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Tuesday, 20 March 2012

Item farming for real money

There's a widespread assumption that item farming in Diablo 3 will be for pitifully small amounts of money, largely because of the existence of a large Chinese gold farming industry which will drive prices down. Force and Sixen voiced this opinion on the latest of their excellent series of podcasts and Marcko of the gold guide more or less agreed.

I'd like to question this assumption:

Marcko wrote: Force stated several times that competition would drive down prices to make farming virtually slave labor. He jokingly mentioned a certain ethnicity known for gold farming and said that this group of people would drive prices into the ground. You're right Force, but they can only drive them down so much. At some point, demand and supply will meet to create a consistent trend for prices. Being ignorant of this balancing act will lead to the assumption that it's impossible to make any money playing the system. But you are correct that simply farming items and selling them is a terrible way to make money on any auction house.

Remember the You Will Die! video that Blizzard released? This is what farming in Inferno looks like when done by some pretty serious gamers (serious enough to work for a games company).

Now I've met a number of Chinese farmers in WoW and read a lot of articles. Generally the typical Chinese gold farmer in previous games has been very unskilled killing very easy mobs for loot. In Vanilla WoW they did the owlbears up in Winterspring all day (and I used to go gank them sometimes).

Another problem is that the accounts are worked in shifts. At the end of an 8 hour shift a farmer sells everything he possibly can to meet his quota and leaves his shift-mates with an almost naked character. That wasn't too bad in WoW where most of the gear, even the bags later on, was bound to the character. But in D3 nothing is bound, a farmer can strip his guy naked for extra gold.

There's no way that these people are going to become effective Inferno teams, at least not early on. In fact we have strong evidence for this because there was already a practice in WoW of selling raid and arena spots - you'd pay a good player to haul your not-so-talented butt past content you wouldn't otherwise beat.

I've never heard of Chinese gold farmers selling arena ranking or raid spots.

So while there will be competition if you are farming effectively in Inferno, particularly if you are ahead of the curve, there won't be millions of semi-literate people from the Third World in the next game farming the same mobs. Not even if their prison guards try to make them.


  1. Good point :)

    Do you think at some point most players will beat inferno and have it on farm though? Like all blizzard content?

    1. At some point. But not right away. Then of course we get an expansion and it starts over.

  2. Mmm, I that item farming in Diablo 3 will be for pitifully small amounts of money, but I don't think it will be because of {insert ethnicity} goldfarmers.

    I think it will simply be due to the massive competition amongst sellers for a finite demand amongst buyers. I think only the rarest perfect items will fetch any significant value - after the initial goldrush, of course. I'm sure some people will make great money just by playing all day every day for the first few weeks and staying ahead of the curve, whilst buyers chase them with fistfuls of dollars waved high.

    'Course I could be totally wrong, and time will tell.

    1. Yeah, that's what I'm talking about. The market for Inferno items while a handful of players are farming ahead of the curve.

      And while it's certainly true that legitimisation will see a lot more sellers it will also see more buyers. There are some players who would have liked to progress via Visa but who were never comfortable with the feeling of cheating.

  3. I imagine the strongest competition will be from unemployed 20-something year olds.

    In my hypothesis, most of the opportunities to make big money will be in the first few months before characters are decked out in decent gear. After the first few months, barring new content, you won't have a lot of opportunities to make easy money unless you get lucky and find gear with exceptional affix types/levels. These are the types of items that will be both rare and have high demand.

    At first, hell level items/recipes will be hugely profitable. Prices will drop fast as the majority of the population reaches 60 and starts flooding the AH. Then inferno level gear will become most profitable. I don't see people spending huge amounts of cash on normal or NM level stuff as you will outlevel it fast. Maybe a weapon, but thats it.

    In all honesty though, it is too difficult to tell at this point. All is speculation as we know very little about hell and inferno. There are just too many unknown variables at this point.

    1. Yeah that's pretty much how I see it with regard to all points. In the UK alone we have one million unemployed 18-24 year olds. It's not the Chinese we need to worry about!

  4. I hope that we won't have a gold inflation problem if everyone focuses on farming gold which is a lot easier than farming very rare items.

    1. Luckily, I don't foresee this being a big issue Solo. Assuming they have done a fairly good job at balancing consumption with drop rates, this should work itself out on its own. If people see that it is easier to farm gold than items they will switch to gold farming more. This will put an influx of gold on the market which will lower the returns and cause people to switch back to MF. Eventually an equilibrium will be reached.

      A little inflation would not be terrible, look at current currencies around the world. Inflation, if it does occur, will likely keep GF gear from become all too useful. Additionally, gold prices can be altered by Blizzard to combat this.

      With all the VERY expensive gold expenditures at launch I don't think this will be a problem until well after release. For the first few months keeping your money in gold will not be a big deal. After that I would keep my money in blizz bucks.

  5. "I don't see people spending huge amounts of cash on normal or NM level stuff as you will outlevel it fast. Maybe a weapon, but thats it."

    Why not? When you out-level an item you get to resell it to the next lowbie. Plus, you are assuming that average players make rational decisions.

    Personally I think most people are over-exaggerating seller competition and under-exaggerating buyer demand. I make $20/h playing poker and I expect to make at least this much in D3 during the first year or two. Can't wait for this game to come out and the speculation to end.

    1. $20/hr is a bit of a stretch. If that were true, people making less than that would quit their day jobs and invest 60 bucks in D3.

      You raise a good point with the normal items. The casual player market is rather large. I expect most of those items to be bought and sold on Gold AH. Then again, you will be able to pretty easily craft items for yourself that are "good enough" for the next few levels till you get a new one. Personal crafting at early levels will likely drive down prices significantly.

      Many players are not geniuses, but it also doesn't take much to realize that any weapon you buy in the early game is going to be worth much less by the time you are done using it. There will be rapid depreciation of sub level 60 items in the first weeks after release. There is a good market there though, if you catch it early enough.

  6. I think it's reasonable to assume a very uneven playing field. Some people will play D3 professionally all week and put in 80 hours for $1 per hour and be satisfied with that. Some very small percentage may earn $20 per hour.

    But imagine for each seller there's a corresponding buyer. Are there lots of buyers spending about $80 a week? Quite possibly. If I worked more than 40-45 hours a week I'd very probably spend that much.

    But are there people who will spend $20 an hour? In poker, sure, because people think it's an investment. But I can't imagine more than a tiny handful spending $20 an hour just to make their D3 character kick-ass. Even the guy who bought a Windforce for $2k back in '01 would only cover that for 2 weeks and there were newspaper stories about him.