"It's the economy, stupid!" - Issue 2: Diablo 3's launch and why people spend money on pixels
Last week, our author Stefan "Devt" Kreutz made his first predictions about the impact the Real Money Auction House (RMAH) will have on Diablo 3 and its economy. In the second iteration of his weekly column, he takes a further look into the mindset of people who spend real money on virtual items and shares his outlook on the game's launch.
Last week, I ended my article with a couple of open questions (this, kids, is what we in the biz call a cliffhanger), which I intended to answer this week. Well, a week has passed and the overwhelming interest in this piece (along with the sheer size of it) has made me decide to turn it into a weekly column, running for as long as I still have something to say. So sit back and enjoy part two of "It's the economy, stupid!" This weeks topic: The launch of Diablo 3 and why people spend money on pixels.
So let's get right into it and look at what will happen when the hordes of hell are unleashed on 15-year-old boys around the world. It is not a very bold statement to make that the days after the release of Diablo 3 will be a frenzy. Going by the precedent the latest World of Warcraft expansions have set, the peak in players will undoubtedly have its impact on the market, especially so since this is a genuine launch instead of an expansion. The first few weeks will be interesting to follow as a lot of standards of the market will be set in these days. There will be a rat race to get to level 60 first and be among the first to see (and farm) the new "Inferno" difficulty. As with all new content, there will be people who see it significantly earlier than others; the interesting aspect is what these people will do with their spoils. How many people will try to sell their items for cash? The characters? And how much will they fetch?
Obviously, nothing in any game is "worth" anything in the real world; but then again, it is. The items and gold I accumulate (the oft-quoted "pixels") are just that to me, virtual goods that hold no real value to me. But I know that plenty of other people think differently, offsetting the quality of an item or an amount of gold with the amount of time they would have to "sink" into the game and deriving a monetary value from that. If it takes them an hour to farm 500G in World of Warcraft, my 10000G are 20 hours worth of "work" to them. And because they think so, I have to think so as well. I know that 10000G is worth a certain amount of cash because people are willing to pay it. That's the root of the issue and why we are having this discussion in the first place: Some aspects of the game are work to certain people. And these people are a huge group. The other group of people partaking in cash trades are perfectionists and self-proclaimed "pros"; people who want to have the best gear no matter the cost (literally). These two groups are the market.
Imagine your average Diablo player finding that elusive super-rare unique item a mere three days into the game's lifespan. Let's say it's not for his class and let's say he has no intentions of rolling a class that could make use of it for a while. Could you imagine that guy not trying to make a fortune milking the early adopters who just have to have the best gear right away? I said last week that there is ample evidence people are willing to spend absurd amounts of money on MMO games (for further evidence on this, look at the myriad of "social" games) so it's not completely unimaginable that someone really, really wants that sword. Maybe he wants it so much he's willing to pay three figures for it. I want those three figures. And so do a lot of other people.
Playing the game in these first few weeks feels to me like it will be a lot like playing the lottery; there are extremely rare items in Diablo 2, and there will be in Diablo 3, and being among the first to find them comes down to nothing else but sheer luck. Many unique or otherwise rare items in the Diablo series have bonus stats that might vary between two numbers; say, 30% to 50% magic find on a pair of boots. If you are involved in the Diablo 2 trading scene you might be aware of how absurd the price difference between a pair with 48% and one with 50% is; people strive for "perfect" items and finding these items early in the game's lifespan will be akin to striking gold on the virgin market. I hardly see anyone selling these items for gold or keeping them for future use with their "value" going nowhere but down as more people get the chance to fund them. Time is key.
There is a moral dilemma to be solved here, to an extend. Sensible minds might realize that items are never as expensive as they are in the first few days and may frown upon those who seek to earn money by preying upon the impatient and those who lack better judgment. They say a fool and his money are easily parted and the torrent of overpriced DLC we see for almost every game these days (pardon the rant) attests to that. When it comes down to it, all a seller on the RMAH does is offer a certain good which someone else might be willing to pay for. What difference does it make if the seller isn't the developer but another player? There's still value exchanged for value, even though each side might see a different value in whats traded. I know I'd value 10$ a lot higher than Awesome Sword of Demonslaying. When it comes down to it, Blizzard has decided to include the RMAH into the game, so part of the game it is. It is just as legitimate to powerlevel through the first few days in order to "strike it big" in the new market than it is to do so for any other reason.
Time will tell which sorts of items will be sold for real money. Simply by virtue of gold being sellable for dollars as well, Blizzard ensured that every item will always have a real world value. The question simply is whether a "standard" item (let's say, a Harlekin's Crown) will be able to hold an actual value or be traded for the gold equivalent of fractions of a penny. Will we see a metagame where the average value of a standard character build will be measured in dollars? I think this is the direction the game is moving towards and I am not sure it's the right way to proceed.
