Great analysis, AzureBonds, that's pretty much spot on - the only thing you've underestimated is the development costs of a Home item, which is rather a lot more than you may think!
The bottom line is: we didn't make any profit from the Auction Event.
However, even though the Auction Event wasn't a financial success for us, and it would seem unwise to run another one, we'd still like to! We want to be able to address all the feedback we received, especially the bidding tax, and run one without the crippling bugs that this one saw. We haven't confirmed this internally yet, but it is something we're discussing at the moment and would like to do properly.
I am not usually a negative-nelly, but EVERYTHING comes down to profit in the end. I mean, how can they profit from this if they could have sold these items to the general public in the thousands at the "normally accepted" price that is in current use...like $1.49 or $1.99? The answer is plain to me; hold an auction to see what is the highest price the market will bear. Brilliant on their part, but very stupid on our part for participating and paying an outlandish $45.00 for an item!!
Now I'm not saying they would jack prices up that far, yet, but if they are selling items now for $1.99 or $3.99, and this shows that even the lowest bidders were willing to pay $9.99 or more, then if I were in business I would believe that I could sell a rare item without the Auction Machine for maybe....$5.99 or $9.99, in the future, and people will pay it!!
I'm sorry, but I would rather stick with paying a reasonable price for these virtual items. I spend a LOT of money on Home myself, but if they do go much higher on the general cost of items in Home (which in my opinion they are reaching rather quickly now,) I'll no longer be able to purchase items in Home. And I really don't believe that the general user of Home can afford to bear much higher prices then they are paying now without it damaging the revenue that developers are receiving.
I don't know, I may be way off here but when I saw the stupid prices people were willing to pay in the auctions....I just wouldn't participate. Nor will I in the future.
I believe Home is better off without this and personally I didn't participate in the least. Prices are certainly high enough these days and I would like to see some sanity come back to pricing.
Serious attention needs to be given to wardrobe and furniture inventory control or lots will be cutting back on purchases in spite of pricing.
I think most of ya'll are forgetting that some of the items actually sold for less than the item cost in the regular store. I think it is great they tried this idea and some of us came out with pretty good deals.
I don't mind if the auction were to continue, but I assume it will only contain high end fashion items (the ones people paid the most for) or even one of a kind exclusive items. I don't think there is anything wrong with trying new types of transactions in home because it can lead to some really creative things down the line.
...and as kind of a side note with ~$4000 bucks being what this thing made I completely see why this didn't make any money as that wouldn't even cover one persons salary for a whole month of working on these items let alone the programming of the auction and the fees Sony probably takes for publishing. I am sorry to say but I seriously doubt all of these items would sell thousands like many of you think. I really doubt there are that many users buying each of these Home items every week.
I think the biggest issue was the the 50% of the users bidding were uninformed in that almost everyone seemed to think they needed to be the highest bidder to win. This is why there were some outlandish bids. I realize not everyone made this mistake, but I talked to many people who thought they had to be the highest bidder and didn't know multiple people would win. I suspect the amount Lockwood made from the auctions would have been significantly less if everyone realized that.
If it was mentioned in a tweet or on their site, and that was the only way to know, then that would definitely be on Lockwood.
Lockwood put it right there for everyone to read. If people bidding for whatever reason didn't bother to do a little investigating, that is entirely on them.
Also, if you look at the second auction of an item, some of the bids were higher than the first auction. Again, a single click on the first auction would show the number of winners.
If people placing large bids didn't do the most badic of investigating, that is their own failing. Nothing was hidden by Lockwood that I am aware of.
True, and true. It is hard to say how many people did not pay attention enough, were worried about not being online when the auction ended, or were just throwing a few extra bucks at their favorite developer.
You can only protect the consumer so much. The 10% fee was clearly labeled before I confirmed my first auction bid. The only thing would be that I already it was not prevalent before I purchased tokens. The tokens are usable in other places but not very easily, so that would be a small gripe of mine.
The other factor is did the auction machine spur a surge in token purchases that would not have happened otherwise even if people did not use them on any auctions. I don't like the whole buy lockwood/juggernaut/hex/hellfire token idea in general. I would rather use cash every time, but my guess is this helps developers get more transactions than any other gimmick that Home could have. So I guess I'll always have a few pennies worth of unspent token money sitting in my coffers.
I didn't like the idea of an auction and I still don't. I'm not happy about people being made to feel less special because they don't have tons of money.
However, I am absolutely horrified to find out that this wasn't a "silent" auction. The idea that you can see others' bids and increase your own appalls me. Why doesn't nDreams just go to the whales of Home and offer them unique items for much more money than they're worth? I'm sure some people will pay ridiculous amounts of money for "bragging" rights; the right to throw their money in other people's faces, that is. I see that on Home already.
nDreams replied that they didn't make any money on the auction, but they "might" do another one "for us". Ha. Ha.