Blue on RMAH Fees

A fan linked to a numerically-challenged anti-RMAH rant from MMO Crunch, which earned an argumentative Bashiok reply.

I don’t mind the sensationalism in an article but that graphic is just devoid of any attempt at being truthful. Also they don’t seem to understand how percentages work.

In any case, the listing and transaction fees, which are flat fees, are being kept as low as we possibly can keep them. Right now in beta it’s 0.80 ‘Beta Bucks’ total if you list and sell an item, and it’s possible it’ll be around that in USD for North America at launch. We still don’t know yet, though, but we’re trying to keep it as low as possible. And of course keep in mind that we still intend to offer a number of free listings per week. If someone wants to just use their free listings every week, they’re more than welcome to. We anticipate a lot of people will go this route as it’s a no-risk situation and no fees are taken if the item doesn’t sell.

People selling items beyond those free listing will indeed want to make sure their items are of a quality the market deems is worth more than the flat posting and transaction fees, and in fact the game just won’t allow you to post under a certain amount. Otherwise they may want to go the gold route, build up some gold, and then sell that through the currency-based auction house.

If you do decide that your sale is something you want to cash out, a percentage will indeed be taken, but we haven’t announced any details regarding what the PayPal cash out fees will be yet.

The “as low as possible” line is an odd one, since that number would be zero, if they wished it to be. The only costs at that point are to Blizzard for hosting the sales and running the system; it’s not as if they’re using some other credit card processing service that charges fifty cents per sale and they have to recoup the costs. The eight cents is pure profit for them, minus expenses. The only external fees come when/if you cash out via PayPal.

That said, zero costs for DiabloWikiRMAH listings and sales would be a bad thing for we consumers, since then everyone would list every piece of junk and clog up the listings and market. There has to be some kind of cost, not just for Blizzard to cover expenses and make a profit, but to weed out the junk items, dissuade griefers, etc. It’s the same sort of logic that leads bars to charge a cover price, on busy nights. Whether eighty cents is a fair fee remains to be seen, but trying to explain all of that in every post would be a tiring for Bashiok, and a little too honest for Bliz PR.

Check Diablo 3 Markets for more, I’m sure Azzure has recently posted something germane to this issue.

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39 thoughts on “Blue on RMAH Fees

  1. Fuck Bashiok, that guy is a total tool and liar and he’s got some kind of female first name IRL. What a douche. I’m sure others hate him as much as I do.

  2. Profits should be made for blizzard from RMAH, only if they’ll put those to use to update the game regularly.

  3. “That said, zero costs for RMAH listings and sales would be a bad thing for we consumers, since then everyone would list every piece of junk and clog up the listings and market.”
    So what?  Allow the players to list whatever they want, and let the MARKET decide what sells and what doesn’t.
    I get so tired of the thinking that XYZ company should charge a fee for whatever reason.

    • Have you ever attended a free event, vs. one just like it with even a minimal cover charge? The later is always endlessly better, as every sort of bored asshole doesn’t show up just b/c it’s free.

      I’m speaking about RL, though. How far that translates into the online world remains to be seen, though if you look at something like email… wouldn’t a tiny, like .01 cent fee to send them, be a good thing? Just to ruin spammers and other garbage senders.

      That aside, Blizzard obviously needs some way to fund ongoing D3 patches and development and realms. They weren’t going to throw us a free 15 year party for D3, as they did for D2. And IMHO, fees on RMAH sales is about the least obnoxious way they could have done it.

      • That ability to fund ongoing D3 patches and development could or will come from a monthly subscription fee like as with WoW.  As such, until all the RMAH costs are revealed when officially launched, the graphic will have some ‘truth’ to some individuals, as evident with some of the commentaries, and remain absolutely hilarious.

        • I don’t think a monthly subscription fee would work for an ARPG… especially when D2 fan-based is used to playing online without a subscription

      • Guildwars and Guildwars 2 manage to make secure servers with updates and patches without any RMAH shenanigans.  Their entire monetization scheme is just box purchases and non-game intrusive microtransactions.  They even manage to be profitable doing so.
        The reason Blizzard “Needs” some way to fund ongoing D3 development is because share holders expect ever increasing profits.  WoW has been such a cash cow that meager Guild Wars, Diablo 2, or Torchlight level profits would be unacceptable.  D3 needs WoW or Farmville level profits for investors to be satisfied.

