Tobold's Blog
Thursday, April 03, 2008
Daily inflation

Most people probably think that whether you make gold in World of Warcraft by farming primals or by doing daily quests doesn't matter. But in a macro-economic sense there is a huge difference between these methods. In the funny Ni Hao video the singer complains how she is paying gold for primal on the auction house, and the gold farmer who put up those primals is selling her "her own" gold right back. If you were wondering why all those gold farmers didn't cause a huge inflation in WoW, the answer is right there: the gold farmers actually weren't farming golds, they were usually farming expensive crafting ingredients like primals. Thus the total amount of gold in the economy wasn't increased by them, they did exactly what the video said, selling players back their own gold in an eternal cycle.

Patch 2.4 introduced new daily quests, and increased the limit of how many you can do to 25 per day. Unlike the Ogri'la and Netherwing daily quests, you don't even need to own a flying mount, or to do a series of group quests to access the new daily quests. Even with lots of other players around competing for the same targets, you can do the 4 daily quests on the isle in half an hour and cash in 40 gold. And as the daily quests are not only easy ways to make gold, but also advance reputation with the Shattered Sun Offensive, and advance the progress of the world event, nearly every WoW player is doing more daily quests now than before. And the effect on the economy is starting to become visible: unlike farming primals, doing daily quests adds more gold to the economy. With more money in circulation, prices for everything go up, and we get inflation.

For example prices for Primal Water on my server went up from under 20 gold to over 30 gold. Of course some prices are also dropping: the mobs you kill for the quests drop motes of mana, so Primal Mana is getting cheaper. And the Shattered Sun Supplies contain high-level green items, so the market is flooded with those. But anything that isn't gained as a side effect of doing the new daily quests is going up in price. This is basic economic theory in action: If you can make 40 gold in half an hour with daily quests, the price of primals is going up until half an hour of farming primals gives you 40 gold worth of primals. The only real currency in an MMORPG is time, and the market adjusts until one hour of time is always worth the same amount of gold.

What is missing in the World of Warcraft economy now is more money sinks. Everything where you pay money to an NPC instead of another player is a money sink, it really removes money from the economy instead of just moving it to another part of it. The biggest existing money sink is mounts, but as The Burning Crusade is getting older, many people already have their epic flying mount, some even several of them. Repair costs are a money sink, but by getting people to play more daily quests and PvP instead of dungeons and raids, Blizzard inadvertedly lowered the amount of money people spend on repair bills. PvP deaths don't affect durability, and few people die while doing a daily quest. Training cost is another money sink, but with nearly everyone already at the level cap, there isn't much training of new abilities and spells going on.

The best sort of money sink would be something which is expensive, desirable, but has no influence whatsoever on gameplay. Pure fluff. First thing I could think of would be armor dyes: I'm sure people would spend hundreds of gold on the ability to change the color of their armor. Another idea would be teleport scrolls, you can now get a teleport scroll to Shattrath by doing a daily quest, so why not sell teleport scrolls to all sorts of places for lots of gold? Blizzard has to add *something* to get all of that new money out of the economy again, or the daily quests will cause a spiral of inflation.
Player Housing.

There, I said it. =P

But seriously, if Blizzard would implement serious customization options (hair, facial features like scars/warpaint/etc) and charged for it, people would eat it up like candy. The fact that the devs were shocked at the enthusiastic response to new hairstyles in WoTLK being announced at Blizzcon, seems to say to me that they don't quite 'get' just how much people want this kind of 'personalized fluff'.
Interestingly, most MMOs have gone with a model that can only be described as flat taxes poorly disguised as state-run services. Sure, no one is FORCING you to repair at the vendor, but they might as well be. Our MMO overlords have no way of shutting off the money presses, so inflation will always end up getting out of control, and these forced "donations" are the only way to slow down inflation.

Two things that separate MMOs from the real world in this regard:

1.) Deflation as a correction mechanism is impossible short of character deletion

2.) The "hunter gatherer" method of surviving in an MMO (use only what you find and only engage in limited barter trade) is completely viable. Interestingly, since the NPC prices never go up or down, people whose playstyles closely resemble hunter-gatherers are largely immune to currency devaluation.
Yea, that would be something, Neil: vendor prices that would fluctuate based on the amount bought within a time period. In fact, they could make all items 'limited' amount, so that the stocks would replenish at set rate and the amount on stock would be reflected in the vendor prices.

This would make the vendor prices fluctuate slightly, and if that was somehow correlating to the mean pricing in AH...

That would make the game very interesting for the AH freaks, but very soon a real drag to the 'hunter gatherers' you mentioned.

IMHO the Player Housing would be a great example of money sinks which should have been implemented years ago.
Totally agreed. housing !!!

Housing is a good money sink with rent to pay like in EQ2 for exemple.

And it is fun to collect a lot of things in house.
As someone who has yet to buy their first epic flying mount, inflation is very welcome in my book, as my absolute income increases and the fixed cost of the mount becomes more achievable.

Bring it on :)
Color change!!! That's a great idea! Look at high level pally armor. Right now I'm in PVP gear and it's purple and not a deep dark purple, but rather a light almost pastel type purple.

How did pallies get the shaft here? Aren't we holy warriors?! Give us gold, silver, something that reflects a "holy" type nature.

the guy in the purple pajamas
1. Enchants

The flood of easy greens has led to spiral of deflation for Arcane Dust and Greater Planar Essence. The only one that is stable for now is Large Prismatic Shard.

So you can 'get a deal' on enchanting mats. I've never seen the prices so low since I got into that business.

