally gets money because they're offering the players a service. People seem to have this idea that just because we're talking about byte transactions here it will cost Blizzard nothing.
Wrong. The development cost of the AH infrastructure, the agreement with the eventual third-party transaction companies, possible legal issues, not to mention the customer support, PR problems and work that will have to be poured into protecting the Battle.net infrastructure from bots and malicious activities. The transaction itself will cost Blizzard nothing, but there are many other costs to cover with this system. Blizzard needs money for this, and the bot/hack work will benefit all. But they're only taking money from people who want to buy items. All of you who don't want to pay are getting a more stable economy, amore hack protection at no personal cost to you.
And no one seems to get the customer value this produces. If Blizzard has facilitates a trade with you for a small fee, then the value you got in the form of a new item and the value the seller got for an item sold are still there. Blizzard isn't slaving you to the work wheel and taking all the profit, they're providing their customers with an entirely new kind of service.
I have doubts that the RMT AH will have the desired effect of negating an item becoming currency, and until blizzard discloses how much they will charge to post an item it will be hard to see how profitable and the state of the RMT AH. I hope it will be affordable i would prefer to have everything at a reasonable price than hundreds of dollars.
The fee will be minimal. A small fee is in Blizzard's best interest, since a large fee will discourage trade and once again provide an incentive for third-part sites to eke out an existence. A higher fee also disrupts the exchange rate between the gold AH and cash AH and will create a less fluid economy. And that could generate imbalances between the two AH's.
Also, people will always find a way and reason of using third party sites like they are doing right now in DII.
No they won't. If you can buy the same ice cream at the same price as in town but right next to your house rather than 10 miles away, you will always buy ice cream next door. There is no incentive to do otherwise.
If you look at the sites now, you see that they are selling (for Wow) 1000 gold for 5 euro's or so...
I'm pretty sure these things will not change.
That proce says nothing about trade in D3 at all. It is irrelevant, because that price is not set in relation to the aggregate total of all gold that is produced in WoW, which would include all the gold circulating on WoW server between normal players as well.
The reason that people were using these sites like D2JSP was because there was no real economy in the game, to begin with - in other words, D2JSP was almost a natural respond to the lack of an ingame economy.
That's possibly true, but I think a fear was that such sites are already poised and ready for D3. Then again I think this move is also a way to continue to generate revenue for an online game that requires massive support without instituting a monthly fee. It's an experiment for sure.
RMAH (or even in game gold AH) won't print $ for customers at all. Yes, some will make money and others will spend, but if nobody's putting money into the system then nothing is coming out of it. In fact, money coming out of the system to the end consumer (the player) will always be less than what's being put into it. I believe that the only thing creating more money in this world is debt, but that's totally out of scope here.
You're right, and the same principles as for debt will dictate the amount of money in the system at any one time according to these three factors:
1. How large are Blizzard's fees?
2. What does the average item sell for in $?
3. How mauch of inserted e-balance is withdrawn as $/spent on Blizzard goods?
The lower the fees, higher the average prices and the less money withdrawn, the more people will be able to benefit from this system without putting in money themselves. So not only is it in Blizzard's interest to keep low fees to combat third-party selling, it's also in their interest because it will allow more people to participate in the cash auctioning and thus the system as a whole.
so this Rmoney AH its only going to cause MORE problems rather solve them! people will fill up the servers from this in order to gain money and for us poor normal player that just want to play our SinglePlayer ALONE, we have to go online to those overloaded servers that could crash.
Are you kidding me? The reason you're against this is because you think it would cause the servers to overload and prevent you from playing online?
It became a new game in itself, and it was always a laugh to trade your newly found items into something else, and then see if you could get something that was worth more in the first place. With the currency being gold(or especially with it being real money) this idea gets utterly destroyed.
That was totally screwed before the cash AH was announced anyway, so it's not like the cash AH destroyed that for you.
The value on everything from items to gold is gonna plummet, because the chinese can afford to underbit everyone almost regardless of the price. If you look at item sites today, highrunes go for less than €1, and it's still profitable for them. We are gonna reach a point where selling your items isn't worth the trouble, rendering the RMAH pointless in the first place.
No. Key difference: professional farmers will have to make money on this. Players have this as a hobby and do not need to generate a set amount of cash each hour. Farmers will have to compete with us.
That's why I'm hesitant against the whole "quit my job and do this"-idea. When I say make money, I do not mean it will cover the alternative cost of quitting your job, especially not in the US or EU. And if it does, then you're no longer playing a game you're just farming.
