Diablo III Real-Money Auction House: First Thoughts

DiabloYesterday the Diablo III Real-Money Auction House opened for business. I'll call it the RMAH and it's interesting that the game company also calls it that. "Real money auction house." The company, Blizzard Entertainment, wants the players to think that the gold coins of the game are not real money while the dollar is real money. We'll see how long that lasts.The terms of service for the game actually put "real money" in quotes at one point.

After the fold, a little of my personal experience and some thoughts on what it means.

I spent about $10 total on four items, at level 20, and it dramatically increased the power of my character. I was blowing down purples. How much does Blizzard make from that? They charge a 15% listing fee to the seller, or a minimum of $1. Since I paid with a credit card - including a couple of transactions at $1.50 - credit card companies are getting a hefty chunk, percentage-wise. I'm sure Blizzard is doing fine on the whole.

No auctions were going below $1, which makes sense - the fee is $1, why would you sell for less? Also it seemed as though lots and lots of items were being offered on both markets, gold and dollar. On the internet, gold goes for about $25 for 3m. The legendary Stolen Ring seemed to go for $10 or $20 on the RMAH and 500,000g - 750,000g on the gold AH. The exchange rate with 3rd party online vendors thus seems better than that offered in the game. There is actually a window for trading gold for dollars in the game AH but I found no offers there.

As far as play experience goes, it was super cool to be able to whip out my wallet, being better off than the average gamer, and buy with impunity the gear needed to make me an ubah badass. Slave away, you pimply nerds! I bury you with VISA! But of course there was no immersion possible and I am sure in a day or two, the hedonic treadmill being what it is, I will wither get bored with my powers and quit the game or step up to the next level of difficulty and - buy my way forward again. The game works only as long as it is fun to mow down the creeps. Which is pretty fun, but I sense it will get boring once I've looked at all the maps.

That's for me. Diablo II showed that there are gazillions of players not like me, who never get bored of mashing their way through monsters sans story, lore, or immersion in pursuit of ever better gear. While the jury is still out, I wouldn't be surprised to see Blizzard make all kinds of money from this mode of gameplay.

It's not good for the industry, though. Blizzard can use the term real money with or without scare quotes, but nobody is being fooled: The RMAH erases any line between the gold piece and the dollar, as far as regulation goes. When I buy with dollars, a popup says "Sales tax may be charged on this purchase." Buy the same thing with gold pieces, no popup. Why not? What's the difference? I agree and indeed am a strong proponent that there is a massive difference between gold pieces and dollars and that we should keep these two things as far apart as possible, for the health of both. The RMAH wipes these differences away. If the state were to extend its regulatory scheme from dollars to gold pieces, what could Blizzard say in opposition?



Comments on Diablo III Real-Money Auction House: First Thoughts:

Rits says:

quick question, are the purple items bound on equip? is there any further upgrade? if there is, can you still sell it afterwards?

Posted Jun 14, 2012 4:27:24 AM | link

Lisa Galarneau says:

I like it! I might have to celebrate with a celebratory post!

Posted Jun 14, 2012 9:43:26 AM | link

Lisa Galarneau says:

Oops, wrong thread.

Posted Jun 14, 2012 9:46:46 AM | link

Edward Castronova says:

So far as I can tell (lvl 24 now) nothing appears soulbound. The highest quality tier is legendary and my legendary gear can be resold.

Posted Jun 14, 2012 11:33:21 AM | link

greglas says:

Thanks, Lisa. (Continuing the thread hijack.)

Ted -- yes, I agree. See this at 43:30:

Really hard to keep the lines separate -- I'm sure they're doing their best de jure, but de facto, it's clear we're looking at a currency.

Posted Jun 14, 2012 5:11:23 PM | link

Rits says:

Hmm, does it mean that the system is encouraging players to purchase gears from AH so that they can handle inferno, and then farm better ones, keeping the best for themselves while selling off the rest?

And why would they not make gears soul bound? It would definitely increase values if they do. At this rate, if the amount of uber gears flood into the market more than growth of population, eventually the values would drop to dirt-cheap. Not very wise of Blizzard, think so?

Posted Jun 14, 2012 5:17:29 PM | link

alukacs says:

Rits - I am not exactly sure why gear is not bound to the character. However, there is no RMAH in hardcore mode, where players lose their gear all the time due to death (in hardcore, you have one life - and everything you have on your character or in the bag is lost). People complain enough that they died because of lag - just think what would happen if you die with a shiny $10 sword. It would just create a customer service nightmare.

Maybe it is a similar thought process on softcore with RMAH - not wanting to deal with people complain about/request unbinds for items that they gave to the wrong character/got bored with the character etc.

Posted Jun 15, 2012 12:04:37 AM | link

Rits says:

Alukacs - ah that makes more sense now. I also just did some research (which I should have done earlier) and learned about the crafting system. That completes the whole picture; buying gears just to smelt and craft. I imagine that would maintain the high demand.

Posted Jun 15, 2012 3:07:41 AM | link

Edward Castronova says:

In systems without soulbinding, gear floats down while money floats up. The money accumulates at the top among elite players. Typically they either destroy the money when they quit them game or, before quitting, sell their gold. Blizzard can make money on the gold sales if the transaction happens in-house. But I have not seen any gold sales on the AH, so I do not know why that market is not running.

