Tobold's Blog
Friday, May 18, 2012
The power of free trade

In the real world, not everybody is for free trade. Many people believe that a country, let's say the USA, would be better off without trade, with protectionism, with erecting trade barriers against other countries like China. But if you are a gamer, this week brought a very powerful demonstration of the power of free trade in the form of Diablo III.

You can play Diablo III without trade, without ever setting a foot in the auction house. You will find some gear you can use, you can buy some gear from NPC vendors, or you can craft gear. But if you play Diablo III with trade, with the auction house, you will quickly see how much better that is for the power of your character. Today I browsed the auction house, and found plenty of "gold" items for my character listed for under 500 gold. Crafting a less good "blue" item of the same level costs over 600 gold crafting fee plus the cost of the materials. Buying a blue item from the NPC vendor costs over 1,500 gold. Through trade it is relatively easy to get yourself fully equipped with gold items, the kind of which only 1 or 2 drop from each major boss, and even that only on the first kill. Trade has quickly become the cheapest way to equip your character, and prices are still falling further.

Of course there is a downside to that: In the real world everybody getting everything for less money is a good thing. In a virtual game world not necessarily so. On the one side the challenges are designed assuming you are wearing the kind of gear you could find or craft on your own, so with trade Diablo III quickly becomes far too easy. And with trade being so powerful, the other ways to get gear end up being not very attractive. Learning crafting recipes costs thousands of gold, each craft costs hundreds of golds in fee plus the materials (although the materials can be had for very cheap by trade): Who is going to craft when he can get better items for less in the AH?

My main problem however is that the whole Diablo series always has been about collecting gear from random drops. If I trade you whatever random item I found and don't need against the item I need that you found but don't need, we are both better off. Economics 101. But that ends up taking the random out of the collecting of gear. If I buy gear for pocket change in the AH which is already excellent, I'll never find a gear upgrade for myself in the game. And then half of the fun of playing Diablo is gone. If on the other side I resist buying gear on the AH, I constantly feel as if I'm handicapping myself. It is a no win situation.

I wouldn't be surprised if Diablo III will do considerably less well than previous Diablo games. Previous games did have trade, but in a much more limited way. The highly efficient and huge regional market in gear brings the full power of trade to bear on Diablo III, and to me it feels as if the game isn't designed to withstand that sort of power.

It is really impossible to do "less well" than previous titles. There is no subscription fee for D3, so box sales are it*. And I am pretty sure they already eclipsed their prior sales records.

*Yes, RMAH is there too. But it is not a primary revenue stream.
If by less well, you mean fewer person-hours played? Perhaps. Although there are some/a lot of people playing Diablo from the annual pass who might not have been without AP;

Amazon said D3 passed their record for most preorded game (previous holders were WoW, SC2, COD) So I doubt that it will ever be considered a failure.

/TinFoilHat I think D3 will be a big hit, but what if AB doesn't care if the RMAH costs them a couple of hundred thousand extra box sales? What if it is just a trial run for a WoW or Titan RMAH? As more and more games go F2P, as D3 has RMAH, the shrill objections are becoming slightly fainter. Getting real world market feedback and testing of RMAH would be invaluable to Blizzard and they are the only company to be able to test a RMAH with a few million customers.

Getting RL$ correct for Titan is very important for Blizzard. Probably more important than D3. And certainly more important to Blizzard executives than how some fans feel about their D3 swords.

/tinfoilhatoff - It's hard to believe a company not smart enough to get login servers to work is capable of too Machiavellian of plans.
I think a great many people are crafting simply because it's a playstyle.

They may however feel disappointed at how worthless the AH condsiders the fruits of their hard work but it doesn't stop them crafting.

Later on the AH will get very top heavy with a few items very expensive and everything else worthless.
Once you reach Hell, it becomes close to impossible to survive without somewhat optimized gear, with elites often killing you in less then second in whatever you got from just leveling normally.
@Tobold - if inferno and end hell are trivialised because of gear trade they will just add a patch with Ragnarok/Gendema or whatever else difficulty.
Back in Diablo1/2/LoD there was always a LOT of trading going on. The difference is that back then gold was not usable as a currency which lead to massive amounts of duped charms and unique rings used as pseudo currency.