Look at WoW today, how effin cheap is gold on farmsites? So for all their hard work here, blizzard is NOT shutting down the profitable farm sites, and the RMAH will not be a properly community controlled economic flow of currency.
Hard to say. It will all depend on availability of items and what margins organized farmers have.
IT creates a nice illusion for naive people to think they can earn some buck of their items. Well, i suspect you might earn something like 20-30 bucks (with luck) for a week of play, i dunno, but it's chump-change when you compare it to what Blizzard will get from all those gullable players who think they will be able to quit they're day job, and sell items online.
If someone does that without properly investigating whether it's possible, then you can either call them a visionary who failed or a dumbass who got what was coming. Either way, it's not Blizzard's responsibility to teach economic prudence to its customers. Somewhere you have to assume that your customers are informed individuals capable of making their own economic decisions. If not, then how dare BLizzard sell games to people with gaming problems?!
First of all, why did those Item Shops started to exist? Obviously, people wanted their items for Cookie-Cutter specs. Well, why the game was balanced in such a way in the first place? Why itemisation was made in such way that certain items were so good, that almost every character wanted to use them? That's all due to bad game balance.
Incorrect. More powerful items are built into the game progression structure and do not depend on cookie-cutter builds existing. Each build will have a logical next gear step, and people will want to buy that.
Undercutting? No problem, a shady company has way more money then little billy, they can sell an item for less and earn some cash, and little billy won't be so lucky - loosing his 1$ or 50c deposit. Raising the price of certain items? No problem. With enough money they can buy out all the lower priced items and sell them for tenfold if they so desire. There is a possibility of people farming left and right for said shops and so on.
There is, but it won't be that easy. First of all, undercutting is not bad, it's a consequence of an auction system. How an organization with running and labor costs are supposed to undercut billy who playes in his spare time and makes a profit so long as he sells above the fees is another matter entirely.
As for controlling the market, first of all they'd have to do it against hundreds of thousands of players in each region. Not easy, but I suppose not entirely impossible either. That could be interesting to watch unfold.
The auction house can fail. From reading the OP, you can't make real money of it but Blizzard and 3rd party(e.g Paypal) can. That sucks. Basically you can put money in but not take money out.
Incorrect, you can and it was clearly stated in the OP.
You can get enough ppl to boycott the system because of ANTI -blizzard behavior as well as self profit motive. YOu can portentially have a group of farmers who do not sell items in the auction house but 3rd party websites.
Name one reason.
It is inherently less trustworthy.
It is more of a hassle.
It is of roughly equal cost, because if they sell it for less then loss of customers in the AH will cause prices to drop down to similar levels. And they can't sell for more because then people wouldn't use them.
2. Due to arbitrage and the gold/money exchange rate, they will be able to generate a stable market. The central bank has tricks they can pull if there's too much or too little money, Blizzard has tricks they can pull if there's too much or too little gold too. They are gaining the powers of a central bank with respect to gold.
Very true, since all gold introduced to the economy goes through drops. Which is great, because then they can adjust unbalanced amounts of gold drops.
Of course that also has the potential to get screwed like any central bank not properly being able to predict economic outcomes, but this is no different than how things would have been without a cash AH.
PlugY for Diablo II allows you to reset skills and stats, transfer items between characters in singleplayer, obtain all ladder runewords and do all Uberquests while offline. It is the only way to do all of the above. Please use it.
Supporting big shoulderpads and flashy armor since 2004.
There certainly would be for inelastic markets. It happened in WoW. You can even pull of more common high demand items. Like Copper Bars in WoW (or wtv they were called).
And in RW markets there are far more external factors that are impossible to take in to account. In a more perfect market in D3, manipulation is far easier, because the outcome is far more foreseeable.
This discussion is going in circles again, so this is my last comment on the whole manipulation issue.
Manipulation is usually done using the flaws of the market, not its perfection. That's what, to use a famous example, George Soros did when he bet against British government's promise (a flaw in the market) that they wouldn't devalue the British Pound by short-selling Pounds Sterling for large sums.
While you are correct about WoW market and some items in it, those manipulations don't really last long. All it takes is some undercutting and the artificially high price won't last for more than something between fifteen minutes and an hour.
Of course, this is only true on high population servers. On low population servers manipulation like the way you described can be pulled off, since there are far less people using the AH and less supply.
This won't be a problem in D3. D3 will have one large region-locked AH (NA, EU, etc.), so there will be hundreds of people selling items there all the time.
