lol gold value will plummet with RMAH

#31KillaBeAtPosted 6/9/2012 10:34:46 PM
It's easy to look at the gold farmers more or less collapsing the value of gold on their own sites by farming it so much, and assume that the same thing is going to happen when it comes out for the RMAH, but the fact of the matter is that these two systems are completely different types of markets.

The gold buying black-market is based on the gold value in the AH without the inclusion of the RMAH, which will basically completely level the playing field (since even if the gold farmers managed to farm hundreds of millions of gold and flood the market every single hour, it will still pale in comparison to the actual gold being sent in to the market by the millions of people playing the game). Once the RMAH comes out, the value of gold is going to drop to insanely low levels within the first few hours, then the market will recover and the gold will be over-valued, and then the value will plummet (this time a little less than the first time) and the value of the gold will eventually plane out at whatever level its going to be at. That level will be based almost entirely on how many people are willing to pay real money to buy fake gold, and if every single F2P mmo in existence is any indication, the people who spend more than a few dollars a month are going to be totally in the minority (as in <5% minority).

As I've said before (and the jaded economics "experts" here have completely ignored) unless a huge majority of people use money EXCLUSIVELY to buy every single one of their items, there is no way that gold is going to become deflated to the point where it isn't going to be able to buy items. It's just not a realistic scenario.

I'm no master economist, I've only got 2 years of econ from university, but it is COMMON SENSE that these things are true. The concept is called market elasticity if you don't believe me, its one of the fundamental laws behind supply and demand.
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#32NewhopesPosted 6/9/2012 10:47:37 PM
KillaBeAt posted...
Newhopes posted...
craziii3 posted...
could someone explain the logic behind rmah = death of gold ah and plummeting prices.


Who in their right mind is going to put items on the Gold AH when they can sell it for real money, and if somebody is stipid enough to put good items there all that'll happen is the chinese farmers will buy it and put it on the RMAH.

So all that'll happen is the gold AH will have all the rubbish which nobody wants which means gold will become just as worthless as it is in diablo 2.


*whooooooooooosh*

.


You obviously don't have a clue what your talking about, so a commodity thats always increasing in quantity and isn't used increases in value ROFL.(little hint it devalues)
#33milenkov17Posted 6/9/2012 11:14:14 PM
KillaBeAt posted...
If all the "chinese farmers" were buying up all the items and putting them on the RMAH, it's going to feed the "Gold economy" in D3 and drive the value of the gold UP not down.


No.

Chinese farmers will pump more gold into the economy, but take good items out of it. At some point a lot of people will have a lot of gold but nothing to spend it on. Eventually an item that could be sold for 1 million before, will now be sold for 10 million, thus devaluing the gold.
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#34StandardPhantomPosted 6/9/2012 11:23:58 PM
Yeah im an idiot, there was a gold seller on d3jsp offering to mass buy gold in 1m increments for 13.50 per million. At the time I had 23 Mil, driven by loot lust I chose gear over money and bought some great DH gear.

Jokes on me, I chose attack speed and a bow over LOLCRIT DAMAGE and an xbow, so im getting a direct nerf. Awesome right?
#35KillaBeAtPosted 6/10/2012 8:11:38 AM
milenkov17 posted...
KillaBeAt posted...
If all the "chinese farmers" were buying up all the items and putting them on the RMAH, it's going to feed the "Gold economy" in D3 and drive the value of the gold UP not down.


No.

Chinese farmers will pump more gold into the economy, but take good items out of it. At some point a lot of people will have a lot of gold but nothing to spend it on. Eventually an item that could be sold for 1 million before, will now be sold for 10 million, thus devaluing the gold.


You're right, that could totally happen, but only if a group of chinese farmers was able to have more buying power than every single legitimate player who is currently playing the game (like, millions of them). But there is NO way that the Chinese Farmers have enough buying power to buy out all the items. If there were 250 items on the market right now at approximately the same price, and approximately the same statistics, they wouldn't have to buy out one of them, they would have to buy out ALL of them. Then, what do you think the people who they bought them off of would do with all of the gold they just made? I'm willing to bet that they would spend that money on more items, at a slightly higher value. Then, the value of the items would drop again, once the gold farmers.

The model you has 3 serious assumptions that are completely false.
1. You assume the chinese gold-farmers have enough money to buy up all the cheap items on the auction house. Literally thousands of items, some of which are priced at 10million+ gold.

2. You assume that there is a finite number of items on the AH and it would actually be possible to buy them all up. But it is constantly being replenished with items at a rate that is probably much much faster than people are buying items off the AH.

3. You assume that people are going to be exclusively using the RMAH or the regular AH, not one to compliment the other, and most industry standards state that this isn't true.

The examples you guys are coming up with are just too small and isolated. A lot of the people don't seem to be thinking about the fact that if the farmers are pumping their gold in to their economy, then the gold is going to people who want to buy things with it (and not on the RMAH). Not only that, but gold is removed on every single transaction that takes place in the AH (commodities, items and, I would assume anyways, the RMAH).

