RMAH reality check - 50$ to potentialy 3,000 $ earnings der=0>

[semakka]

Hello.This is my first topic here, so have mercy pls .(no need read bellow articles on my blog - tho might worth it, stick to tl;dr here).

The long (1700+ words) version is on my blog.The text is bellow :


Long version :
"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 .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 ****, 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.
………………………………………………………………………………………………………….
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 ****.

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"

Short version :

-8 million Diablo 3 players in first 2 months after release ;
-480 to 600 million $ worth of sales in first year (first 12 months) ;
-20% of the player base (about 2 million) to spend 20-25$ / month for items and/or gold ;

On another article on my blog, i made a very conservative estimate, but even so i ended up with potential earning of + 1,000 euros (was made for RMAH-EU zone, which i belong).
The estimate was for 3,5% of EU players to spend between 100 and 150 euros / year.

Long version :

After a week of reading forums, blogs and official sites, I came to a conclusion regarding the possibilities to make nice amounts of money thru Diablo 3 RMAH.

First thing was the Blizzard announcement that they have sold 1 million copies of Diablo 3 thru Annual Pass.The second was an estimate made by analysts that Blizzard will sell 5 million copies in first year of Diablo 3 launch.Based on the 20 million copies of Diablo 1 & 2 sold up to the date, it is fairly sure that Diablo 3 will see probably over 5 million copies sold in first year, but let’s stick to what the analysts estimate.They know better.

The third thing was reading countless posts and replies on EU and US Diablo 3 forums, mainly on Trading section, most of the posts being in the range “nobody will make a living off RMAH”, “Iwill not spend any money in RMAH”.This alone made me wonder if they are right or just trolling.
There are a number of questions arising when one ask if RMAH can be a possibility to make money, and not peanuts, but really good money.

The number 1 question is : “How many D3 players will spend money on RMAH?”.The answer is not hard to find, tbh.Most D3 players will be mature players, with jobs, families, responsibilities, hence, with very limited time to play, but with money to spend.
I believe that like 70% of the D3 players will have under 2 hours / day, or, put it better, like 10-12 hours / week (assuming 4-5 hours in weekend days).How many of those will spend money in RMAH ? Most likely, 90% of them will NOT spend any money.But 10% of them MIGHT.AND 10% of them means 7% of total players (10% out of 70% = 7%).

Now, will ALL of those 7% spend money on RMAH ? Ofc, no, not all of them will…but like half of them will.And that is 3,5% of the player base.Now, we have 5 million copies sold WORLDWIDE, split in 3 zones : North America, Europe and Asia.It is fair to say that all the zones will be kinda equal, with NA and EU having bit more, but not much more.

A fairly estimate for NA or EU would be 1,7-1,8 million players.3,5% of 1,700,000 = 51,000.It is not unreal to think that 51,000 EU players will spend money in RMAH.They will have LIMITED time to play, which means lowest amount of gold and lowest chances for good drops (more time = more kills = more chances for drops).They WILL use their money to fill in the gap needed to play Inferno.
How much would are they willing to spend in RMAH to buy the goodies needed to have a smooth and enjoyable game experience ? 50 euros / year ? 100 euros / year ? More ?

A guy in a developed EU country (France, Germany, Netherlands, Belgium, Sweden, etc) who have a normal 9-17 job earn like 2,000-3,000 euros / month.Would he pay 100 euros / year to buy a 50 euros very good weapon and another 50 euros for 2 pieces of very good gear, all of them needing otherwise MONTHS of farming (months because with 2 hours / day it kinda sucks) ?

I believe that a medium amount spent / player will be 100-150 euros / year.Which means : 51,000 x 100 euros = 5,100,000 euros / year.Now, based on what is happening in WoW AH, there are like 20 millionaires MAX / server.With 220 or so server, that means 4,400 millionaires in WoW…out of 10,000,000.Which means 0,044%.And they are amassing about 35% of the TOTAL WoW gold.

Most likely same will happen in Diablo 3 also.The percentage of players who will be really rich will be around 0.05%.Out of the 1,7 millions EU Diablo 3 players, this means like 850 players.They will amas like 35% of those 5,1 million euros, which means 1,785,000 euros.Divided to 850, means 2,100 euros / year, which means only 175 euros /month.

Not much, BUT…out of those 850, only about 200 will get the big share, probably like half of those 1,785,000 euros, which means like 890,000 euros.Divide this figure to 200, and every one of those players will earn 4462 euros / year, or like 370 euros / month.
There will be people who will make 1,000 euros / month, people who will make 300, people who will make 100 and people who will make 10 euros/ month.

The potential is there.Those few who WILL make 1,000 euros / month or more will need some key elements to achieve this : first is TIME, second is Gold AH manipulation, third is economic knowledge, fourth is gaming experience in trading, fifth is INSPIRATION and last is LUCK.
If you miss only ONE of the above, you will most likely fall in the 100 euros or less made per month.
But this was almost 2 weeks ago.The more research i did, the more i modified the figures.

There will be people who will make 2,000-3,000 $ / month.No doubt about it.
-i think that about 0,05% of the D3 players will make the above amount of money.It is not much, even at 8 million, ONLY about 4,000 will be good enough, have enough time AND have multiple accounts to be able to make that much.

