Extra Credits: The Diablo III Marketplace

This week, we consider the intended goal (and possible results) of Blizzard's plan for a "real money" marketplace in Diablo III.

Recent Comments:

  • lol of course it doesn't, i was just pointing out the lack of research and the importance of detail.

    Yeah, but it's a completely different situation. CoJ:TC was an entire game based around the Mexican drug war, a serious conflict that's happening right now. Even though it's a game it's dealing with serious issues that it gets wrong due to lack of research.

    Extra Credits on the other hand doen't deal with issues outside the realm of gaming and are known for just picking up random images to go with the speach. I seriously doubt that someone's going to walk away from this episode thinking that Yugoslavia still exists just because of the image.

    I'm probably overeacting as the situation is a little ironic in a way. I just think it deracts from the seriousness of the CoJ:TC episode.

  • Eve Online has had an open player economy where players can legally make money/pay for their subscriptions through in game finance for years. I guess it's a smaller MMO, but it isn't a new idea or system.

  • I find the idea really fascinating, but I'm hesitant for two reasons.

    First off, Blizzard is using this to squeeze more money from their players, rather than trying to use it as a service to their customers. Essentially, I pay 60 dollars for the game, then have the option to pay more money to someone else (who also payed 60 dollars for the game) to get more items to use... in the game. The idea of this type of system as far as moneymaking (near as I can tell) is to have something like microtransactions, but with less of an investment. Requiring the same up-front fee as if the service didn't exist means that you're both cutting into the number of possible monetized players (by reducing the total number of players), and you're hurting the marketplace, because people aren't going to want to buy, after they've put 60 bucks into the game already, and everybody is going to want to sell, because the incentive is to try and recoup your investment. That means that, assuming supply and demand are in effect, nobody is going to be selling for any appreciable amount of money, selling for maybe a dollar. So people are going to want to make 60 one-dollar sales (or more, if possible, but for sake of argument...). Assuming they take 1%, blizzard makes an additional 60 cents per sale. Lessening the sale price, or even going free to play, would really strengthen their marketplace, and probably make them more money over time by having more people paying more money in the marketplace for them to take their 1% from.

    Secondly, I'm not sure if Diablo is the series for this type of thing to work with. The fun of the game doesn't come from having the best loot, it comes from going into dungeon X and clicking the monster-shaped pinatas hoping to find the best loot. The inherent drive for power creep makes the idea of paying real money for something kind of counter-intuitive. Sure, I can get a +5 vorpal Battleaxe of Everything-stomping, but why would I pay $5 for it when I might find a +6 version from the next dungeon?

  • Who pays the taxes here? That question really needs to be addressed.

    It depends on what type of taxes you're talking about and for what goods.

    If a player pays for virtual currency and spends it all in game, he owes no tax because he paid for the item out of his post tax income. He is the end consumer and this is not considered a tangible good.

    Generally, downloadable content that is delivered electronically (as opposed to on a physical media such as a DVD), is not subject to sales tax, at least in Florida in the United States, last I checked (I haven't worked in that arena in a few years but a recent conversation with former coworkers).

    The game publisher pays taxes on their net profit of which, the virtual currency transactions will be a part. If there is a system where players or users can trade back and forth between real and virtual dollars and some of the players/users are making a net profit on these transactions they pay income tax on their net profit presumably for whatever fiscal year they cashed out their virtual currency as real currency. As another poster pointed out, this is not unprecedented. There are many users in Second Life who make their entire income off of in world transactions.

    For the time being, taxes on profits made from a game most likely kick in when virtual currency is cashed out, whether the currency is exchanged for money or for a tangible good. If people start trying to hold significant amounts of virtual currency perpetually to dodge taxes, I'm sure local taxing authorities will look at changing the law but that's probably not going to be an issue for a long time.

    P.S. All the above assumes that the virtual currencies and digital goods remain in the virtual environment, either remaining on the publisher's servers on the users account or being downloaded over the internet. If a digital good is copied to a physical storage media and delivered to a user or player, that transaction may be subject to sales or use tax according to local law.

  • I was looking forward to this game until they announced the always-online thing. I borrowed Diablo II from a friend around four years ago and liked it, so I had high hopes for Diablo III.

    I can't bring myself to pay money for this game when I know I won't be able to play it on 3G Internet with 500-3000 ping, the difference of that in jitter, and frequent packet loss.

    But at the very least, it'll be an interesting learning experience to see how the auction house works out.

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