Yeah, we will all have to wait and see what happens, although I am fairly confident that companies will try and use all sorts of maneuvers. And I do agree that in a PERFECT market it will counter balance, like you mentioned earlier with less people paying the higher price, but unfortunately the world has yet to see an invisible hand.
George Soros is a prime example of someone who uses large sums of money to apply market pressure. Black Wedneseday was sort of England's fault as they refused to change interest rates - regardless, I get what you are saying.
Everyone just needs to chill out and stop raging. Personally I believe this is a great move on Blizzard's part and Scyber explained it very well in the OP. If Blizzard can prevent botting and, particularly, duping, then we will have a stable economy regardless. To me, those two things killed D2, not 3rd party sites.
Nice job Scyber! Keep fighting the ignorant ragers...
EDIT: Also, Blizzard not providing an easy and efficient way to trade in D2 led to 3rd party sites. Therefore, eliminate botting and duping, and then them providing a way to trade in game = No logical reason to go/use 3rd party sites...
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~ Some people are still alive only because it is illegal to kill them ~
My only concern is that people will probably want to BUY items in gold, but, SELL them in real money. See how that wouldn't work?
...and for that reason Gold AH will have only crap items.
LEGENDARY drops will ONLY be sold/bought in the real money AH.
Like Phrozen already said, the fact that gold is interchangeable into e-balance (or money) will eliminate this.
No it won't. You're assuming everyone behaves rationally, like counting machines. You're assuming everyone will exchange currencies immediately like some HFT software. Human beings are not pure theory executors, and the system in practice will be many orders of magnitude more complex than you and Phrozen are making it out to be.
Here's an important point: The models you're using are in reference to two real-world currencies. But that's not what we're discussing. We're talking about one fake currency and one actual currency. The models don't necessarily hold, and the emotion and moral dissonance that is obviously at work here destroys many of your notions.
While I honestly appreciate the exercise in econ 101, the world does not operate in a vacuum, nor does it adhere to steadfast rules like this, because there are no steadfast rules outside a vacuum. We can't say that a video game community is going to behave like wall street currency traders. The fact is we just don't know any of this for sure.
My bottom line is this. Why do I have to exchange between two currencies in the FIRST PLACE? It's an added layer of toil that keeps me from killing monsters and getting loot.
There are many answers to this, but I haven't heard any that are compelling.
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"Ridicule is the only weapon which can be used against unintelligible propositions."
-Thomas Jefferson
No it WON'T. You're assuming everyone behaves rationally, like counting machines. You're assuming everyone will exchange currencies immediately like some HFT software. Human beings are not pure theory executors, and the system in practice will be many orders of magnitude more complex than you and Phrozen are making it out to be.
Hopefully this isn't too much of a tangent. What if instead of two AH markets the exchange rate is "fixed"? What if the exchange rate is constantly up-to-date? I have no idea if it is practical but if the AH allows bids in gold and cash interchangeably, would that solve your frustration?
No it won't. You're assuming everyone behaves rationally, like counting machines. You're assuming everyone will exchange currencies immediately like some HFT software. Human beings are not pure theory executors, and the system in practice will be many orders of magnitude more complex than you and Phrozen are making it out to be.
Here's an important point: The models you're using are in reference to two real-world currencies. But that's not what we're discussing. We're talking about one fake currency and one actual currency. The models don't necessarily hold, and the emotion and moral dissonance that is obviously at work here destroys many of your notions.
While I honestly appreciate the exercise in econ 101, the world does not operate in a vacuum, nor does it adhere to steadfast rules like this, because there are no steadfast rules outside a vacuum. We can't say that a video game community is going to behave like wall street currency traders. The fact is we just don't know any of this for sure.
My bottom line is this. Why do I have to exchange between two currencies in the FIRST PLACE? It's an added layer of toil that keeps me from killing monsters and getting loot.
There are many answers to this, but I haven't heard any that are compelling.
If people are not behaving rationally (working off the economy laws) they lose money. When they lose money, I get money. Yay for me.
Fake currency? Played WoW ever? Fake currency and yet the most robust, active and WORKING economy I've ever seen in gaming. Hell, some real-life economies are not as stable as WoW economy based on a FAKE currency.
PS. All currencies (yes, I am tlaking about dollars, euros and all those other pieces of paper) except for pure gold are fake, just saying...
