Real Money Trading

Real Money Trading or RMT, refers to the practice of spending real money for digital goods such as game items, characters, gold, or other such features or services.

Diablo III officially supports and allows RMT through the in-game Auction House.

Background

RMT has a long and fairly sordid history, and has been illegal, or strongly discouraged by most Western game developers, especially in MMORPGs. (Where RMT is most common, since the games have virtual economies in which gold and other resources have real value.)

Prior to Diablo III, Blizzard did not permit any form of RMT in their games, and the company has engaged in long-running and generally-successful efforts to stop character leveling services and gold farmers/sellers in World of Warcraft. This isn't to say that players can't legally buy extra features and services in WoW; Blizzard began selling special mounts and other features for real money, and also enabled realm transfers and character faction transfers in 2008.

RMT in Diablo 3

To the shock of most observers[1], in July 2011 Blizzard announced that the Diablo III Auction House will have a real money aspect to it. The real money is only usable for item (and eventually character) sales for softcore (non-hardcore) characters, and it operates in tandem with the in-game gold trading auction house. Players may list items on either service. Blizzard charges a flat fee for each item listed (to discourage players from flooding the market with junk items), then takes another fee from successful sales. Proceeds can be spent on Blizzard merchandise and games, or withdrawn in actual currency, after another fee is paid to Blizzard and the financial partner.

See the RMT section of the Auction House article for more details.

No Hardcore RMT

Since the first announcement of the Real Money Auction House, Blizzard has been adamant that Hardcore characters will not have access to it. Hardcore characters can use the Gold Auction House, but there is no real money element to Hardcore item trading. From the original Auction House FAQ:

Can Hardcore-mode characters use the currency-based auction house?
No. Hardcore characters will only have the option to buy and sell items together with other Hardcore characters via a separate "Hardcore-only" gold-based auction house; they will not be able to use the currency-based auction house. Hardcore mode is designed as an optional experience for players who enjoy the sense of constant peril that comes with the possibility of permanent death for a character. All of a Hardcore character’s items are forever lost upon that character’s death, so to avoid the risk of a player spending real money on items that could then be permanently lost when the character dies, we decided restrict the use of the currency-based auction house in Hardcore mode.

This seems to contradict one of Blizzard's main reasons/excuses for adding the RMAH -- that players were selling items for gold anyway (in Diablo 2) and having to use shady third party sites to do so. That players will use third party sites, or perhaps even ebay, to sell items in Hardcore is clear, and Blizzard has not yet addressed this contradiction.

One explanation offered by fans is that Blizzard is worried about the legal issues of permanently lost items. The question is, if Blizzard enabled currency trading in Hardcore, took their cut of the sale, and players then lost (forever) the items or characters so purchased due to a Battle.net realm failure or other technical issue, could players sue Blizzard for the loss of their investment? Sue to regain the transaction fee?

Blizzard has never commented on this issue, but as legal issues pertaining to the the ownership of virtual items remain in an evolutionary state, it's not unreasonable to think this factored into Blizzard's no-RMT in Hardcore policy.

RMT Fees in Diablo 3

The RMAH fees were initially set at $.15 for an item listing and $.65 for an item sale, with a minimum price of $1. This was adjusted in Beta Patch 13 when several major changes were implemented.

• The gold auction house is once again available for testing
• The listing fee for all auctions has been removed
• The transaction fee for auctions in the currency-based auction house has been increased to 1.25 Beta Bucks
• The minimum listing price for an item in the currency-based auction house has been increased to 1.50 Beta Bucks
• Players may now only have 10 active auctions per auction house
• Tooltips have been added which will allow players to compare items on the auction house to the items they're currently wearing

The Fees are Too Damn High!

Bashiok argued back against criticism of the RMAH fees in a forum post in late December, 2011.[2]

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.

As some fans pointed out, the "low as possible" figure is whatever Blizzard sets it to. After all, they're handling the entire transaction -- there are no outside fees -- so they could set the price to zero, if they wished. Obviously they need to cover their costs for hosting Battle.net and developing the software in the first place, and moderation and support, but that would surely cost a lot less than eighty cents per sale.

There are other factors, of course. Since there's no subscription fee for Diablo III, Blizzard is using the RMAH to generate income off of Diablo III long term, or at least clear enough to cover the hosting costs. Also, if auctions were all free, players would post everything without any judgment, entirely spamming up the process. Some cost keeps the system from being clogged by junk, and provides a basic check on the lowest level of the economy. The listing fee was eventually removed, while the maximum open auctions per account was lowered to 10.

