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View Full Version : Auction house thoughts and a suggestion in regards to a RMAH



syphonhail
05-15-2013, 10:33 AM
or "How to prevent an assault at the electronic Bay."

Summary and brief suggestion:
The only way money should enter into transactions between players through the Hex software is through the sale and purchase of platinum. There should not be a separate, real money auction house. Players should have the option to put platinum on the AH for either gold or dollars.



The too long to read section:

The role of real money in a secondary market is still in flux as Crypto looks at their options and determine what is feasible both given the technology and given various jurisdictions. We know a few things thus far. First, there will be an auction house that uses gold as a currency. Gold is an in-game currency earned through PVE and has various game sinks associated with it. The value of gold is going to be based around its supply, how demanding the in-game sinks are, as well as how many people are actively engaging in that supply. Thus, it will have some inherent time-based value to it that will devalue predictably over time. Accumulating gold in the short term is likely to be a less good strategy than spending gold as the daily value of gold will decrease.

The second auction house will be a platinum based market. Platinum is an in-game currency that can be purchased from Crypto and is currently not reversible (as in, they will not buy it back from it). For now, I will assume that 1 plat = $1 and that the platinum is divisible at least into the hundredths for liquidity reasons. As there is no other supply of platinum beyond a secondary eBay market at the moment, prices will hover close to the $1 mark with occasionally bursts of people selling off plat that they have achieved from selling cards on the auction house; taking a loss to cash out.

The result of these two auction houses is that you have a bifurcated market where cards will go up either on the gold auction house or the platinum auction house. This creates imperfections in the market place where the expected gold to plat exchange will not be mirrored in the auction house prices for cards at given times. For example, hypothetically, if 1 plat is worth 100 gold (as determined by market transactions), it would be surprising to see a 5p card (letís say Replicatorís Gambit) up for 700g. This creates the opportunity for arbitrage and creates a third game outside of PVP and PVE called the Auction House. A perceptive player will buy the 5p card, sell it for 699, and then buy 6.99 plat with the gold. Given a market cut by Crypto of 5% for each sale, the only sale that affects the arbiter is the 700g sale, so they would make 664.05 off the gold sale and be able to buy 6.64 plat or a profit of 1.64. Arbitrage is a necessary and expected component when you create goods that straddle two markets. It ensures that the cards reflect the true value of the market in all markets and providing a profit to the agents who conduct the transactions.

So, this gets us to a Real Money Auction House (RMAH). If a traditional RMAH is instituted via Diablo 3, we enter a trifurcated market where the available pool of goods is now split over 3 distinct markets. As the sample is divided, competition in the market place divides and increases the potential profit for playing the Auction House. While arbitrage is a good for settling variant market prices, creating an artificial demand for people to exploit is less desirable. You are also likely to see a glut in the AH that reflects the more stable currency. In a situation where you choose gold or plat, people are likely to pick plat as that has less day-to-day devaluation than gold. In a choice between gold, plat, or dollars, people will pick dollars. Thus, you have better competition in the real money auction house and worse competition (and better avenues for arbitrage) in gold and plat.

The RMAH is attractive as it allows people to put a price on their goods and know the value of their collection. Crypto can achieve this without trifurcating the market internally by allowing real money auctions purely for platinum. If you want to sell off your collection, you can dump the platinum and move on. If you need some quick plat to get on the PAH, you can do that. If you want gold, you can buy plat, then buy gold with your plat, then play on the GAH.

The issue is only having plat for real money is that it would potentially rob Crypto of the direct sales, but this is unlikely as they have plat sinks. Tournament fees are/should be offered in plat, so plat will exit the economy any time someone enters a draft or a tournament. This will keep the secondary market price close to the real price as well.

Another benefit to having only one active real money auction between players is distribution. If you cannot allow real money transactions in Korea, disable it. In Diablo, this means you have to turn off the entire RMAH and players lose access to an entire market worth of goods. If you turn off real money for plat auctions, players will still have access to the PAH where they can buy cards for plat, they just cannot buy cheap plat from other players.

