Tobold's Blog
Friday, May 04, 2012
 
Diablo 3 RMAH fees

Blizzard posted a webpage with all the information about their gold and real money auction house for Diablo 3. And it is very clear that they plan to make serious money with that real money auction house: The transaction fee for equipment is $1, the transaction fee for commodities is 15%. And that is if you want the money to go to your "Battle.net Balance", from which you can only use it to buy other items, or to pay things like a WoW subscription. If you want the money to be transferred to your PayPal account, you will pay another 15%.

Thus selling for example a stack of gold for $10 leaves you with $7 on your PayPal account, and Blizzard with $3 (part of which goes to PayPal, presumably). If you sell a sword for $5, Blizzard gets $1.75 ($1 fix plus 15% of $5) and you get $3.25. Assuming the real money auction house has a lot of activity, Blizzard will quickly make some serious cash with those fees. Some people might end up paying more to Blizzard per month for Diablo 3 than for World of Warcraft.

Think of it as a 30% tax rate on your virtual earnings, if you want to cash them out. Well, before paying *real* taxes on them as well. But that is a different story. Casual AH users are probably better off leaving the money on the Battle.net Balance. But if you fell for one of those "get rich quick" Diablo 3 guides, the only rich people will be Blizzard and the guy who sold you the guide.

Comments:
You can't purchase your WoW subscription with your Battle.net balance, can you? It's not included in the list of things you can buy with your balance
 
Oh, good point, I missed that one. Strange that you can buy stuff like a WoW server tranfer but not a subscription.
 
Tobold, it's your favorite snake oil salesman again. I'd like to bring up a point about "scam gold guides."

If a guide can show you how to make say, $6 per hour, is it fair to charge $5 for the guide? How about $20?

Also, I know there are a lot of scammers out there and a lot of free information, but something that I uniquely bring to my diablo 3 gold secrets guide are services. These services include an IRC, private forum, podcasts, videos, speculation guides, outside the box analysis, etc.

At some point, isn't there enough value present to charge money?

I dunno what it is about you but I find your analysis fascinating. I think it sums up a common misconception about online information products, which unfortunately is an accurate description for enough of them to become mainstream.

Kind of went on a bit of a rant there, but I am curious if at some point the business model of selling guides/services for video games EVER feels right to you.

Cheers
 
You're talking to somebody who is in the business of providing free content on the internet. Of course I'm biased against people who provide similar content for money. Just ask any married woman how she feels about prostitutes. ;)
 
I am most interested in seeing how this pans out.

Unlike WOW (where I did actually spend substantial amounts of money on both getting gold and buying max level characters) I can't imagine myself paying for anything for Diablo 3.

Truth to be told I would not pay again for WoW or any similar theme park style game either ...
 
I can't imagine myself paying for anything for Diablo 3.

I'm pretty certain that just about everybody can finish Diablo 3 on normal difficulty without ever visiting the auction house, not even the gold one. On normal, buying gear from the AH just diminishes the fun of finding loot, and diminishes the fun from what little challenge there is.

That leaves us with the curious situation where we would have to assume that somebody spending substantial amounts of money on the AH is doing so to beat the game at a higher difficulty level. That person would first deliberately make the game harder for himself, and then pay real money to make it easier again.

I find that a very weird concept.
 
When I first saw the fees, I was taken back. I thought it was too high. But in the end, they make the rules. And if there are consumers that enjoy the service and are willing to pay, then I don't see the negative about it. It is what it is.

Will I use it? I don't think I'll ever buy anything, but if I happen to come across a very rare and valued item in my adventures, I don't see the harm in selling it, getting 85% of its real market value into a battle.net account and then using that money to buy a character service like a race or faction change, which are things I don't value at their current sale prices.

Trade in uber knuckles of awesome brawsomeness for a different race for my toon? That's a pretty cool feature.
 
I'm a bit happy about the fees. It deters people from using the RMT auction house.

As some one who prefers to have as little real world influence in my games as possible, this is great.

In fact, I'd vote to increase the fees if they asked me.
 
I was initially skeptical about the RMH. But honestly having played D2 a lot over the years I am well aware that people are already willing to pay cash to have what they want in the game. So Blizzard doing this just helps cut out the illegal item selling that was already going to happen by having a more convenient and legal method available.

In D2 the drop rates for some things actually made it nearly impossible to ever build your perfect character without trading. And unless you were absurdly wealthy item wise your characters didn't get your ideal gear setup until long after you had beaten the game on all difficulties.

