D3 Markets Explains Gold Supply & Demand

A new post on A short excerpt provides a useful Econ 101 description of how and why the price of gold can rise or fall based on supply and demand. If you’re looking for more insight into how values in the economy, fueled by the RMAH will ebb and flow, this should do the trick. There are even handy color-coded charts! :

Every hour, the following amount of gold is listed for sale:
– 1,000,000,000 (1 billion) gold on market for the market price of $2.00. 99% of transactions will settle at this price.

– 1,000,000 (1 million) gold on market for slightly cheaper than average price, say $1.90. These will virtually appear for just seconds before selling. The people selling lower than market are doing it because they need the money NOW

– 100,000,000 (100 million) gold will be on sale for higher than market value, say $2.05. These will only sell when the above amounts clear out, in other words when demand overtakes supply @ the average price level. IMPORTANT: This is how the market value of gold increases!

– 10,000,000 (10 million) gold will be on sale for way above market value, say $2.50. These are usually people who are in no rush to sell gold, are gambling that the price of gold will increase. A lot of people may do this in anticipation of a price increase for gold due to a certain event.

Now, the thing that determines how the above figures play out and determine the price of gold is supply and demand. So think of it as a sliding scale of tiers. Read the below scenarios to illustrate this point:

Remember that gold buying and selling is almost completely automated in the Diablo 3 DiabloWikiAuction House. You select how many thousands you want to buy, the AH interface shows you the market price, and you click yes or no. That’s it; you never interact with a human gold seller or haggle over the price or quantity. It’s so quick and easy you’ll soon forget that you’re paying real money, or at least the Bobby Bucks™ equivalent.

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13 thoughts on “D3 Markets Explains Gold Supply & Demand

  1. Where does this data come from? Did Azzure manually compile a spreadsheet of observed values, or is there some slicker technique being used?

  2. It is a simple guess on his part. I do not think accepted market value theory will hold in a world where the commodity isn’t real, and trading carries no real risk of loss. Speculation is useless in other words. But hey, the fun is in the guessing eh. 😉

    • Speculation is indeed useless if you don’t intend to make any money out of RMAH. But if you are, it is useful. Countless people will just dump all their stuff at lowest price possible to get a quick buck, It’s things like this that gives to edge to other people. No real risk of loss? Time is money, and there are ways to speculate on the market flow.

  3. Sorry to say but FUCK EVERYTHING ABOUT THIS!!! I wish I could blame only Blizzard, but the greed is inside most of the players also. I don’t feel the minimum joy in playing a game where every single person is a money hungry zombie.
    I’m glad I got a Dota 2 and PoE beta keys. Those two babies will make me busy for a year or two, otherwise it would be hard to avoid playing diablo.

    • I do really hope those games keep you for as long as possible. It is no joy playing alongside people who are calling me a money hungry zombie.

      You know, when they add an extra variant to polls, like
      Do you travel by train?
      Often / Sometimes / Never / Pew-pew, I’m Batman!
      It does not ruin poll results, it actually filters out idiots. 

      Same here.

      • Yes it does ruin poll results as now you don’t know whether or not idiots travel by train, smartass.

  4. There is no need to speculate when you can easily exploit every arbitrage opportunity that presents itself. 🙂

    The best thing is people will be blind to bid walls and other market maneuvers. I simply can’t wait, it should be incredibly fun 😀

  5. I agree.

    Both Wow and D3 are based on the same hugely successful principle : gear chase and better the character.

    Now this gear chase is linked to … Real value loot/mechanics.

    It is simply a complete new angle to play.

    It will be an atomic bomb in the on line industry … And since Blizzard was so smart to put it in the hands of the players, D3 will be THE HIT of 2012.

    Forget those clunky Light sabres, MY magic wand will have a real value in this game

    Brilliant ideas come unexpected: it will take the on line markets by storm.

    And of course the known Blizzard game play will do the rest.

  6. MY knowledge on the econs in D3 is full with portholes and incomplete, so here comes a should-be-noob-question: Is there a fixed rate blizzard gain from auctions in the gold AH like the RMAH? 

    It is all a jumble and mess to me atm. So if u trade in RMAH, blizzard gains some amount of flat fee, and some % if it is more than a certain amount. But there’s also transaction of gold to money and money to gold, which means if u r rich, u can buy not just from RMAH, you can buy gold and shop in the gold AH anyways. So why is blizzard not putting a flat fee and % fee on the gold AH as well?

    I never really is interested in the trades, since i really want to play the game without any trading, so i wasnt paying too much attention to all the details. But yeh, just trying to work out what is really going on atm.

    • If they would put a fee on the gold AH as well then they would take a cut twice. The gold has to go through the RMAH first to become cash. Thats when Blizzard gets their cut.

  7. 1000g = $2.00?!?! Even if 100,000g = $1.00 then I should make collecting and selling gold my day job. Of course this is too good to be true. You would have millions of Chinese people farming 24/7.
    Also, I would totally list my gold below market price because I highly doubt there will be enough fools to buy gold. I don’t know though.

  8. As an economics grad, I think speculating on the demand/supply of gold or anything in the AH is ridiculous.  For anyone that wishes to succeed in any market, he/she needs to know two things.  One is information about what is going to happen to the market before it happens (like there is a new area in d3 that that has a outragously high gold drop rate).  Second part is knowing how the market will react once the information is made public.  So far, we don’t know any of the two factors. However, to say econ does not apply to someone like d2 which has no real commodity is ludicris.  A market existed in D2, didn’t it? Lastly, people that say they will not play d2 for the reason of AH is A) lying, they know they will buy d3, B) ignorant.  In D2, countless people did not participate in trading, but managed to play for years.  I played d2 without trading.  I did not have any of the top runewords, but still managed to obtain 99% of the uniques and set items.  Plus, isn’t the whole point of playing is to gather loot and item hunting?  If you spend the money to buy everything, you have essentially \beaten the game\.  At which point, I would imagine the game will become boring. 

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