Tuesday, August 2, 2011

Real Money AH in Diablo

It's pretty strange that I am writing a post about an announcement for Diablo. In truth, I have very little experience with the franchise. I played Diablo one for a little while after sold for a heavily discounted price. I never touched Diablo 2 and had/have no plans to try Diablo 3. This isn't a comment about the quality of the franchise; it's a matter of so many things to do and so little time. So I think you can see why it is strange for me to post about a Diablo announcement, but this one cuts very close to WoW.

In case you haven't seen it already, Blizzard has announced a new Auction House feature in Diablo 3 that will allow transactions both in game-gold and real-life currency. For the full details, please look at Blizzards site.

An Attempt at Fairness:

First and foremost, I need to qualify my comments on this subject. As stated above my experience with Diablo is very limited. While I can envision a lot of bad things if this type of feature was introduced in WoW, I can't say with any experience that the same bad things would happen in Diablo. In fact, Bashiok has made some decent arguments as to why having this type of AH in Diablo is different then having the same type of AH in WoW.

It should also be said that Diablo 3 is not WoW. Just because this is happening in Diablo doesn't mean this will be added to WoW as well. Blizzard has said in the past that this type of feature won't be implemented in WoW, and they have also said that real money transactions provide any game advantage. This could be a feature that is only intended for Diablo and will never interact with WoW. I recognize that players who have an opinion similar to mine could be overreacting, because there really is no intention of ever implementing this type of feature in WoW.

That said, it's incredibly hard not to see this as a step down a new road for Blizzard. If you had asked me yesterday if this type of feature would ever be considered I would have given you a complete and confident "NO." This step definitely increased the chances of this type of feature being added to WoW, especially when you consider other features like Race and Faction changes which Blizzard claimed at one time or another would never happen. That is why I think my concern for WoW is justified, when Blizzard adds a feature to another game that could possibly be added to WoW as well, even when the games are unrelated.

I really don't care if this feature is added to Diablo 3 or not, but I do have very strong opinions about if this type of feature should be added to WoW. And when I see posts like Mathew McCurley's on WoW Insider absolutely drooling over a real money AH I feel the need to post an opposing view of why this would be bad for WoW.

Dual Auction Houses are a Lie:

One of the big selling points Blizzard is trying to make is that there will be two Auction Houses that you can use depending on your preference: a Gold AH and a Currency AH. Bashiok has gone so far as to say "I have no doubt that the gold auction house will by-far outweigh the real money auction house in scope and amount of items available."

While I am sure that there will be in fact two Auction Houses, the idea that you can choose which one to use based on preference is an illusion. You can tell by answering one simple question. Which is better, fake money or real money? If you answer real money then you are like 99.9999% of the people who will play the game.

Anyone who thinks about this situation at all will realize that the Currency AH will drive the postings on both auction houses. Bashiok may be right that the Gold AH will be bigger, but all of the prices will be determined by the Currency AH.

For example, let say that the Boots of Uberness are listed for $5.00 on the Currency AH, and 1000g is selling for $1.25. How much gold are the Boots of Uberness worth? Clearly they are worth 4000g in this situation. You can list this item on either AH, but the price is clearly going to be determined by the Currency AH. I could list this item on the Gold AH for 10,000g but why would someone buy it there? They could just sell 4000g for $5.00 and buy it off the Currency AH.

So, as you can see, any suggestion that the Gold AH is an independent auction house is an illusion. This isn't to say that the prices between the two AHs will be in perfect lock-step. The fees charged by Blizzard and the less liquid nature of gold will cause some differences, but don't be surprised when they are fairly close most of the time. If WoW's AH has taught us anything, it has shown that there are a lot of very smart people who can work the system to make fake currency. Just think what will happen when people are motivated to make real currency.

Legitimizing a Shady Industry:

Another suggestion that seems to be popular is that is that this is a big blow to the shady business of Gold Selling. In his WoW Insider piece Mathew McCurley says "Blizzard could remove the profitability of gold farming by making everyone a gold farmer."

Yes, how could the gold farmers possibly be profitable when you can buy and sell gold and other things from anyone in game? Let me think. How could they survive?


