Tobold's Blog
Tuesday, March 10, 2009
 
The value of WoW gold

The Greedy Goblin has a unique opportunity to buy 5,500 gold in World of Warcraft for $20 in a completely legit, sanctioned by Blizzard way. He made a character on another server for an experiment, in which he proved that even under difficult conditions he could make 1.5k gold per week with a freshly rolled character and just 10 minutes per day of work. 5.5k gold later, he is thinking of stopping the experiment. So although I was sure I knew the answer, I just had to ask whether he would pay $20 for a character transfer to his regular server, to recover the gold. Of course he won't. He is making 20k a week on his regular server, and already has over 140k gold there. There is nothing he could spend it on, so 5.5k gold are completely worthless to him.

I'm not quite the businessman Gevlon is, but I'm at 30k gold, and consequently put a similarly low value on WoW gold. Don't think I'd spend $20 to buy 5.5k gold, even if it was legit like in Gevlon's case. What would I need the gold for?

But watching how my behavior changes under these conditions leads me to an idea to explain one of the big questions of WoW economics: Given that earning gold in Wrath of the Lich King is easier, why isn't there any inflation? Pretty much every trade good, from herbs, to ore, to crafted epics, is *falling* in price since WotLK came out, while economic theory would suggest prices should be *rising*.

I think the answer lies in the fact that in a virtual world like World of Warcraft, the moment we have "enough" money (on a totally subjective scale), we simply stop working. Why should I spend time farming gold, if there is nothing I want to buy? In the real world you're not stopping work on Wednesday, because you think you already made enough money for the week. In the virtual world you do. The only daily quests I do nowadays are those I need to gather the reputations I want, there is no reason to do a daily quest just for the gold. Instead of keeping working, accumulating a fortune, and then causing inflation with a buying spree, we stopped working, kept our fortunes at some comfortable level, and refuse to go overboard bidding items up on the auction house.

It is hard to tell if many people are in the same situation, that they have enough gold and just don't need any more than that which is coming in automatically from questing and running dungeons. It used to be that raiding was expensive, but nowadays the mobs drop a lot more gold and loot, and at the end of the day I'm often in the plus, even after paying for a flask and the repair bill.

As I'm not following the prices of illegit WoW gold, I can't say how the prices for that have evolved. But if there are many people like me, who have more than enough gold, then RMT must be suffering. Why pay somebody else to farm gold for you, if you already have more than enough of the stuff? I don't know whether that was done on purpose by Blizzard, but I can only imagine that the gold traders must be hurting right now, with not much improvement in sight.
Comments:
If everybody has more gold there WILL be an inflation. But I thing that only some people like to make gold and like to think about how to make gold. Therefore the wealth is probably massively concentrated in WoW. Then, you are correct that these people, who have a lot of gold, have nothing to spend it on that consists of other goods.
While luxury boats and expensive BWM cars are made of steel, hard work and machines like all other cars, the Paris Hilton bag is not. A higher demand here does not drive the price of tradeable goods up.
 
Gevlon's forced capitalist attitude usually puts me off. I also wonder what he was trying to prove. Just make a char and level him up with two gathering professions and YOU WILL make more than enough money, even if I afford me vanity pets and luxuries. You are so right; if people do not play WoW for the money, they usually have enough not to bother about their amount of gold on the bank at all.

It is just that many people are not so much about the money as Gevlon. My friend Steve is always broken, and often laments that he does not have enough money. He changes servers like people their underwear, and usually wants me and two-three other friends to follow. But I no longer play, and while Andre is always following him, he usually manages to show him that you can make some 2-3K while levelling up without being a Gevlon. ;)
 
My wife and friends find that we have enough gold to get what we want and need.

In the 2k to 7k range at any given time, most of us with an epic flier or two, and variously twinked alts and a level 80 character or two, each.

I think Blizzard has hit the sweet spot for the amount of gold generated by playing the game normally versus gold sinks and expenses.
 
