Diablo III – Now Featuring Hyperinflation

At launch the problem was  Error 37 and other related “always online” issues.

Then it was how the gold auction house was killing the game, something I first brought up in May of last year but which Blizzard, in the form of  Jay Wilson, was still professing amazement about 10 months later.  And then there was the recent auction house burp, which shut it down for several days.

Now, even as Blizzard is patting itself on the back on the one year anniversary of the game, there is an article out there with the title,  A Virtual Weimar: Hyperinflation in a Video Game World, which discusses the impact of the the Diablo III real money auction house on the game over the last year.

Diablo II Shop

And they thought this was bad…

Being compared as a parallel to Weimar German and the great inflation… that is never a good thing.  I think even Greece has only been held up against the Weimar Republic to show that the situation in Greece isn’t as bad as it could be.

And it all seems to fall back to something Edward Castronova said, a while back:

Being an elf doesn’t make you turn off the rational economic calculator part of your brain.

And when real money is part of the mix…

So what else can go wrong, aside from Blizzard having no backup plan and no content expansion ready in the foreseeable future?

Hat tip to Edward Catronova for spotting the story.

3 thoughts on “Diablo III – Now Featuring Hyperinflation

  1. Asmiroth

    I was wondering when someone would take a more scientific look at this problem. Market economics are a hobby of mine (sad really) and from the get-go I thought that D3 would be a terrific test of the relationship between gamification and market forces.

    The real kicker for me is that all of this, from the start, was clearly identified by the playerbase – even before launch. I can understand WoW’s model of no cash sinks but to apply that logic of only faucets and no sinks to a game with real-market impact… it’s really mind boggling. The cynic in me says that they wanted this to happen, to devalue in-game gold so much that the only recourse players would have is to spend real money. It’s just too bad they didn’t think that 3rd party sites would continue to undercut them and by margins that put Walmart to shame.

    As the article states, things like this happen so rarely and in spaces that are so rarely confined that it’s hard to examine all the causes. That it happened in a game, one with extremely limited factors that can easily be measured – people are going to be writing papers on this for the next 10 years.


  2. Damion

    D3 would have been such a great game but there is no way in hell (haha get it hell?) I am going to spend anmore real money after buying the game for 60 bucks!


  3. Pingback: Gaming: Blizzard is not as clever as they thought they were | stnylan's musings

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