There is a market price and to drive it up, reducing supply will work. It may not be so drastic as the example listed but regardless it is easily doable with a bit of money. If I am buying out the market at 10$ and I have to buy your one 900$ sword to keep the market price up it does not effect the avg. price so much if my volume is high, which I am guessing it would be. Even so if I wanted to retain market prices I would still be making a profit on your 900$ dollar sword. This increases YOUR gain for the sword, but it creates a very very messy economy.
Of course you wouldn't want to hold a manipulation for extended times but with MANY companies doing this, it can turn in to a very 'not so fun' environment. Market manipulation is abundant in the real world, in example it only takes an average 3 million USD to manipulate Sri Lankan markets, it is not just a problem with oil.
If you buy a sword for 1000$ it is worth 1000$.
If you don't think a sword is worth 1000$ - DO NOT BUY IT.
I mean, it's simple, it's how marketplace operates and still people cannot understand even basics of it. How do you live your life without knowing basics of supply/demand and free market?
My bottom line is this. Why do I have to exchange between two currencies in the FIRST PLACE? It's an added layer of toil that keeps me from killing monsters and getting loot.
There are many answers to this, but I haven't heard any that are compelling.
Actually there is only one answer to this. You don't. Who said you had to exchange in order to trade? Did Blizzard say that, if they did go find the quote and bring it here. Likewise for any MODS on Dfans.com, and the OP. They never stated you did have to eexchange.
They did say if you wanted to make a profit in a certain situation you COULD do it. COULD beign the KEY word, if you follow me.
So like i said, you DONT. You don't have to exchange to trade. And you especially DON'T have to even use the AH or RMAH to kill monsters or get your loot. Since Blizzard made sure that killing monsters and picking up loot is exactly what everyone will be doing for free after you purchased the game of course.
If your going to reply to this make sure you get an official quote stating clearly that you will either be forced to use the AH/RMAH or be FORCED to exchange in order to enjoy D3 then we can talk more.
PS: Dont come here with a vague statement and try to change it's meaning with your own representation of it. Get a clear black and white one that everyone can take it's exact meaning at face value.
Here is an example of a clear Blizzard quote taken from the AH FAQ for your viewing pleasure (since I'm sure you didnt bother reading it) :
Players can choose to participate in whichever version of the auction house they prefer, on a per-transaction basis.
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[SIGPIC][/SIGPIC]Diablo 3, Hottest shit to happen to 21st Century Entertainment since Georges "Rush" St-Pierre.______________ --------~~Mattheo's Quote of the day~~---------
----------Brought to you by Diablofans.com Forums -------- Originally Posted by mattheo_majik
I LOVE being a SEX TON!!!
No it won't. You're assuming everyone behaves rationally, like counting machines. You're assuming everyone will exchange currencies immediately like some HFT software. Human beings are not pure theory executors, and the system in practice will be many orders of magnitude more complex than you and Phrozen are making it out to be.
Here's an important point: The models you're using are in reference to two real-world currencies. But that's not what we're discussing. We're talking about one fake currency and one actual currency. The models don't necessarily hold, and the emotion and moral dissonance that is obviously at work here destroys many of your notions.
While I honestly appreciate the exercise in econ 101, the world does not operate in a vacuum, nor does it adhere to steadfast rules like this, because there are no steadfast rules outside a vacuum. We can't say that a video game community is going to behave like wall street currency traders. The fact is we just don't know any of this for sure.
My bottom line is this. Why do I have to exchange between two currencies in the FIRST PLACE? It's an added layer of toil that keeps me from killing monsters and getting loot.
There are many answers to this, but I haven't heard any that are compelling.
If people are not behaving rationally (working off the economy laws) they lose money. When they lose money, I get money. Yay for me.
Fake currency? Played WoW ever? Fake currency and yet the most robust, active and WORKING economy I've ever seen in gaming. Hell, some real-life economies are not as stable as WoW economy based on a FAKE currency.
PS. All currencies (yes, I am tlaking about dollars, euros and all those other pieces of paper) except for pure gold are fake, just saying...
There is a market price and to drive it up, reducing supply will work. It may not be so drastic as the example listed but regardless it is easily doable with a bit of money. If I am buying out the market at 10$ and I have to buy your one 900$ sword to keep the market price up it does not effect the avg. price so much if my volume is high, which I am guessing it would be. Even so if I wanted to retain market prices I would still be making a profit on your 900$ dollar sword. This increases YOUR gain for the sword, but it creates a very very messy economy.
Of course you wouldn't want to hold a manipulation for extended times but with MANY companies doing this, it can turn in to a very 'not so fun' environment. Market manipulation is abundant in the real world, in example it only takes an average 3 million USD to manipulate Sri Lankan markets, it is not just a problem with oil.