Setting gold sales aside, Blizzard makes money with every sale. So it makes sense for their system to encourage as much selling as possible. Not soulbinding encourages lots of selling.

Posted Jun 15, 2012 9:10:47 AM | link

Rits says:

Right, they're "taxing" on a flat price, so transaction numbers is all they want while the price wouldn't matter. In fact, they want surplus in gear supplies to keep the price low, so to attract majority causal playesr to purchase.

Posted Jun 15, 2012 4:01:45 PM | link

Shander says:

Oh dear.. ; ) if you needed "help" getting gear in any but the hardest "inferno" level you might need to brush up on your spell optimization.. .. especially now 3 weeks in where very good items are "vendor trash" and can easily be purchased with the gold that drops at monsters feet when they explode

If the RMAH had come out the first week, those with less time would have avoided tons of time pushing refresh looking for steals on the AH to price higher or to farm... as decently adequate equipment for the dificulty of the even the moderate levels of difficulty sold at a premium at first.

But, I guess you paid even though there was very adequate and powerful gear on the gold AH and if you did so did others. (caching for Blizzard and a few farming players/bottors/expoiters or whatever.

At the inferno level(4rth level of difficulty) your comments are still on mark, this week at least. With the numbers of people farming and trying to cash in, very good equipment able to do the first parts of the hardest level.

Some people seem to have a touch at selling things for hundreds of dollars. The last number of pages of this thread give some annecdotes and screenshot of paypal accounts etc.


Posted Jun 15, 2012 11:39:11 PM | link

Shander says:

Had you seen this article on Korea banning sales of virtual items?


This sort of approach might be the best all around solution for the courts to avoid getting called in to regulating games and arbitrating disputes.... not only between players but also on the enforcablity of the Eula's etc as they relate to games (and avoid precendence in a game shape other intellectual property arguments etc)

If the government just flat made selling virtual items illegal .... the sticky tort questions would go away , wouldn't they? It wouldn't be teh Eula's prohibition of sale that avoided responsiblity to abide by banking laws and consumer protections....yada yada.. too complicated hash that through in paragraph.

BUT... I wonder if the Korean rule against player to player sales of assets for real money would be extended to game companies sale of goods for cash too ? Its another step along a path.. not exactly the same situation, yet. given their earlier casting of random rewards for cash as gambling the idea begins to mesh.


One last thing... reading between the lines... it seems apparant to me that the men and women in government in korea making these laws actually have played the games. Doesn't it almost sound like they're saying , like purests, that the Rmt practice ruins the fun of the games rather than just calling games trouble across the board?

Posted Jun 15, 2012 11:49:31 PM | link

Rits says:

Shander - "In a statement, the ministry says item trades contribute to many problems in society, including teenage crime, and felt that a solution was required.

The ministry is planning to give active guidelines to provincial administrations and have the police department actively enforce the new law. "

Passing law to ban the companies from offering RMT doesn't solve the problem (or indirectly causing more problems) -until- "police department actively enforce the new law", which is still far from happening. Jack M. Balkin in "Virtual Liberty: Freedom to Design and Freedom to Play in Virtual Worlds" (2004) called for the court's awareness since 8 years ago, he's not the only one, and so far no change in reality. The underground trading continues to exist. Bots and farmers flourish in every game. There really need something more vigorous to actually give a reason for the governments to care. I agree that Blizzard offering legit RMT (or RMAH) might take away the fun, and so applies to -most- games (wouldn't say all), but if D3's case really pushes the court to start thinking about law enforcement and regulation, then perhaps this is just a course of nature, a good sign for a better future.

Posted Jun 16, 2012 12:58:25 PM | link

Jenn says:

I have 3 questions for the very smart people here:
1) I am sure people are making serious cash through the RMAH. I would assume that this would be taxable, so will Blizzard provide a way to keep track of how much people have gained?

2) Is battle.net really secure enough to protect people? If I were interested in gold farming, I would probably turn my sights on hacking into the mechanics of RMAH rather than sending out level 1's to farm hides.

3) does this blur the line between virtual property and real property in U.S. courts. I am OK with a company (Sony, Blizzard, others) selling gold or items in their store, because that is a clear purchase. It gets a little weird for me when player A and player B are conducting real money transactions using the game as a conduit.

And one more...
4) Wouldn't this be a more effective method of money laundering than the traditional gold farming?

Posted Jun 21, 2012 6:41:22 PM | link

Krista-Lee says:

Quick observation from Taiwan - while teaching English at a large Internet company I asked my students about the RMAH in this game. They mostly thought it was not such a big deal because you could always buy items and currency for real money - even accounting for the fact that it was often of questionable legality.

(They brought up Diablo 3 so I figure that makes it fair game for a class time discussion, right?)

Posted Jun 26, 2012 9:58:38 PM | link

MicroPolo says:

Do you think the real money auction house demeans the core concepts of Diablo 1 and 2? Something never really sat right with me in this regard. How am I to feel good about spending days working towards an item when my friend just purchased it for a few bucks. Its kind of insulting to my play time.

Posted Jul 13, 2012 2:40:52 PM | link