So the end of last week saw the unveiling of some big news about the Diablo 3 auction houses. We learned about cash out fees from Paypal, exact caps for real money on the RMAH (battle.net balance) and gold on the gold auction house. We also found out that the RMAH will be launching a week after Diablo 3 launches. I think this is wisdom.
The servers are more than likely going to be pushed to the limit – properly tested by millions of people logging in. Better to unleash the real money auction house at a more settled time but what kind of market will the delayed RMAH cater to on May 22nd?
One common prediction is that people will have built up a wealth of gold that they’ll want to sell.
So what does this mean for those of us who had plans to take advantage of the demand for gold or players chasing world firsts or some other strategy that relied on a day one RMAH? It means we need to tweak our strategy.
A lot of success can be had from going ‘against the grain’ in an economy. I don’t mean doing something difficult, or something stupid (if most people are being sensible), I mean catering to the needs of others. Or better yet, predicting the needs that those others don’t realise they are going to have… until it’s too late.
Let’s look at that prediction above again, “People will have built up a wealth of gold that they’ll want to sell”. If a lot of individuals are stock piling their gold to sell then what’s their story?
Logically we’d have to say that those players have more gold than they think they need – they’re either being frugal or they’re playing at a point in game where the gold sinks haven’t kicked in (they’re not wiping in hell or inferno or they’re neglecting their artisans). So do we, by going against the grain, BUY gold from them?
That’s not what I’d do. I will have a sizeable store of gold ready to sell when the RMAH rolls out (until the exchange rate starts falling rapidly – then I’ll hold off and see what kind of cycles emerge). But I don’t plan on buying gold. A plan that includes ‘buying gold’ could very easily backfire. So what do we do?
I’m interested in what would cause a player to have lots of excess gold, to think they don’t need gold…
It’s possible that a lot of that excess gold will come from successful players and traders – but that won’t be the most common explanation. I’m certain that the majority of gold entering the market will be down to frugality. People will be saving up to sell. In doing so they’re not spending and aren’t experimenting with their gold. What about those who NEED gold? What’s the buyers story?
Well they might need to level their artisans more. They might need to buy some sweet item they’ve been watching on the gold auction house. They might just need to repair. I’m interested in the 2nd example. In fact, I want to be listing those sweet items – some I will find but a lot will be crafted.
Here’s a list of some of the things that I foresee myself doing during the first week of Diablo 3′s launch (before the RMAH hits):
- I’ll be converting gold into MORE gold – in other words trading in the gold auction house;
- I’ll be storing a substantial amount of gold in valuable items that will not deflate as fast as gold (in other words – buying!);
- I’ll stock pile a modest sum of gold – just in case the market does something unpredicted;
- I’ll be levelling my character intensively (hopefully into Nightmare or even hell in that first week);
- I’ll level my artisans;
- I’ll experiment with the market – after all, it’s better to take risks before the ‘real game’ begins;
- I’ll find the most efficient (profitable) crafting niche with each artisan;
- I’ll identify areas in the game where I can make gold quickly – again, we can’t be 100% certain gold will be worthless;
- I’ll identify, to the best of my ability, the future needs of those who are being frugal and those who are dying to spend gold and cater to them both.
A lot of people are planning on selling gold when the RMAH launches and that’s not a foolish plan. But it’s very important to understand that when a lot of people do a thing, that thing is common place. In this case, it means that there is a high probability that gold will follow a downward trend at least for the first few days…
For those days (or weeks, or even longer) we need to be flexible and we need to be prepared. After that, who knows?
Perhaps those who gave their gold away so freely will begin to level their artisans or engage with areas of the game that otherwise drain their gold supply. Maybe those selling in a market over supplied with gold will come back looking to buy it back and be shocked to find it’s worth the same or more than what they got for it. Maybe they’ll need better gear, gems or materials and won’t have the gold to buy them (I’ll be sure to cater to their needs on the RMAH).
What about you? What kind of strategies are you planning for the first week in the Diablo 3 auction house (and beyond)?
Ray
{ 15 comments… read them below or add one }
Hey well I was gonna go for a quick rush to hell and try and take advantage of the gold drop there and be able to cater for the initial gold buyers and the higher price of gold, but having the RMAH active after 1 week I can see that failing pretty easy. I still think getting to hell ASAP is important I think lots of ppl will be wanting to rush to hell and then take there chances in inferno, and they might just want to invest in high end hell items to be able to farm inferno. I think thats gonna be a good chance to sell items. Also a lot of ppl (including me!) are gonna want to try inferno as soon as they finish hell and could easily hit a high need for gold witch didnt have in hell and didnt prepare for and might need to buy some. I dont know what you guys think?
