Another collaborative essay by Perculia and Hamlet (see About for more info), this time not about WoW.

Diablo has always had a formula: elevating the mundane task of clicking and looting into something inexplicably enthralling. Everyone who’s played any Diablo game understands it, other games have tried to replicate it, but nobody ever seems to know exactly what the secret ingredient is. Diablo 3 looked as though it was going to remain safely in this well-charted territory. But over the hours we’ve spent playing in the first four weeks since the game’s release, one element we didn’t foresee has, for better or for worse, altered the formula on quite a fundamental level. We want to discuss the new system in Diablo 3 that, since it was released into the wild, has bent the entire game around its existence: the Auction House.

Blizzard has remarked that the game’s testing was done in an AH-free environment. While simulating the AH for internal testing would have been obviously difficult, it seems the ramifications of the AH have taken everyone by surprise. Having had time to see it in action, we discuss how the AH has affected players across the spectrum, from low-level first-time players which make up a large part of the user base to high-level Inferno players. We also explain why we now believe the AH’s omnipresence was inevitable once it was introduced.

As of this writing, on the planned eve of the arrival of the real money AH, the effect that will have on the landscape remains speculative. There’s no doubt it will be interesting, and will provide fodder for more analysis once everyone has digested its effects. But we wanted to write this piece before that took place, because the effect of the AH on the nature of the game, even without the more complex real money factor, is quite dramatic in its own right.

Low Levels: The Big Red Button

While leveling up, the AH has an unusual and somewhat unprecedented effect. Any character, including a player’s first character, has access to twink gear with virtually no added effort from the player. This leads to a drastic variation in gameplay experience between players who use the AH and those who don’t. To be completely clear, “use the AH” refers to the mere effort to click on it occasionally and browse for 5 minutes. The gold an average player collects from normal leveling is, at any point, perfectly sufficient to not only thoroughly obsolete all other sources of character improvement, but to do so while only using a small portion of her funds at any point.

Our first trip through Normal, Nightmare, and Hell difficulties on our mains was fairly clean. We weren’t spending a huge amount of time reading about the game or doing much of anything besides work, sleeping, and playing. We didn’t look at the AH too closely for either buying or selling because we assumed it would be daunting to learn about item pricing, and playing was more fun. The game felt more or less like you’d expect from Diablo or similar adventure games with gear-based development. Our stats were somewhat random at any time, even on basic points like whether they were offensively or defensively balanced. Sometimes one of us would die a few times and we’d notice that it was due to having almost no HP, simply from unwittingly upgrading away from all the Vitality-bearing items we had a few minutes ago. When we’d gone without weapon upgrades for a few levels, getting a new one was a huge windfall. It would even sometimes make one of us significantly stronger than the other for a time. We don’t have to go on here; you know what it feels like to live off the land in a game, and get along with what you find on the way. And we only realized later that it all happened because, by sheer accident, we’d ignored the AH.

Let’s be more specific. Since in this game you level somewhat quickly, you often go many levels without an upgrade in a particular slot. It seemed that items on the order of 5-10 levels behind our actual character level, in each slot, were typical. A magic-quality drop that was at a level equal to ours with a relevant stat for one of our classes was a huge upgrade, and usually lasted for many levels. If it was a weapon, it was likely to instantaneously double a character’s DPS output, or more. Perhaps that sets up the context for where this is going: imagine if at one point, out of nowhere, we’d suddenly had such powerful items in every slot. The whole game would have been different. The spots where things were a little rough, where we had to hunker down and come up with something of a plan, would never have come close to happening. After playing later characters with the benefit of the AH, we can verify that. And the salient point is that anyone can do this. If you’ve never tried it, we’ll reassure you, sight unseen: you have enough gold to make it happen without even making a dent in your reserve.

Should you avoid the AH on your first playthrough? We’ll leave that alone for this essay, but hopefully you come away at least well-informed about how you want to play. An apt analogy is using cheat codes in a single-player game. If you’re someone who tends not to do that, similar logic would apply here. At the very least though, the import of that decision is not something we’d anticipated.