Finally, players will sell platinum regardless of it being an in-game feature. The real benefit is that crypto will get a cut instead of eBay and Paypal.

Cryptozoic has smart employees working on this feature, but I wanted to add a voice that argues that plat for RM auction house would be good for the game and for Cryptozoic, while a straight RMAH will create undesirable, additional problems.

Stok3d
05-15-2013, 10:48 AM
As long as there is no listing fee and the sell fee <=5%, then I think we'll be fine. A secondary market will form to handle the cash to platinum conversions.

Mugaaz
05-15-2013, 11:36 AM
All I care about is that 1 platinum = 1 cent, roughly. Need denominations less than 1 dollar for the purposes of trading. Needs to be super intuitive though, not like 1 plat = 3.73 cents. I also think that it would be better if there is no discount on buying different quantities of platinum, the price should be constant.

syphonhail
05-15-2013, 12:04 PM
All I care about is that 1 platinum = 1 cent, roughly. Need denominations less than 1 dollar for the purposes of trading. Needs to be super intuitive though, not like 1 plat = 3.73 cents. I also think that it would be better if there is no discount on buying different quantities of platinum, the price should be constant.

It would be more intuitive if .01 plat = 1 cent. You see, the word cent is from centum, meaning 100. A cent is 1/100th of another currency and is not unique to the dollar. In terms of US currency, 1 cent = .01 dollars.

Tinuvas
05-15-2013, 12:58 PM
Well syphonhail, you put some pretty serious thought into this. I agree with your thoughts as well.

At first, I thought it would be in Crypto's best interest to allow players to directly convert plat back to cash. Easy way to cash out, etc. etc. But Stok3d is right, a secondary market WILL form, and all will be well. If I get grumpy and want to leave, and that will happen for some, I can take my resources and go, no muss no fuss. But if they DID allow direct plat to $ transactions, the financial liability, legal hoops, etc. would be staggeringly difficult to overcome I think, and with the secondary market in place, it's not needed. Individual ambition and ingenuity will figure it out without the legal junk getting in the way for Crypto.

Another potential reason to not allow plat to $ conversions is that as has been mentioned with Korea etc. the legal ramifications may devastate the potential player base, making the world of Hex smaller and worse for us gamers. Let us real world folk figure out the hoops with the secondary market. Individual ambition and ingenuity is a powerful thing. Just don't get in our way (and Crypto has stated that they won't).

Now if Crypto can find a way PAST those issues, then a plat to $ conversion option would sure be nice (simple, more secure, etc.), and as already mentioned, allow Crypto a piece of the action. But the potential downside to the whole deal is a bit daunting in my opinion, and again, not needed.

Wow, this game just keeps getting better and better. I need to go ask my wife if we REALLY need that money to go to rent this month...

Daer
05-15-2013, 01:01 PM
Wow, this game just keeps getting better and better. I need to go ask my wife if we REALLY need that money to go to rent this month...

Having a roof over your head is overrated. Just think about all those sweet, sweet cards.

Mugaaz
05-15-2013, 01:15 PM
It would be more intuitive if .01 plat = 1 cent. You see, the word cent is from centum, meaning 100. A cent is 1/100th of another currency and is not unique to the dollar. In terms of US currency, 1 cent = .01 dollars.

I don't care how they break it up, just need to be able to exchange currency at the cent level.

Cornholio666
05-15-2013, 01:22 PM
Having a roof over your head is overrated. Just think about all those sweet, sweet cards.

@Daer you guys can live in the guild keep

@Syphon Great Post/thread!

Temig
05-15-2013, 01:34 PM
It would be more intuitive if .01 plat = 1 cent. You see, the word cent is from centum, meaning 100. A cent is 1/100th of another currency and is not unique to the dollar. In terms of US currency, 1 cent = .01 dollars.