This isn't a death blow to the gray market. This is just legitimizing it. Claiming this is any kind of weapon against the gray market is like a politician saying they won the war on drugs by legalizing them.

Some of you might then argue, that because all players are now allowed to participate in the market this will reduce the profitability and that gold farmer won't make enough money, and therefore leave the market. At first that point of view may sound logical, but it's missing a few key points. First, the gold sellers’ biggest problem currently is finding gold buyers. While legitimizing the market will increase the number of sellers, it will also increase the number of buyers, and may not change the profitability of the market at all. It may even increase the profitability of the market.

The other thing proponents of this argument are forgetting is that the gold sellers won't play fair. Gold Sellers are more then willing to bot and hack their way to create their product, and that's not going to change if Blizzard legitimizes their market. Botting will still be the most efficient way to gather trade goods. Since Blizzard tends to allow bots to operate for a few months and then ban them in waves even when the bot is obvious, the gold sellers are unlike to stop using bots. Hacking has a similar issue. It's obviously profitable for them now, and there's nothing about a Currency AH that would make hacking unprofitable on its own.

In short, anyone who thinks that a Currency AH is a silver bullet against the commercial gold sellers is just deluding themselves. It will definitely change their business model, but it's not going to prevent them from doing harmful things like Hacking. In fact, legitimizing the gold sellers could harm the casual player more then botting and hacking ever have. If the gold sellers are significantly more efficient with their gold farming than the average player, then that will push the price of gold extremely low and inflate gold prices on the AH, thus forcing players to play long hours to earn enough gold to buy an item or to buying gold.

The Social Hazard:

Finally, I want you to think about this situation if a Currency AH was introduced to WoW. Let’s say you are the GM of a moderately successful guild with 100,000g in the guild bank along with plenty of items. After a while you grow bored with the game or just want to go casual. What do you do?

Of course, there are a lot of GMs that would leave the guild bank intact and step down without issue. At the same time, I'm just as confident that there will be plenty of GMs that will take the money and run. Being the GM of a guild is hard work, and I assure you that fore some people it will be easy for them to justify taking the money by saying they earned over there time as GM in the Guild. I've heard that excuse several times in my 4.5 years of WoW without a Currency AH.

And guess what, you as members of the guild are powerless to stop them. Guild Masters have total control of their guild. They determine who has access to the guild bank and who can be in the guild. They could justify locking up the guild bank by saying they want to protect it from people who might take the items for themselves to sell them. Then the next thing you know, you log in one day with everyone kicked from the guild except the GM and his alts. I can't say how often this will happen, but I guarantee you it will, and you might be surprised what your friendly GM is capable of justifying when several hundred dollars of gold and stuff are on the line.


To be fair, I have very little experience with Diablo, and a real money AH may be perfect and helpful for that game. I also recognize that what Blizzard does with Diablo doesn't necessarily relate to WoW in any way. So, my concern for WoW at this announcement may be an overreaction. However, since they are willing to implement it for Diablo, it's reasonable to assume that they might conceder it for WoW as well. That is why I think it's important to lay out why I think a Currency AH is a bad idea for WoW.

While Blizzard can create and claim to have two separate AHs, it's impossible to have them operate independently. The Currency AH will set the prices for both AHs because gold will aways have a price. Some people are arguing that this is a damaging blow to the gray market businesses that deal in game items for real money, but it is no such thing. It just legitimizes them and makes their business easier in some respects. It also isn't going to prevent harmful activities like botting and hacking in any way shape or form. Finally, if this type of service was added in WoW it would create new hazards for players. Guild Masters and other players with access to community gold and items can easily take them and sell them for personal gain. And if that personal gain can have a real financial impacts expect that activity to become more common.


Anonymous said...

Another interesting effect is that in purchasing turbine points or some other artificial game currency which you then use to purchase items in game it is possible to avoid the very clear legal difficutlies that arise from taxation and income issues. You are purchasing an in game service and it just happens that this is used in game for items. That is how all systems up til now have worked. EVE online is very much into this. What happens now though to a player involved in RL money trading here? There appears to be no separation. For professional farmers ... the IRS may be showing up and that will trickle down to the small fry too. Blizzard is opening up a huge can of worms here. This is more akin to running a system like EBAY than the traditional model --- I would argue that it will clearly define some precendents on how these services will go in the future.