If you buy a sword for 1000$ it is worth 1000$.
If you don't think a sword is worth 1000$ - DO NOT BUY IT.
I mean, it's simple, it's how marketplace operates and still people cannot understand even basics of it. How do you live your life without knowing basics of supply/demand and free market?
I don't really get what your saying but if you mean the worth to the individual then yes, I think this is fairly obvious? But if you mean to say that if you pay a 1000 then its value is 1000 is incorrect. And in regards to my post, I don't know how this relates - care to elaborate?
edit - I read it again and I think you may not understand the concept of inelastic demand... so before you point fingers...
My bottom line is this. Why do I have to exchange between two currencies in the FIRST PLACE? It's an added layer of toil that keeps me from killing monsters and getting loot.
There are many answers to this, but I haven't heard any that are compelling.
Actually there is only one answer to this. You don't. Who said you had to exchange in order to trade? Did Blizzard say that, if they did go find the quote and bring it here. Likewise for any MODS on Dfans.com, and the OP. They never stated you did have to eexchange.
Oh WAKE UP buddy. All the best items are going to gravitate almost immediately to the RMAH, for reasons that have been stated ad nauseum. So if I want to be competitive in this game, and I do, I will be forced to use the RMAH if that's where all the highest quality gear resides.
Now, Phrozen and Don seem to think that's fine, because arbitrage will magically make everyone win, but their reasoning sits on some seriously shaky ground, and am not moved by their arguments because there are no working models that represent the economy we're talking about here. It's never been done.
I object to the RMAH on both personal and practical grounds. Personal because I hate the idea of playing a game, and whenever gear drops it will be impossible not to think about how many real U.S. dollars it's worth. Practical level because ALL I WANT IS A WORKING ECONOMY. You can do that strictly with good game design. I don't want multiple layers of fake economy abstraction and extra currency exchange hoops to jump through.
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"Ridicule is the only weapon which can be used against unintelligible propositions."
-Thomas Jefferson
Your so sad, that you couldnt even get one quote proving I'm wrong. I found 2 quotes already proving you are.
Heres another one for you.
.
Players are free to participate in the gold-based auction house or the currency-based auction house, or to opt out of using any of the auction houses at all, progressing through Diablo III using only the items they obtain through their own adventures or direct trade with other players.
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[SIGPIC][/SIGPIC]Diablo 3, Hottest shit to happen to 21st Century Entertainment since Georges "Rush" St-Pierre.______________ --------~~Mattheo's Quote of the day~~---------
----------Brought to you by Diablofans.com Forums -------- Originally Posted by mattheo_majik
I LOVE being a SEX TON!!!
I'm sad? You're a goof ball pal, and if you wanna take this outside, I'm game. (Edit: I say this jokingly because you have a pic of st. pierre as your avatar, and I happen to study BJJ so I'd be down for a roll.)
No in all seriousness, I don't give a damn about some pre-canned HR Q/A quote. I don't need to quote anything in order to prove my point, I just need sound reasoning. We all know what's going to happen. I want to be competitive in this game, and in order to do so, it's extremely likely I will be forced to use the RMAH.
That quote you just gave me does nothing. I don't want to play the game that way, it will (most likely) not be viable for someone who wants to be competitive.
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"Ridicule is the only weapon which can be used against unintelligible propositions."
-Thomas Jefferson
Everyone doesn't behave rationally, that's the major flaw in econ 101. However, that fact is irrelevant as long as the market acts rationally in the larger scale.
Now, nowhere near everyone needs to behave rationally. Hell, you (or anyone else, for that matter) don't need to exchange currencies. You can stick to trading in one (gold or money).
Other people will meddle with the two markets and make them work for you by abusing the arbitrage and making the prices interchangeable between the two. There are countless people (me included) that get this perverted satisfaction in the trading aspect of D2. The minority that will abuse this way to make easy profit will be enough.
Regarding your question about why there needs to be two currencies, several reasons:
Not everyone wants to use real money, so there needs to be the gold AH.
Besides that, people need gold (for repairs, artisans, etc.).
By tying the in-game gold's value into real money's value they achieve market stability in a way that is unattainable by using in-game gold alone. This is because the only way a purely gold-based market can work in a game like D3 is when the amount of gold gained is really minimal compared to the amount of gold needed. And even then it'd be hard to keep gold increments reasonable.
It's all been proof-tested by D2JSP, which created one of the most stable and functional markets for D2.
