Actually, I'll go out on a limb here and say that many of you are really pissed at Blizzard right now. But before you condemnd Blizzard of sacrilege, we should take a closer look at what this system will really mean for the players.
The Basics First
Buying
Selling
Example
You can use the cash AH without spending a dime
It doesn't matter which AH you end up using anyway
Added bonus: It eliminates third-party selling
I don't want this crap in Diablo
Potential Hazards
Farmers
Hacking
Conclusion
The Basics First
Blizzard has revealed that there will be two auction houses available to players through the Battle.net interface: one which uses in-game gold as a currency (just as the WoW auction house does) and one which uses real world money such as dollars, euros or similar depending on which region you play in.
Buying
In order to buy items, all you have to do is transfer over money to your B.net account from your credit card, which will convert it into e-balance. You can then go right ahead and bid on items with your e-balance. If you win the auction, your bid is automatically subtracted from your e-balance and you get the item. If you bid on an item but someone else outbids you, it will cost you nothing. This is true for both the gold and cash AH systems, the only difference between them is that in one you will use actual money.
Selling
In order to sell items, it's a little more tricky. If you want to put up an item for sale, you have to pay a fee. This fee will be subtracted from your money whether you succeed in selling it or not and given to Blizzard. In the gold AH, this fee is a gold sum (again exactly like WoW), and in the cash AH it's your e-balance. This fee is set at a fixed nominal value (the exact amount we do not know at this time). If you don't manage to sell the item, it will remain in your stash and you can try to sell it again, but the fee will already have been removed from your e-balance. If you do sell it however, an additional selling fee is also applied and given to Blizzard, and afterwards one of two things can happen.
By default, money that people buy items for will be added to the sellers e-balance (or gold total, if they sell in gold). However, it will also be possible to set up your account so that it will be added your credit card. This will require adding a third party payment service to the account to handle the actual transaction. Blizzard is currently negotiating with potential companies at this point in regards to who will handle this service, so at this point we don't know who it will be or in what regions they will operate. However, it will be possible to make money selling items in Diablo III. What will not be possible, however, is to convert your e-balance back into cash. So if you sell an item and haven't set up your account to give you cash, it will increase your e-balance instead. That e-balance cannot later be withdrawn as cash, but it can be used to buy other items and anything in the Blizzard store, including games and WoW subscription time.
Blizzard has also stated that every player gets a number of auctions which allows them to put up cash auctions without paying the nominal fee. It's unclear whether this is a fixed amount for each account (x free auctions in a lifetime), a fixed amount concurrently (x free auctions at any one time) or a recharging value (x free auctions every week), but Bashiok has hinted we might be talking about a set number each week. In any case, using such a free waiver will provide you with the possibility of making money without risking a single cent. We'll get back to that further down.
Example
(NOTE: CONTAINS ENTIRELY FICTIONAL NUMBERS I MADE UP FOR THIS EXAMPLE.)
Here we have three people: Sixen, Scyber and Nektu.
Sixen has put up a leather cap for auction for 10$. In order to do this, he had to pay a nominal listing fee of $1 to Blizzard. Scyber sees this leather cap and decides to bid $10 on it. A couple of minutes later, Nektu sees the same item. He thinks it's worth more than $10, and bids $12. Scyber thinks anything over $10 is too expensive, and does not bid any more. The auction runs out a few hours later with no bids more bids being placed, and Nektu wins the item.
At this point, $12 are subtracted from Nektu's e-balance while nothing happens to Scyber's e-balance. The selling fee, in this example also $1, is subtracted from Sixen's $12, which means he has made $10 total on his auction (-$1 listing fee, -$1 selling fee)
Under normal circumstances this would be added to his e-balance, but if Sixen has also set up his account to forward him cash, the third party payment service will at this point extract a fee from those $11, say $1, in order to administer the transaction and give Sixen the rest, in this case a total of $9.
So Nektu pays $12, Scyber pays nothing, Sixen gets $9, Blizzard gets $2 and the third party gets $1.
You can use the cash AH without spending a dime
Using the cash AH is entirely optional. Players aren't forced by Blizzard to use it to trade for items. However, many of you fear that having a cash AH will make it so all the best items only sell for real money, thus in reality forcing people to spend money in order to get the best stuff. And while that's appears to be true on the surface, it isn't really. Here's why:
If you sell an item using one of your free weekly waivers, you can put up an item in the cash AH, sell it, and generate a positive e-balance without spending a single $. With that e-balance, you can then continue to put up items for sale and, using your initial e-balance, pay for the listing fees. Once you accumulate enough e-balance, you can then buy items for real money without having put in a single cent yourself. So you sell that legendary axe and legendary armor you found and use the generated e-balance to buy an awesome staff instead. The system doesn't lock anyone outside of acquiring the best items, what it does is allow people to spend money to get items faster. But it's still perfectly possible for anyone to use the cash AH.
