Sunday, November 27, 2011

Diablo 3's RMAH - money maker or not?

I wrote this post in response to Diablo 3 gold guide's blogging carnival challenge for December. The topic is "Why do you believe or don't believe the RMAH will be a money maker in D3?" It's interesting and challenging to write for a set subject so here's my attempt at answering this question.

First, we are talking about the RMAH (Real Money Auction House) and not the gold auction house. It's a given that gold can be made on the gold AH. The same people who were poor in WoW will be poor in D3, in terms of gold, while the rich ones in WoW will probably be rich in D3 as well, provided they apply the same effort.

Now that we have the gold AH out of the way, the RMAH is trickier to predict at this point in time. From the look of things, Blizzard hasn't even got this component working properly and that's one of the reasons while Diablo 3 is being delayed. Predicting how real money trading will work is a bit of a hit and miss. There are some reasonably things we can expect, based on historical precedent and general gaming experience.

My short answer to this question is yes, there is money to be made with the RMAH. What I can't put my finger on is the actual amounts. I have two major points I'm basing my argument on.

1. Historical precedent

Some very good evidence pointing towards the RMAH being a money maker is the fact that many 3rd party sites which sold items spawned around Diablo 2. People were paying tens and hundreds of dollars for rares, legendaries, gems, runes and so on. They were willing to trust shady 3rd party sites and shady eBay sellers and they were also happy to spend those huge amounts of real money just so they could equip their characters better. The funny thing is that many (if not most) of those items were dupes, and not even the real thing.

Blizzard is both shrewd and crafty: they know that people will flock around the RMAH like there's no tomorrow. That is, if they can provide the safe and secure trading facility they have been promising us.

Moving from unauthorized 3rd party sites to an official venue will probably completely eliminate such sites, though I wouldn't be surprised if some people will still try. But I believe that the majority of players (those who pay for the game at any rate) will use Diablo 3's RMAH. Now when I talk about the "majority" I mean those who are willing to spend real money on items.

I am willing to bet that offering a secure venue for item trading will entice even some of those who have never considered spending real money on virtual items to engage in a little bit of buying. I am one of those. When I first heard about the RMAH I thought I would never buy an item for real money. Now, I'm not so sure. Under the right circumstances I just might.

Consider this simple example: if I find a severely underpriced item, say, the Sword of Uber-Awesomeness which is an extremely rare legendary, posted for $10, you can bet that I will buy it right there and then. And then I'll re-post it for $200 or whatever it is really worth. The original seller will make a paltry $5 or $8 or whatever is left after fees, but he will make some money and I will make even more money.

2. Blizzard is behind the RMAH

We need to keep in mind that Blizzard is the massive force that drives the RMAH. They came up with the concept and are betting big on it. This is going to be a solid part of their business model, going forward. It wouldn't surprise me if they implement a RMAH in World of Warcraft within the next 1-2 years and their next MMO, Titan, is almost certain to have it.

The RMAH will be Blizzard's sole revenue after the game is initially sold and they need the money to keep the servers running and continue developing the game. Diablo 3 doesn't have monthly fees and Blizzard needs a constant stream of revenue. They have done their homework and already know what level of trading to expect from players. They will do everything possible to make the RMAH work. This includes making it enticing to as many people as possible. If only for the fact that Blizzard won't allow this to fail, I am confident there is money to be made.

Having made these points, there still remains the question of how much money is there to be made in Diablo 3? It depends on how much time and effort each individual is willing to put into it. Do you simply want to have fun playing the game? Guess what, you can have your cake and (almost) eat it too. In a previous analysis I pointed out that even if you make as little as $1 an hour playing Diablo 3, you will still make a tidy sum that adds up over time and essentially allows you to get paid to play.

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