Friday, December 28, 2007
Limitations of Auctioneer
Inspired by Og I downloaded and installed Auctioneer, a famous addon to watch World of Warcraft auction house prices. That is I first downloaded the AuctioneerAdvancedSuite, pressed a wrong button on it, got spammed with "this is cheap, do you want to buy it" message boxes which I couldn't turn off, and then uninstalled it again. Then I installed the AuctioneerClassicSuite, which was much less confusing. I think I'll just use it for a while and see what comes out. But although I haven't used it much yet, I'm already more aware of its limitations than many regular user, due to previous knowledge of economics and how the WoW AH works.
Auctioneer overestimates prices: This is inevitable, because Auctioneer doesn't have data on actual sales, it only has data on for what prices people put up items for auction. If nobody buys something overpriced, the buyout price still shows up in Auctioneer, and because the auction goes on until it expires, everybody on the server using Auctioneer will probably register the price. Cheap or underpriced items will be bought much quicker, and not everyone will see them, because the auctions last much shorter. On average the prices recorded by Auctioneer are too high.
Averages hide variations over time: World of Warcraft items undergo cyclical price fluctuations. If you watch prices on every day of the week, you'll notice that items aren't worth the same during the week (especially on patch day) as they are during the weekend. During the christmas event small eggs (needed to bake cookies for a christmas quest) suddenly go up strongly in price. Other one-time events change prices too, for example prices for gems skyrocketed with the latest patch, because people got lots of socketable arena season 1 gear for honor points. Auctioneer can store high and low prices, but won't tell you at what times prices are usually higher.
If everybody would use Auctioneer, you couldn't profit from it any more: Auctioneer can help you to buy things cheap and "flip" them, selling them at a profit. But that only works because some people sell goods for cheap, because they don't know what they are worth. If you sell something frequently traded, like lets say Runecloth, it is easy to see for how much other people are currently selling it and then undercut them. But if you want to sell some green item, the "Dastardly Dagger of the Duck", chances are that when you sell it there are no other identical pieces for sale. Thus people usually accept the proposed bid price (which is 50% over vendor price) and then post a buyout price somewhat higher. That has nothing to do with the market value of the items. Traders know that for example the same item "of the eagle" (+sta and +int) sells for more than "of the gorilla" (+str and +int), although the bid price WoW suggests will be the same. The profit comes from many people being not well informed, and thus selling items too cheap. If everyone had good information on previous prices, "flipping" would be much harder. Note that other games, e.g. Pirates of the Burning Sea, give price information on the average sales price of every item over the last 30 days.
I can see the interest in making quick virtual bucks by flipping items on the WoW auction house, but that business isn't for me. I don't see myself camping the AH for profit instead of adventuring. Not that I don't enjoy trading, but in WoW trading isn't the most fun part of the game. I'd rather do my trading in PotBS, where it is much more fun and the adventuring is less good than WoW.