It may seem more intuitive, however it either restricts trading to whole dollar amounts (which obviously doesn't work), or necessitates that plat be useable in non-whole amounts which would just be weird...

Selling a card for 23 plat would make more sense than selling it for 0.23 plat in this particular system where we're talking about a single currency denomination. You don't go around saying you'll sell something for 0.23 dollars, but rather you say 23 cents. Essentially, there needs to be a name for a smallest unit available, and in the case of a single-unit system like this, the easiest correlation is plat:cent.

GatticusFinch
05-15-2013, 01:43 PM
I would like to see a Guild Wars 2 style trading post, whereby I can post that I am looking for card X, and willing to pay/trade card Y or amount of gold/plat Z to get it, and have others be able to see that and fulfill my request instantly. Not sure how hard that is to accomplish, but I think it takes away some of the gamesmanship from the AH and allows the macro-market to define prices easier.

syphonhail
05-15-2013, 01:45 PM
It may seem more intuitive, however it either restricts trading to whole dollar amounts (which obviously doesn't work), or necessitates that plat be useable in non-whole amounts which would just be weird...

Selling a card for 23 plat would make more sense than selling it for 0.23 plat in this particular system where we're talking about a single currency denomination. You don't go around saying you'll sell something for 0.23 dollars, but rather you say 23 cents. Essentially, there needs to be a name for a smallest unit available, and in the case of a single-unit system like this, the easiest correlation is plat:cent.

It may be weird for you, but it is not an uncommon practice. For an immediate, topical example, bitcoin is often discussed in fractions of bitcoins. Cents are quite literally fractions of dollars and even if you do not think of them as in fractions, you certainly do talk about them that way. A cent is 1/100 fo a dollar, a quarter is one quarter of a dollar, dime comes from the old English word disme which means 1/10th, a half-dollar is... These sub-denominations exist as fractions of dollars, it was not a happy accident that our decimalized currency just happen to add up to the right amount of dollars when you combine 4 quarters or a hundred cents.

You can call .23 plat 23 cents if it makes you more comfortable (the word cent is used for over 2 dozen different currencies globally), but it does not really matter for conducting transactions. When you are looking to buy a card, the difference between bidding 423p and 4.23p is trivial. The latter makes displaying numbers easier and doing plat to dollar calculations simpler.

Temig
05-15-2013, 02:07 PM
I would say that it IS an uncommon practice and that bitcoin is one of the few examples there is for such a system.
I'll give you that it is (negligibly) easier to do a plat<->dollar conversion with a decimal format since there would be no conversion, but I do believe that integers as a whole (pun fully intended), are typically easier to work with for most people (See http://verizonmath.blogspot.com/2007/08/original-recording-of-verizon-customer.html for all the facepalm you need) but, in the end what it is is what it is and I've digressed far enough from the original post ;)

syphonhail
05-15-2013, 02:11 PM
Right, the problem in the Verizon example is that cent itself is not a currency; it is, by definition, a fraction of a currency. So, when you say a fraction of a fraction, then people get more confused.

When you say 23 cents, you are quite literally saying I have 23 1/100ths of a dollar or .23. The only reason why we don't think of it that way is that we made coins to represent these fractions.

Another coinage trivia. The nickel used to be called the half-disme in the US (half a 1/10th of a dollar) and it was made out of silver. It was coined the nickel when we went away from silver and started making the coin with 25% nickel.

Turtlewing
05-15-2013, 02:18 PM
I would say that it IS an uncommon practice and that bitcoin is one of the few examples there is for such a system.

Really? you've never seen a price listed like "$1.99", "£3.95", etc.? I'm pretty sure that's not accurate. The only first world currency I can think of that might not routinely deal in fractions in the Japanese yen.

Tyrfang
05-15-2013, 02:33 PM
Really? you've never seen a price listed like "$1.99", "£3.95", etc.? I'm pretty sure that's not accurate. The only first world currency I can think of that might not routinely deal in fractions in the Japanese yen.