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I agree with the stop working attitude, When Wrath came out I leveled a deathknight from 55-80 right away. Doing so afforded me the Flying skill 1K gold, epic flying 5K gold, cold weather flying 1K gold and the special deathknight flying mount another 1K gold. Now I was mining and selling all my ore while leveling up, and doing daily quests for a few days to afford everything but once I got all of that I stopped, Haven't done many daily quests since, Nothing I want, don't need a ugly expensive mammoth, motorcycle or ring. I'm content with my Undead Griffin and PvP bear mount. I find that I make enough money raiding to cover the repair cost of raiding, thus I am Currently sitting at about 800gold, Not going up, not going down. When I need new gems I go do 1 or 2 daily's to afford them, but I never gather some 30K bank of gold because there is not any reason to. I think the money situation is fine right now in Wrath, More people then you think are probably sitting around 1K gold and not putting any effort into getting any more.
 
What WoW might need a way to have your money work for you. Interest rates at banks or simple financial investment options. Obviously, it is questionable if this would add to the joy of playing it in the original sense :)
 
My warrior main is only level 72. For several weeks I only logged in on him once in a while to do three of the early dailies. I was sitting on a little over 1k gold the whole time. I was still wearing Tier 4 prot gear and never bothered to change out of my prot skills.

Suddenly I got the urge to do more damage. It was that simple. I pulled out the few poorly gemmed DPS items I had in bank, regemmed them and finished off my DPS "set" from the auction house.

That was several weeks ago already and I am still sitting on the 70g that I had left after my auction house purchases.

My current lack of motivation is likely not the norm, but I think supports the idea that some of us just don't care about gold anymore and I don't think we need to have a lot of it to fall into that mindset.
 
Above a certain point, the only use in making gold is the pleasure in it. And not everyone likes making gold. I've had enough gold to last the expansion at the start (40k gold) but since I enjoy making gold, it's now up to 63k. Now I've restricted myself to an hour or two each week, getting in more then enough gold to offset my raiding or other costs.

People do have more gold so why don't prices go up? I think there's a simple reason: the demand goes down. Let's take an example: tailoring. In the first few weeks people will be buying tons of cloth to level their first aid or tailoring. Those who aren't levelling it will need cloth to get those nice robes a tailor can make. The demand is high. But as time passes, people level their professions to the max. Gear isn't crafted anymore. Demand goes down, prices follow. Some items remain useful over time such as herbs. Their prices aren't going down anymore on my server, they have stablized and are selling at a set price.
 
There just isn't any large gold sinks anymore. There aren't complete sets of epic craftable gear available only to crafters. There aren't weapons out there from crafting that rival the drops of accessible bosses.

Why spend 800g on new pants that boost your DPS by 5%, when none of the content you do is that tightly tuned? Why spend even 1000g on a new weapon when 2-3 better ones drop in 10 man Naxx?

Inflation, put simply, is too much money chasing too few goods. There just aren't any goods worth chasing right now. The only thing I can see on the horizon that will suffer from inflation are epic gems, but with the shunning of sockets in gear (compared to TBC gear) by Blizzard, I have my doubts even about this one. ~ Centuri
 
Possibly Ulduar will provide a big stimulus to the economy as people scramble to improve their gear after a few nights wiping. I know when I was raiding as Holy Paladin I didn't feel motivated to upgrade from a +50 weapon enchant to a +61 weapon enchant because the content was so easy except for Sarth 3 and even that was beatable more by learning the fight than by eeking out the last percent of stats.
 
the reason why people don't stop working on wednesday, usualy is becasue they cannot afford to. not always because they don't have enough money, but becasue they would be fired/would lose their business/etc. In real life, there are no friendly NPCs to sell your vendor trash to or to do couple of quests for a bit of gold, no questions asked.

In WoW people can actualy afford to do what they cannot afford to do in real life - only work as much as nessesary without risking loss of income in a future.

economic theory doesn't apply to WoW, other then supply and demand part of it. and the reason for that is that minimum income in WoW is available to every single person - there's no competition for jobs.

P.S. the only dailies I do concistantly nowadays are hodir because I cannot get their rep via instances. I might occasional head to ice crown and shoot some drake raiders as if they are moving duck targets at the summer fair's shooting booth, but that's becasue the actual summer fair is unavailable at this time :P
 
Naxx-10 is a virtual goldmine, providing good-as-crafted epics and money that covers repair bills. Maxing-out tradeskills has become easier than ever, too. So what's the use of more gold? There are less farmers on these days (both gold farmers and regular people farming tradeskill mats), but the demand is even less, driving prices down.

3.1 will cause a big temporary jump in prices though. Glyphs for dual-spec, and gems/enchants to min-max gear for the harder challenges.
 