This concludes the first official issue of "It's the economy, stupid!" as a column! Feel free to provide comments, questions or suggestions either right here or via Twitter and make sure to tune in next Friday, when we look into the reasons behind Blizzard's decision to add the Real Money Auction House into the game in the first place.
Links
Twitter - Follow Devt on Twitter!
Last week, I ended my article with a couple of open questions (this, kids, is what we in the biz call a cliffhanger), which I intended to answer this week. Well, a week has passed and the overwhelming interest in this piece (along with the sheer size of it) has made me decide to turn it into a weekly column, running for as long as I still have something to say. So sit back and enjoy part two of "It's the economy, stupid!" This weeks topic: The launch of Diablo 3 and why people spend money on pixels.
So let's get right into it and look at what will happen when the hordes of hell are unleashed on 15-year-old boys around the world. It is not a very bold statement to make that the days after the release of Diablo 3 will be a frenzy. Going by the precedent the latest World of Warcraft expansions have set, the peak in players will undoubtedly have its impact on the market, especially so since this is a genuine launch instead of an expansion. The first few weeks will be interesting to follow as a lot of standards of the market will be set in these days. There will be a rat race to get to level 60 first and be among the first to see (and farm) the new "Inferno" difficulty. As with all new content, there will be people who see it significantly earlier than others; the interesting aspect is what these people will do with their spoils. How many people will try to sell their items for cash? The characters? And how much will they fetch?
Obviously, nothing in any game is "worth" anything in the real world; but then again, it is. The items and gold I accumulate (the oft-quoted "pixels") are just that to me, virtual goods that hold no real value to me. But I know that plenty of other people think differently, offsetting the quality of an item or an amount of gold with the amount of time they would have to "sink" into the game and deriving a monetary value from that. If it takes them an hour to farm 500G in World of Warcraft, my 10000G are 20 hours worth of "work" to them. And because they think so, I have to think so as well. I know that 10000G is worth a certain amount of cash because people are willing to pay it. That's the root of the issue and why we are having this discussion in the first place: Some aspects of the game are work to certain people. And these people are a huge group. The other group of people partaking in cash trades are perfectionists and self-proclaimed "pros"; people who want to have the best gear no matter the cost (literally). These two groups are the market.
Imagine your average Diablo player finding that elusive super-rare unique item a mere three days into the game's lifespan. Let's say it's not for his class and let's say he has no intentions of rolling a class that could make use of it for a while. Could you imagine that guy not trying to make a fortune milking the early adopters who just have to have the best gear right away? I said last week that there is ample evidence people are willing to spend absurd amounts of money on MMO games (for further evidence on this, look at the myriad of "social" games) so it's not completely unimaginable that someone really, really wants that sword. Maybe he wants it so much he's willing to pay three figures for it. I want those three figures. And so do a lot of other people.
Playing the game in these first few weeks feels to me like it will be a lot like playing the lottery; there are extremely rare items in Diablo 2, and there will be in Diablo 3, and being among the first to find them comes down to nothing else but sheer luck. Many unique or otherwise rare items in the Diablo series have bonus stats that might vary between two numbers; say, 30% to 50% magic find on a pair of boots. If you are involved in the Diablo 2 trading scene you might be aware of how absurd the price difference between a pair with 48% and one with 50% is; people strive for "perfect" items and finding these items early in the game's lifespan will be akin to striking gold on the virgin market. I hardly see anyone selling these items for gold or keeping them for future use with their "value" going nowhere but down as more people get the chance to fund them. Time is key.
There is a moral dilemma to be solved here, to an extend. Sensible minds might realize that items are never as expensive as they are in the first few days and may frown upon those who seek to earn money by preying upon the impatient and those who lack better judgment. They say a fool and his money are easily parted and the torrent of overpriced DLC we see for almost every game these days (pardon the rant) attests to that. When it comes down to it, all a seller on the RMAH does is offer a certain good which someone else might be willing to pay for. What difference does it make if the seller isn't the developer but another player? There's still value exchanged for value, even though each side might see a different value in whats traded. I know I'd value 10$ a lot higher than Awesome Sword of Demonslaying. When it comes down to it, Blizzard has decided to include the RMAH into the game, so part of the game it is. It is just as legitimate to powerlevel through the first few days in order to "strike it big" in the new market than it is to do so for any other reason.
Time will tell which sorts of items will be sold for real money. Simply by virtue of gold being sellable for dollars as well, Blizzard ensured that every item will always have a real world value. The question simply is whether a "standard" item (let's say, a Harlekin's Crown) will be able to hold an actual value or be traded for the gold equivalent of fractions of a penny. Will we see a metagame where the average value of a standard character build will be measured in dollars? I think this is the direction the game is moving towards and I am not sure it's the right way to proceed.
This concludes the first official issue of "It's the economy, stupid!" as a column! Feel free to provide comments, questions or suggestions either right here or via Twitter and make sure to tune in next Friday, when we look into the reasons behind Blizzard's decision to add the Real Money Auction House into the game in the first place.
Links
Twitter - Follow Devt on Twitter!