      • Seems to be having different experience there… Was on a lot of free events and a sum of events with entry fee. The free events tend to be the ones beeing memorable, often because of the dickheads crashing the thing, while the events I paid for usually turned out to be a managed bunch of crap, giving a sterile experience that just leaves the hollow feeling of having done something with one his time to be accepted by a certain part of society. (I accept myself. With all my flaws and errors. Especially my flaws and errors 😉 I don’t need the latter anymore to do the job for me…)
        Also: The fee only secures that gamers, playing the game casually, won’t get anything out of it, as they’ve seldomly find anything useful enough to put it “on auction”. The “bored assholes” got time anyway, play a lot and, thus, can profit in the end, be it with or without fee. But it is indeed a method counteracting an overflow with good items. (So count on frequent “ladderresets” anytime people are bitching en masse over the worth of items ;)) (edit: More their lack of worth)

      • If this was about keeping things clean, introducing a max. auctions per hour system would have been an easier solution – almost certainly much easier than this whole legal/rating board fiasco.
        No no, this definitely is about profits and keeping up a constant stream of income beyond box/digital sales. After all, creating this game from scratch twice (or possibly even more times) over the course of – what? – ten years production time (and no end in sight) is expensive. I cannot imagine D3 to be exactly flying off the shelves if priced it was at 150$/€ per unit in order to compensate for its production costs. =)
        Granted, there’s no way they’d create a highly successful game with a longevity such as D2’s nowadays without having a plan to cover for the server costs. But let’s keep in mind it’s their marketing and anti-piracy concept that’s forcing every single unit sold to stress their online hardware in the future …
        Also, let’s be clear about those auction taxes: these are not replacing subscription fees as those known from a certain MMORPG. While they did vaguely mention the possibility of adding content beyond the game’s release through patching here and there, those plans may actually have or may not have a future at all like any of their other concepts they’ve been talking about in the past. Expect to be paying for bigger updates like new systems and features or stuff that requires new art & sound through expansion sets, not auction fees. Also, in case you manage to accidently lose/sell/slavage your valued possessions, there won’t be any friendly GMs helping you getting them back – not even grumpy ones. 😉

        My opinion: Auction taxes are perfectly fine to help Blizzard cover for their hardware costs and keeping the servers running over the decades. I did however imagine something completely different when they introduced that concept and were speaking about “minimal” fees: 5 cents for allocating a digital copy of an imaginary item to a different account in the same database – that’s ok. But 80 cents plus X plus X cents PayPal costs is a very definitive indication that server upkeep cost is not the primary driving force behind this.

        • “If this was about keeping things clean, introducing a max. auctions per hour system would have been an easier solution – almost certainly much easier than this whole legal/rating board fiasco.”
          It does not accomplish the goal though. If you restrict purely through the amount of listings, then that will not be enough for some and too many for others. Result? Those who have more than enough listings put useless stuff in the RMAH and those who farm heavily are forced to cut their sales. Making it cost a small amount of money accomplishes the goal without making the system too complicated (and, of course, provides the company with profit).
          As another example, the fees for transferring your character in WoW between servers/factions is not there because it costs them that much to actually do it, but to give meaning to the choice of your realm and faction while allowing those, who desperately want to switch, to do it. If they provided one free transfer per month, someone could get stuck on a server for up to a month without any way to get away and countless others would change factions/servers just to sell some stuff on the AH or to bypass a raid lockout.
          It’s entirely possible that I come off as a fanboy, but I believe them that the primary motivation for the fee is the restrictive aspect, not the profitable one. Yes they would need some sort of continued profit from the game, but I believe the decision for the fee (the existence, not the amount) was made by the developers before they ever got to the point of determining how they wanted to make it profitable.
          If you’re looking for the profitable aspect, I would actually look at the gold AH instead, because the fee of that AH will decide how much traffic the RMAH gets. The higher the GAH fee percentage, the lower the point where you’d rather put it on the RMAH. Personally I believe 15% is way too high and if that actually hits live servers then I would definitely consider that a decision made for profit and not for say… a gold sink, 5% is enough for an effective gold sink.