As far as characters beyond your first, that’s where the impact of the AH is least disruptive. That’s what we, and likely most people, had in mind for the AH–you’ve played the game already, you can use your gold to make future characters level quickly. It’s akin to the purpose of heirlooms in WoW. The fact that you can have the equivalent of heirlooms on your first character however (something much stronger, in fact), is probably unintended, given that the game was developed and tested largely without the AH being involved. What this means to us is that they failed to anticipate that the AH would have a greater impact on the Diablo experience than any other innovation they’ve introduced. They thought it was a great side feature, but the game would still be as we described it above: primarily about finding stuff. The rest of this is piece is about what happens when a game is changed into something new (for Diablo purposes): a game about buying stuff.

Inferno: The Life of a Salesman

You’ve hit 60. You’ve gotten some decent drops from the end of Hell and slowly worked through the early Inferno quests, and now you’re stuck on some Invulnerable Minions in the crypts. You have to make your characters stronger somehow. This is Diablo, so you know what to do: repeat the last bit of content you can do. If you’re not overgeared for it already, upgrades must flow! There is a novel option though: sell everything you get, and buy items with the exact stats you want. Ultimately you’re going to do one of the two. Overgearing the content is a much easier solution playing meticulously (and very slowly), and even if you do play very well, timed enrages and other gear checks ensure that characters cannot progress arbitrarily far on skill alone. Players with limited time, especially, will be much better served buying upgrades instead of struggling through a new quest or doing farm runs.

What’s even more of a shakeup to the natural order of things is how you get the gold you need to support these purchases. You can farm gold–either by farming items to sell, or using actual gold find gear to farm certain areas. The former, for reasons explained below, will grow more difficult as items that are worth nontrivial amounts become increasingly rare. The latter is fine–it sounds tremendously boring to us because you don’t even get the fun of gambling for good drops–but more importantly, it pales in comparison to another activity: pure Auction House trading. The concept is obvious: buy low, sell high. The interesting details of this game-within-a-game are best reserved for another article, but the key points are: 1) your yield is essentially unlimited, and grows exponentially with your bankroll rather than linearly with your character strength, 2) game knowledge is at a premium–knowing what stats are valuable will help you out here more directly than it will when you actually play, and 3) finding great deals can be fun in its own way.

A typical evening of progress through Act 2 Inferno

An Act I run culminating in a major boss (Skeleton King or Butcher) with 5 stacks of Nephalem Valor and magic find gear swapped in before every meaningful kill will not garner as much gold as a few simple AH flips. With Act I and II dropping low-level rares, the items you loot generally won’t be worth listing. Now at the end of Act III Inferno, we took a break this past weekend to plow through all of Act I for fun, and we may have gotten enough gold to rival the profit from finding one mediocre Attack Speed neck that’s underpriced. It was more enjoyable than obsessively checking to see if deals had slipped through our AH filters, but it didn’t contribute to improving the strength of our characters. We received no useful drops and didn’t make anything close to the million or so gold we needed to buy anything of use off the AH. We did it because playing our characters for an evening is a fun time, but to imagine actually getting from Act 2 strength to Act 3 strength by doing this–well, one can see why Blizzard thought that it would take people months to get into late Inferno.

The crafting system is similarly overshadowed by the Auction House. The Auction House will always return a well-stocked set of search results for anything you like, while crafting is a gamble. Currently, crafting is a risk on top of an initial gold loss: you must destroy items, pay the Blacksmith a fee to craft, and then turn the shards into an item that more likely than not will have a lackluster stat combination, since there’s no way to control the output. And to drive the point home, when you do get a good item from crafting, what do you do with it? You sell it on the AH. Blizzard plans to address the unpopularity of crafting in a few weeks, but the basic issue is that crafting items will remain a gamble, albeit a less risky one, while the AH returns precise search results from the entire playerbase. To make crafting more appealing, Blizzard must do more than lower the crafting fee and required materials. In Diablo II, gambling served a function, because excess gold needed a purpose. But now, where gold is the benchmark of progress, gambling it away is is far less appealing.