In 2011, the RMT's world-wide were about 3 billion $.
http://www.washingtonpost.com/busine...brC_story.html.
It is exagerated to say that Diablo 3 to reach 500 million, considering that the RMAH will be LEGIT (the customers will probably be 4 times more).

I think that 20% of Diablo 3 players to be the spenders is conservative.I also think that 25$ / month is below what will be spent.

What i am sure about, is that almost everyone will make some money, while i am also sure that only very few will manage to pass 2,000 $ / month.

If i am wrong about my estimates (player base, the percentage of buyer, the money spent monthly, etc) pls reply.

Ty for reading.

[Kornkills]

I think botters will make 4k a month the first month.

[Enlil]

I think botters will make 4k a month the first month.

I think making 1000-1500 will be possible for the dedicated.
Blizz will soon take action against botters, the warden system will weed them out.

[ahwolf]

I doubt that botts on the market today could very effectively farm inferno. And that is where the money will be at in my opinion. The problem with earning money is that you need a steady supply of items that do well in the RMAH. And the best sold items will be pretty rare drops so spread across all those millions of players. Gems, gold and craft mats may be steady but prices will drop for those as everybody will accumulate them. I havent quited my job yet in any case.

[Blackstream]

My goal is to make about 50 a week playing about 2 hours a day. Or about $3.50 an hour. Seems like it should be fairly conservative, but we'll see.

[semakka]

I think botters will make 4k a month the first month.

This is not going to happen.Not going to go into proving my calculations, but if 20% of the Diablo 3 player base will use bots, in 2 months top, the gold value will be 3 times lower than when were no bots, the prices in GAH will be 400-500% higher, the entire GAH trading will die, triggering a crisis in RMAH, Blizzard losing a potential 300 million $ in first year alone, making 200 million $ instead 500 million $ in first year.

You must understand that there are 2 ways to make Diablo 3 a success : heavy clamp down on boters (baning accounts, IP's, and even countries - that happend before in other games) OR hope that 70% of the player base to use bots.The last way is IMPOSSIBLE, 80% of the players (the casuals) will refuse to use bots (casuals really hate to cheat)...so, only the first way is the way to go.

A small number of bots running (for less than 1 day) might be possible...but they will not be able to impact the economy. 10,000-20,000 bots running for 24 hours before getting baned it's nothing.Also, when they are baned, ALL of their gold and items will be deleted EVEN if they are in AH (gold or real money).

So, worry not about bots AT LEAST for 3 years.After that, when Blizz will get his pockets filled with 1-2 Billion $ and no more big money are to be made, there might be more bots.But if Blizz manages to keep a steady and good revenue from RMAH, Diablo 3 will be known as "the bot killer".

[Enlil]

This is not going to happen.Not going to go into proving my calculations, but if 20% of the Diablo 3 player base will use bots, in 2 months top, the gold value will be 3 times lower than when were no bots, the prices in GAH will be 400-500% higher, the entire GAH trading will die, triggering a crisis in RMAH, Blizzard losing potentialy 300 million $ in first year alone, making 200 million $ instead 300 million $ in first year.

You must underastand that there are 2 ways to make Diablo 3 a success : heavy clamp down on boters (baning accounts, IP's, and even countries - that happend before in other games) OR allow 70% of the players to use bots.The last is IMPOSSIBLE, 80% of the casuals will NOT use bots...so, only the first way is the way to go.

A small number of bots running (for less than 1 day) might be possible...but they will not be able to impact the economy. 20,000-50,000 bots running for 24 hours before getting baned it's nothing.Also, when they are baned, ALL of their gold and items will be deleted EVEN if they are in AH (gold or real money).

So, worry not about bots AT LEAST for 3 years.After that, when Blizz will get his pockets filled with 1-2 Billion $, there might be more bots.But if Blizz manages to keep a steady and good revenue for them from RMAH, Diablo 3 will be known as "bot killer".

After blizz have made there 2 billion they will want another 2 billion. Fear not blizzard will stop the bot's.
Long live D3 death to all botters xD

[semakka]

After blizz have made there 2 billion they will want another 2 billion. Fear not blizzard will stop the bot's.
Long live D3 death to all botters xD

I so like when i see like-minded people thinking the same as me

Yep, i am sure Blizzard will stop the bots.

[Enlil]

I doubt that botts on the market today could very effectively farm inferno. And that is where the money will be at in my opinion. The problem with earning money is that you need a steady supply of items that do well in the RMAH. And the best sold items will be pretty rare drops so spread across all those millions of players. Gems, gold and craft mats may be steady but prices will drop for those as everybody will accumulate them. I havent quited my job yet in any case.

Agreed, I'll eat my hat when some hacker can program a bot to have the intelligence, cunning and stratagy of the human mind, as only these human qualities will survive in inferno if its as brutal as we've been told.

"I'll belive its that hard when I see it lol, gonna own it up like a boss" xD

Inferno acts 3/4 will be the only place to go when playing for money, sorry bots your not smart enough.

[Blackstream]

I'm hoping all of inferno is outside of bot capabilities. Specifically, knowing what I know about d3, I'm hoping that the range of mob affixes are too vast and require too much skill and adaptation to deal with. And of course the warden software just obliterates 99% of botters anyways.