Will Blizzard Manipulate the Economy?

Conspiracy theorist fans have been speculating about Blizzard's ability to game their own Auction House since the system was first revealed. Blizzard has, of course, denied that they would ever do such a thing.[3]

No, we don’t generate any items or gold on the auction house. It’s a player driven feature and the items you’re buying are from what other players have found and placed on the AH for sale. There can certainly be a situation where you may want to buy 1 million gold and only 850,000 is available in total from all current auctions. You’d be informed of this when presented with a final purchase price.

The fact that auctions are entirely anonymous, and that the quantities of items being sold will be so high, makes these sorts of accusations easy to make, since there's no way fans would ever catch on to minor market manipulations. Aside from Blizzard's vows that they will never do such a thing, the risk/reward seems crazy, and keeps most fans from seriously considering this possibility.

Blizzard's economic model is to make a small profit per sale on millions of sales. If Blizzard were found selling fake items or cheating the system, the backlash, bad publicity, and lawsuits would cost them far more in lost goodwill and business than they could ever hope by cheating the system.

Korean Games Rating Board

Late 2011 and early 2012 saw a lengthy saga as the Korean Games Rating Board repeatedly refused to certify Diablo III for sale in Korea, due to the Real Money Auction House. Korea strictly regulates all forms of gambling, online or off, and by their laws, the Real Money mechanism built into Diablo III turns it into a form of gambling. A quote from the online Korea Times explained the potential problem in September 2011.[4]

The issue of gambling, illegal for Korean nationals, is a sensitive one, especially after a 2005-06 nationwide scandal over the Sea Story game machines that first passed the regulatory body inspection but were removed after the police discovered excessively speculative and addictive behavior among the players. Due to this controversy, the watchdog and approval committee was created in the Game Rating Board.

The country’s attitude toward gaming involving cash transactions has irked Blizzard’s local staff who are reluctant to deal with the controversy expected with the introduction of the auction house but are forced by headquarters to launch the feature, an industry source familiar with the matter said.

These predictions came to pass, and when Diablo III was submitted to the ratings board in early 2012, there were numerous delays. Blizzard tried a second time with the "cash out" element removed, but still did not win approval. Only when they submitted Diablo III without any RMAH at all (just a Gold Auction House), did the game win approval on January 13, 2012.[5]

Korean RMAH Timeline

• September 26, 2011: First word that the KGRB might have problems with Diablo 3's RMAH.

• November 16, 2011: Kotaku Australia points out that the RMAH might make Diablo III illegal in Korea, as other titles with any semblance of real money or gambling have been banned or restricted in that country.

• December 15, 2011: Bashiok insists that the Korean delays are not to blame for the full game not yet being released.

• January 2, 2012: The KRGB again declines to rate Diablo III due to the RMAH feature.

• January 4, 2012: The ratings board again declines to approve Diablo 3, even with the "cash out" feature removed from the RMAH.

• January 7, 2012: The Ratings Board again declined to approve Diablo III, despite additional adjustments to the RMAH feature.

• January 13, 2012: Diablo 3 is approved by the KGRB, 'without the RMAH feature. If Blizzard wishes to include the RMAH in Korea, they will have to resubmit it to another ratings agency at a later date.

• January 14, 2012: Players ask if they can play on the Korean servers to avoid the RMAH in other regions, and get confused and contradictory replies from Bashiok. (The thread is soon locked and then deleted, leaving the question unresolved.)

RMT in Other Games

Other developers with less popular games have taken more pragmatic approaches, and some have come to accept RMT in their games, with them the eBay-like recipients; skimming some % off the top of every auction or cash trade.

Many other games, especially ones popular in Asia where most players play in baangs and pay an hourly fee (which makes the concept of paying a bit more for better items or other upgrades seem a natural extension of the financial model), are more accommodating of RMT. RMT is seen in virtually every "free online" game, since those use RMT and ad banner loads to fund their operations. In popular games such as MapleStory, the basic game is free, but players can buy cooler outfits, better equipment, or access to the full game or extra dungeons/items, for cash fees.

Additional Information

• Markco writes extensively about the RMAH and gold auction house at Diablo 3 Gold Guide.

• The Virtual Economy page on Wikipedia.org provides a comprehensive overview of this issue.

• Scott Jennings, a long time industry insider, discussed the distaste most Western gamers feel for RMT, and later wrote a more general overview of the realities of RMT in his weekly gaming column.