I had a similar opportunity once, where I had a character I used to play years ago on another server Horde side, and some friends wanted me to level on their server to play with them. I thought "Hmm, I've got a few thousand gold on that other character I don't play anymore, should I transfer her over so I can use it?" In the end, I decided I would do it. It's not like I'm buying gold from someone else, I earned the money myself, once upon a time.

Personally, I also don't bother earning money when I don't need it. I spend a little bit of time every day gathering herbs to do my daily inscription research. I do a couple of dailies for rep when I feel like it, and I make sure I have enough money on hand for expenses I might have in the immediate future (i.e. 2000 gold on my main to upgrade my Kirin Tor ring and buy dual-specs when 3.1 comes out, enough money for my level 76 DK for when she finally gets to 77 and learns how to fly) When I see expensive purchases on the horizon, I earn money until I have enough for them when they arrive, but I usually don't have more than a few thousand gold on hand otherwise.
 
Contrary to some of the subtext I'm seeing here, demand has a greater influence on price than supply. Prices won't magically rise just because people have more gold, if no one really needs the stuff anyway. Pre-WotLK, economies were driven by raiding guilds. Buying at least one flask per raid, food, and regularly upgrading gear with enchants and gems. Arena players also contributed to this demand, and in TBC it was pretty easy to get most of the Arena items.

In WotLK, raiding is a lot easier. While this may be more fun for most of us, it means there's less that needs buying. I don't even need a flask anymore unless my 10 or 25 is trying 2 or 3 drake Sartharion. With feasts, one person can supply all the food for the entire raid. Since my character has very few gear options left until Ulduar, there isn't as much to re-gem or re-enchant; and high-end enchants (and perhaps even gems) don't seem necessary right now. While I have nothing to support this next point, I bet there is less casual Arenaing going on right now due to the ratings changes (started in TBC), so that element of demand has also dropped off. I'm a fairly casual raider too, I can only imagine how much money the "hardcore" raider is saving due to completing the content so quickly/easily. This doesn't even account for the significant "nerf" that happened to crafting professions in WotLK. There's no real reason to cap professions these days, and a lot of players switched to JC with the reduced value in the other professions, which in turn crashed that market too.

So yes, while people may not be doing dailies as often ... they probably don't even need to spend the money they have. In fact, when I finish Naxx I often end up _making_ money including repairs, which if anyone raided pre-WotLK is a pretty crazy phenomenon.

My guess is we'll see some sort of spike in prices once Ulduar gets going, and we'll have to see how hard it is to know how long that will last.
 
I don't think many people have "a lot" of WoW Gold. I think people can generally afford to buy things they want with little work (enchants/gems) and don't try to accumulate much more wealth beyond the immediate needs. I suspect that "grinding for gold" is only really happening when people need a new enchant or whatever.

On my server (and from what I read, this is all servers), we are experiencing deflation across the board on all items with only a few notable exceptions (Frozen Orbs in particular). As someone wrote above, if money were really plentiful, we would be seeing inflation not deflation.

No -- instead, I think what we are seeing is that less people need much gold. Gold can only buy you so much and I think we are at a point where most players only care about consumable items (potions/gems/enchants/food). In fact, you really only need to "grind for gold" if you are after a high-ticket item like the Surge Needle Ring or Darkmoon: Greatness card.
 
I Stopped gathering gold in WoW as a standard after reaching 200 000 gold.
any extra gold gained from lvling toons or raids is just cream on the cake, ive loads of friends who have
borrowed from me for various projects and i really dont care if they have the time / ability to return it.(its just data on a screen to me)
This was gained on ave at round 2-4k per day mostly in BC play.
When i started playing wow in the WotlK i couldnt credit the amount and ease of gold that blizz was giving away to ppl from lvls 70-80. what better a way to stop illegal sales of wow gold. When ppl no longer need to buy.
WotlK is Rocca Fella's money tree.
For those ppl who have played since start of classic or close and still have no cash. I assume you are the most casual of players or unfortunately Useless lol
for those who started after BC or WotlK youve truely no idea what grinding for gold is :)
Anyway one of these days im going to buy the entire AH in 1 go Xmass perhaps fraps it and post it
Just for a lark...
Some ppl dont plan to Fail they just Fail tp plan
 
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