          The reason why the GAH is more important for that aspect is that Blizzard earns nothing when a GAH fee is paid, but they do earn something when an RMAH fee is paid, while for the player the cost only depends on that breaking point where the GAH fee is worth more than the RMAH fee. So if they increased the RMAH fees, less people would decide to pay it, but if they increase the GAH fees, more people decide to pay the RMAH fees.

  4. Is $0.8 too much for selling? Time will tell. But i agree that cash out and paypal fee should be high, very high. Everyone expect that they will earn money on D3. Thats bad. Money should stay in the system, to keep RMAH alive. Blizzard should put ridiculous cash out fee to discourage ppl from taking money from the system.

    • > paypal fee should be high

      Why are people wondering about PayPal fee? Can’t everyone just open their PayPal account and check their cash out rates? (I can’t, PayPal does not allow cash out in Russia 🙁 ) 

      The only thing we don’t know yet is the Blizzard->PayPal cash out fee (and alternative cash out systems for PayPal-devoid), and it can be pretty low – money will still stay in the game. The easier you can transfer money out, the more eager you’ll be to add them back 🙂

      • Huh? Blizzard can offer a discounted cash-out fee because they do so many transactions in such a short time. It’s called PayPal Mass-Payout or something. That’s how vWorker works, for instance.

  5. Ahh, some numbers to work with. Assuming that the $.80 listing and closing fee sticks and that Blizzard didn’t work out some magical arrangement with Paypal (ha!), then the minimum price for equipment has to be around $1.13. Paypal charges 2.9% plus $.30 per transaction, and I see no reason why they would change that for Blizzard’s sake. That currently works out to around 480g according to D3 Markets, but there’s no telling what the exchange rate would be when the game goes live. Taking it one step further, you need something that’s worth at least 900g to even see a dollar of profit. I’m not in the beta, but is there any equipment there that you can buy from a vendor for that much?
    Note that I’m also assuming that there is no Blizzard cash out fee. I don’t see why they would have one as that’s blatant double dipping.

  6. Wow, 80cents per listing is MUCH higher than what people had anticipated. Blizzard intends to make a killing.

    • The listing fee is only $ 0.15. Then when you sell – say for 4 dollars – the total fixed fee = 0.80

      So total profits on a $ 4 sell is … $ 3.2 dollars.

      With that profit you can pay subscriptions for WOW, buy the WOW card game boosters, merchandising AND other games (like the next SC expansion etc …   ) on the BattleNet shop.

      When I sold a magic the card game on ebay for 40 Euros, I get net around 37 dollars on my bank account (E bay and PyPal deducted).

      FYI: In EU the transfer from Paypal to your bank account (not Visa) is FREE in your home country.    

      So in both ways it is a win/win. The player gets money and spends it or cashes out. Blizzard has a system that can replace or be a subsitute to paying subscriptions.

      BTW: The RMAH is a MUCH better way for MMORPG’s too than any lame passive cash shop in the hands of game companies SELLING you buy to win gear.

      So I hope it will come to WOW as soon as possible in an adapted form (free to play – no subs AND a RMAH: expect 20 million WOW players because of no subs).

  7. If I understand this right, I havent been following the auction stuff, if we can sell items for real cash, wouldnt that also mean we would have to pay sales tax on all our sales at year end?

  8. Lol, 80 cents per transaction, nice Blizzard, very nice. So You’re basically saying that You are charging 60$ for a game to make profit and then milk community for next dozens of millions of dollar per year, without even mentioning how will You spend those moneys? Oh and we will have to pay for expansions too, right?

    If anyone dont understand how big cash cow RMAH will be, i’ll throw some numbers

    Lets guess that Diablo 3 will sell 3m units [and i’m pretty sure it will exceed this prediction]
    1.5m for NA
    1.5m for EU

    We know that most people will use AH, because why wouldnt they? We also know that most people will have to use RMAH because better items will be listed there. So lets say 50% use AH, so 1.5m people.
    With pounds and euro listing the average Blizzard fee per transaction will be around 1$, because of higher exchange rates.