And you won't even have to exchange legendaries for legandaries. If Blizzard has done its job properly and accomplished what was intended, which is to make gold a valuable resource, then people will want huge amounts of gold for their crafting, repair and vendor needs even if they only use the cash AH. And since gold can be traded on the AH, anyone will be able to sell gold for cash. Of course, the exchange rate between gold and cash is impossible to predict as of now, but in theory anyone will be able to make e-balance without spending any money. Provided there are some individuals out there who actually do put money into the system, some original e-balance has to be generated with actual money. But they will not have to be a majority.
In fact, the cash system will establish an exchange rate between gold and real money. The exchange rate will be an approximation since there won't be any mods available to track all auctions, but the market will probably reach a rough value. At that point, every piece of gold you make in the game will be worth an amount of $ equal to the exchange rate. This money cannot be taken from your e-balance (can't make e-balance into cash) but it can be used to buy items and blizzard products.
It doesn't matter which AH you end up using anyway
What did you say? Each piece of gold dropped will be worth a certain amount of real money? Not only does this mean that you are tecnically making money as you play, it also means that whether you use the gold AH or the cash AH will be irrelevant. The concept is called Arbitrage, and for those of you not accustomed to economics I'll explain how it works.
Let's say that I find a legendary axe that I don't need and thus want to sell. I can either sell it for gold or e-balance. Looking in the AH, I see that there are incidentally ten axes, five in each AH, currently up for sale: five go for 2000g and the other five for $20. But I decide to see what gold sells for, and I quickly see that 200g costs $1 in the cash AH. Afterwards I proceed to sell my legendary axe for $19, which the sold for gold will be 19*200=3,800g
That's arbitrage, the possibility to profit due to price imbalances in different markets. Even if I didn't want cash, it's still a better option for me to use the cash AH under these circumstances, since it gives me more gold. The next thing I do is naturaly to buy the other five legendary axes for 2,000g each, sell them for $19 again, essentially giving me 5*(3,800-2,000)=9,000g profit without having killed a single monster.
This will of course not last, since eventually other people will figure out that the legendary axe is underpriced in the gold AH and correctly adjust their prices. I probably couldn't even have sold those five axes for $19 again, since I essentially bombed the market by doubling the supply of those axes. But that is exactly the point. This kind of equilization will happen continuously across all different items for sale in the two markets, and will work to create a stable exchange rate between gold and $. And when that has happened, it won't really matter which of them you decide to trade in. Even if you consider yourself a purist and never so much as look at the cash AH, the prices you see for items there should be same as those seen in the cash AH.
Perfect equilibrium is generally upset by various factors such as transportation costs, taxes, varying legislations between markets, expiration dates on products etc. In the future Diablo economy many of these are removed: the the flat fees applied to purchases are a transaction cost and will generate some imbalances between the markets, but that's about it. In the end, it will matter little which one you actually use.
Added bonus: It eliminates third-party selling
But that's not everything the AH will accomplish. The purpose of the AH is to eliminate third-party selling of items and the inherent uncertainty that follows from using such sites. I will quote Don here:
Most Diablo II veterans are familiar with D2JSP and the immense use it had in facilitating trade in Diablo II. It wasn't perfect, but it was much better than what Diablo II offered and allowed buyers and sellers to find and trade with each other using a (relatively) stable currency.Quote from
Well in D2 the market essentially worked just the way this real money AH will. Every serious player used D2JSP for trading because of the sheer effectiveness of it. And you could either buy forum gold for real money or sell items for forum gold. There was no way to convert forum gold back to real currency however.
D2JSP was really easy to scam in (since you had to do the trade in-game and giving the currency in the forums) if you weren't careful. The site was also corrupt (they gave gold to their friends who didn't pay for them) and so forth.
With Blizzard now running a cash AH, they've established a low-risk market. Blizzard will in this case act as the insurance of every transaction: if you sell an item and the buyer for some reason has no money, you will still get your money and Blizzard takes that financial hit. All transactions will be guaranteed by Blizzard, which will facilitate a safe and secure trading environment. In addition to that, since Blizzard will not be selling any items and since the exchange rate between gold and $ will be determined solely by the players in a region, Blizzard will have no way to influence it and purposefully generate a corrupt environment. In addition, the cash AH is a much more convenient method of trade, meaning any competing sites will have a hart time, well, competing.