Trading now with the gold AH is so much more convenient. Imagine finding a trade partner through chat/external forum, set up a game to meet with your characters... no chance all these 500 Gold yellow items would be traded.
Tobold, I realised the same thing as you yesterday after a long play session with a nice dude I met (we played through Act2 and started Act3, sharing good drops between us as barb/wiz combo.. very nice and fun).

Now for my input to your findings; I have a 27 Barbarian in decent gear (I thought). I salvaged all my blue gear for crafting my own "good items" and "saved" some items to sell on AH for cheap 500/1500G so others may use it.. All the while I put my gold into upgrading the Smith-dude and Jeweler-fellow. Then I got onto the AH to sell my stuff and lo and behold...

Huge amounts of usable gear(much of it overpriced).

Looking at (in my view) decent buy-out prices (say at the price of crafting an item) I found some gear (not lots) at that BO price range. I then realised it very much seems better to just sell your good stuff on AH, your less good stuff to a Merchant and do regular AH trips for upgrades... leave the upgradable NPC Smith/crafter and Jeweler to much, much, much later.

Whats the problem here so far? Stabs suggest people will craft.. for useless items? As you have to be connected any way the AH is just 2 clicks away. So I think crafting is not attractive enough to a player compared to the AH. Simply as single player game does not exist; you have to be online anways, unless your a hard-ass principal-bearing person who likes playing hardcore by not trading AH, but my feeling says that kinda players are a minority.

I think this crafting issue is due to:
1) the crafted items are less powerful compared to the AH items due to their level requirement when you can craft them versus AH items you can get for that same level in the AH.

2) crafted items get random stats, while the huge AH offering allows you to be quite selective (e.g. sort on item with Int and Vit), while achieving those two stats on a crafted item may take a large amount of resources due to the amount of crafting tries.

3) upgrading the crafter/jeweler is too costly when playing through the game with your first character and buying of AH is the way to go for upgrades (you can still salvage the bad blues for later).

4) Combined with your (and I share your view) continuing price drop on AH (my god some silly prices there) for twink gear will drop/average out to affordable or similar a factor 10 or 20 of what you can get from a Merchant.

5) Why train production skills (training your crafter analogy) for T2 items (rare yellow item analogy) when you can get them for cheap in Jita (AH analogy) and save your ISK for later????

I see the need for Blizz to fix the crafter system to keep that part of the game interesting enough for the players. Because at the moment I feel it is a gold sink and not giving me any satisfaction. The gear I get is outclassed and too costly. I wasted close to 200K gold on nothing useful. Which if saved I could have spent each few levels on gear upgrades from Jita..euhm AH, just fine (note this is from the view of a first playthrough on my first char now at level 27, but I have the feeling my observations hold valid for all level ranges).

/rant off.

p.s. Look me up ingame as Apaosa#???? I do enjoy a good co-op.
I'm limiting myself to game-drops and vendor gear only at the moment. I don't buy gear because I don't feel as though I need it, but I do sell my rares and crafting materials via the AH. It gives me the freedom to buy the vendor gear that I would otherwise ignore since I'd be too worried about running out of gold.
You can't get GREAT gear on the AH for cheap. You can buy OK gear. OK gear is OK for normal, probably nightmare and maybe hell. Inferno is designed to demand great gear so you can't just grab anything that has some of your basic stat.

