• Diablo 3 Auction House Saturation

    So, I've been really thinking about the whole buying and selling process in Diablo 3 and on the Gold AH And RMAH. A few things have come to mind:

    With gear not be soulbound, there will come a point where the AH will become saturated with a lot of the same gear. Granted, there are some game mechanics that may help reduce that to an extent, like disenchanting items, but gear will never be permanent and can always be resold. The saturation will be most noticeable on lower to mid-level gear items, at least at first. This may decrease profit opportunities, as the margins become increasingly smaller as quantity of items increase and general prices decrease.

    As saturation increases, the gold-making strategy will shift heavily to the buying and selling of those perfectly itemized gear items, those with the perfect stat combos and the highest amount of stats. There will likely be niche markets for gear with +MagicFind and +Gold, selling to players who want to farm their items. There will obviously be niche markets (if you can really call it a niche market) for the best gear items at various levels, but dominantly the top level, best gear will be the sought after items. The more rare gear will sell for more, naturally, especially Inferno level gear.

    In general though, this is an area where I'm trying to determine a good course of action. I likely won't jump into the AH game immediately upon game release. I want to experience the game, play my character and level him up initially. I fully intend to work the AH, figure out some strategies, the markets I want to work with, and the best way to attack those markets. Unfortunately, not being in the Beta, I'm a little in the dark on what may work the best. Then again, the Beta isn't always the best place to determine any of that as well, since items on the AH can be inflated and demand can be skewed, since it really means nothing (or means less than it will in release version) to players yet. That and only a small sample of the total items in game are available to play with, so it's hard to get a really accurate gauge on what might happen in release.

    Similar to WoW, I see commodity items as being a big staple in the gold making game for Diablo 3. These are the items that actually do get consumed and therefore AH saturation is less of an issue. This is something that I want to really explore and see where the potentials are for making gold, and possibly real cash. Crafting materials, runes, gems will be hot items for a while, if not long term (and long term is pretty likely, I have a feeling... no different than WoW really).

    End Game
    In terms of gold-making, end game items are going to be hot items, especially the perfectly itemized items, stat-wise and the really rare items. It will be interesting to see how the gold-making strategies revolve around this market. Right now, it's tough to say how it will play out, but if it's anything like WoW or D2, this stuff will sell pretty well for a while at least. It could be a market of high profits, if worked correctly.

    Hiring Farmers
    Similar to WoW, I wonder if you could work deals with farmers, hiring them to find things for you and buying off them directly, reducing your costs to an extent. I can see it being a possibility, providing a method of obtaining commodity items at discounted prices, possibly in quantity. You could even use farmers to acquire more rare gear items.

    So yea, just some thoughts I've had running around in my head. The biggest unknown to the whole gold-making process is the sheer number of players no a single server and how that will affect the profitability of various markets. Not all players will work the AH and gold-making game... likely more players won't do this, leaving more room for players that want to. The RMAH will likely generate some initial interest in many players, but because of just how many people try it, I can see it creating frustration for those players who don't really understand the gaming economy and how markets work. This will cause many players to not bother that much with it, opening up the door for those who do understand the economy and work the markets to their potential.
    This article was originally published in forum thread: Auction House saturation started by Drrwho View original post
    Comments 9 Comments
    1. Sterling's Avatar
      Sterling -
      Hmm, interesting thoughts.

      I imagine the tier at which the general population is playing will slowly become saturated. Eventually, saturated markets will lose their value and content at this level will become trivial. As players progress through harder content, new content becomes trivialized.

      I never played D2 seriously. How was the demand for rare items sustained?
    1. Drrwho's Avatar
      Drrwho -
      Quote Originally Posted by Sterling View Post
      I imagine the tier at which the general population is playing will slowly become saturated. Eventually, saturated markets will lose their value and content at this level will become trivial. As players progress through harder content, new content becomes trivialized.

      I never played D2 seriously. How was the demand for rare items sustained?
      That was kind of my thought process as well. The lower tier items will lose their value as the market becomes overly saturated with the same stuff again and again. It will only be at the higher tiers that saturation will take longer to occur, if ever. Commodities will be the only thing that might be somewhat immune to saturation, since they will continue to have demand and stock will be used up, instead of recycling back into the economy.

      In D2, the more rare items continued to be in demand for a long time. SOJs were almost always in demand and were used as currency to a large extent as well. The top end rare items, especially perfectly itemized items, and the really good set items were sought after for a good while... could even argue that they are still in demand to some extent even today. The top tier items sold pretty well on Ebay and other "open market" sites.

      With the sale of items being truly "legal" in D3, that will likely affect the prices of items. We probably won't see the really high prices like we did in D2, but I'm betting there will still be some items that will sell for fairly hefty amounts... those truly amazing top tier items, especially Legendary items.

