The Guardian Cub’s release in November of 2011 was met with mixed reception – a pet that you could buy on the Blizzard Store with real world currency and sell to other players in-game for gold provided a unique opportunity for players. Forums and comment threads were ablaze: was it the gateway to real-money trade in WoW? Could it combat security concerns by decreasing black market gold buying? Would it change the pet store forever?
The answer to these questions seems to be “probably not”.
The experiment of the Guardian Cub was straightforward – Blizzard released the pet to test the water. Would players actually buy the pet in order to sell it for gold in game? Would this, in turn, decrease black market activity for gold buying and, by extension, security issues and botting?
While players don’t have access to the numbers, there doesn’t seem to be any fewer botters. If anything, the increased popularity of the game brought on by the expansion has heralded new waves of bots: people flying in Pandaria before level 90 while gathering, paladins farming Halls of Lightning, and persistent PvP bots. As for black market gold trade and security threats, there are plenty of spammers in trade chat still phishing for people to buy TCG mounts outside of the game and shady websites where you can buy gold.
In related news, the “best gamer in the world”, Athene, launched his project to raise 400 billion gold for Save the Children. By selling the raised gold and items and donating it to the charity, he hopes to help address the hunger crisis in West Africa, where there are more than 18 million needy people. In today’s prices, 400 billion gold would sell for $10,000, so we will see how much he raises. He also plans to visit West Africa at the end of the August and livestream some of the benefits of the charity. Already, his project Operation Sharecraft raised $1 million for Save the Children, culminating at Dreamhack earlier this summer, and Razer has been very supportive as a sponsor in his efforts.
Diablo 3‘s auction house has been having its ups and downs (quite literally), delaying the release quite a few weeks from the game’s launch 28 days ago. If in-game messages and other sources are to be believed, the real-money auction house should be available in NA, EU, and possibly other regions beginning today, June 12. Due to possible issues, the commodities auction house may not be usable at its launch, meaning that only equipment will be tradable. This unfortunately means that gold may not be tradable at first – and I believe it will be the best thing to trade.
Blizzard also recently updated its Terms of Service to include that you are required to have an authenticator in order to trade on the RMAH. The huge amount of new, unprotected Battle.net accounts have been commonly compromised with the huge popularity of the game and demand for gold and items, especially with the knowledge that you can cash out within the Terms of Service. Additionally, if your account ever gets compromised, you will have precisely one chance to secure your account with an authenticator – another compromise and you will be permanently barred from using the real-money auction house. If you don’t yet have an authenticator, you can get a free app for your iOS or Android device, or buy a stand-alone authenticator for $6.50 on the Blizzard Store in the US.
If you want to cash out to PayPal and not just to your Battle.net Balance, you may have to sign up for Battle.net SMS alerts in some regions – including the EU.
One of the basic ideas of economics that gets thrown around a lot by laymen is “supply and demand“. They are really two separateideas that can be used in conjunction with each other to predict market behavior. Let’s delve into some of these economic ideas to approach the auction house and its fees.
To make a basic graph of what “supply and demand” looks like, we need to understand how suppliers and consumers react to pricing. Intuitively, if something (lets say a super-awesome sword) can be sold for a high price, people are going to do what they need to in order to get it so that they can garner a large sum of money. Conversely, if the sword is offered at a lower price, less people are going to be willing to sell it. At higher prices, more swords will be offered for sale, and at lower prices, there will be less swords. As for consumers, they will buy more swords the lower the price is, as they will be able to more easily afford them at lower prices and be more willing to part with less of their hard-earned cash. At higher prices, people will only buy swords if they really want them. Thus, at higher prices, less swords will be bought, and at lower prices, more swords will be bought. If we asked sword-producers how much they would sell a particular sword for at a variety of prices and graphed it, then asked sword-consumers how many swords they would buy at a variety of prices, we would get a graph like this:
The important idea is that the supply curve has a positive slope, whereas the demand curse has a negative slope.
Last time, we looked at how the fees for the different auction houses will affect trading in Diablo 3. Today, I’d like to look at it from Blizzard’s perspective and understand how the company selected the fee structure, what it will be paying attention to, and how it might treat the auction house in the long-term.
If there’s one thing Blizzard learned from Diablo II, it’s that there is a huge demand for functional in-game economies. Where Blizzard did not provide, players and companies emerged and established methods for trading and valuation. Both Diablo II and World of Warcraft have shown that there is a huge demand to use real money to purchase things, like characters, items, and gold. Blizzard took a staunch “no-RMT” policy for World of Warcraft, as expressed in the game’s Terms of Service, and does not hold back in banning accounts used to sell items or gold. If you haven’t seen it yet, it really shines a light on how serious Blizzard is about preventing RMT in WoW:
Blizzard has acknowledged that WoW gold purchased from third parties is “most commonly” obtained through compromised accounts. Blizzard has also acknowledged that third-party sites in Diablo II were often the source of credit card fraud and often did not provide a high level of service. It also promoted spam, bots, and hacking. It makes sense for the company to offer this service to players directly and built into the client: it provides a better experience and Blizzard can skim a bit of cash as well.