PS: the economy-to-be of Diablo 3 will be rather simple mathematically. All it takes is some people understanding statistics and some proof of concept taking place during the beta and the whole AH can (and probably will) work like a charm.
Completely agree with your point here, but I just have to point out that markets don't always act rationally (in the large scale). I think what they are trying to do is give Gold in D3 more intrinsic value by pairing it with USD/EURO. I wonder what the effect of a fixed rate would have. Like many currencies in developing nations do in order to create stability.
I'm kind of at loss for words about what to say regarding this. I see the real-money aspect of this taking it out of the hands of the third parties. However a real-money auction house doesn't seem like a good idea to me, because that's where all the best items will go. With all the hacks D2 had in the past I'm most certainly not attaching my bank account to this thing. It's bad enough to see a hacker empty my character, let alone my bank account. On top of that will this be another thing to push back our release date because Blizzard has to find a third-party site? How long will that take to work the bugs out so people will consider using this dumb system. "So long D3, see you next year!"
Dunno if someone already pointed this out, i'm not gonna read all the comments, but i'm sorry to tell you that there is a major fail in arbitrage explenation. 2000 gold divided by 20$ is 100 gold per $ not 200. Therefore u earn 1900 for the axe not 3800. so u simply sold it cheaper either way.
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There is a market price and to drive it up, reducing supply will work. It may not be so drastic as the example listed but regardless it is easily doable with a bit of money. If I am buying out the market at 10$ and I have to buy your one 900$ sword to keep the market price up it does not effect the avg. price so much if my volume is high, which I am guessing it would be. Even so if I wanted to retain market prices I would still be making a profit on your 900$ dollar sword. This increases YOUR gain for the sword, but it creates a very very messy economy.
Of course you wouldn't want to hold a manipulation for extended times but with MANY companies doing this, it can turn in to a very 'not so fun' environment. Market manipulation is abundant in the real world, in example it only takes an average 3 million USD to manipulate Sri Lankan markets, it is not just a problem with oil.
Much like an earlier poster who talked about WoW's "auction-pvp", there are some of us who will use the AH in D3 for the fun of it. I will play the game to kill mobs, hell yeah! but I will also get a TON of mileage out of that evil "Market Manipulation".
I 'know a guy' who bought a truck and two jetskiis by selling WoW gold. There it was illicit and against the EULA but.... Here in D3 it will be sanctioned and will support Blizzard.
ETA: You just posted again so this is in reply to your page 5 post.
In progress: Barbarian, WD
Completely agree.
There certainly would be for inelastic markets. It happened in WoW. You can even pull of more common high demand items. Like Copper Bars in WoW (or wtv they were called).
And in RW markets there are far more external factors that are impossible to take in to account. In a more perfect market in D3, manipulation is far easier, because the outcome is far more foreseeable.
Size does matter. And how large the market is will have an impact on how hard it will be to manipulate.
In progress: Barbarian, WD
How can no one see the benefit the players get? Blizzard naturally gets money because they're offering the players a service. People seem to have this idea that just because we're talking about byte transactions here it will cost Blizzard nothing.
Wrong. The development cost of the AH infrastructure, the agreement with the eventual third-party transaction companies, possible legal issues, not to mention the customer support, PR problems and work that will have to be poured into protecting the Battle.net infrastructure from bots and malicious activities. The transaction itself will cost Blizzard nothing, but there are many other costs to cover with this system. Blizzard needs money for this, and the bot/hack work will benefit all. But they're only taking money from people who want to buy items. All of you who don't want to pay are getting a more stable economy, amore hack protection at no personal cost to you.
And no one seems to get the customer value this produces. If Blizzard has facilitates a trade with you for a small fee, then the value you got in the form of a new item and the value the seller got for an item sold are still there. Blizzard isn't slaving you to the work wheel and taking all the profit, they're providing their customers with an entirely new kind of service.
The fee will be minimal. A small fee is in Blizzard's best interest, since a large fee will discourage trade and once again provide an incentive for third-part sites to eke out an existence. A higher fee also disrupts the exchange rate between the gold AH and cash AH and will create a less fluid economy. And that could generate imbalances between the two AH's.
No they won't. If you can buy the same ice cream at the same price as in town but right next to your house rather than 10 miles away, you will always buy ice cream next door. There is no incentive to do otherwise.
That proce says nothing about trade in D3 at all. It is irrelevant, because that price is not set in relation to the aggregate total of all gold that is produced in WoW, which would include all the gold circulating on WoW server between normal players as well.