South Korean Won
Vietnamese Dong

Fireblast
05-15-2013, 02:35 PM
100 plat = $1 is just easier.
Not even considering the feeling of $10 buying in 1k plat feels better than 10 plat

~

Temig
05-15-2013, 02:39 PM
Really? you've never seen a price listed like "$1.99", "£3.95", etc.? I'm pretty sure that's not accurate. The only first world currency I can think of that might not routinely deal in fractions in the Japanese yen.

And these currencies have unit names for their smallest unit. $1.99 isn't typically stated as "one point nine nine dollars" but rather "one dollar and 99 cents".

And syphonhail: I 100% understand, and think of currency as, fractional units. My point, as stated above, is simply with regard to having a name for the smallest fractional unit. It's a relatively minor difference and I, personally, am fine with whatever direction is taken. But looking at it in terms of being able to easily communicate, getting rid of the fractional units just makes things easier.

Tyrfang
05-15-2013, 02:46 PM
It's sort of implied in common speech to say "$1.99" without any units, as "one ninety-nine"...

syphonhail
05-15-2013, 02:47 PM
100 plat = $1 is just easier.
Not even considering the feeling of $10 buying in 1k plat feels better than 10 plat

~

You are literally arguing that p = d/100 is easier than p = d.

Fireblast
05-15-2013, 03:29 PM
It's not ingame currency if p = d.
And no game uses fractions, they either use alot of the same (diablo, ffxi) or different currencies (wow, eq...)

~

ForgedSol
05-15-2013, 03:43 PM
I'd prefer it if platinum = $1 because it mirrors how money is used and it simplifies things (for people in the US). The real reason to change it to anything else is a psychology trick to it make it feel like it's not money, which encourages spending more. If you're in another country, you're going to have to do a conversion regardless.

syphonhail
05-15-2013, 03:44 PM
It's not ingame currency if p = d.
And no game uses fractions, they either use alot of the same (diablo, ffxi) or different currencies (wow, eq...)

~

Count the logical fallacies: shifting goal posts, appealing to authority and tradition, lack of warrants, and false equivalency. You can spam bad arguments elsewhere.

Turtlewing
05-15-2013, 03:45 PM
And these currencies have unit names for their smallest unit. $1.99 isn't typically stated as "one point nine nine dollars" but rather "one dollar and 99 cents".

And syphonhail: I 100% understand, and think of currency as, fractional units. My point, as stated above, is simply with regard to having a name for the smallest fractional unit. It's a relatively minor difference and I, personally, am fine with whatever direction is taken. But looking at it in terms of being able to easily communicate, getting rid of the fractional units just makes things easier.

"cent" means 100. Thats the origin of the word "percent", and the word "century". And in context means "hundredths" or 1/100.

The main problem with trying to use integer currency is that you're screwed if you end up having to represent things that cost less than your smallest denomination. On the other hand if you plan on using decimal notation it's no big deal to just use an extra decimal place.

Cornholio666
05-15-2013, 06:15 PM
I think in magic they went with 1 ticket = $1 so most things were denominated in tickets. The fractionation then occurred by offering more cards. 4x Card whatever for one ticket, it kind of sets a floor of 25 cents per card, if they needed to go lower they just offered free junk cards 4x Card whatever and any common or uncommon in my binder marked for trade up to trade limit of 32 cards. (or maybe 5x or 6x of the single card if they had them, then the next person could try to trade or pass the extra unplayable ones)

I think this system is better if you want higher value on cards becuase if $1 = 1 plat , and you price an awesome new rare at 12 plat it easier to get that then to price at "1200 plat when $1 = 100 plat" becuase there is a psychological barrier that "1200" is 'high' and so subconscious resistance even though they would both be $12.

ShaolinRaven
05-15-2013, 07:03 PM
Yeah if they are looking at pricing their booster packs at $2 then having 1 plat = $1 is simpler then having 1 plat = 1 cent and making booster packs 200 plat. Besides if we also consider gold, then if 1 Plat is 1 cent 1 gold becomes smaller then 1 cent, so if the market dictates that 100 gold = 1 plat then gold is 1/100th of a cent. With multiple currencies involved plat has to be higher then a cent so gold can also have some value.

