Azeroth Economics - Part 2

In part 1, posted nearly a year ago, I have been looking at inflation in World of Warcraft from the point of view of a hypothetical investor. I concluded that the best strategy was to "invest" is rare blue items, and I think that prediction was correct, the price of such blue items on the older servers has shot through the roof.

The only problem with the analysis was that there are no investors in World of Warcraft, there are only players. And the slow general inflation of Azerothian general economics is invisible for most players, due to a fast "personal" inflation. Or to say it in a real life example: You don't give a damn about the price increase in peanut butter, if you are quickly becoming rich and put caviar on your bread now.

Personal inflation is based on the player gaining levels relatively quickly. And with each level, his income from loot and quest rewards is going up. That is especially visible at the early levels, where a new player at first struggles to gather a few copper pieces, but can reach something like level 20 in a couple of days, and suddenly owns a handful of gold pieces.

I previously described an ingenious get-rich-quick scheme, where I was killing level 8 owls in the night-elf newbie area, gathered 40 small eggs from them, and hoped to sell these eggs for a total of 2 gold pieces. I just got delayed in that scheme by the christmas event starting later than I expected. It could still work, but the problem is that meanwhile my night-elf hunter is level 23, and has 5 gold pieces in his pocket, while when I planned it I was level 12 and had only a few silver pieces. Earning 2 gold at level 12 would have made me "rich", but at level 23 it is just a nice bonus.

This also has consequences for investment strategies. If you get richer all the time, saving anything in any form is just plain stupid. As long as you are still leveling, the optimal strategy is to spend the money for anything that helps you level up faster, or earn money faster. That can be training, crafting recipes, or even equipment that you actually use. Saving gold, or buying items in the hope of reselling them at a profit much later is a waste, although you could try to buy underpriced items and resell them immediately at a higher price.

The negative consequence of the personal inflation is that only your main character on each server is able to play the economic part of the game properly. Why make an effort to gain money with your second character, if you can just mail the cash instantly from your main, who is earning much more per hour? Obviously that destroys some of the fun of balancing your money between training cost and buying equipment, and of earning gear with quests and loot, if you just get the cash by mail, buy the best stuff the auction house has on offer, and still got your pockets full.
- posted by Tobold @ 8:21 AM Permanent Link