Back
06-23-2012, 12:15 AM
Economists Are Taking Over the Game Industry (http://www.buzzfeed.com/tommywilhelm/economists-are-taking-over-the-game-industry)
When Blizzard unveiled Diablo III, one of its most-hyped features was the Auction House, a free player-to-player market where characters could buy and sell items. Instead of having to kill monsters until one of them dropped the right enchanted lance, players could buy it with in-game gold or real money. The free market would make sure everyone got what they needed and no one got ripped off.
At least that was the idea.
Instead, it's been an ongoing headache since day one (http://knowledgeproblem.com/2012/06/12/poor-market-design-causing-high-prices-in-diablo-iii-auction-house/). The initial glut of new users created huge demand for the low-level items beginners need, which drove up the price to astronomical levels. Gold farmers inflated the currency, driving prices even higher, and because of restrictions on how quickly users could change prices, the market was slow to respond. Within a month, the market was effectively broken. The only items for sale were ludicrously expensive starter gear, which funneled money to gold farmers and was useless to everyone else. Blizzard responded by gritting their teeth and instituting a set of unpopular new restrictions on users (http://www.forbes.com/sites/erikkain/2012/06/21/diablo-3-patch-locks-down-new-accounts-for-up-to-72-hours/). It's an ongoing story, but one thing is already clear: they would have been better off with an economist on board.
When Blizzard unveiled Diablo III, one of its most-hyped features was the Auction House, a free player-to-player market where characters could buy and sell items. Instead of having to kill monsters until one of them dropped the right enchanted lance, players could buy it with in-game gold or real money. The free market would make sure everyone got what they needed and no one got ripped off.
At least that was the idea.
Instead, it's been an ongoing headache since day one (http://knowledgeproblem.com/2012/06/12/poor-market-design-causing-high-prices-in-diablo-iii-auction-house/). The initial glut of new users created huge demand for the low-level items beginners need, which drove up the price to astronomical levels. Gold farmers inflated the currency, driving prices even higher, and because of restrictions on how quickly users could change prices, the market was slow to respond. Within a month, the market was effectively broken. The only items for sale were ludicrously expensive starter gear, which funneled money to gold farmers and was useless to everyone else. Blizzard responded by gritting their teeth and instituting a set of unpopular new restrictions on users (http://www.forbes.com/sites/erikkain/2012/06/21/diablo-3-patch-locks-down-new-accounts-for-up-to-72-hours/). It's an ongoing story, but one thing is already clear: they would have been better off with an economist on board.