    In 30 days, every one of those 1.5m people will list and sell at least 10 auctions [its not much isnt it for a whole month?].
    So Blizzard gets 15m dollars of pure profit every month, so 180 million dollars per year! Its more than many games LTD profit!
    And cost of mainting AH is really low, like less than 200k $ per year.

    Now, why is listing so high? Why does game still cost 60$? Why we have only 10 character slots, its not like its database intensive [AH is more demanding in terms of transfer, weight and cpu usage than storing some char saves].

    • your math is off a bit on principle. Blizzard has already said you get some free listings per week. there will be people that may only use the free listings and wait until next week to sell any other items.
      as of right now it is hard to gauge how fast the AH will move. if we are only given 2 free listings a week then its very likely people will pay for AH usage, but there is a risk that if its too low enough people wont bother and keep the AH mostly empty except for a few really great items. on the other hand if we get 100 free listings everyone will try to make a buck off every piece of junk they find.
      We will probably have to wait and see how the balance plays out. but its far too early to guess how much money they will make off this. and lets not forget people can ignore the AH and trade items if they want (right??? or was this feature removed in place of the AH?) to stick it to Blizzard. It wont be hard to figure the value of items to get a fair trade for both parties. then blizzard loses $1.60 if 2 people go this route.

      • About those limited “free listings per week”:
        You may indeed not have to pay a listing fee for putting a few of your items up for auction per week. In case those listing-fee-free items do sell however, Blizzard sales cuts and PayPal cashout fees will still apply.
        You didn’t think they’d let you get away with real money so easily, did you? ;P

  9. My math is only an example, it doesnt count normal trading, free listing, but also dont include people who will withdraw cash to paypal, higher percentage of users using AH or higher sales. Its just average, if it will be 100m$ or 250m$ it doesnt really matter in the end, because they got tons of money.
    In worse case scenario i could think off, they would get 70m$, its still tons of money, so many that You could develop two AAA games for it, or 5-6 ‘smaller’ ones and thats just from one year of AH revenue.
    They will get more money from AH than they will from retail/DD sales. Blizzard will get 45-50$ from retail and DD, so from [earlier] sales they will get 135-150m$ – similar to RMAH profits [after just one year], if SC 2 could sell 5m in first year, then D3 should too, so its more like 2-2.5m guys using RMAH and 225-250m$ profits from sales!
    You can make 10 games like D3 for just first year profits! Its insane how many money they get.

    • Wow makes – on average – around … 100 million dollars … Per month.

      So the RMAH is only a fraction of this amount. Wow made a revenue of 1.4 billion dollars in 2010 and yep – despite fewer subs – they managed to beat every quarter up to 3rd quarter 2011 by a 10% margin. Blizzard totals for the year was 1.6 billion dollars, including all games.

      So Diablo3 revenue has to be seen in the overall picture of a company – blizzard- which NEEDS to make 1.5 billion dollars revenue to survive. People just do calculations and multiply and see everything as “profits”. Did you know that a game that sells for 60 dollars in retail, only half of that is going to the producing company as gross revenue?

      As … This amount is of course just gross revenue, not profits. Blizzard has almost 4000 people at work dude and a world wide network and infrastructure to support.

  10. If i can buy Blizz games(SC2:X2.X3) or merchandise ,or WoW / Titan playtime from D3 gold/items/runes i will love the system. 😉

  11. I imagine RMAH transaction fees will be used to pay for the costs of running D3 services in general, and not just running the RMAH. Seems like a smart way to monetize the whole service/product without charging recurring fees to a vast majority of your customers.

  12. “8 cents is pure profit, minus expenses”

    Then it isn’t pure!  It is dirty!  Dirty capitalistic pigs!

  13. I don’t agree with all the complaining people. What where you expecting? That every player could go and make a fortune with Diablo3? This will ensure that the AH isn’t spilled with crap that no-one wants. And I think it’s fair that if you want to use a blizzard game to make money for yourself that blizzard gets a cut from it.
    And if you don’t like that, there is still the gold auction house.

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