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Thread: Auction house thoughts and a suggestion in regards to a RMAH

  1. #1

    Lightbulb Auction house thoughts and a suggestion in regards to a RMAH

    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.

  2. #2
    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.

  3. #3
    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.

  4. #4
    Quote Originally Posted by Mugaaz View Post
    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.

  5. #5
    Master Theorycrafter
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    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...

  6. #6
    Quote Originally Posted by Tinuvas View Post
    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.

  7. #7
    Quote Originally Posted by syphonhail View Post
    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.

  8. #8
    Quote Originally Posted by Daer View Post
    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!
    http://i.imgur.com/aeU4CXf.png
    Click to see our new website; and for all dTCG news.

  9. #9
    Quote Originally Posted by syphonhail View Post
    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.

  10. #10
    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.

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