MMO Economies

When I set my mind to something, I usually exceed at the given task – as would anyone else really.  When I decided a few years ago (middle of Lich King expansion) in WoW that I would spend a month making as much money as possible, I spent a few days reading on ideas, another day building an economical model with possible price points, another day developing a strategy then a plan, and finally after a week I jumped in.  I made 10K the first day.  After the month was over, I had over 300k in cash, had bought the best flight training on every character I had and a few knickknacks along the way.  I easily cleared 500K from my numbers.  And then, I gave up trying because money was all of a sudden useless to me.

At the time, my brother wasn’t necessarily broke but he did think about how to spend his cash in game.  I didn’t have a worry in the world, I could buy whatever I wanted at a moment’s notice.  I could easily skip content and speed up the game process.  In effect, this cheapened the game experience.

Diablo 3 has an auction house but the main difference here is that all the items in the game are tradeable.  That uber-mega weapon in WoW that you can only get by killing Heroic Lich King?  For sale in Diablo 3.  I have a level 54 and a level 48 and across all the levels, I have used 2 items that have dropped.  Every single other item has come from the auction house.  Why is this a problem?

Think of it this way.  In the best case, you have a 1% chance to get an item you can use and is an upgrade.  So you need to get 100 items to drop to see it.  That takes you about 4 hours (25 rares per hour).  Let’s say there are 4 million people on your server (US), that means that every 4 hours, there are 4 million pieces of upgrades found – or 1 million an hour.  Not everyone will sell it but even if half those people do, they are going to compete for your money and sell it at a decent price.  So at any given time, you have access to thousands of quality items, for a decent price and next to no chance to see an upgrade on your own.

From normal, to nightmare then hell difficulties, this isn’t so much of a big deal.  Skill is more of a factor but if you needed to buy items, you could do all 3 difficulties and still come out a millionaire at the end of it all.  Inferno though, is a massive gear check.  If you were getting hit for any noticeable damage in nightmare, you will die in a single hit on Inferno.  This puts an artificial barrier on entry to Inferno where you have to buy your way in.  Since fewer people are there now, and the amount of money that drops from enemies is significantly higher than in Nightmare, prices are 20-50 times higher than they were at level 59.  The cheapest item is 200k and the majority in the millions.

To top it all off, the money sink of the game, disenchanting (or blacksmithing breakdown) provides basic materials that sell for 5-10% of the value of vendoring the item.  And using those items to craft costs about 200K at level 60 and has the same chance of providing a good item as an item drop (1% in our example).  So 200k for a chance, or 200K for a guaranteed item?

It’s an interesting business model. Once more people get into the millionaires club, the prices will rise accordingly, putting an artificial barrier for lower level items.  I mean, if I can sell an item for 1 million, why bother posting something for 5K?  Without item decay, item loss or just a simple money sink, the economy is doomed to spiral to a ridiculous level in just a few months.

Maybe, in the end, this is what Blizzard wants, so that they can sell in-game money to buy the items you need to actually play their game.  Maybe not.

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