Mugaaz
05-15-2013, 07:07 PM
Yeah if they are looking at pricing their booster packs at $2 then having 1 plat = $1 is simpler then having 1 plat = 1 cent and making booster packs 200 plat. Besides if we also consider gold, then if 1 Plat is 1 cent 1 gold becomes smaller then 1 cent, so if the market dictates that 100 gold = 1 plat then gold is 1/100th of a cent. With multiple currencies involved plat has to be higher then a cent so gold can also have some value.

Simplicity isn't ideal if it makes the system much worse. Its almost impossible to trade for commons and uncommons with tickets unless you don't mind get insanely ripped off. The game needs a way of handling decimals, or make 1 dollar = 100 plat. PERIOD. I don't care which.

funktion
05-15-2013, 07:08 PM
If anyone is keeping track... being able to trade in fractions of a dollar is important. I can't stand that I'm forced to deal with bots on mtgo since we are unable to trade in fractions of a ticket with people. Being able to trade in fractions of plat (my preference) or having 1 plat = 1 penny (not even close to as good an option) are much better than the way mtgo handles things. And I'm sure there are even better options to be considered.


...With multiple currencies involved plat has to be higher then a cent so gold can also have some value.

From what I understand, gold and plat are not necessarily interchangeable. Meaning their values are completely independent of one another.

BlindMan
05-15-2013, 07:12 PM
It appears that the basic point here is simply that the platinum currency should be tradable at values small enough that you can exchange low value cards for platinum without requiring the insane MTGO system of "credits" for partial tickets.

Cornholio666
05-16-2013, 12:28 AM
I may have paid for an uncommon here or there but usually you can trade commons and uncommons on a card for card basis or get them for free from your guild or just by asking. I given away thousands of duplicates in magic , and gotten hundreds from my clan and from the free trade bots.
Who is going to make the effort to post trades for card X at 2cents in the auction house? You just post "trade commons for commons" look through their trade binder and click on what you want.

ForgedSol
05-16-2013, 12:42 AM
Not cards at 2 cents, but cards at 2.15, 3.45, 10.63, etc.

djlowballer
05-16-2013, 12:45 AM
I prefer an actual RMAH. Adding an extra step in the currency chain is just annoying for players from countries where the USD is not traded. I have to go Going SGD->USD->Card is much simpler both ways than SGD->USD->Plat->card.

syphonhail
05-16-2013, 08:30 AM
I prefer an actual RMAH. Adding an extra step in the currency chain is just annoying for players from countries where the USD is not traded. I have to go Going SGD->USD->Card is much simpler both ways than SGD->USD->Plat->card.

As I argued in the original post, this is almost inevitable in a trifurcated market. Having the pool of cards split over 3 currencies increases the asymmetry in market prices in relation to the gold to plat to dollar exchange rate. If we have a RMAH, you will have to search a card 3 times and then figure out if it is cheaper to buy it in gold, plat, or dollars. You will have to do the exchange work whether or not there is a RMAH.

djlowballer
05-16-2013, 08:55 AM
I don't think its going to be like that at all. The bulk and professional dealers are going to gravitate towards a cash shop for the simple reason its simpler for them to conduct business. No serious dealers will be selling on the gold AH because in-game currencies always suffer from inflation due to the nature of their creation. Most will lean towards a RMAH vs Plat to avoid being stuck with a pile of "fun money" on their balance sheet. These big dealers are the ones who set the prices for singles/lots which will set the standard for the other two auction houses anyways. Hex doesn't need its own version of Microsoft Points to foster a healthy economy for their cards.

Searching 3 times is needless as well. It would be trivial for CzE to show the current rates in all currencies for a particular card in one query. The only reason Blizzard separated it out was to draw attention to the RMAH and make it more work for people to find the better deal.