      But part of my reason for not jumping headfirst into the gold-making process right at release is to get a better feel for how the markets will play out. That and pricing will be extremely volatile and inflated initially, which won't be sustained. I'd rather watch and see how things shake out, how they even out. Will I sell some stuff right away? Very possibly, if I really don't need or want it. Whether I will test the RMAH or gold AH first, I don't know yet. I have a feeling the RMAH will take a little bit of time to really get kicked off. The gold AH is likely to see more action. I could be wrong, but I just have that feeling. A lot of WoW players will hit up Diablo 3 and they are used to the Gold AH, so they may naturally flock to that to start with. Plus, a lot of players will have a negative thought process towards the RMAH to start, but as the game progresses and markets shape out, the RMAH may become more appealing, especially with their being no listing fees anymore. This means no risk to sellers and more interest in trying it out at some point.
    1. Kathroman's Avatar
      Kathroman -
      On the flip side, if that's where the bulk of the playerbase ends up, won't that be where a lot of the demand lies?

      At the end of the day, I would compare the potential D3 economy to the Cata epic gem market, or maybe 397 BoE's - it's about "bang for your buck". Is an extra 10int/str/agi worth an extra 2k or so? Not for most. In D3, if you end up with an item that has 14% MF selling for $10, and then a perfect 15% MF version listed for $50, where's your market? I'd be willing to bet you'd be able to sell at least 5 of the 14% ones just as easily as you could sell the 15%.

      So, I'd say that most of the profit will likely come from that second layer - the "not quite BiS" versions. Sure, the elite players will be willing to pay top dollar to min/max their gear, but as you've already pointed out, that is going to end up being such a small portion of the overall playerbase that I don't know if it's really worth pursuing. It's also going to be the area of the economy that attracts the most attention/competition. "Dude, that sword is selling for $50, IMA be rich!". While that guy's off making donations to the RNG gods, I can go sell 100 swords for $1 each for far less effort, I'd expect.
    1. Drrwho's Avatar
      Drrwho -
      Yes, you have a point there, and I agree. The bulk of the market could be with that mid-level area. The biggest unknown and potential iffy point is selling gear to that mid-level area. Since gear isn't soulbound, the potential amount of pieces on the open market will likely be significantly higher. What's more likely to occur is the 15% MF item sells for $50 and the 10% MF item sells for $2 or less, because of how many there could be available. Not saying we shouldn't sell in that mid-level area, where much of the player base will be. Just saying, the profit potential is possibly going to be much lower... we would have to aim for volume of sales to be able to pull much profit in.

      Gems are a different story... they are used up and not recyclable, if I understand the D3 system correctly. So, supply will remain lower than gear and the demand for gems, and commodities items in general, will remain fairly high.

      What can become a bigger pain is the sheer amount of undercutting that will occur. So many more players on the same server creates increased AH activity. This will mean more people posting at any given time. So in WoW, it might take 5 to 10 mins to get undercut, but in D3 it could be 5 or 10 seconds. Granted, the amount of sales will be higher too, for the same reason... more players on the server. We'll have to see how it evens out in the end.

      I no doubt believe there will be some great profit opportunities and strong markets to work with. I'm still torn on what and how much I will sell on the RMAH. Right now, I'm considering using the GAH to build up gold, buying and selling the majority of stuff there, like commodities and mid-level gear. Then I'll use the RMAH to sell the upper-level items, top tier pieces and some gold itself. That's what I feel will be the better items to sell off for real cash. Players will want to buy gold, as they do now in WoW and potentially pay cash for the really good pieces of gear. The rest of the stuff may be best to dabble with on the GAH... buying and selling for gold profits.
    1. Kathroman's Avatar
      Kathroman -
      That's pretty much what I was thinking, too.

      My only hesitation would be that I wonder if most of the farmers/botters/"whatever you want to call them's" won't be focused entirely on liquidating their in-game assets purely through selling gold for RL $$$. It's easier to sell, it's "safer" for buyers, and it's more flexible. If that's the case, the value of gold itself will be under heavy fire.

      I've said this before, but I really believe the biggest opportunity for RMAH deals will be people trying to "play the AH" and then doing it wrong. I would also like to see what ends up happening with the 10 auction limit as well, since that could potentially influence what gets posted and what doesn't. If you only have 10 auctions available, you're either going to have to camp your account and go with quick sellers, or you will have to choose your 10 "best" items to get the most out of your listings.

      The largest curiosity I have about the D3 economy is to see how quickly and in what form the "seedy underbelly" develops. If Blizzard's RMAH interface doesn't satisfy the needs of the power-sellers, they WILL develop their own channels, you can count on it.
    1. Blackey's Avatar
      Blackey -
      The more saturated the market becomes with gear, the more picky some of the higher end players start becoming. They want the best gear. In Diablo 2 this meant 'perfect' items. This meant the items not only had to have the exact stats for one's class/build, but they had to have the highest possible amount of each stat.

      Someone could pay a huge amount for a 'near-perfect' item, meaning it's like 2str below perfect and they will still be in the market for the exact same item, just a better version of it. This is where WoW mentality becomes useless in Diablo. In Diablo, a person may always be in the market for the same item, always trying to get a better version than what they have. In WoW, once you've got a BiS item, you're done for that slot (aside from gems/enchants).

