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Friday, June 8, 2012

Tools you will need for the Gem Market

Hello again all!

Today I'd like to discuss the Jewel Crafter and his wares!

We all know him from his aperrance in Act 2 Sewers, his name of course is Covetous Sheen.

What you may not know is the upcoming changes to Gem combining costs both in terms of Gold and Materials and what this will mean, pending the reintroduction of the Commodities Auction House, for those planing to craft gems.

We already know the costs of crafting Gems and have access to the Gem Calculator produced by Diablo 3 Artisans. The Changes can be found in the 1.0.3 design changes blog here.

Blizzards design philosy has always been to use the jeweler as a Gem Sink, evidenced by the need to use 3 of each previous tier to make the next. his is down to 2 for the earlier gems. As it stood you would have needed a whopping 1,594,323 CHIPPED GEMS to MAKE 1 RADIANT STAR GEM, 3x3x3x3.....x3x3 (or 3^13). With the changes that is down to 62208, (3^5 x 2^8)

But we won't be buying Chipped Rubies in stacks of 62208 to craft our Radiant Stars so why does that affect us? Well it doesn't in those terms, but understanding the maths behind it brings me to my next point.

To profit from the gem market we need to know and understand 3 things.

Firstly the crafting costs. What you pay the Jewler to make a gem. Cumulatively these mount up, prior to the patch they cost so much more that since chipped and flawed rubies dropped relatively fequently at low levels there was a glut on the AH and none actually went into the sink. Blizzard clearly hopes to change this. Now to craft at that low level will cost only 10 gold, so when you have 2 in your bags you are much more likely to upgrade, if not for any reason other than to save inventory space.

Secondly the material costs. How much do the gems, and pages, or tomes, cost to buy from the AH.

And thirdly the AH costs. The 15% fee for selling anything is one that frequntly gets over looked. If I determine it cost me 100 gold to make an item in Diablo 3 I need to sell it for 100/(1-0.15). where 0.15 is the 15% fee. Giving me 100/0.85 = 117.6 or 118gold JUST TO BREAK EVEN!

In the absence of real data from the comodities AH which is offline I've used a chipped ruby purchase price of 1 gold, pages and tomes at vendor prices of 34, 54 and 64(the lowest we can ever expect to see). And from combining he crafting costs, material costs at the 1.0.3 levels we get a cost for a Radiant Star from Chipped Rubies of 44,804,331, meaning we have to sell it for 52,710,977 to break even! Thats without buying the plans required for the higher value end game gems!

I sincerley doubt we will ever see gems, even the first on the realms going or anything close to these values. So how can we possibly make gold from what is (over the lifespan of a gem a MASSIVE GOLD SINK!)

Simple: I would recomend creating a simple spreadsheet in which you can enter the values of each of the 3 levels of Tomes, and each of the 14 levels of  gems and watch! I made this one which reverses the process, calculating in much the same way as done of my tips for flips post the top buyout price of the previous tier in order to sell for a profit the next tier having taken the crafting prices into account.


So we see that given that Radiant Stars are selling for 1,200,000 gold I need to scoop up the Perfect Stars on the AH under 206,000. As we know how to play the "snatching" game on the commodities AH (search till you find your chosen amount in the price range you want and press buyout repeatedly until you get a failed message telling you you have exhausted the supply...then collect your failed "bid", items, and refunds if there were any posted lower while you were spamming the buyout button).

Now with the prices we see here of 400,000 for Flawless wouldn't it be better to just flip? Well not really...people won't be buying Perfect Stars with Radiants Stars on the AH, knowing they can keep them forever with the ability to remove at will. How many Chipped Rubies did anyone sucessfully flip once the player base was into Normal/Flawless/Square ranges of the game?

2 comments:

  1. I have something similar. But I don't understand your logic for "Buy at".

    If 1 flawed goes for 25, you need 2 (in the next patch) to combine them, so 25*2=50. Plus the combine fee 50+10=60, plus the AH fee is 60*1.15=69. So 69/2=34.5. To break even, you'd have to buy the chipped gems at 34.5.

    Would you mind explaining your logic for "Buy at" ?

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    Replies
    1. I totally messed that up. The last phrase was supposed to say "To break even, you'd have to buy the flawed gems for 34.5". We are combining from flawed to normal.

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