I don't want this crap in Diablo
So far I've explained why you won't be left out of the system and why you won't have to spend real money. But these are all technical arguments. A fundamentally different argument people raise is that bigger wallet = better character. Most comments seem to counter this with "dis would happuned aniway, deal with eet" but that's not entirely true. Yes some people would have bought items for money, but you could at least feel that Blizzard did not support such actions and that an environment where no monetary benefits in RL would ever affect your own gaming experience existed. But "legalizing" it so to speak will with certainly cause a larger percentage of the total gaming population to at least consider engaging in these activities.
And to that, there's really nothing I can say. Because it is true that this will happen and that it will most likely affect how you view the game. Perhaps try to ignore other people's items? Kick their ass in PvP regardless? Secretly gloat that they're giving you money for your items? I don't know. Every change to a game is bound to be unappealing to some players unfortunately.
Potential Hazards
Finally we have the issue of the various kinds of potential risks this system faces: "chinese" farmers and hacks (particularly bots).
Farmers
The first fear is that loosing the restraints of the system will invite countless gold farmers in China and similar to pour into Diablo now that this is allowed. And at face value, we can say that there's no reason for such farmers to reduce in number because of this system, and there's also no reason Blizzard can ban them for. After all, all they've done is buy the game and play it according to the rules (working conditions and such aside, but there's no way for Blizzard to control that).
How will this affect Diablo III? Well, under normal circumstances such farmers operate in a black market outside of the general trade system. They are competing against each other in this environment, but still away from the main body of trade occuring in the general game.
Now however, every Diablo player will become a potential customer, and since the AH will be anonymous it will be impossible for you to tell whether you're buying items from a Chinese farmer or not. Of course, whatever items they generate will have to compete with the prices of every single item that every single player puts up, and the people who previously had to go to them for gold or items can now instead trade with the real players, thus hopefully pushing down prices and making it less profitable for them. Still, it will probably lead to a greater amount of items being generated, but so long as the problem of duping doesn't reappear, it shouldn't be a problem.
Bots
Botting is a second potential problem, one that doesn't really involve any running labor cost other than your electrical bill. Unlike farming however, this is actively prevented by Blizzard and we can only hope that their experience dealing with botting in WoW and SC2 has paid off and will allow them to contain this potential problem well enough. Has this cash AH given botters a bigger incentive? Undoubtedly. Do I think Blizzard can handle it? Yes, otherwise they've done some really terrible estimates prior to announcing this system.
Conclusion
Will this new cash AH force you to spend real money? No.
Is it certain to work/flop? No, neither is certain.
No one has done this before, and so it seems unlikely anyone can guarantee an outcome here. Individual future situations are not that easily prognosticated. But I don't think the outset is all that bad either. What it will do is to hopefully lead all trades to be handled through Battle.net, which will generate a more stable economy, a larger economy of more buyers and sellers, a more liquid market and an opportunity for people who want to spend money on items to do so freely while at the same time allowing people who do not want to spend money to still generate a net profit, and more importantly, still interact with the entire trading community regardless of financial situation. The problem will be accepting that people with more money can buy better gear, but if you can do that you should not be worried about what this system can bring.
You mean... Who would buy real money items? Those rich punks, Buy low/Sell high people, or those people doesnt have time to farm for gears due to full time job.
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Regarding making a better game, this could work... or it could also blow up in their faces. I don't actually know how it will go for them, but I do think it is far too complex a task for Blizzard to successfully undertake. Some people thought they could pull off their 9 gazillion builds, and look where they are with that now.
Bottom line, like it was said before, this is a money-printing machine for them. That's the bottom line. This is going to be a massive cash cow for them. The need to balance it and deal with the plethora of problems it (and its users) will have... that's a secondary priority for them. One that they'll be taking care of just to protect their cash cow. If they pull this off, expect to see this feature in every conceivable game possible.
I think some people here have far too much blind faith in Blizzard. Others, it seems, have never heard of corporate greed. And I am most amused by the ones that think they could actually make significant money out of playing this game (let alone make a living!) All due respect to them, but who do you think you're dealing with?
