I'm interested -- and I bet many of you would be too -- in a crowd-sourced prediction of the gold-to-dollar exchange rate after the RMAH has had a month to stabilize.
Let's set the RMAH launch date as the first day it's live in the US region and stays live for a subsequent 48 hours. (Why? Because if like the commodity market, it's down for many days shortly after launch, none of that time would function as "time for prices to stabilize".)
30 days after that, how much gold will $1 buy you? (Remember that fees are paid by the seller.)
I will edit this top post with commentary on the state of the poll as of just before the RMAH launch date. Poll answers after that will of course be influenced by the observed gold/$ exchange rate up to that point.
**EDIT 6/12** RMAH launched today, as scheduled! However it appears the commodity side is not enabled yet. So let's clarify the "RMAH launch date" to be the date they actually launch the ability to buy gold for dollars. If that feature stays live for 48 hours, then that launch date is our day 1, and the poll question is how much gold will $1 buy you 30 days after that?
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Note: why am I posting this in General rather than US/Trade? Because I believe it's of general interest even to many non-traders, and in the trading forum it would be buried under 5 pages (I counted) of WTS/WTB posts after 24 hours. If it must be transferred to US/Trade, could we please sticky it so we can get a good sampling of answers.
Come to think of it, it would be great to sticky it in the General forum. Even if answers to the topic die down, it will still be of interest to eyeball the state of the poll -- at least until a month after RMAH launch.
Anybody cares to explain how a year from now the AH won't be flooded with a sea of cheap items nobody will want and the only lack of supply will be noticeable with the very best items for Inferno? And most of the player base probably won't be in Inferno so nobody will buy their drops while they could equip themselves fairly cheaply (and then progress further and sell back for a very low price)...
That's a very good question. Part of the answer is that (I presume) there's no way to configure items to perpetually auto-repost until they sell, so people will stop paying the effort cost to put things on the AH that aren't moving. Meanwhile if the value of items on the GAH goes low enough they'll be gobbled up by salvagers who want to gamble on their own crafting.
People will surely be willing to invest in level 60 items since they will be 60 for lots longer than other levels. However I hear tell that level 60 crafting requires enormous amounts of salvaging of high-value items, so that demand will hoover up items that become too cheap as well.
Sellers are going to feel an incentive to hawk their "perfectly itemized" items in public forums -- personally I hope that they don't end up a way of distracting me unless I'm actually looking for such things.
I'm hoping to get a conversation going about what to expect in the Diablo 3 markets based on what we know going in, and what that suggests for early strategies. I'd love to hear from folks with actual training in Economics and new markets. :-)
Here's my initial thoughts.
-The average amount of gold generated per hour of individual playtime community-wide will go up as the average level goes up. How much real money people are willing to pay for gold scales with how much effort it saves them. So, I expect the gold exchange rate will consistently move in one direction: a dollar will buy more and more gold over time.
-I expect a level-floor effect in the RMAH. Given the above point about the exchange rate, the $1 selling fee will represent more and more gold over time, so the cut-off level (below which even the best-itemized items can't generate enough demand to justify the $1 fee) will go up over time. Below that level they will all sell on the GAH instead.
Corollary: Blizzard will eventually realize that and either lower the selling fee or change it to 15% to match the GAH and eliminate the distortion. Otherwise the RMAH will ultimately only be used for level-60 items.
-The best-rolled items for their level will tend to recirculate on the AH as players outgrow and resell them (no soulbinding). New items will continually be generated at that level as players progress through, so the quality of the top-quality items at a given level will continue to go up, approaching a limit. There will of course be variants preferred by gold-farming, magic-finding, DPS, etc strategies.
-Early on, no-one will be experienced at item valuation so all kinds of things will be posted and find buyers. As groupthink emerges eg "crit rules all" or whatever it turns out to be, desirable items will become easier to spot by buyers and sellers alike. Anything else should be salvaged.
-Speaking of salvaging: since vendor prices don't inflate, the value of salvaging compared to vendoring items will go up over time. It may initially be worth it to vendor things in order to get hard-to-acquire gold, but once the threshold is passed there'll be no going back.
(EDIT: the first market development has been that everyone salvaged like crazy and drove Subtle Essence below the vendor price. So vendoring is king for now, just buy any mats you need for crafting. But I stand by my statement above that since vendor prices don't inflate -- and neither do the BS's crafting fees -- eventually we will pass a threshold where salvaging will be the better economic choice.)