      Let's take Diablo 2's Herald of Zakarum (aka hoz) for example. Most players would settle with a decent one (~190% enhanced defense), but many players wanted a perfect one, meaning 200% enhanced defense. Then, other players would continue to take it a step further and try and find a perfect 'ethereal' hoz (ethereal means unrepairable, but comes with higher stats), use a quest to socket it, and give it a zod rune (highest rune, expensive, gives an item the 'indestructible' modifier).

      That is how Diablo's economy continues to thrive seemingly indefinitely without gear being soulbound. Really the one thing that can break the Diablo economy is duping. If Blizzard can prevent it in Diablo 3, the economy should thrive for a long time.
    1. Zerohour's Avatar
      Zerohour -
      Don't compare it to WoW. Like, at all. There won't be farmers. We called this magic finding back in the day. The good news? Bots have already been developed to handle this problem and you cannot do this in the MMO sense because farmers aren't real players - they are farming in a commodity based environment with fixed stats where no human intervention is really required. D3 items are random almost every single time so it requires a certain finesse and understanding of the game, something that Xiao and Co cannot do from their abandoned airport hanger in Shanghai. That's where these new bots are going to become smarter as the developers learn more about analyzing the game codes to look for desirable stats and determine whether or not to keep the item. Why do I talk about bots already? Because there are 3 of them ready for release, check around.

      There will not be a saturation as the item generation mechanics are going to make it a VERY rare thing for two items to have the exact same mods. What you will have for the most part will be desirable stats and items with the same name. Look at Uniques (aka Legendaries... pfft) with their item generation having a possible 5-6 random mods on them at max level. Rares will be valuable provided a person knows what they are looking for. For the majority of items, rares will be junk. But for those rare trophies out there, expect these to be the most valuable items in the game and blowing the value of uniques out. Up to $250 of course.

      Crafting mats have existed within Diablo since LOD, people just never bothered with them. In D2 they had the opportunity to craft the best items for certain slots in the game. My first in-game fortune was made after D2:LOD was released with this. Crafting mats will be readily available and just like D2, your crafting efforts and time will generally be spent pissing you off. Crafting is for the wealthy, and I believe it will progress the same way. This will be your gold market for the most part, with those rare exceptions actually going for cash.

      In everything I've just mentioned here, it's randomization that makes this non-MMO friendly. Realistically a person should spend the better part of a year trying to locate the best possible gear for their character. D2 offered a time frame of up to 5 years in many cases, but as mentioned above, duping killed it in D2. A person could pick up a duped perfect item and the sellers could saturate the market with perfect items, while you were not supposed to be able to achieve that.

      I will say that Blizzard has their work cut out for them. After 12+ years (16 if you count the original) of trying to fight dupers and outright LOSING the battle in both D2 and WoW, I don't believe they have the first inkling what they've done by making the RMAH a legit thing. Fanboys be damned, Blizzard has allowed duping to get out of control and they've never really enforced their own policies because of backlash, but what they HAVE gotten good at is denying it and getting sheep to believe it.

      This is the ONLY thing that can lead to saturation, outside of that you will price your items based on it's quality vs. the next best competing item on the AH. There really shouldn't be 1g undercuts unless two items are exactly the same and as I said, that won't be the case. You will have to look at all the other items with your name on them, and compare value, not price.
    1. Faxmonkey's Avatar
      Faxmonkey -
      Given the high listing fees currently in the beta, coupled with the few you are given free in a month, I don't think most people are going to bother with the RMAH for cheap things. Also consider that the RMAH is effectively capped on how much money you can sell an item for based on the cap that an account can hold.

      I think, given all of that, we're going to spend most of our time on the gold-based AH--dealing with commodity items and such, and buying the rarest of the rare items with gold from players who cannot or will not get involved in the RMAH. Then we will sell those items on the RMAH. With the high listing fees, I cannot ever imagine commodity-type items being predominant on the RMAH.
    1. Drrwho's Avatar
      Drrwho -
      I'm with you on the thought that RMAH will most have the most rare, most valuable stat combo items on it. Commodities will likely hit the GAH mostly.

      If duping does take hold in D3, it could ruin the RMAH and the game. People will still play it, yes. But the RMAH won't be what Blizzard intended it to be and the income they make from it could flop. I agree with @Zerohour that duping will be the main issue for Blizzard... if they can stop it, things look very bright for D3 future. If it gets out of hand, it could ruin the economy and turn many players away from the RMAH, selling anyway.

      I personally will have to learn a lot about that whole economy still (or again) and just see how things play out. I don't have intentions of making a living from the RMAH, so at least that mentality can keep me sane in the event things go belly up in D3. But I wouldn't mind making a few bucks here and there, maybe pay for my WoW subscription, at least up till the Annual Pass expires. At that point, I will evaluate what I want to do between WoW and D3.