That's possibly true, but I think a fear was that such sites are already poised and ready for D3. Then again I think this move is also a way to continue to generate revenue for an online game that requires massive support without instituting a monthly fee. It's an experiment for sure.
Reread what I said, try to grasp the basic economic forces at work here, then come back.
You're right, and the same principles as for debt will dictate the amount of money in the system at any one time according to these three factors:
1. How large are Blizzard's fees?
2. What does the average item sell for in $?
3. How mauch of inserted e-balance is withdrawn as $/spent on Blizzard goods?
The lower the fees, higher the average prices and the less money withdrawn, the more people will be able to benefit from this system without putting in money themselves. So not only is it in Blizzard's interest to keep low fees to combat third-party selling, it's also in their interest because it will allow more people to participate in the cash auctioning and thus the system as a whole.
Are you kidding me? The reason you're against this is because you think it would cause the servers to overload and prevent you from playing online?
That was totally screwed before the cash AH was announced anyway, so it's not like the cash AH destroyed that for you.
No. Key difference: professional farmers will have to make money on this. Players have this as a hobby and do not need to generate a set amount of cash each hour. Farmers will have to compete with us.
That's why I'm hesitant against the whole "quit my job and do this"-idea. When I say make money, I do not mean it will cover the alternative cost of quitting your job, especially not in the US or EU. And if it does, then you're no longer playing a game you're just farming.
Hard to say. It will all depend on availability of items and what margins organized farmers have.
Yes it does. See ice cream above.
Yes it does. See original post about Blizzard insurance.
Depends on how you define gimmicky, but I'd still say no.
If someone does that without properly investigating whether it's possible, then you can either call them a visionary who failed or a dumbass who got what was coming. Either way, it's not Blizzard's responsibility to teach economic prudence to its customers. Somewhere you have to assume that your customers are informed individuals capable of making their own economic decisions. If not, then how dare BLizzard sell games to people with gaming problems?!
Incorrect. More powerful items are built into the game progression structure and do not depend on cookie-cutter builds existing. Each build will have a logical next gear step, and people will want to buy that.
There is, but it won't be that easy. First of all, undercutting is not bad, it's a consequence of an auction system. How an organization with running and labor costs are supposed to undercut billy who playes in his spare time and makes a profit so long as he sells above the fees is another matter entirely.
As for controlling the market, first of all they'd have to do it against hundreds of thousands of players in each region. Not easy, but I suppose not entirely impossible either. That could be interesting to watch unfold.
Incorrect, you can and it was clearly stated in the OP.
Name one reason.
It is inherently less trustworthy.
It is more of a hassle.
It is of roughly equal cost, because if they sell it for less then loss of customers in the AH will cause prices to drop down to similar levels. And they can't sell for more because then people wouldn't use them.
Very true, since all gold introduced to the economy goes through drops. Which is great, because then they can adjust unbalanced amounts of gold drops.
Of course that also has the potential to get screwed like any central bank not properly being able to predict economic outcomes, but this is no different than how things would have been without a cash AH.
Yeah, we will all have to wait and see what happens, although I am fairly confident that companies will try and use all sorts of maneuvers. And I do agree that in a PERFECT market it will counter balance, like you mentioned earlier with less people paying the higher price, but unfortunately the world has yet to see an invisible hand.
George Soros is a prime example of someone who uses large sums of money to apply market pressure. Black Wedneseday was sort of England's fault as they refused to change interest rates - regardless, I get what you are saying.
Nice job Scyber! Keep fighting the ignorant ragers...
EDIT: Also, Blizzard not providing an easy and efficient way to trade in D2 led to 3rd party sites. Therefore, eliminate botting and duping, and then them providing a way to trade in game = No logical reason to go/use 3rd party sites...
No it won't. You're assuming everyone behaves rationally, like counting machines. You're assuming everyone will exchange currencies immediately like some HFT software. Human beings are not pure theory executors, and the system in practice will be many orders of magnitude more complex than you and Phrozen are making it out to be.
Here's an important point: The models you're using are in reference to two real-world currencies. But that's not what we're discussing. We're talking about one fake currency and one actual currency. The models don't necessarily hold, and the emotion and moral dissonance that is obviously at work here destroys many of your notions.
While I honestly appreciate the exercise in econ 101, the world does not operate in a vacuum, nor does it adhere to steadfast rules like this, because there are no steadfast rules outside a vacuum. We can't say that a video game community is going to behave like wall street currency traders. The fact is we just don't know any of this for sure.