I think, (based on what I’ve learned here) that much of the opportunity in the RMAH will come from the discrepancies between values in the GAH and the RMAH. If players are stockpiling gold, and the demand of gold is low, then it’s probably that demand will be high for other items. Stockpilers are probably not investing in artisans. It’s possible they’re even selling off their surplus items and crafting materials for more gold. That means there will likely be a lower supply of some non gold item. Maybe crafting materials will be in high demand. Using techniques learned here we can use our week one gold stores to take advantage of what’s in demand, and possible value discrepancies between the markets spawned from player ignorance. I can use my gold to by undervalued items in the GAH that are in demand in the RMAH. I think that’s going to be my strategy at least until the dust settles.
*It’s possible they’re even selling off their surplus items and crafting materials for more gold. That means there will likely be a lower supply of some non gold item*
I think that would be the other way arround, if lots of players are stockpiling on gold and selling of everything else that wouldnt mean there will be a low supply of other items it means there will be a high supply because they are all selling them, Just a thought not sure if im right
Hmm, good point – I guess it depends on where they are selling them, GAH or in game merchants. Although even if they’re selling them in the GAH, I think the market will seek balance – if they sell all their items to get gold, there will be a glut of items first, then a glut of gold and lack of items.
So I’m still confused about the artisans, fully leveled up, how good can the items be that they create? as good as the “best” items in the game? If so I am going to level up my artisan first as quickly as possible, since the gold market is completely speculation, with no way of knowing which way it can go after the first week.
And set up that forum please!
The forum is still a work in progress – I’m hurrying as fast as I can ^^
As for artisans – take a look at this: http://us.battle.net/d3/en/artisan/blacksmith/progression/#level=10 there’s some very nice pieces there. The ‘best items in the game’ won’t be crafted but you’ll get close.
Now there’s a few things you need to consider when looking at those items and I should post about them.
In summary:
1) You need to gain access to or buy Inferno materials/drops/plans to unlock that level and to unlock the majority of items AND to create the items themselves.
2) The item level matches a lot of high level items that are drops. All items in Diablo 3 work from random affixes – chances are some of these crafted items will be much, much better than some Inferno drops. The reverse also applies. Prepare for RNG.
3) Sort of continuing on from point 2: Check out http://us.battle.net/d3/en/item/dagger/#page=2 – there are no magic or rare ‘drops’ there but let’s extrapolate from the ‘normal’ items (there’s a chance every normal that drops will become magical, or rare, or legendary after all).
Ignore the Legendary blades (work in progress) – the best item (dps) is the Dark Blade (drop) and the Piercer (drop) matches the crafted blades. The real separator will be the affixes and specifically the total number of affixes. If drops get upwards of 6 (7 or more) then (RNG again) they’ve the potential to outshine the crafted gear.
With little additional information it’s safe to say that a maxed out Blacksmith is going to be making some very nice, desirable nice items but more than likely not the very best items in game.
My goal is still to get to inferno as fast as possible to take advantage of a low population selling inferno mats and such. And have the ability to farm gold in mass quantities should it turn out the gold market is booming, which I’ll be able to do cause I’ll be super high leveled and probably some decent GF gear.
So all my money will go towards leveling artisians as needed and getting myself to inferno. I’ll probably try and keep like 10k on hand just in case the market opens and it’s like $4 per 1000 gold, but other than that yeah.
In regards to my previous comment (value discrepancy, arbitrage, etc), I’m building an iphone app as a tool/calculator to help us determine the best way to sell something. By entering in some basic figures such as average gold price, average material prices etc, it can help you decide, say, is it better to sell this item in the GAH and then sell the gold, or better to salvage the item and sell the materials in the RMAH. Keep in mind the fee Blizzard takes may effect how many steps you wish to go through before cashing out – the calc will automatically apply the 15% (or $1) fee so you know exactly what your final proceeds will be.
I’m posting because I’m wondering, does anyone have any suggestions, or things they’d like to see in this kind of tool?
I think you got it there that tool would be esential and would be even better on my iPhone
I could use it whilst in game playing and not have to leave the game. Im not sure how your programming skills are but something I think that would be great for this would be for the app to make a graph of the prices for ex: If day 1 gold = $1 x 1000g, day 2 = $0,9 x 1000g etc you could see how the prices are evolving on different commodetie prodducts.
Thanks Jordan – at first I was going to do a web app, but then I immediately thought iphone would be better so you could use the app while in game. Also then I can monetize it
but I’ll be sure to give away some codes in comments / forum.
