As of last week, you can now buy Diablo 3 gold for real money. Well, you could always buy Diablo 3 gold for real money if you knew where to look, or how to Google “diablo 3 gold”. The difference now is that the practice has been legitimised by Blizzard as part of the game’s real money auction house, where a curious thing has happened. The price of gold has almost immediately dropped to the lowest possible value, a 25 pence hard cap that Blizzard enforce to prevent gold becoming near-valueless. But why has this happened? Who’s losing, and who’s winning?
Well for a start, no matter what happens or where the gold comes from, Blizzard are winning as long as gold is moving. On every real money auction house sale they’ll take a 15% cut from the seller’s earnings. From there, proceeds from auctions are deposited into a Battle.net wallet. To withdraw your money, Blizzard impose another 15% transfer fee. That means that for every £1 you make selling your gold and commodities on the real money auction house, Blizzard are taking 28p in fees. Make of that what you will: there’s an inherent risk in buying gold from shady third-party suppliers, one that obviously doesn’t factor into purchases made through Blizzard’s auction house. If we’re being generous, that 28p fee could be considered a reasonable security tax – one inflicted upon sellers rather than buyers.
If we’re being cynical, however, it’s Blizzard’s vested interest in the success of the real money auction house that undermines confidence in the design of the game itself. Blizzard enthusiastically deny that loot drop rates (which many players complain are too miserly) are tailored to suit a healthy auction house, but it’s clear that a scarcity of decent loot – deliberate or otherwise – drives more players to the auction house and so more revenue into Blizzard’s coffers. If this is the case, players who don’t use the auction house are losing out. We’re skirting conspiracy theory degrees of cynicism here though, so let’s leave tinfoil hats to one side.
Why have gold prices hit rock bottom? That’ll be because, in the run-up to the launch of the real money auction house, honest players and illegal botters alike had been hoarding as much gold as they could in anticipation of being able to convert it into real cash. There’s now massive oversupply driving prices down, and that supply simply won’t sell if it’s priced too far from the lower limit.
Here’s how selling gold in Diablo 3 works. Gold is sold by the 100k chunk, and sellers set a single buyout price for however much gold they’re auctioning (commodity auctions don’t use a bidding system). Your gold is thrown into a Scrooge McDuck style communal pool of all gold currently being auctioned. Now when a buyer searches for, say, ten units of 100k gold (one million gold, maths fans), the auction house will take the ten cheapest units available and give it to the buyer. This amount can come from a number of different stacks, so your gold can be split and apportioned out to different players as it’s demanded. This also means that there’s no guarantee that your gold will ever sell, especially if you’re trying to sell it for significantly more than the cheapest available gold.
Currently, that lowest amount that the auction house is finding for buyers is 26p. Last week that amount was 27p, indicating that the auction house is still saturated with cheap gold, dragging the average ever closer to the bottom limit of 25p. Ultimately, that 25p limit is there to protect Diablo 3’s other economy: its regular gold auction house. If players were able to pick up hundreds of millions of gold for mere pennies, the resulting gold inflation would cause item prices in the gold auction house to skyrocket. Both economies would break. You’d have shonky daggers going for billions of gold (which is what I think might be happening in Greece).
Meanwhile. how does the real money auction house compare with buying gold from third-parties? Today, one of the most popular gold selling sites will sell you one million gold for $1.99 – that’s about 13p per stack of 100k gold, half of what you’d pay at the real money auction house. But this third-party price is now rising to close that gap and undercut Blizzard prices more efficiently.
It’s difficult to predict what happens next. After that initial injection of hoarded gold is all bought up, we should start to see the price per unit slowly float upwards. The third-party price of gold will likely keep real money auction house prices tethered, but only insofar as players are canny and willing enough to risk using the third-party sellers in the first place.
My prediction: gold will be stuck around 26p for months before creeping into the 30p-40p range, where it will stay until the global economy collapses and all the electricity gets turned off. Horadric Hamburgers, meanwhile, are now selling at around £18 a patty.