In the first weeks of Diablo, players would run Act I Inferno to accrue an initial pool of gold, play the AH to deck their characters out and trivialize Act II, and then either farm Siegebreaker or Act IV Aspects with magic find gear and glass cannon specs. Those areas were easy farming spots that yielded the chance of high-value items, much more profitable than suffering through an act in chronological order. Leveling together, we don’t have the time or inclination to spend a huge amount of time playing the AH, but after spending a few minutes a day on it and seeing our problems with particular quests dissolve with upgrades after having tried conventional methods for hours, we’ve had to embrace the system somewhat. The AH has warped the concept of max-level progression.

And if you do decide to tackle content in chronological order and rely on the AH for help, you become further entrenched in the system the farther you progress. Gear requirements become steeper across acts, and ideal upgrades on the AH skyrocket in price. Purchasing upgrades swiftly moves from several thousand gold to over a million; to keep up with harder content, players have to step their AH game up to maintain a satisfactory gold reserve. A player content to casually check the AH to buy some basic level 60 upgrades may get discouraged after several rounds of the AH game, when they must generate 20 times that to stay afloat and gamble on already-expensive items to flip. The Act I experience shared above, of simple flips outweighing playing the actual game, is magnified in harder content when higher repair bills (especially after the upcoming patch) and lack of NV hamper gold acquisition. We haven’t even touched upon learning bosses–that’s because most people don’t want to spend hours wiping and respeccing while undergeared to get some meaningless blues. Log off and relist some underpriced items. Playing the AH is not only the most effective way to get gold, but also to progress your character. Playing your character has little tangible reward.

The Law of Perfect Competition

One of the interesting questions is, what’s so different about item acquisition from Diablo II? People traded in that game. In fact, high-level players had to acquire most of their gear on the trading market, for roughly the same reason as in D3. Since gear was totally random, most of the good stuff you found was for characters other than your own, and gear was much more build-specific in Diablo II. The difference is not obvious, and that’s largely why we think this basic change in the Diablo experience has mostly crept up on everybody. The system has moved along two axes however. First, gear dilution is even stronger–the percentage of gear that’s not complete junk is lower than ever before. Second, instantaneous access to a single worldwide market is sufficiently different from Diablo II’s third-party trading forums so as to not be comparable at all.

We’ve not done a detailed study on itemization distributions in D3 vs. D2. But a few simple points of logic suggest that elite loot is going to be very rare. For one, sub-60 gear can drop even in all levels of Inferno. That’s a substantial fraction of loot that may as well be white or grey. It exists primarily for flavor reasons; part of the subjective feel of the game relies on the constant shower of loot as you move forward, including blues and rares. Getting an ilvl 52 weapon in Inferno doesn’t serve any possible purpose no matter what the stats are, but someone somewhere decided that the flash of hope as you see the yellow text should be fed to you at a certain rate to make you keep clicking. At any rate, those items are completely illusory for economic purposes; they’re disguised gold drops. Next is the fact that rares have to roll up useful stats over junk stats, but that’s more or less akin to Diablo II. It is relevant that, at least until a later patch, rares are usually substantially stronger than legendaries in D3, because rares have the added hurdle of rolling up useful stats (and actually, D3 legendaries all have random stat affixes, we believe for the same reason–to ensure that there are a percentage of bad ones). Finally, variance in numbers on each stat roll is very wide. Since truly elite items need to be near the top end of their stat rolls, this is another filter of randomization that makes them exponentially rarer. In Diablo II, many very important affixes (+skills and +school skills in particular) had little or no random variance. Putting it all together, the item pool in D3 is orders of magnitude more dilute. Quite a sequence of rand() rolls have to turn out well to produce an amazing item. Every time we find a weapon in Act 1 with amazing stat rolls and only 500 DPS, we think about how it’s very different world from the one in which merely seeing the words “Colossus Blade” in gold letters was enough to mean your day was made.