Anachan said...

You're not the only one with concerns about what would happen if it spread to WoW. I wrote a blog post, but kept it in my drafts folder, because I kept hearing so many people saying, "You're overreacting." Maybe I'll post it up, if I can manage to get it to sound as well-reasoned as yours is. ;)

Hoss said...

This is such a bad idea for gaming. I wouldn't for a moment doubt that Blizzard is using this as a test platform to see how the community will accept it, all whilst shaving a profit.

What really bothers me most about this system is rather than adding an element to the game it is distracting us from the its fundamental purpose; playing for the love of the game. I can clearly see how this will shift the focus and force player to make profit gaining in-game decisions. In addition to this, I feel like there is an irresponsible delusion that sustainable income could be maintained. What does this message say to our society? I know this thought is a bit far off, but our youth should be engaged in community enriching employment with gaming being an entertainment solution; not a career field.

Ohken said...

The reason this would help with gold trading is not that gold trading will go away. The reason it helps is that those businesses will be legitimized, and dealing with legitimate businesses is a lot nicer than with businesses that are underground.

For example, if this change happens in WoW, I predict vastly less gold spam. Any spammer that can really undercut the going rate on the existing AH would just use the existing AH. And any spammer that is charging a higher rate would attract no customers.

Regarding the other items you list, I generally agree with them, but they aren't statements about things that will be worse for the game. You're just poking holes at things that other analysts have written.

What exactly goes bad if people can legally buy and sell Warcraft gold? That's the big question. I think it is not too hard to make it go well. With good game design, Blizzard should be able to make it so that people who invest hours rather than dollars will be able to perform at top level.

Anonymous said...

I think one distinction must be made to clarify the conversation: buying things that are generated through game play is not the same as buying gear/gold from Blizzard. RMAH doesn't increase drop rates or add gold to the in-game economy. What it will do is increase liquidity and make it easier for both buyers and sellers to get what they want. If Bliz started selling gold or items the economy really would blow up; an influx of resources would drive prices sky-high and basically force everyone to buy gold just to keep up.

Anonymous said...

Maybe not being able to trade gold between characters would help with the gold farmers. Leaving the AH as the only way sell stuff and to move gold around.

You should only be able to buy gold and not sell it, selling gold is what will change WoW as kids will start to use it as a business.

I can just see now, people running 5 mans will be like "ffs noob that wipe just cost me $2. Kick him"

Graylo said...


Yes, a real money AH would probably eliminate Gold Spam, but in my opinion that is probably the least significant issue with gold selling. If you take the two seconds to report them they are gone.

I am concerned about the much more significant problems like hacking, and botting. Which this would do nothing about.


You're very nieve if you think that just because Blizzard isn't selling the gold directly that it won't add gold to the in-game economy. Take these two examples.

First, between all of my toons (primarily on two servers) I have between 400k and 500k gold. I have no intention of spending it and If I quit I wouldn't give it away. If a Real Money AH is added, I would be stupid not to cash it in eventually. In addition to that, remember that this game is close to seven years old. Think of all the in active accounts with gold on them out there. Old players, who quit the game with a lot of gold now have an incentive to reactivate their account sell the gold deactivate it again.

The point there is that there is already a ton of gold sitting around not being used. If Blizzard assigns a value to it in any way, large chunks of it are going to be dumped on the economy

Second, it provides people with a better reason to farm gold. When I started to play the AH I did so, because, I wanted to see if I could hit the (old) gold cap. When I did, I stopped most of my AH activites because the gold had no real purpose other then that.

I am now playing the AH again, but I'm doing so because I'm on a new server and I want a healthy balance so I can buy what ever I need without worrying about going broke. When I get bored of what I'm doing and or feel that I'm in a good place I will stop.

If the gold I farmed had real value and could possibly pay for this game If I sold it, then I have a new insentive to earn gold. As a result you will see more economic activity which will mean more questing and mob killing which will result in more gold in the economy.

mushu said...