Good items will have price, finding them (or equivalents to trade) will be a way of playing and crafting will work too for creating such items.
@Gevlon: Depends on how you define Great. If I at level 27 have a raer sword with 32 DPS with some decent stats that dropped from a boss at level 27 in Act2. I should be able to assume it is good; it's fricking yellow ain't it? When I go to AH and type 1H weapon (barb) with Bo limit of 4000Gold with stats STR & VIT you will find some comparable GREAT items.. my Damage shot up from 170 orso to well over 220 by buying 2 weapons for total sum of 8000Gold for that level.. That is a 30%damage increase!! Tell me that ain't great for a casual player working through the game for the first time using the game owns features... And secondly tell me I can get this same dps from crafted gear for that amount of Gold and that damage and I eat my digital copy of D3.
Thus far I have simply ignored the existence of the auction house...I know it's there, but I haven't spent a single gold piece there. Thus far I have had no need to, I've done fine with whatever has dropped for me, my first character is pretty well equipped and I have a stash full of hand-me-downs that will make leveling alts easy. It might be slightly easier and I might have more gold if I bothered to use the AH but it would be a miniscule amount of the former and I have not even come close to running out of the latter.

This may change in the higher difficulty levels sure, but I like the feeling of finding/making something on my own.

I see it as no different from WoW...sure, I could twink out my alt, but I don't need to, I'll do fine with what I get from quests/drops. At this point left-clicking most mobs with my monk leaves huge swathes dead in a single combo.

While D3 will (adjusted for inflation) probably make a great deal more than 1 or 2, I don't feel like it will have the staying power that 2 had, mainly because of the lack of a "build" in 3. I personally don't mind it, I am having a lot more fun getting to change things up every few minutes, but in the long run it may mean the game quiets down much more quickly than 2 unless they expand the content.
@Gevlon: forgot to mention.. 8000gold in my view is cheap! So GREAT and cheap does exist on gAH at the moment
You can't get GREAT gear on the AH for cheap. You can buy OK gear. OK gear is OK for normal, probably nightmare and maybe hell. Inferno is designed to demand great gear so you can't just grab anything that has some of your basic stat.

What percentage of the player base do you think is really worried about what kind of gear they will need for their 4th play-through of Diablo III at Inferno? I'd say about the same percentage as WoW-players worrying about having the BiS gear, which would be in the single digits percent.
I guess Blizzard balanced the later game assuming that you traded gear. If they also made some of that gear *extremely* rare, this can work.
I have not used the AH yet (Level 40 Demon Hunter in Act 2 Nightmare) and feel glad for it. I have always felt that the AH would erode the fun of the game, since finding good gear is what the game is all about. I was struggling at the start of nightmare but kept plugging forward, got some lucky drops, unlocked a couple of useful runes and am having a much easier time.

The feeling when you find a really good upgrade is great. I can't personally understand why people voluntarily cheat themselves of that feeling by hitting the AH for upgrades while leveling. I can understand it at the farming stage of the game, but not while leveling.
@Siaer: I can't personally understand why people voluntarily cheat themselves of that feeling by hitting the AH for upgrades while leveling

1. Would you like to understand?
2. Define cheating
3. Do you solo the game or run co-op via open games? if you co-op do you accept drops that other players had and give/trade to you?
@Tobold: My main problem however is that the whole Diablo series always has been about collecting gear from random drops.

I would contend that statement quite heavily. I don't know about you, but the Diablo series in of itself is a solid dungeon crawler with fluid gameplay mechanics, and it doesn't rely on equipment carrots for early/midgame.

In the endgame, D2 was just as much about the economy and trading your way to better gear as it was finding random drops (which you would sell and trade for better gear).

@Tobold: "If on the other side I resist buying gear on the AH, I constantly feel as if I'm handicapping myself."

Only if you think that it's a handicap worth caring about (which it isn't in normal mode or nightmare mode).

It's like wearing sandals to play basketball against a bunch of 5-year olds. Sure, you're technically handicapping yourself by wearing footwear hard to run in, but the handicap is so little compared to the ease of the task that it doesn't matter.
It appears a Diablo history lesson is needed.

In Diablo 2, Rares (yellows) were never expensive. They were always cheap. You could walk to the gambler with a bunch of gold collected on your main and get tons of yellows.

That is, pre level 60.

The game has always...and I emphasize...Always revolved around Uniques, not rares save for a few slots, and only then because the uniques for those slots were lacking.