Great article though
Second please list these problems cause I bet you don't know jack S*&T no one will until the game comes out. AND we don't know how much this will make blizzard as jay wilson said they "think" they won't lose money... with an attitude like that how can it be a so called "Money-printing machine/cash cow"
F&*^
/rage off
By raging at me like a fanboy you're proving me right. I'm saying blind faith because they're doing something that has never really been done before. I, for one, despise World of Warcraft, and as a Starcraft II player, I haven't loved the direction they've taken the game in lately. So maybe that's why I'm able to be a little more critical instead of just worshiping their every move. Of course you're right though, we all know that if they win awards, you have to stop thinking for yourself.
If you had actually taken the time to read my post, you'd have seen one of the first things I did was say that I don't know for sure how it will turn out. I personally believe they're biting off more than they can chew, but that's just what I think. I don't think I'm forcing my opinion on you.
Let me give you a more detailed explanation. So, if you want to use the real money trading service extensively, you'll have to pay a fee. By putting up the auction, they're charging you again. If the item sells, they charge you again. And after that, they charge you for translating your profit into real money. That's 3 times they charge you, assuming you only used the free auctions you're allowed to make --and I'm really interested to see just how "free" they're going to be. No-one even said how many they're going to give you.
Sites like D2JSP made mountains of cash by offering a service only a fraction of the player base used. Blizzard is legalizing it, and doing it on a massive scale. So after making the game and just letting things drop, they're making money every time someone sells something. Besides the costs of maintenance, which are independent from the auction house, they're effectively making a money printing machine. The money comes directly out of your pocket, and they just have to sit back and watch you buy and sell like a monkey. It's a really genius move, business wise. Once they set everything up, the cash will be flowing.
The same moral or ethic aspects that go with games like World of Warcraft. Of course it's not their fault, at least not entirely, but I don't have to tell you the kind of repercussions this game can have when it's advertised as "play and make money!". Some people are talking about making a living out of this.
And it's been said before that the same thing happened in Diablo 2... however, like PhrozenDragon said, this time they're making an official implementation. This will surely make it much, much more prominent than in Diablo 2. Exactly what the full effects of that are, I can not say for sure. We'll have to wait and see.
About PvP... I don't care for it. Never played it, never will. However, you have to admit that the Auction House made it far less relevant than it could have been. I know some people were hoping for a decent system, whereas now it's probably going to be a not even respectable one. Regardless of the effects of the RMAH, they don't even have the support of Jay Wilson.
Death AND taxes I'm not even sure sites like D2JSP are fully going away. What about offering transactions without the fees that Blizzard is going to put up? Surely that will sound good to at least some.
Yes, I would agree. However, I never called their system unfair or extortion, so that's besides the point.
As far as I'm concerned, they're doing nothing that I could call "unfair". If I were them, I would be very unhappy with 3rd party sites making money out of my work. I won't argue with that. However, to think that the RMAH is implemented out of the goodness of their hearts or to protect us from ourselves is to delude yourself. This is, in the end, a business decision.
Just how much those of us who opt not to use the RMAH are in for, that's debatable. I would expect that you're going to be missing out on most, if not all of the best end-game gear. Unless you choose to partake in their little auction game. That, of course, doesn't technically require you to invest a single cent into the game. In theory, at least.
Like I said before, I understand what you're trying to say, and I recognize that the 3rd party sites are a big issue that needs to be dealt with. However, I'm not sure they're going away, and I never did call what they're doing extortion.
You clearly understand the basics (and more) of how the market works and what it means to play it, and I understand we can't really predict with exactitude how it will pan out in the end, but let me ask you this: how do you feel gold farming will affect this market?
On an unrelated note, you're one of the most civil people I've seen on here. Props to you for being so eloquent and actually backing up your arguments.
As for the hate debate over the auction house i just dont get the complaints , if you dont like it dont use it " simple " just look at it as an optional extra " like all the radio stations you dont listen too in you car ".
Most people are overeacting to a single game feature " thats completely optional " when they havent even played the game.
I loved D1 and D2 and lan play with friends on a drunken friday night " lan play isnt in D3 " we gamed and pick up loot exchanged loot etc and played to the early hours of the morning awesome fun , at no time did i feel the need to buy any items to increase the pleasure i got from the game so little johnny rottencrotch buying his gear from websites made no difference to me ,if he got enjoyment from it good for him as thats what games are for FUN .
But everything else might not be constant. For instance, the idea people have put forth that this will provide greater incentives for farming will increase the supply.
