06/16/2012 04:12 AMI have been reading threads and found a blue thread that states the RMAH is demand driven. That is 100% wrong. If demand drove the market there never would be items selling for $250 each. As example, if Ford decided to sell a Focus for 100k do you think it would ever sell? Of course not, there is no demand for 100k Ford Focus's. I cannot believe there is a demand for digital items selling at $250 each.
Posted by Ambro
If there was no demand it wouldn't sell.
Demand is created when lots of people want a certain item and purchase said item, thus the price goes up.
Not for luxury goods. Luxury goods don't necessarily have a lot of people buying and bidding the price up -- they are priced as luxuries for a smaller market that is interested in buying the luxury item and is willing to pay the requested price. An example is a Porsche as compared with a Ford Focus. The Porsche has strong demand, but far fewer units are sold, and very few people in the market as a whole want to pay what Porsche demands for a vehicle, so they don't. But there is still a healthy demand for Porsche's, and the price is maintained by the seller (1) keeping the volume down and (2) setting the price point that is acceptable to its smaller, luxury market.
This is the same for the RMAH -- a 1300+ DPS weapon is a luxury good. It's the Porsche of the game. There are limited quantities, and there is demand for the weapon at that price, even though the number of people generating that demand is smaller than would be the case if it were priced at $10.
But the RHMA started with prices out of most everyones price range, so how can you ever determine demand. You cannot tell me $250 items are flying off the digital shelves and thus creating a demand that will cause the prices to go even higher. I understand in the real world supply drives our markets, for the most part, but this in the digital world supply is not an issue.
Supply is indeed an issue because of the drop rates. Blizzard is keeping the supply of very good gear (high DPS and good/useful stats for weapon/armor type) very low indeed, which creates scarcity and drives demand. This will even out over time as more people reach the later phases of the game and more of these items are farmed up and placed on the AH -- as they become less scarce, the prices will drop. But what we see right now is fairly classic supply and demand action -- an item which is in limited supply being sold for a high price, because the demand, even at that price, exceeds the limited supply.
The way I see it, the RHMA is greed driven, nothing so elegant as supply and demand.
If this is the case, and there really isn't demand for the items at $250, then we will see prices fall as sellers reprice them at lower prices. This market reprices slowly due to the mandatory listing times, which are not short. So, in a week or two you should be able to tell by whether things are generally being repriced or not.
Keep in mind, however, that the relatively small market that does spend real money on virtual items has deeper pockets than most people think. Back in WoW's heyday, for example, it was not uncommon for full loaded level capped characters to sell for 1200-1500 on the black market.