2. Max your Scryer / Aldor rep

People seem to be getting marks / armaments and signets / tomes more than ever before, so a lot of that excess gold is going into buying the rep up to exalted. The price is rather stable, but the turnover rate is very fast.
The inflation will accelerate too, as more dailies open up in Quel'danas. Right now I'm doing 11 more daily quests than I did before 2.4. These pay better too, so my income is up about 150%, and that's before any AH income.

It isn't traditional inflation because incomes are rising in tandem with prices. Players don't tend to have a lot in saved assets, and if they do then their needs are probably pretty small. In effect it is another way to narrow the gap between the haves (with lots of saved gold) and the have nots. In that way it's similar to the cheap PvP gear: it levels the playing field.

All these changes in 2.4 seem to be targeted to leveling the playing field for WotLK. I fully expect that the pendulum will swing the other way when it launches, and hardcore players will once again be able to open a gap to the casuals, via T7 and T8 armor or whatever.
Player housing is a very good idea, lets take it a step further, guild houses. Various, upgradeable guild houses, the larger the more rent. Instant access to the guild bank and for fun, you can display various trophies you gain from beating Raids. "Oh that, Fang of Onyxia. And over here we have the Hand of the Betrayer."

Considering how often you see new guilds use the fact they have a guild bank as a recruiting practice this would be a an instant money sink. Hell, you could even add a guild member fee option to the GM control panel to help pay off the massive rent on a maxed out Guild Hall.

If anyone has even played on an RP server (or even on normal servers) you've seen the guilds that seek out of the way places to be their guild hall. People want this and it's not too hard to implement, Just create a mini instance that's based on your current guild, kinda like the Officer's Lounge they used to have back in the day.
I'm a tightwad in game never finding myself short money for mounts etc. But Yes I would pay to be able to recolor some of the hideous schemes they force on us.
No money sinks? You must not have seen my bill for gems, enchants, or those 5 Nether Vortices I just bought.

As it is, I owe another guildie 3700g. Most of that is from when I bought my epic flyer.
No money sinks? You must not have seen my bill for gems, enchants, or those 5 Nether Vortices I just bought.

And where is that money now? In the hands of the players who sold you the gems, enchanting materials, and Nether Vortices (bonus points for the correct plural form of Vortex). So the money is still in the economy, and not in a "sink".
Tobold, Blizzard has started down the path you are talking about at the end of your post in regard to new money sinks. Once this Shattered Sun Offensive questline is in its final phase, you will be able to purchase the "...of the Shattered Sun" title for 1000g.

A great idea I think, its something that has no effect whatsoever on game balance but lets you further customize your character.
At a later stage of the island progression a daily quest will open to give you reputation with the new faction in exchange for gold. And I believe once someone gets exalted with them, they can pay 1000g for a new title. I don't know if a lot of people will go for it, though, I don't even like using the titles I got for free.
If it really is a problem (I long ago left WoW for LOTRO), why doesn't blizard simply raise the AH tax? They could also raise repair costs (at 70 of course so that low levels aren't screwed). With a few small edits in their code they can drain the cash out of the system until it returns to normal.. they could even do it quietly so that no1 ever knows...
I have a strong and sneaking suspicion that the quest to unlock a death knight will require a sizable amount of gold. Think the 0.5 armor set quest from classic WoW.
@ anonymous. Lets be honest all they have to do is let people buy the pets that you can only unlock with cards now.
Allow people to color thier armour.

Allow crafters to tweak the models when they make an item. Or at least let them pick from a predefined set of models and then pick the colors.

People would sink tons of gold into things like that.

But they are getting lazy and don't want to touch the old stuff.
I'd like to see more guild related cruft, like being able to spend 100g to purchase a big guild flag I can either (1) plant someplace for 15 minutes, or (2) equip (2 handed) and carry about.

It would of course clearly display the guild emblem, large enough to be visible across a battlefield.

The RP and machinima crowds would go nuts.

It shouldn't provide any significant buffs, except maybe a spirit buff, and then only to members of your guild.
"PvP deaths don't affect durability"

PvP deaths do affect durability, just at a much lower rate than PvE deaths. Go hit the BGs for a few hours and you'll be down to 60-70% of your durability. Do that with a full set of S3 gear and your bank account will definitely notice.
Initially I didn't see Tobold's point, and cited some player transactions in which the money (except for AH fees) didn't really leave the economy, but passed between players. I actually end up reselling a lot of stuff, so in my case there are often two AH money sinks. But with prices of what I tend to deal in being depressed because there is a level-68 BOE green in every Shattered Sun package which often ends up on the AH as enchanting mats, I'm dealing less and less on the AH of late.

I guess that the existing sinks of mount costs, repair costs, AH fees, and players quitting may not be enough to offset the tremendous accessibility of dailies (though I did notice that daily quest payouts have been nerfed a bit). I know some people who are now motivated to finally try to grind out that 5000g for the epic flyer, which is the biggest single 'sink'.

My major gold sinks in the near future will be buying vendored crafting mats, mounts for alts, training costs (both class skills for alts, and crafting patterns and training), and AH fees. I might consider buying the 1000g title when (or if) I reach Shattered Sun exalted; it's not at the top of my want list right now.
PvP deaths do affect durability, just at a much lower rate than PvE deaths. Go hit the BGs for a few hours and you'll be down to 60-70% of your durability. Do that with a full set of S3 gear and your bank account will definitely notice.

Nope, that isn't the PvP deaths that cause this. Staying IN COMBAT for some time slowly degrades durability, PvP or PvE. The PvP deaths don't matter for that.
I just thought of a great money sink, one in practice in our every day lives (depending on where you live). Gambling, the stupid tax. Betting on Arena matches to good ol' fashion fixed card games. If WoW have NPC run gabling the money would dry up faster than rain in a dessert.
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