There's also still no information on the end game. Blizzard has constantly talked about the endgame and how it will be better than in D2 but haven't actually revealed anything.
And I know I at least will invest hours of play into the game, because I believe it will actually be fun to play. Where there's one there's more.
And depending on how many people actually want to use the gold AH. If there's a fan interest in rejecting cash, which there are indications of, there will be opportunities to trade in gold, and as I have outlined this should provide both sides with equal prices.
And if by extension there is no interest in selling good stuff on the AH, that means there's no demand for good stuff on the gold AH, ergo no one is actually using it, not even those who protect it right now.
If there was a way for those of us who don't want the cash AH to avoid it altogether, I suspect we would have nothing to argue about to begin with.
There is a way for those who dont want to use the cash ah , dont use it " simple " whichever way the games economy goes wont affect those who dont use it.
I think you completely missed the point of my post. If the two AH systems were independent, you could make this claim. They are, however, interdependent. Even if I want nothing to do with the cash AH, my gaming experience will be affected by it. No one knows to what extent, but for some people just knowing that their gaming experience will be affected by how much real money is being pumped into the system is enough to make the game less appealing.
Perhaps someone with more knowledge on the subject can clarify.
farmers will take over. think of WoW if you have ever played it... this will ruin the game i can't see how anyone thinks otherwise they are legitimizing and condoning (maybe indirectly but condoning none the less) gold/item farming so they can make more money. THAT IS ALL. After 10 years of waiting this is what you get, the ability to completely deck out a character with a credit card. It will happen if you can buy items with money plain and simple. Instead of working on ways to prevent it they are making it easier.
http://www.g4tv.com/videos/54527/sesslers-soapbox-diablo-3s-auction-house/?quality=hd
After reading everyone's opinions and thought's however i do feel like blizzard is acting for the good the Diablo community, but they are doing it for the wrong reason's imo, "They are just going to do it anyway" is a really horrible excuse.
D2Jsp was successful because Diablo2 had no easy way for people to trade items in game... But it wasn't a problem for the first few years. but after awhile the diablo2 population dwindled after a few years(Especially for HC players like myself), and blizzard wasn't doing anything with diablo2 at this point. and trading in-game became impossible , Thus d2jsp was able to thrive, and i used it but not after i played diablo 2 for 8 years, and then FINALLY succumbing to the evil of 3rd party sites created an account so that i could actually accomplish some trading.
And just because d2jsp thrived does not mean that the Diablo community "wants to buy items".... we traded items for fg, and fg for our needs. it was better than, joining a random trade game from a really bad Game list to begin with, to get a guy say..."Wug" and leave after you shown what u have.
This Brings me to HC=No RMah. This is prolly the best news for me considering all i played in d2 was HC,(Had plans of making a SC toon just to pvp, but RMah obliterated that idea)But Not having the RMAH in hc also presents me with the fear of 3rd party sites again, which would also obliterate whatever was left of HC PvP that blizz left for us to play with. But ill put my faith in blizzard and i know that Diablo3 will be attended to much more closely.
All of this said,I do recognize the benefit's of RMAH, I PRAY that im wrong and Blizz hasn't gone insane, and knows what they are doing. All in all i have been relatively happy and excited about most of the changes they have announced recently, and ill put my faith in blizz, but there is a really sick feeling in the pit of my stomach right now
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Why anonymous? This really sucks.
I definitely do not agree with it .
It makes not only a easy way to "Chinese farmers" sell self generated items (when they found a way to generate), but it also will be a easy way to someone from Blizzard Staff sell items, since there is no way to know who are selling. Humm.. maybe there is the why. :/
Also, a lot of people seem to think that since the "farmers" in WoW are content to gold farm, they will only care to gold farm in Diablo III. However, Diablo III is going to be a completely different game from WoW, and without having the economy already established to reference we can't really presume to know just how strong in-game gold will be. Especially with the RMAH undermining it's value. Even without having the system in place to reference it's obvious that RMAH undermines gold. It may not make gold completely worthless, but it makes it so that you can circumvent using it at least in the AH by using real money and if you need it for something in game you can just buy as much as you need with real money.
If they introduce ever increasing tax on putting items to auction, that would prevent farming/botting. Say if there are 10 open bids, it would cost 11% of asked price to put 11th item, 12% for 12th etc, up to 100%. Or same, but on the daily basis, that would force acquiring multiple copies of the game, setting up multiple money accounts and would not generate any profit above some small amount. In other words, Blizzard could limit how much money an account could make per day.
What do you think?