This is a LONG post, but I think is worth reading it.
I am not playing with words here.The launch of Diablo 3 will be the beginning of the Revolution…in game industry ofc :D.I am talking about RMAH.
How would this Revolutions will end ? With “regime change and victory” (RMAH will be a success and the other game companies will follow suit) or will end with a “bloodshed” (the other way lol, RMAH being a disaster) ?
My bet is that RMAH will be a success…not only a succes, but a BIG one.So big, that will actually REVOLUTIONIZE the gaming industry.And I am willing to bet everything on that.
My reasons why RMAH will be a success and why will bring Blizzard an income that will prompt them to keep improving their games, to create new ones or better ones and to keep the Real Money Auction House as feature in their future games and, maybe, implement it in current games.
First, and the most powerful reason is that Blizzard decided (willingly or not…) to protect against illegal RMT and practically destroying out of game RMT (for Diablo 3 only…atm).The World Bank estimated that in 2011, the RMT with in-game items, currency, powerleveling, etc. was at…hang on your chairs…3,000,000,000 $ http://www.washingtonpost.com/business/economy/world-bank-says-online-gaming-industry-is-a-boon-to-asia-economy/2011/04/05/AF1cebrC_story.html
Hawt shit, isn’t it ? 3 BILLION $ in 2011, and Blizz can’t get a piece of those transactions ? I think that a hefty part of those 3 billion $ are from WoW and Diablo games.How much ? I can only estimate on this, but most likely between 8-10%, if not more.But it is still a 300 million $…and this with UNSECURE transactions (scams, hacks, BOTS, DUPING).I use the last 2 in capitals, because those 2 are LOWERING the price transactions.
So, Blizzard probably estimates that a LEGIT and SECURE RMAH in Diablo 3 will bring them ALOT of money.How much is this alot?If out of the above estimate of 300 million $, WoW gets 70% and Diablo 2 gets 30%, means about 90 million $ in 2011 were coming from illegal RMT with Diablo 2 items (HEAVILY botted and duped).
My sincere estimate (and probably Blizzard’s one), is that Diablo 3 will have a volume of RMAH sales close to 500 million $ / year. Hmm, why do you think that Bozzor? Well, let me light up a ciggar…BRB.
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Back.I don’t really know if Diablo 2 had RMT’s worth 90 million $, but WoW is HUGE and it is quite safe to say that WoW could had 7% of the total RMT’s world-wide and D2 only 3%.I am going to cut this figure, to 1,5% for D2 and 3,5% for WoW.Even so, the illegal RMT’s in D2 (again, heavily botted and duped) could have seen a 45 million $ volume.
Now, Diablo 3 is estimated to have 5 million copies sold in first year.Even if RMAH is a possible source of income, i think that not many already bought 2 or more copies of the game, so i will assume 5 million players.Once RMAH will prove viable (and will prove so or not in 3-4 weeks max) a number of players will buy more copies (especially because of the 10 auctions limit / account in same time).But for now I will agree with the estimates and will stick on 5 million players.
This is half of the current WoW player base.Now, this is where I stop comparing WoW with D3.A LEGIT and SECURE place for RMT’s (the RMAH) will DRASTICALLY increase the number of those who will spend money AND the amount they will spend.In WoW, out of 10 players willing to buy gold for money, only 1 or 2 would also RISK doing it.And they will RISK small amounts, 10-20 $ / transaction.If the WoW gold selling would have been legit, 7 or 8 would buy gold, and, because would have been SECURE (like D3 RMAH will be), they will NOT limit to 10-20 $ / transaction.
So, the number of buyers will quadruple (7-8 compared with 1-2) and the amount of money will, probably double.This, OFC, if Blizzard would have kept the WoW gold inflation under control (will be heavily controlled in D3).So…4 times more buyers x 2 times more money.That means 8 times more the money volume…which means 45 million x 8 = 360 million $ / year.
Is this much? Well, let’s crunch some numbers.
1. 360,000,000 $ / year = 30,000,000 $ / month = 1,000,000 $ / day.
2. 1,000,000 $ / day / 5,000,000 players = 0.20 $ / day /player.
Would this be about right ? Each of the players will spend 0.20 $ / day ? Nope, it is not correct.First, not all player will spend money in RMAH.But then, how much will? Well, i have no idea, BUT 30,000,000 $ / month, assuming that a player will be able to spend 10 $ / month for something that he needs, means that 3 million player will have to spend this amount of money every month…highly unlikely.
Now what ? Now we need to come down to reallity.Players estimates that between 20% and 40% of the players will spend some money in RMAH.Even those estimates are high from my point of view.In another post, I estimated that 4% of the players will spend money in RMAH, and I also thought that the amount will be like 100 $ or euros / year, bringing the RMT’s volume to 20 million $ / year in Diablo 3.
