This is going to be a supplementary post to augment the position laid out in the last blog post about this subject. Last post, I detailed how Blizzard's game design D3 was optimized to profit from the Cash Auction House (CAH). Now, those are only the short term effects. By understanding player behavior, and using just a bit of economic knowledge, we can analyze the long term effects of these design choices.
The first of the two major points I'd like to bring up is that Blizzard taking a flat rate from all transactions puts a downward force on the market. Let's say, for example, Blizzard takes only $0.10 from every transaction. Now, let's say the current market price for "Theoretical Item (TI)" is $1.00.Now, the seller is making $0.90 profit off of every transaction that happens at that price point, but what happens when the inevitable undercutting happens? Another seller decides to sell TI for $0.95, making a $0.85 profit. Anyone who is selling for $1.00 can't buy up the lower priced item and re-list it under a higher price, or they'll be selling at a $0.05 loss (they'd be paying $0.95 for the item, but making only $0.90 at a sale), due to the flat rate take from Blizzard. Certainly, you could sell at a five cent lost every once and a while to keep your higher price point, but MMO players have demonstrated in the past that they are willing to sacrifice profit in the name of guaranteeing sales due to the lower price. This means that, as long as someone is willing to make a sale for less, the price will keep dropping. There are lots of factors at play here, and that isn't even the most important one. Another example is that Diablo item's simply aren't soulbound, and thus, aren't "consumed" when a character equips them. Everyone will jump on the chance to sell their old leveling gear. Items are never "lost".
The second point is that this plays exactly into supporting mass transactions (which nets them more money, because again, they only profit on # of transactions rather than value). This self-deflating economy also is extremely appealing to more casual players, who would rather spend $5 than to grind out top-end gear. Diablo 3's economy, as it stands, is an extremely powerful and effective marketing strategy that will draw in tons of new players, and any claims by Blizzard stating that they don't know exactly what they're doing is a blatant lie.
Have there been any studies as to the affect of bots and gold buying on the Diablo 3 cash auction house? I know there's the remote auction house, and sites that offer to sell gold to players, but does that hurt or help the economy and the player base? Will some player making a ton of gold off a bot like (just googling here), but like d3botgold.com sells, will that end up effecting the market if they're auto leveling and making money off bots, instead of investing the time and being more protective of the gold they've made?
ReplyDelete