-Leveling up artisans is a major gold sink (ie money removed from the economy). It costs ~600,000g to fully level one's Blacksmith and ~140,000g for the Jeweler. That will put a damper on inflation for a while as most players will want to build those assets for themselves. Artisans are shared across all your characters so that's a single 740,000g sink per person. Once the bulk of the player base has the artisans they want, inflation will be more pronounced as people will have higher and higher gold incomes to spend on the same things.
-The ability to take one's profits in real-world currency will create a huge incentive to buy-and-repost items between the GAH and RMAH anytime there is enough of a market difference for that item in the two AHes given the current gold exchange rate. So unless you put a really low value on your time -- or "playing the market" is sufficient fun value in and of itself -- I expect these margins will be quickly narrowed to the point where it's not worth searching for them.
-The above is a GOOD thing for people who just want to sell/buy some things and get a fair price.
What are good market strategies given an expectation of inflation?
1) Don't sit on a pile of gold without doing anything with it. If there's nothing you want to spend it on right now, buy up salvage dust as a store of value and then sell it later at an inflated gold price. (EDIT: I stand by this, too. Tidal waves of gold will come spilling from lvl-60 characters back into outfitting new low-lvls for fast playthroughs. Prices for good low lvl items will go up way higher than new players could afford with their found gold. Crafting low lvl items will become profitable, and the price of salvage dusts will rise. Meanwhile, if your bank account can afford you one fantastic item today, the same amount will get you 1/20th of a fantastic item before you know it. Don't sit on gold.)
2) Put off leveling your artisans. 740,000 looks like a mountain of gold now, but that price will look cheaper and cheaper over time as it won't inflate. Moreover, since the quality-standard for the best-itemized pieces of a given level will go up over time (as the best ones recirculate and new bests get generated), it will get rarer and rarer to randomly roll a crafted item that is worth more than the mats you spent. A far better strategy will be to buy whatever you would try to craft off the GAH for the market rate and then sell it back when you're done with it. You'll comfortably be able to outspend players who sink some of their gold into artisans.
3) Put another way: artisans are content. People will level them because it's a part of the game they want to see. If that describes you too, great! No bad vibes at all playing the way you want to play. My point is that tons of people will pursue a crafting strategy regardless of whether it is an economic win for them. Therefore the actual economic win will be in the contrarian strategy: sell salvage dust to crafters, use the profits to buy what you want of their products. (Or if there's a min Blacksmith level required to salvage per item level, only level him as required for your salvage needs.)
1
Let's set the RMAH launch date as the first day it's live in the US region and stays live for a subsequent 48 hours. (Why? Because if like the commodity market, it's down for many days shortly after launch, none of that time would function as "time for prices to stabilize".)
30 days after that, how much gold will $1 buy you? (Remember that fees are paid by the seller.)
I will edit this top post with commentary on the state of the poll as of just before the RMAH launch date. Poll answers after that will of course be influenced by the observed gold/$ exchange rate up to that point.
**EDIT 6/12** RMAH launched today, as scheduled! However it appears the commodity side is not enabled yet. So let's clarify the "RMAH launch date" to be the date they actually launch the ability to buy gold for dollars. If that feature stays live for 48 hours, then that launch date is our day 1, and the poll question is how much gold will $1 buy you 30 days after that?
-------------
Note: why am I posting this in General rather than US/Trade? Because I believe it's of general interest even to many non-traders, and in the trading forum it would be buried under 5 pages (I counted) of WTS/WTB posts after 24 hours. If it must be transferred to US/Trade, could we please sticky it so we can get a good sampling of answers.
Come to think of it, it would be great to sticky it in the General forum. Even if answers to the topic die down, it will still be of interest to eyeball the state of the poll -- at least until a month after RMAH launch.
1
People will surely be willing to invest in level 60 items since they will be 60 for lots longer than other levels. However I hear tell that level 60 crafting requires enormous amounts of salvaging of high-value items, so that demand will hoover up items that become too cheap as well.
Sellers are going to feel an incentive to hawk their "perfectly itemized" items in public forums -- personally I hope that they don't end up a way of distracting me unless I'm actually looking for such things.
2
They could change it to "15% or $1, whichever is lower". That would be anti-greedy and still preserve the RMAH for under-60 items.