With 15% RMAH fee (assuming only gold will be sold in RMAH), Blizzard will get only like 3 million $ / year.This could be upped a bit with the listing fee of items in RMAH, but not much, probably to 3,1 – 3,2 million $.Is that ALL Blizzard expects to get ? Dunno, compare those 3 millions / year with WoW 1 billion / year.I agree, Diablo 3 is not a MMO…but hell, it will have 5 MILLIONS players, and this in first year.While not being an MMO, it is surely very close.
Blizzard cannot expect half of WoW money , which means 500 millions from RMAH cut of 15%…which, god, means Diablo 3 to see RMT’s values of 6-7 BILLION $ / year.Not going to happen.
I think that my 4% estimate was wrong, i a way that was the most conservative figure.Also, 40% or 20% are the most optimistic figures.The truth must be somewhere in the middle of 20% and 4%, so 12%…but closer to my 4%, probably around 10%.With 10%, my 20,000,000 $ / year volume estimated couple weeks ago, will become 2,5 times larger, reaching 50,000,000 $ / year.
Even so, Blizzard would get only 2,5 x 3 million $, so 7,500,000 $ / year.It is NOT worth it for them.I can increase the money spent from 100 to 200 $ or euros / year.This would mean 16,6 $ spent per month.Not a very large amount of money for such a great game.I think it is entirely possible that 10% of the players will spend 16-17 $ / month, and this will become the conservative estimate.Why conservative ? Again, I need to smoke…BRB.
Back.
The second reason why I think RMAH will be a success and will also increase the RMT’s volume, is what I call “Blizzard Market Regulations” for Diablo 3 RMAH.Firstly, there is minimum limit to sell something in RMAH, which is 1,5 $.Not extremely much, but enough to keep a min pricing.Secondly, the limit of 10 auctions open / account in same time.This will, along with the fixed fee to list auctions (there will be a limited number of free listings), prevent useless listing of millions of worthless auctions, making that the prices will rise or drop based only on demand-supply rule, and NOT manipulating huge volumes of gold or items.Third, the GOLD inflation will be limited due to a number of gold sinks.The biggest gold sink will be Crafting.ALOT of gold will die there.Another sink will be repairs, tho not as big as crafting, will be quite costly at lvl 60 in Inferno.The fourth reason is the access to ALL Gold AH’s in the world BUT the locked RMAH for your zone.Another way to keep GOLD prices under control, since GOLD will be, most likely, the most sold in RMAH (tho, might not have the biggest slice).
Blizzard said that they intend to have a balance between drops and crafting, in quality and volume also.This means that Blizzard will control the drop rate and the crafting drop rate for items similar in power.I think Blizzard will make the drop rate low enough to KEEP players both into crafting (gold sink) and into farming best items (that drop in Inferno – another gold sink due to repairs upon death…and will be many deaths
).
So, far so good…but how will this increase the spending? Most of the players will have LIMITED time to play, i think about 60% to 70% to be in this category.Limited time to play meaning like 2-3 hours on weekend days, like 4-6 hours / week.Maybe more, but this really doesn’t matter…because the low drop rate and Inferno difficulty will make most players with limited time unable to get the desired items in fairly short time (1 week or less).Also, due to his limited play time, he CANNOT hope to save as much gold as needed to buy a shiny he wants / need unless spending weeks upon weeks of farming.He will have to buy the item EITHER from RMAH, either buy the gold from RMAH to buy the item from GAH.
70% of the players will be in this situation.Some of them will CHOOSE to level the artisans in order to avoid paying much for best items and hoping to be “lucky” to get good items.But they will hit the GOLD wall.Not only the leveling of Artisans will be high enough, but a lvl 60 item require 150-170 k gold in fees alone, not to mention the materials needed.Craft 5 of those, spend 1 million gold (like 25 hours of farming, with 40,000 gold / hour – which means, for the casual, 4 weeks in real-time…) and get nothing but shit.
So, 10% of player base to spend 17 $ / month in RMAH ? Think again…with the controlled drop rate (both crafts and boss/champion/elite drops), crafting expenses and repairs alone, it is safe to say that gold will be very needed by more than 10% of the players and the expenses will surpass 17 $ / month.
This is the last sentence.I believe that about 20% of the players (probably about 8 million in 1-2 months) will spend about 20-25 $ / month in RMAH, on gold and/or items.So, 2 million players will spend a total of 40-50 million $ / month in Diablo 3, bringing the yearly volume to 480-600 million $.This will bring Blizzard a profit between 72 and 90 million $ / year from fees.Compared to 1 billion from WoW in same time frame, it is like 12 times smaller.But the expenses to run WoW 200+ servers and HUGE amount of data (being an MMO) it is also like 12-15 times higher.
I lied.This is the last sentence
.Only time (and not much, less than couple months) will prove if i was wrong about this.You think I was wrong about 20% of the player base as buyers in RMAH, the 8 million D3 players or the 20-25$ spend on monthly basis ? And if you think I am wrong, where and how much I am wrong?
Peace,
Bozzor, Gold Multimillionaire.
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