So far as the transfer fees go I can see an easy solution, so long as there isn't some silly low gold cap. Just do all your trading with gold, then sell your gold on the RMH when you want to cash out. You'll still be stuck with all the 15% cuts along the way, but you'll get out of all the $1 fees along the way. If they disallow selling gold on the RMH just use the gold to buy whatever the best value of consumables is or some high dollar item and sell that for $.
 
The most significant thing about the fee structure is that if you fail to sell your item, you pay nothing. There is no non-refundable deposit, as we are accustomed to from WoW's auction house. So, there's really no reason not to try to sell stuff. I'm sure this will lead to a healthy auction house, and untold lakes of money for Blizzard to swim in.

I seriously think that the RMAH will be the most significant development in the games industry this decade.
 
On the other hand the auction house fees feel quite large, but in the grand scheme of things, ease of use of the auction house should make it ok. If we consider the alternative of how it's like in D2, you either try to reach a trading partner on a forum which is not visited by the whole player base on your region, or sit in a game labeled "N XXXX, O 5 SoJ, either way it's a huge cost in efficiency.

Now I can simply slap my wares on AH and let it do part of the work. Nothing wrong with charging something for that.

As is there nothing wrong with charging for guides on how to play either. I think the main gripe about them generally, or at least for me, is that I personally could easily find comparable, and even better, information by searching a bit. But as the world is, less knowledgeable people will always end up paying more for less, it's inevitable. It doesn't matter if it's guide on playing a game, or buying a cheap kitchen appliance once a year instead of a reliable one for higher price.

I basically feel bad that other people are worse at doing things than I am.
 
Small mathematical nit: 15% twice does not leave 70%. It's $10 *(100-85/100) * (100-85/100) = $7.225

The way I see it 70% (or 72%) of what someone would pay for my surplus items is a vast improvement over 0% like it is in most other games.

Regarding Marcko's gold guide I'm actually participating and very much enjoying the community. Is it unethical or prostitution? I don't think so.

Or maybe the 70s punks were right all along with the We Are All Prostitutes slogan.
 
Oh Tobold you're so humble! Suggesting that the content on this site (commentary on the progress of gaming companies and whether you enjoy their creations or not) is even comparable to the stuff I provide is quite laughable.

Warn me next time as I now have tea up my nose.
 
Do I write Diablo 3 gold-making tips? Certainly not.

Would I be able in a day to compile from freely available information on the internet to write a gold guide as good as yours? Certainly yes.

Remember, you gave me access to your stuff. I know how much your product stinks.
 
"You're talking to somebody who is in the business of providing free content on the internet. Of course I'm biased against people who provide similar content for money. Just ask any married woman how she feels about prostitutes. ;)"

WOW!!!

Tobold, do you really consider a wife's role in marriage equivalent to free prostitution?

Because I don't know if that's what you meant, but that's what you've said by drawing an analogy between your Blog and Markco's gold guides, and wives & prositutes.
 
Well and my crazy idea about the RMAH is that there will mostly be traded gold, although it is more inefficient financially, just because a stable gold/$ ratio will produce a more efficient market at the end.
 
@Cap'n'John - this is an old joke when economist is asked why wives are against prostitution - because they disrupt the market and devalue the product they are offering. I doubt that this is Tobold's personal opinion on marriage.
 
Jokes don't travel well on the internet.
 
Tobold, I did figure you were joking by the ;) after your comment, but I was not aware you were referencing an old "Economist" joke. Then again my Major was in Accounting not Economics, so while I've heard a lot of Accounting jokes I've not heard many Economics-related ones. Obviously this is an old joke because of the archaic view expressed in it, being that a woman adds nothing to a marriage that a man cannot get from a prostitute.
 
Getting back on topic I'm not averse to the RMAH fees - that's not why I won't be buying D3 - or even Blizzard's seemingly high cut.

What I don't like is that, as others have pointed out, you cannot use the proceeds from your AH sales to pay for your WoW sub, or for your BNet sub when they start charging for BNet.
 
Obviously this is an old joke because of the archaic view expressed in it, being that a woman adds nothing to a marriage that a man cannot get from a prostitute.

I don't think the joke is about what a woman adds to a marriage, nor is it even meant to be anti-woman. If anything it is anti-men, because an economist alwasy considers what "utility" the buyer is looking for. The joke reduces men to stupid creatures controlled by their dick, looking only for a single thing from women.

Nevertheless the analogy between somebody providing a free service out of love and somebody providing he same service for cash is there. There is a lot of free advice on the internet which easily beats many guides you'd need to buy. And Markco, while an excellent salesman, really sucks at economics. I'd take a post from Gevlon over a complete guide from Markco any day if I needed advice on how to make money in a game. Gevlon is a jerk, but he *is* good at economics.

What I don't like is that, as others have pointed out, you cannot use the proceeds from your AH sales to pay for your WoW sub, or for your BNet sub when they start charging for BNet.