8
Here's my initial thoughts.
-The average amount of gold generated per hour of individual playtime community-wide will go up as the average level goes up. How much real money people are willing to pay for gold scales with how much effort it saves them. So, I expect the gold exchange rate will consistently move in one direction: a dollar will buy more and more gold over time.
-I expect a level-floor effect in the RMAH. Given the above point about the exchange rate, the $1 selling fee will represent more and more gold over time, so the cut-off level (below which even the best-itemized items can't generate enough demand to justify the $1 fee) will go up over time. Below that level they will all sell on the GAH instead.
Corollary: Blizzard will eventually realize that and either lower the selling fee or change it to 15% to match the GAH and eliminate the distortion. Otherwise the RMAH will ultimately only be used for level-60 items.
-The best-rolled items for their level will tend to recirculate on the AH as players outgrow and resell them (no soulbinding). New items will continually be generated at that level as players progress through, so the quality of the top-quality items at a given level will continue to go up, approaching a limit. There will of course be variants preferred by gold-farming, magic-finding, DPS, etc strategies.
-Early on, no-one will be experienced at item valuation so all kinds of things will be posted and find buyers. As groupthink emerges eg "crit rules all" or whatever it turns out to be, desirable items will become easier to spot by buyers and sellers alike. Anything else should be salvaged.
-Speaking of salvaging: since vendor prices don't inflate, the value of salvaging compared to vendoring items will go up over time. It may initially be worth it to vendor things in order to get hard-to-acquire gold, but once the threshold is passed there'll be no going back.
(EDIT: the first market development has been that everyone salvaged like crazy and drove Subtle Essence below the vendor price. So vendoring is king for now, just buy any mats you need for crafting. But I stand by my statement above that since vendor prices don't inflate -- and neither do the BS's crafting fees -- eventually we will pass a threshold where salvaging will be the better economic choice.)
-Leveling up artisans is a major gold sink (ie money removed from the economy). It costs ~600,000g to fully level one's Blacksmith and ~140,000g for the Jeweler. That will put a damper on inflation for a while as most players will want to build those assets for themselves. Artisans are shared across all your characters so that's a single 740,000g sink per person. Once the bulk of the player base has the artisans they want, inflation will be more pronounced as people will have higher and higher gold incomes to spend on the same things.
-The ability to take one's profits in real-world currency will create a huge incentive to buy-and-repost items between the GAH and RMAH anytime there is enough of a market difference for that item in the two AHes given the current gold exchange rate. So unless you put a really low value on your time -- or "playing the market" is sufficient fun value in and of itself -- I expect these margins will be quickly narrowed to the point where it's not worth searching for them.
-The above is a GOOD thing for people who just want to sell/buy some things and get a fair price.
What are good market strategies given an expectation of inflation?
1) Don't sit on a pile of gold without doing anything with it. If there's nothing you want to spend it on right now, buy up salvage dust as a store of value and then sell it later at an inflated gold price. (EDIT: I stand by this, too. Tidal waves of gold will come spilling from lvl-60 characters back into outfitting new low-lvls for fast playthroughs. Prices for good low lvl items will go up way higher than new players could afford with their found gold. Crafting low lvl items will become profitable, and the price of salvage dusts will rise. Meanwhile, if your bank account can afford you one fantastic item today, the same amount will get you 1/20th of a fantastic item before you know it. Don't sit on gold.)
2) Put off leveling your artisans. 740,000 looks like a mountain of gold now, but that price will look cheaper and cheaper over time as it won't inflate. Moreover, since the quality-standard for the best-itemized pieces of a given level will go up over time (as the best ones recirculate and new bests get generated), it will get rarer and rarer to randomly roll a crafted item that is worth more than the mats you spent. A far better strategy will be to buy whatever you would try to craft off the GAH for the market rate and then sell it back when you're done with it. You'll comfortably be able to outspend players who sink some of their gold into artisans.
3) Put another way: artisans are content. People will level them because it's a part of the game they want to see. If that describes you too, great! No bad vibes at all playing the way you want to play. My point is that tons of people will pursue a crafting strategy regardless of whether it is an economic win for them. Therefore the actual economic win will be in the contrarian strategy: sell salvage dust to crafters, use the profits to buy what you want of their products. (Or if there's a min Blacksmith level required to salvage per item level, only level him as required for your salvage needs.)