Crafting is simply the version of gambling in this game, however it has the ability to actually be relevant at higher levels. Also, remember, you only have to level your blacksmithing/jewelcrafting once for your whole account. It's account wide.

The floor is falling out from under the rare market because of the following factors only:

1. Rares can be re-traded.
2. Rares are pretty much the new blues, legendaries the new rares. Check legendary prices, but even those will drop for these same reasons.
3. The game is new and the 1-60 range is buying all the gear. Once the population ages past that, things will even out.

Also, to the comment 'Why would I play through again'... More history for you. The game is far from the same on Nightmare. The only same thing is the story. Every mob, elite, boss, area, pretty much 100% different. What was a 'cute' ability of a tree mob in the first act becomes a vicious deadly ability in nightmare. I'd argue 'most' diablo players play for the constant challenge that nighmare/hell/inferno give. Any of us original D2 players could have told you the only challenge on normal would be bosses. (Thankfully, that's not the case, I've already ran into mob packs that took some thinking to get through and around)
"In the real world everybody getting everything for less money is a good thing."

If you believe that is an absolute truth, you might want to step back a little and take in the big picture.

Or, ask yourself why you might be able to get something for less money and see if the answer is always one that would be considered good by anyone asking it.

Sorry to nitpick, but I find your original position to be short-sighted, with any argument by analogy also failing along that same line.
"The game is new and the 1-60 range is buying all the gear. Once the population ages past that, things will even out."

Agree, although "things will even out" is a bit simplistic. We are making a lot of market predictions based on the grand opening of the trading floor.

Many players probably haven't even ventured there, yet.

The tweaks to the game allowing easy trade between alts, online play and of course the AH/RMAH have brought playing the game into the "persistent world" realm. I don't think you can predict how this will go from personal histories of previous iterations.

And I'm sure nobody is watching as closely as A-B.
Isn't there a percentage taken from the auction house on all sales? Isn't that actually what free traders object to nations doing?

In any case, the D3 economy is a disaster. They need to close the spigot on yellow items in a rather drastic way. Perhaps 50% or 90% reduction to start.
"In any case, the D3 economy is a disaster. They need to close the spigot on yellow items in a rather drastic way. Perhaps 50% or 90% reduction to start."

Not really. I mean, if you are trying to sell your level 1-10 yellows for 5000 gold, yeah, it is horrible. If you are selling them 500-750, it's moving along well.

You see, there isn't enough data out there to say 'X Stat is King, Y Secondary stat is King, rest junk.' You have quite a lot of people who are used to WoW, not Diablo. Diablo 2 took very, very complex math to figure out, especially due to the infamous 'Lying Character Sheet'.

More Diablo History. Specific items became 'expensive' because of how useful they became to specific builds that were considered 'the best' at X, Y, or Z. That isn't here yet. When we get closer to there, prices will level out.

And what do I mean by level out? Well, I'm not exactly talking about price. Just availability. As soon as people figure out something along the lines of 'Dex and Int on the same items makes it useless', and that becomes common knowledge, those yellows will disappear. When those disappear, the yellow market gets a little smaller, and more of the items will start to even out in price. Whether they trend upwards or downwards who knows, but the actual median should definitely level off.
@Numtini: "In any case, the D3 economy is a disaster. They need to close the spigot on yellow items in a rather drastic way. Perhaps 50% or 90% reduction to start."

Wat? Why? You'd need to elaborate way more than that. First on why you think it even is a disaster, and why the reduction in rare drop rates would fix such a disaster.

The only thing I can think of is that you think prices are too low for low level items, and that reducing the yellow drop rate would increase the prices and "stimulate" the economy. I don't even see how that's a problem. Low level items will always be low in demand compared to the practically infinite supply of items, and worrying about the low level economy in the first place is absolutely ridiculous.
i agree with Tobold. I think it's a horrible mistake. I just doubled my hardcore guy's dps with some cheap gear from AH. mowing through the game and drops are just useless since the AH has much much better stuff.

Might as well have bosses drop 'free picks' from the AH as rewards.
I imagine their plan is the real money ah will favor the highest levels of difficulty.
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