I don't like that either, because a subscription would have been the most likely thing I would have spent the money for. I rarely used server transfers or similar services that you can buy.

If you keep your money in the Battle.net balance, it basically becomes just another virtual currency like gold. It would be mostly useful for just buying stuff in the RMAH again. All of it ultimately ends up in Blizzard's pocket.
 
Is there any technical information out there regarding how servers are going to be handled versus how the RMAH is to be implemented across them?

The reason I ask this, is because while playing the beta I noticed that several tiers of gear are material dependant, where even legendary items/mats are involved.

What's to prevent groups from controlling the D3 AH the way they do in WoW, or from gaming the system based on drop rates once WoWHead clone sites get enough info to effectively determine baseline buy/sell pricing?
 
Chris, there is a limit of ten auctions per account on both gold and real money auction houses. Combine that with the auction houses servicing the whole region and not a server of couple of thousand people, and you see how the group effort trying to take over market would need to be immense.
 
"That person would first deliberately make the game harder for himself, and then pay real money to make it easier again."

As the old Goblin says, "time is money, friend", then isn't grinding for better gear or gold to buy better gear to do harder content exactly the same thing?

That sentence describes the essence of RPG's, including D&D: We play (spend time or money) to increase levels and get better gear to make moving on to harder content easier.

It's a tried and true recipe, certainly not a "weird concept".
 
I would say that it makes a huge difference whether you gather gear to get to the next level of new content, or whether the higher difficulty is from playing the same game through at hard setting.
 
I've said this before, but maybe now that people have gotten past the "I'm going to pay my rent by paying Diablo 3" phase they will actually listen.

I imagine this might just make some money for Blizzard, but a fortune? No.

What they are doing is getting ahead of the gold sellers by negating their function, which is to produce items or gold for people who would rather pay cash than get it themselves.

They do this by removing the need for a middleman to convert cash into gold by making cash=gold.

They do this by harnessing the free labor of normal players to flood the market with goods at prices that the gold farmers cannot match, especially when they are losing 30% of their gross just to get the cash into a bank account.

That's the point of this. And it might also make them quite a bit of cash, but I really doubt it (by Blizzard standards, anyway). What will happen is that common gear will end up on the gold AH, and only those items rare enough to justify a cash transaction will be on the cash AH. However, this will follow the same arc as BOE epics in WoW; sky high at first, then plummeting as demand slakes. Since normal players will be happy to get paid much less than necessary to turn a profit as a business, the price will drop to the point where there is nothing you can profitably farm on a commercial basis.

Viewed as a direct attack on gold farmers the move makes a ton of sense. It has the beneficial side effect of making cash for Blizz. But I suspect the primary purpose is as an experiment to see how it effects gold farmers.
 
From the point of view of The History of Economic Thought, this is a fascinating development that mirrors the emergence of the State and its role in taxing economic coordination.

Basically, Blizzard is leveraging the concept of taxing gains from exchange in much the same way that early governments took a portion of each exchange in the city's market. The government provided the walls and rules, and people voluntarily submitted because they were better off, even after the tax, compared to living in autarky. Here, Blizzard is providing servers and rules and the same set of incentives.

The genius of this scheme is that nowhere do they force you to participate in the taxed exchange, but rely on comparative advantage to do the work for them.

Hmmm, I might well have to blog about this.
 
"That leaves us with the curious situation where we would have to assume that somebody spending substantial amounts of money on the AH is doing so to beat the game at a higher difficulty level. That person would first deliberately make the game harder for himself, and then pay real money to make it easier again.

I find that a very weird concept."


Cheevos, Tobes. Cheevos. The hypothetical guy referenced is paying to enlarge his e-peen.
 
I don't see the problem in Blizzard earning 30% on a service they offer you to use, when you have a free alternative.

I have heard of some fruit company where they sell apps on a store where they also take 30% of the sellers money. On top of that they also charge atleast 100$ just to be able to sell in their store.

I think that it is super cool that you are able to sell / buy stuff in an eligible way. Now it is up to you to decide whether to user it.
 
Thanks for the glowing endorsement Tobold. We are very proud of our work at Diablo 3 Gold Secrets!
 
Where do you stand on premium downloadable content. Is it cheating when it bundles character enchancements with additional gameplay?

For 25% of the price of the full game you get 10% more gameplay and a handful of BiS items. Is the only non-cheat solution to wait until after the main story has concluded before you engage in the extra content?
 
Markco, basically you sold my email address and my email account got spammed to death with junk mail from dozens of internet marketers.

The "secrets" you promised to email never materialised.

You sir are a scammer.
 
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