And how many kids are going to tell their parents when the inevitable Form 1099-Misc arrives in the mail (and Blizz better darn well be sending out 1099's or they're in *big* trouble)? Will the parents get in trouble with the Internal Revenue Service (IRS)? Yep. What about foreigners, or people that register with a different address? Blizz is opening a huge can of worms in that area also.

jwenting said...

you suggest that players could start legitimately selling gold through the currency ah. I seriously doubt that would be possible, Blizzard aren't stupid like that.
If they're going to be selling gold for real money, it's going to be in an item mall run exclusively by Blizzard themselves. But as any MMO out there has an inflation problem and needs gold sinks, and Blizzard know that well. Why do you think WoW trainers charge increasingly high prices for every skill and recipe? Or better yet make gold useless by replacing it with something that can't be used to trade between players like jewelcrafting tokens, Tol Barad commendations, Chef's awards, etc.

So it's not going to happen. What is going to happen is that the game gold ah is going to be pretty bare of anything of real use in game. Not initially, but once there's a core of hardcore "professional" players that's going to be the case.

Translated to WoW that'd mean all those firelands drops and pretty much everything crafted using orbs would no longer be available for gold, it'd require you to hand over dollars or euros (or whatever currency the thing would use) instead.

It would encourage goldsellers, rather than get rid of them, though technically it will reduce their number. They'll just stop selling stuff at inflated prices at the gold ah, and sell it for real money in the dollar ah instead.
They'd maybe even stop selling gold in game (except as a sometime byproduct), rather using the stolen accounts they use for farming to continue farming but now farm exclusively stuff that can make a decent profit when sold for real money (as we're effectively already seeing, with stolen accounts being used as the backbone for many if not most firelands trash runs, that's where those 30k+ items on the ah come from, goldsellers using stolen accounts. The few legitimate players doing the runs are doing them looking for something they can use for their own toons more than anything, for the achievements second, and to help friends and guildies third).
In Diablo, which is primarilly single player content, that problem is far smaller.

jwenting said...

I've played Diablo and Diablo II for years, and never heard of hacked accounts or goldsellers during those years (though maybe by now they do exist).
In a single player game with some multi-player content (mostly what it was in Diablo and Diablo II was being able to group up for what in WoW would be dungeon runs, those same runs you could also solo, so it was almost exclusively social) there's also no problem with "pay to win". If you're too impatient to farm an area for an item you want, noone's going to get disadvantaged when you cash out and buy it somewhere.
In wow of course that's somewhat different. Already we see a lot of problems in places like battlegrounds but also dungeons with toons decked out in full heirlooms being way more powerful than others at the same level without that luxury. Those are (especially in dungeons, because of the exp bonus heirlooms grant) usually toons where the player obviously has little clue as to how to play the class, giving rise to dps classes pulling entire packs with apparent immunity to the damage the elite critters can do, and totally ignoring the tank and healers (or tanks who have no clue what they're doing, charge in, pull entire rooms, but can't generate enough threat to keep the mobs on them, causing wipes).
Heirlooms therefore are a worse problem in WoW than a cash ah would be in Diablo III, yet hardly anyone dares stand up and say so.
In my guild, we've effectively decided on a policy of no heirlooms in guild runs. If you want to wear them elsewhere, up to you, but when doing guild runs they come off and you wear real gear. Does 2 things: 1) everyone has to really play at their actual level, and 2) everyone levels up at the same rate (as not everyone has access to (the same amount of) heirlooms for their toons (as we all have one or more toons that get levelled exclusively in guild runs).

Jornk said...

Haha, games are already like part-time jobs, now we can finally get paid for them.

Seriously though, Blizz stands to make a TON from this. Putting a fee on real money transactions will only add to the "extras" they have been piling on over the last couple years. Remote features from smartphones, paid server/class/faction changes, and in-game pets/mounts/items were just the tip of the iceberg.

Everyone knows farming is going to take place. Blizz is just taking a piece of that pie.

Tsuds said...

If I wanted to make real life gold ... I'd get a second job ... If I wanted to blow my hard earned real life money on stuf ... I'd go to a shop.

So now I face the possibility of being belted out of the ball park in bg's not because I am not prepared to pay game currency on twink gear (old school) or drape my toon in heirlooms but because I'm not prepared to donate more of my real world money to a fantastical world....