Is the value of gold going to drop? Probably, but its a little crazy to think that just because somebody bought an item for 1 million, the next item is going to go on for 1.1 or 1.2 million and sell, all the way up to 10 million. At a certain point the items simply aren't going to be accessible to everyone, and if only a small segment has enough money to BUY these items (and from your model, it sounds like the rich getting richer here) there will be a massive market saturation of high end items and not enough people wealthy enough to buy them, and the price will drop. Thats just how markets work.

Just because EVERYBODY buys from McDonalds, doesn't mean they are going to increase the cost of all their meals (unless food costs increase anyways) because it would make the market less accessible to the people who want it.
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#36Sigma0PiratePosted 6/10/2012 8:22:38 AM
Who in their right mind is going to put items on the Gold AH when they can sell it for real money

Who in their right mind is going to buy items for real money when you could buy them for in-game currency

?_?
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#37KillaBeAtPosted 6/10/2012 8:45:36 AM
Newhopes posted...
KillaBeAt posted...
Newhopes posted...
craziii3 posted...
could someone explain the logic behind rmah = death of gold ah and plummeting prices.


Who in their right mind is going to put items on the Gold AH when they can sell it for real money, and if somebody is stipid enough to put good items there all that'll happen is the chinese farmers will buy it and put it on the RMAH.

So all that'll happen is the gold AH will have all the rubbish which nobody wants which means gold will become just as worthless as it is in diablo 2.


*whooooooooooosh*

.


You obviously don't have a clue what your talking about, so a commodity thats always increasing in quantity and isn't used increases in value ROFL.(little hint it devalues)


The game CONSTANTLY generates an endless supply of gold. People here seem to think that all this RMAH gold is just going to be wished in to existence, or suddenly there is going to 300x as much gold in the economy as there is now.. Lets be extremely generous and say that 10% of all the gold that gets put on the RMAH within the first month is farmed and wasn't going to be used to buy items anyways. The other 90% of the gold that goes on to the RMAH? Thats gold that is coming OUT of the AH, thus decreasing the overall amount of gold currently in supply to buy items with, thus increasing it's buying power. But even THIS ignores the most important part of WHY gold is never going to be totally devalued.

I'm willing to bet that people are buying it so that they can order buy items off the AH with it. I'm going to use a little bit of math here to prove my point (though I'm sure your argument of "NUH UH UR WRONG" holds up really well against empirical examples).

If you wanted to buy a 1 million gold item off of the Auction House you have 2 options

1. You have 1 million gold sitting sitting around, and you buy the item.
1mx.85 = 850k gold transaction, 150k gold is eliminated from the overall economy

2. You don't have 1 million and have to buy 1 million gold off of the RMAH
that means you have to buy 1 million off of the auction house, with the 15% transaction tax, and then you have to use the 1 million that you just bought to buy the item, which means that you are going to have to pay that 15% transaction tax twice, eliminating 300k gold from the economy. Thus, since you have decided to buy gold off the AH, have eliminated more of it off of the servers, you have effectively driven the buying power of gold up, not down when compared to the cost of just buying the item off the regular AH.

Technically who buy gold off of the RMAH are increasing the value of the gold in the economy. I'm sure its by design, since the economy was probably developed by a team of university trained business majors (read; not me, not you) that are using techniques that we just aren't able to completely understand. I don't see how YOU could possibly think that you are smarter than the group of people who have successfully run one of the biggest video-game economies in the history of gaming.

Also, since you clearly did no research at all before you started putting on your stunning display of ignorance, just so you know 15% of gold in EVERY transaction, commodities, items, or presumably RMAH gold is eliminated. I already pointed out way up there that artisans render gold constantly valuable at a set value. If it were insanely cheap to get gold, you could just buy up all kinds of gold, use it to craft at the artisans, and reap MASSIVE gains and simple market economics is not going to let that happen.
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#38milenkov17Posted 6/10/2012 9:38:03 AM
there are a few things that work against your ideas:

1. D3 population has already peaked and it's all down from here, which means less people finding items to sell on AH

2. when RMAH is released, many people will post their items there, which means less items on Ah

3. people will continually upgrade their equipment, which would make more and more items on the AH useless since they will not be an upgrade

4. all of the above means that at one point the only items worth anything would be absolute top tier equipment which is found by a shrinking number of players. Those items would probably go into RMAH, which means that if anyone of them makes it to the AH it would result in a bidding war from people who have been stockpiling gold for the above reasons, thus resulting in very little actual value of gold.
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PSN: vaskov17
#39YouStillHateMePosted 6/10/2012 9:48:50 AM
Until artisans are actually worth sinking gold into prices will inflate regardless of the RMAH. Taking out 15% of the economy's gold is not enough.
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