I was thinking of the daily average chart, or something like that, I’m just not sure the best way to scrape that data, and I don’t know if I’ll have time everyday to enter it in.
Let me know if there are any other features
Maybe you wont have to you could add a way for ppl to upload the value at each moment and save it for them or something like that IDK
Not a bad idea, just put the responsibility on the user. It would be nice to see average prices changes over 7 days or more.
As im not very good at math, nor I have acess to any kind of tool to calculate if im gonna gain more by selling the item or salvage it, I’m going to write down everything old style- pen and paper for every day.Including crafting mats, gold and maybe rare/legendary items.Perhaps I’ll move on to Excel since it’s gonna be a lot of info, but I know Excel so I’m gonna be able to sort item prices etc.
With the launch I’ll aim to level up asap and try to invest/seek out +MF gear.I won’t lvl my artisians, I’ll just sell the items/salvage and sell all the materials/pages/tomes that I get my hands on.
Ray’s post about how you invest your time was wonderfull and I think that really “farming” inferno isn’t a viable option for best money gain at the start, even after a month or two.I could imagine that, by aiming most profit, killing faster in Nightmare or Hell will net me more profit.Why?Because ppl leveling their artisians will reach inferno way before they reach their artisian’s level for items with inferno’s materials.They will NEED more mats from Hell, and that’s where I think I’ll gain most profit from.
Also I’ll slow down my own toon’s gearing up for a bit, in case that legendary wep I find sells for 250$(or more in the GAH).I will sell it in a heartbeat.Since one weapon might boost me 5%,10% even little more, I would definately want it, but I’m gouing to profit a lot more selling it IMO.
Hopefully I’ll be leveling together with a friend but that’s not yet certain, I might be on my own(worst case scenario).From here I see two perspectives:
-One: Going into inferno and farming pre-skeleton king mobs for gear for myself and for sale, also selling any other valuable stuff I could find untill im geared enough to progress.Consider that one must lower his +MF gems in order to gain more strenght/survivability to beat monsters in there.
-Two: If inferno turns out very,very,very slow/hard, I’ll be farming Nightmare/Hell for more +MF boost,also to gear myself up and sell anything else of value (plus, gears/mats/pages/tomes/potions etc in Hell are gonna be VERY desired, because it’s where you’re getting ready for inferno, but also pretty hard difucculty itself that not every player will be able to beat “easy”).
So how do you guys feel about it? Are you goinna use your geared char to farm fast lower/medium content with ease, or are you gonna hit inferno and try your luck getting that “uber-multiple-affix-gear” to sell?
You raise some good points Funkyjoe (I like that name) and one in particular that gets me thinking…
“Also I’ll slow down my own toon’s gearing up for a bit, in case that legendary wep I find sells for 250$(or more in the GAH).I will sell it in a heartbeat.Since one weapon might boost me 5%,10% even little more, I would definately want it, but I’m gouing to profit a lot more selling it IMO.”
This bit drew my attention. I see your point for a legendary item and I don’t anticipate you’ll need legendary items to clear higher difficulties – in fact there will be multiple levels/tiers of legendary. Well rolled magical or rares will do the job too, but you know, you’re going to need a full set of well rolled magic/rare gear to progress in higher difficulties.
This will mean a lot of players (who don’t get lucky with the rolls) are going to be hunting those items down.
How many players like you will be providing a supply?
Now it’s been clear for some time that the ‘gearing up’ time period will net considerable profits but this ‘choke point’ means two things (and these are the kinds of decisions that are crucial):
1) The gear is valuable. You could sell all your gear that would take you to Nightmare and beyond but never go beyond.
2) There is a restriction on the numbers entering higher difficulties (and it gets more restrictive at each tier). You could take your best gear, sell the 2nd best and keep pushing at the content.
I foresee a plan, combining the two. I must go jot it down.
Depending on your strategy for profit in Diablo 3, you have a couple of options with gold in that first week. Gold will be worth more in these initial phases of the game than it will be in perhaps 6 months time. Therefore you should spend it while it’s worth more (buy up whatever else fits into your strategy for profits) eg. Are you planning to sell gems, rare crafting materials or something else later in the game? The first couple of months would be the perfect time to buy up as much of this as you can with your gold (in the gold auction house) to prepare you for a mighty profit a couple of months later in the real money auction house when the value of gold drops.
The strategy then for the first week’s play. Exchange your gold for other things while it’s worth more in the gold auction house, then sell your purchases later in the real money auction house.