If you haven’t seen it, Blizzard made an announcement about Diablo 3, in that they are adding an auction house. Diablo Fans has a great write up on it here.
Let’s look at the Diablo 3 Auction house ...
1) You can sell items for real money.
Not points, not tokens, directly to real money. So do I pay taxes on this income, like other real life auction houses?
2) Blizzard will take a cut of the sale. And the seller needs to pay up, first...
A nominal fixed transaction fee will be deducted from the seller for each item listed in the auction house. This fee consists of a fixed charge to list the item, which is assessed whether or not the item is successfully sold, and an additional fixed charge that is assessed only if the item is sold. Because the listing portion of the fee is charged even if the item doesn’t sell, it will be in the seller’s interest to list items he or she believes other players will be interested in, and to do so at a competitive price. Specific details related to the transaction fee for the currency-based auction house will vary by region and will be announced at a later date.
3) Intended to auction off unused super rare items, not general use or custom items. This was obviously not designed by an economist. One can’t impose scarcity on an infinite good such as item data. This is why Eve Online has two full time economist in their ranks.
Looking at this 3 main features of the Auction house I see two main problems. First, this will not work as they stated. There is just no way it will work legally. I can see this playing out as gambling, and that might cause some governments to take notice. Let alone how Blizzard is setting themselves up for pyramid schemes and other exploits. This is one reason Microsoft uses points on their xbox live: the laws for each of the various currencies around the world. I’m sure legal at Blizzard has its collective head exploding right about now.
When it comes to Blizzard, I tend not to want to post right away. When they make a mistake, in time they seem to rectify it. So I learned not be rash and hasty. I should be patient and watch how the auction house will unfold. But in this case it couldn’t wait.
To me the auction house that Blizzard is looking to set up is the start of the next trend in gaming. Moving us one step closer to Full Timer Gamer as a profession. I have a fear that one day people will be playing games 80 to 100 hours a week not for fun, but to pay real life rent. And the sad thing is that game companies won’t build games for fun. Instead they will tune the game for a bigger cut of the labor that full time gamers can potentially make.
Let’s look at the Diablo 3 Auction house ...
1) You can sell items for real money.
Not points, not tokens, directly to real money. So do I pay taxes on this income, like other real life auction houses?
2) Blizzard will take a cut of the sale. And the seller needs to pay up, first...
A nominal fixed transaction fee will be deducted from the seller for each item listed in the auction house. This fee consists of a fixed charge to list the item, which is assessed whether or not the item is successfully sold, and an additional fixed charge that is assessed only if the item is sold. Because the listing portion of the fee is charged even if the item doesn’t sell, it will be in the seller’s interest to list items he or she believes other players will be interested in, and to do so at a competitive price. Specific details related to the transaction fee for the currency-based auction house will vary by region and will be announced at a later date.
The worry is the phrase “which is assessed whether or not the item is sold” -- in other words, “place your bets” -- but the house always wins. I believe we have a name for this type of business.
3) Intended to auction off unused super rare items, not general use or custom items. This was obviously not designed by an economist. One can’t impose scarcity on an infinite good such as item data. This is why Eve Online has two full time economist in their ranks.
Looking at this 3 main features of the Auction house I see two main problems. First, this will not work as they stated. There is just no way it will work legally. I can see this playing out as gambling, and that might cause some governments to take notice. Let alone how Blizzard is setting themselves up for pyramid schemes and other exploits. This is one reason Microsoft uses points on their xbox live: the laws for each of the various currencies around the world. I’m sure legal at Blizzard has its collective head exploding right about now.
Second is my Game Design worry. If you’re making money off very rare drops, why design a fun game? People are making you money with their time, so you put them to work. Why make loot tables that drop what people want? Instead, drop what doesn’t work for the character, as you will make more money. They will sell what is useless for them and buy what they need, and you take a cut at every turn. It’s not hard to tweak a table or two to make you a few extra million.
This poor design. Sorry Blizzard, I have to say it. This seems like more of a executive add in at the last second than a game design decision. You set yourself up to exchange fun for profits. That is not a game I want to play.
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