One of the much debated features in Diablo 3 is the new Real Money Auction House. I've been reading about it today and trying to make some sense of it.
The first point to make is that the game looks like it will be played in regions. This is similar to D2's division of the world into US East US West Asia and Europe. Consider this answer from the D3 auction house faq:
If I live in Australia/New Zealand/Southeast Asia, what server will I play Diablo III on?
As with StarCraft II, players who purchase the Australia/New Zealand/Southeast Asia version of Diablo III will have their own regional servers, offering lower latency and more action during peak hours. While we encourage players to play on these servers, we recognize that many have longstanding friendships with North American players and would like to continue playing with them. Because of this, we're again giving Australia/New Zealand/ Southeast Asia gamers access to both regions' servers so they can choose where they'd prefer to play.
It says both regions. Both means two. Aus/NZ/SouthEast Asia is one region, North America is another region.
Both regions contain countries issuing different currencies.
Due to various factors, including technology, language, and currency, there will be multiple separate auction houses serving different player communities around the world. We'll share specific details on how the auction houses will work for each region as we get closer to launch.
OK so there will be multiple separate auction houses. In the Aus/NZ/SE Asia region we can expect separate auction houses based on currency for Australia, New Zealand, Thailand, Indonesia etc. However read this:
How does this impact the items I have purchased in the auction house?
Auction house purchases are bound to the servers in the region in which they're bought. Any items acquired on the Australia/New Zealand/Southeast Asia servers, in-game or otherwise, are bound to those servers and are not transferrable to the North American servers (and vice versa). Please keep this in mind when making purchases in the auction house.
Interesting, eh? So a player could buy an item on the RMAH auction house that serves a country where people are generally poor (like Thailand) trade it to a character on a different currency within the same region and re-sell the item on the Australian auction house where people are a bit better off.
If that doesn't sound complicated enough, the plot thickens when we consider this:
Which regions will have currency-based auction house support?
We plan to roll out the currency-based version of the auction house in as many regions as possible with the launch of Diablo III. In regions where the currency-based auction house will not be available, players will still have access to a gold-based auction house. We'll share more details in the future.
So in some cases there will be no currency auction house at all!
Consider the commodities market in an item like the Butcher's Carver. Some people will find them and list them on the gold AH which covers the entire region. Some Thai people will list them on the Thai auction house, let's say they list them for £1 each. Some people will list them on the Australian auction house for £10 each.
People from Australia will spot the ones on the gold auction house and think wow, that's cheap and buy them for gold to relist for real money. People from Thailand will notice that they're selling like hot cakes on the gold auction house and will buy them for £1 and re-sell them because it's better than buying £1 of gold.
But the vast majority of players won't follow or understand the market as a whole. You need market data from each currency AH to be able to do that.
What's more some people won't have a RMAH at all. Let's say Laos, a small poor country. It is likely to be low on the priority list for Blizzard's currency AH system. So people in those countries who play will sell their stuff for gold.
There are tremendous arbitrage opportunities here.
Not only that but currencies of course fluctuate against each other. If events in Greece take a turn for the worse and the Euro suffers then an item I am selling for £10 will suddenly cost more Euros because £10 is relatively higher against the weakening currency.
To take advantage of this complexity you need data. Either to collect it yourself or to find it on the internet. It's very likely we will see sites going up listing prices day by day. You also need to be able to buy in one market and trade in the other. But most people will be able to do this at least to the extent of buying in the gold AH and selling in the RMAH (or vice versa). More sophisticated players will have multiple accounts in multiple currencies. So if you're in the USA and you want 2 accounts you'd be best to have one account in US dollars and one in Mexican Pesos or Canadian dollars. That allows you to buy from auction houses that have different price points.
To take advantage of this complexity you also need scarcity. If Butcher's Carvers are fairly common then the amount of Aussie players wanting one will soon get satisfied and the price will dip towards the local price for places like Thailand. That doesn't mean Aussie players don't value them any more - they know they're getting quite a bargain for they're paying £1.50 for an item they'd be quite willing to spend £10 on if the market weren't saturated. However with rare items no one will know what it's worth because there aren't dozens of others to compare it with already listed on the AHs.
I think we're going to see incredible stories of flipping, of people buying an item for £1 and selling it for £1000 simply because players who are casual about the economic side of the game will often not have a price point for rare finds. If there's already a Skorn on the AH most people slightly undercut but if there isn't one how do you know what it's worth? And there will be so many different AHs as well as players with no RMAH option in their currency that pricing will be quite wild. This is much less true of North America which is dominated by one large country.
Suppose there have been 3 Skorns found and not kept in the SE Asia region. One is listed by an Autralian player in his RMAH for £1000. One is listed by a Thai player on his RMAH for £50. One is listed on the gold AH by a Laotian player for 10k gold. You see it's hard for these players to have a reference point as they probably won't see the other people's price points because the item is so rare (although the first two would be able to see the listing on the gold AH).
We may also see very strange demographics emerge. For example perhaps half the players in China will pick the US server because they want to sell lucky finds for good money. So we could even end up with American Diablo 3 players bewildered to see that on their regional servers no one speaks English and items are dirt cheap. And who knows, prices could be higher in Mexico because all the Mexican professional farmers work the US RMAH and there's no one keeping stuff cheap on the Mexican RMAH (in that case the arbitrage opportunity would be buying stuff on the over-farmed US market and selling to rich Mexicans!)
There's another point arising from that. Let's assume the Mexican RMAH is, at least initially, a lot cheaper than the US RMAH. If you expect to love Diablo 3, are busy and well-paid and are intending to spend more money on items that you earn then if you're American you'd do probably better to register for the Mexican currency. Because you can buy stuff cheap. None of the American people you play with need ever know which AH you see, if everything's in Spanish you can use Google translate and besides there would probably be an option to choose the AH language. (The nature of the Euro makes them do this, they can't expect everyone who is in a country that uses the Euro to play their game in German).
Of course it's possible that Blizzard may restrict access to the currency auction houses based on where you reside. So as I live in the UK I'd only be eligible to use the RMAH for pounds. But that would mean that Australian players choosing to play on the North American servers wouldn't be able to use the RMAH.
It's definitely going to be something of an economic frontier zone when this opens up.