The recent
flood of information we had has left many of you shocked. Skill points removed, traits reworked, new pvp mechanics, banners, shared stashes etc. etc. But many of you are probably most interested, or hesitant, regarding the
auction house (abbreviated AH) system that will allow players to trade their items in exchange for real money.
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:
Quote from "Don_guillotine" »
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.
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.
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.
(And no cheating!)
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