My bottom line is this. Why do I have to exchange between two currencies in the FIRST PLACE? It's an added layer of toil that keeps me from killing monsters and getting loot.
There are many answers to this, but I haven't heard any that are compelling.
-Thomas Jefferson
Hopefully this isn't too much of a tangent. What if instead of two AH markets the exchange rate is "fixed"? What if the exchange rate is constantly up-to-date? I have no idea if it is practical but if the AH allows bids in gold and cash interchangeably, would that solve your frustration?
Obviously, that is a rather large hypothetical.
In progress: Barbarian, WD
If people are not behaving rationally (working off the economy laws) they lose money. When they lose money, I get money. Yay for me.
Fake currency? Played WoW ever? Fake currency and yet the most robust, active and WORKING economy I've ever seen in gaming. Hell, some real-life economies are not as stable as WoW economy based on a FAKE currency.
PS. All currencies (yes, I am tlaking about dollars, euros and all those other pieces of paper) except for pure gold are fake, just saying...
If you buy a sword for 1000$ it is worth 1000$.
If you don't think a sword is worth 1000$ - DO NOT BUY IT.
I mean, it's simple, it's how marketplace operates and still people cannot understand even basics of it. How do you live your life without knowing basics of supply/demand and free market?
Actually there is only one answer to this. You don't. Who said you had to exchange in order to trade? Did Blizzard say that, if they did go find the quote and bring it here. Likewise for any MODS on Dfans.com, and the OP. They never stated you did have to eexchange.
They did say if you wanted to make a profit in a certain situation you COULD do it. COULD beign the KEY word, if you follow me.
So like i said, you DONT. You don't have to exchange to trade. And you especially DON'T have to even use the AH or RMAH to kill monsters or get your loot. Since Blizzard made sure that killing monsters and picking up loot is exactly what everyone will be doing for free after you purchased the game of course.
If your going to reply to this make sure you get an official quote stating clearly that you will either be forced to use the AH/RMAH or be FORCED to exchange in order to enjoy D3 then we can talk more.
PS: Dont come here with a vague statement and try to change it's meaning with your own representation of it. Get a clear black and white one that everyone can take it's exact meaning at face value.
Here is an example of a clear Blizzard quote taken from the AH FAQ for your viewing pleasure (since I'm sure you didnt bother reading it) :
--------~~Mattheo's Quote of the day~~---------
----------Brought to you by Diablofans.com Forums --------
Originally Posted by mattheo_majik
I LOVE being a SEX TON!!!
I don't really get what your saying but if you mean the worth to the individual then yes, I think this is fairly obvious? But if you mean to say that if you pay a 1000 then its value is 1000 is incorrect. And in regards to my post, I don't know how this relates - care to elaborate?
edit - I read it again and I think you may not understand the concept of inelastic demand... so before you point fingers...
Oh WAKE UP buddy. All the best items are going to gravitate almost immediately to the RMAH, for reasons that have been stated ad nauseum. So if I want to be competitive in this game, and I do, I will be forced to use the RMAH if that's where all the highest quality gear resides.
Now, Phrozen and Don seem to think that's fine, because arbitrage will magically make everyone win, but their reasoning sits on some seriously shaky ground, and am not moved by their arguments because there are no working models that represent the economy we're talking about here. It's never been done.
I object to the RMAH on both personal and practical grounds. Personal because I hate the idea of playing a game, and whenever gear drops it will be impossible not to think about how many real U.S. dollars it's worth. Practical level because ALL I WANT IS A WORKING ECONOMY. You can do that strictly with good game design. I don't want multiple layers of fake economy abstraction and extra currency exchange hoops to jump through.
-Thomas Jefferson
Heres another one for you.
.
--------~~Mattheo's Quote of the day~~---------
----------Brought to you by Diablofans.com Forums --------
Originally Posted by mattheo_majik
I LOVE being a SEX TON!!!
No in all seriousness, I don't give a damn about some pre-canned HR Q/A quote. I don't need to quote anything in order to prove my point, I just need sound reasoning. We all know what's going to happen. I want to be competitive in this game, and in order to do so, it's extremely likely I will be forced to use the RMAH.
That quote you just gave me does nothing. I don't want to play the game that way, it will (most likely) not be viable for someone who wants to be competitive.
-Thomas Jefferson
Completely agree with your point here, but I just have to point out that markets don't always act rationally (in the large scale). I think what they are trying to do is give Gold in D3 more intrinsic value by pairing it with USD/EURO. I wonder what the effect of a fixed rate would have. Like many currencies in developing nations do in order to create stability.