So, here is a post taking those clarifications and putting them in bullet-point form for easier digestion. There's a lot of info here, but most of it is fairly important, especially if you're looking to use the system yourself.
If you purchase a WoW Token with real world currency:
- you cannot:
- use the token yourself to add game time to your account;
- set the gold price of your token (you either list it for the going rate or don't list it at all);
- trade the token to another player via the trading interface;
- mail the token to another player via the mailbox;
- deposit the token into a guild vault;
- vendor the token; nor
- destroy the token;
- you can only:
- move the token around in your own inventory; and/or
- sell the token for the current set gold price via the Game Time tab on the auction house.
If you purchase a WoW Token with in-game gold:
- you cannot:
- resell the token you purchased via the Game Time tab on the auction house;
- trade the token to another player via the trading interface;
- mail the token to another player via the mailbox;
- deposit the token into a guild vault;
- vendor the token; nor
- destroy the token;
- you can only:
- move the token around in your own inventory; and/or
- use the token to add game time to your account.
Regarding the involvement of the Auction House:
- WoW Tokens are bought and sold via their own system that is not like the WoW auctioning system with which players are currently familiar:
- there are no individually set prices;
- there is no real "auctioning" involved;
- there is no bidding;
- there is no up-front deposit to list a token;
- there is no Auction House cut taken from the sale price;
- there is no expiration time on token listings;
- token listings cannot be cancelled;
- the system is region-wide (Americas, Europe, Taiwan, Korea, China) and not limited by realm;
- the system is more akin to NPC vendors
- anyone selling tokens puts theirs up at the currently set price, like vendoring an item except you have to wait a while for your gold to be mailed to you;
- anyone buying tokens purchases theirs at the currently set price, like buying from a vendor;
- the only choice players have is to:
- buy / sell at the current price;
- refuse to buy / decline to sell at the current price.
Additional important stuff:
- Real world currency cost for the tokens will not be cheaper than monthly subscription rates;
- Gold prices for tokens
- will initially be set by Blizzard on a per-region basis (because gold value varies by region), but
- will eventually be taken over by an algorithm that looks at the historical supply and demand of tokens to balance prices per region;
- Gold can be created or destroyed in the system, as
- buyers will only ever pay the current gold price for tokens, regardless of the price at which the tokens were listed;
- when a token is sold its seller will receive the gold price quoted at the time of listing regardless of the token's purchase price; thus
- if the price goes up after a seller lists a token, the buyer will pay that price but the seller will not receive extra gold; conversely
- if the price goes down after a seller lists a token, the buyer will pay the lower price but the seller will still receive all of the gold they were quoted at the time of listing;
- Blizzard is okay with gold being created or destroyed as prices slowly change if it means that sellers don't have to guess about how much gold they will actually receive once their token sells;
- Tokens will generally be sold in the order that they are listed;
- If you run out of game time but have enough gold on a character to buy a token, you can do so directly from the character select screen and it will automatically add the game time to your account;
- The WoW Token system launch likely won't launch everywhere at once - it will likely be a staggered release to allow Blizzard the opportunity to troubleshoot problems before it becomes available worldwide.
FRAUD PREVENTION and PROTECTION:
- Blizzard will protect both buyers and sellers of tokens from fraudulent purchases, so
- if a buyer uses illicitly-obtained gold to purchase a token, that gold will not be taken away from the innocent seller; and
- if a seller uses fraudulently-obtained tokens to make gold, the tokens / game time will not be taken away from the innocent buyer.
- Like current auction house systems, buying tokens for gold will likely be instantaneous, but selling them will likely include a delay while Blizzard performs a fraud review, though
- players with established credit histories with Blizzard may have a shorter delay.
- Additional limitations, such as a limits on the number of transactions allowed per account, may also be a factor.
I think one of the interesting aspects of the WoW Token system is that tokens that are purchased with real world currency can only be sold for gold, and tokens purchased with gold can only be used for game time. That seems to be a feature designed specifically to combat players who might otherwise try to play both sides of the market and thereby wreak havoc on exchange rates. Combined with the fact that tokens will cost at least as much as a single month's subscription, this means that each token transaction will require a fairly decent profit margin just to keep up with the discounts given by 3- and 6-month subscription options.
Could I persuade you to explain what you mean with your last sentence?
ReplyDeleteSure. Let's start out by outlining some basic ideas first and build out from there.
DeleteThe basic principle of playing both sides of the market is to buy low and sell high - buy WoW Tokens for gold and use them for game time when the gold price for them is low, and buy WoW Tokens for real money and then sell those for gold when the gold price for tokens is high.
The extra gold that you get from buying low and selling high is your profit. Profit margin is your profit divided by your cost. So if you sell a token for 11,000g and buy one for 10,000g, your profit is 1,000g and your profit margin is 1,000g / 10,000g, which equates to 10%.
The next concept is the idea of opportunity cost. Opportunity cost is essentially the idea that by doing one thing, you are giving up the opportunity to do something else. For example, if you spend money to purchase a WoW Token to sell for gold, you give up the opportunity to spend that money on directly buying game time for WoW instead.
Basically, what I'm saying at the end of the post is that because Blizzard gives discounts to players who pay for 3- or 6 month subscriptions and because the opportunity cost of choosing to play both sides of the WoW Token market is that any game time you earn with tokens is not eligible for these discounts, anyone who wants to play both sides of the WoW Token market needs to take this opportunity cost into account when analyzing profit margins.
For example, let's assume that a WoW Token costs $15 - a player with a 3-month subscription could purchase 15 months of game time at $14/month plus 1 token to sell for a total of the $225. Similarly, a player who only purchases 15 tokens to play the token market would also pay $225. This means that the player who chooses to buy the 15 tokens to sell needs to make at least enough gold by selling those tokens in order to be able to buy the equivalent of 16 tokens (15 months of game time, plus 1 token's worth of profit) or they would have essentially wasted their money trying to play the market. That equates to just under a 7% profit margin average per token in order to break even with the opportunity cost.
With a 6-month subscription, one could buy 30 months of game time at $13/month and 1 token for $405, compared to only 27 tokens for that same price. If playing the market with those 27 tokens doesn't generate enough gold to buy the equivalent of 31 tokens (30 months of game time plus 1 token worth of profit), then one would have been better off not playing the market at all. This equates to needing nearly a 15% profit margin to break even with the opportunity cost.
Plus, remember that Blizzard has only said that WoW Tokens will cost "as least" as much as a monthly subscription. If tokens end up costing more than $15 each, profit margins will end up needing to be even higher in order for playing both sides of the market to be worthwhile.
Did I explain that okay, or does it still not make sense?