The point about worldwide trading with no barriers is simpler but likely more significant. You have access to the drops of everyone in the world. If you just stop and think about it, the result should be obvious. Don’t get tripped up by the economics; the fact that you have to pay gold for others’ items but not for your own is a red herring. Gold is the medium of exchange; we all have it, and it flows around in the closed system of the AH, but items exist independently of gold. Similarly, the 15% AH cut is ultimately meaningless on the gold AH. The gold flows in a circle as Blizzard gives it to you and takes it back; it only serves to make AH flipping slightly less profitable than it would otherwise be. The facts are simple: we all have far more items than we need. If they can all get allocated to people who need them, people will have an incredible overabundance of relevant gear. Now, the AH doesn’t come close to allocating everything perfectly, but it comes close enough. Experience shows that if you want merely adequate gear at any moment for any character, it is available for a pittance. And the logic in this paragraph should show why that’s completely expected. To make it clearer, imagine yourself zooming out to watch everyone in the world playing Diablo. Whenever one person thinks “I want a level 34 Monk weapon,” within a few seconds of him having that thought, thousands of such weapons have dropped for other people. Within the 36-hour AH window, millions. Even if a tiny fraction of those are picked up and bothered to be listed on the AH, there is no way whatsoever that that player has to pay more than a token cost for what he wants. Basic economic reality cannot be changed, even by Blizzard.

At low levels, only the first factor, the extreme abundance of adequate items, is relevant. Since looking for perfect items is unimportant, the result is one-sided–there is not even a semblance of scarcity. In Inferno where the desire for optimized items becomes relevant, the extreme mathematical rarity of superb items plays against the sheer volume of items constantly appearing. High-level items are designed to have such an enormous spread in value because it preserves some sense of scarcity in the face of worldwide availability. But this is like holding back the tide with a teaspoon. Diablo 3 sold 6.3 million copies in its first week. Without knowing how many more sales there have been since, or how many people are still playing, it’s fair to guess that it’s on the order of millions. When they are trying to balance a game to be played both with and without the AH, they are thinking of two different games where effective item drop rates differ by a factor of millions, or close to it. Perhaps by now you are convinced that there is no way to have both games play out in nearly the same way.


Moreover, there’s no clear way that any of this can be changed, even though the upcoming patch will bring about a number of changes to iron out issues in the gameplay. Some will have an effect on the economy of gear: allowing ilvl 63 loot to drop in Act 1 and generally nerfing the hardest content. However, we don’t expect these modifications to significantly affect the issues discussed here. They may render the problem somewhat academic for high-level characters by making the game easier, which may well be desirable for other reasons, but that is not an actual resolution. And nothing is changed for players below level 60. Without restating the whole argument, the effect of the AH on gameplay is endemic to the nature of a worldwide trade system with instantaneous and cost-free access.

The core experience of Diablo, bathing in the shower of items while scanning for that yellow gleam of a potential diamond in the rough, couldn’t be more at odds with–well, with going shopping (or depending on how you use the AH, with being a sort of fantasy adventure day trader). If you’re a casual player, you have the choice to use the AH or not, but games are defined by the choices they present. That button on the main menu just under “Public Games” that’s labeled “Free Gear” is a hard thing to ignore once you know it’s there, and in any case plays a curious role in a game that’s wholly about gear. For Inferno-caliber characters there is less of a choice, with AH-free play being a strenuous self-imposed challenge that would come at very significant cost in terms of time and effort. In both cases the underlying effect is more subtle; once you know about the complex global marketplace, you can’t unknow it. Logging on hoping to find anything in a barrel feels just a little more quaint, a relic from past games. The AH was supposed to be a useful support feature for character enhancement or to fill in gaps, but it has developed a life of its own, overshadowing the primal need to loot everything on the ground. Looking back on an evening spent playing, it’s not always so clear which one is the main game and which is the side activity.