Tobold's Blog
Thursday, October 08, 2009
 
Auction house PvP

On my server and faction in World of Warcraft there are currently 15,098 auctions on the auction house. Of that, more than a quarter, 4,550 auctions are for glyphs. Of the glyphs, more than a quarter, 1,339 glyphs have been posted by me. Somehow I don't think that Blizzard planned the inscription profession to end up this way.

On the one side crafting and posting a thousand glyphs has all the excitement of an Excel spreadsheet. But on the other hand there is an element of player-vs.-player competition involved: Ruthless businessmen trying to undercut each other, hoping to push the competition out of an overly profitable market. Unfortunately that didn't work out as planned, a recent inscription guide at MMO-Champion has instead brought in more and more players into the business. Up to now it is still profitable, but sooner or later the market is going to crash. Quite interesting to watch, actually.
Comments:
My server usually has 7000 auctions up. There are about 3 traders in the glyphmarket. The prices are at 2G per glyph. No problem for me since somebody buys all my snow ink for 18G the stack and the herb stacks I buy for no more than 20G the stack. Therefore 6 ink need to earn me at least 2G to make a profit.

Although I offer every glyph in the game three times there is no way to become rich this way. Market efficiency has set in. The cosumer benefit is increadible.

Since I fought the glphy prices down, priests start to re-glyph in front onyxia just for the anti fear glyph and at several other occasions.
I sell a hell of a lot of glyphs at this price level - but it's a lot of work, too. I feel more like a benefactor of the server than a businessman, although I make my 1,5k gold the week.
 
I also think the guide is having a big impact on the market. Glyph prices are dropping and more glyphs are on the market. Herbs are often close to sold out and prices are going sky-high. I've seen an increase in price of 50% in the last week.
I think it will be a short peak though, I'm counting on the new players to give up soon enough when they realize it takes quite some effort to make it worth your time. Since I don't have anyone supplying herbs at a good price for me, I'm thinking I'll just sit it out, not selling below costprice, and increase my stock for future sales (if I can get my hands on cheap herbs or ink).

@Nils: gotta love capitalism, you're getting rich, you even feel like you're doing a good deed, and everyone loves you for it (except the competition, but who cares!)) :)
 
"I feel more like a benefactor of the server than a businessman, although I make my 1,5k gold the week."

Would you not make more money and have more fun killing stuff?
 
I find it interesting that, given the amount of money that can be made, no-one has been able to create a Cartel situation, as certainly that would be a solution to multiple competitors in the marketplace driving out profits from the trade.

Though un-ethical in the real world, and prevented by regulation. I don't exactly see an regulatory Azeroth equivilent to the UK Monopolies and Mergers Commission (MMC)ran by the Blood Elves or a US-style Sherman Antitrust Act being enforced by the Goblins.

This is, after all, a game.

I find it odd that in a cooperative MMO game like WoW Cartels are not more normal to be honest. Though I'm sure in games like EvE they are.
 
Would you not make more money and have more fun killing stuff?

In times of strong competition on the glyph market, the income per hour online is effectively lower than what you would get with, for example, herb or ore gathering. Nevertheless many steps of the inscription business can be more or less automated. So while I might spend half an hour milling herbs, I'd do it while reading, and just spamming a single button. Or I'd spend time scanning the AH with Auctioneer, or posting 500 glyphs at the same time, all of which takes time, but not much attention. Which, frankly, after a hard day at work sometimes suits me just fine.

What is more fun is a very personal question. I don't find earning gold with daily quests much fun, because there is zero challenge. A cutthroat business competition, as I said, is a form of PvP, and can be fun and exciting.
 
Reminds me of the early days. I was making a killing re-selling on the AH a few certain high demand items that I knew how to get on the cheap. I posted a blog entry and a post on my guild website. It was picked up and in a matter of days the competition on my server was fierce.

Only later did I piece together that myself and a late night playing guildmate were PvPing each other on the AH :P
 
Can you believe it Tobold? I never would have thought that part of the WoW Economy would interest you!
 
@ Nees:
Yes, markets are great things. Ideology sets in as soon as you start to belive, just because markets are great, everything turns into a market if you don't regulate it.

Unfortunately most things in life need to be regulated to estabilish a market - something a lot of people do not understand.

$60 mio / year wages are not a market outcome, but a sign of market failure.
 

A cutthroat business competition, as I said, is a form of PvP, and can be fun and exciting.


Tobold asks for more cutthroat PvP in MMOs !! :)


I actually agree. I spend some time in the morning before I go to work and in the evening before I go to bed to repost the glyphs and restock them.

Since I keep only a stock of 3 around and always list all 3 I manage to do it with one alt.

The worst thing about it is the 50 items/mailbox limitation and the time I need to recraft glyphs. The latter I usually do a few times a week while waiting for a daily heroic group or a raid.

During reposting you can prepare your meal or read the newspaper. That's why I prefer the glyph market.

The only thing I do not understand is why people buy my snowflake ink for 18G/ink. There must be some profit there, but I don't see where.
 
@Metaresearchboi :

Several reasons:

1) Forming a catel is much more work
2) A cartel is easy to circumvent with alts. Nobody knows wether you are that 'random' seller.
3) Market entry is easy. One guy who believes in Gevlon is enough to ruin your prices.

Ironically, asymmetry of information helps form a efficient market in this case.
 
Ha ha

It is very ironic that players are drawn to spreadsheeting because it's more fun than combat.

I'm doing it in Eve but only because it's very easy money. If it dropped below the value I could make running missions I'd stop playing the auction house and run more missions in the time.

I do take your point about semi-afk gaming. It's one thing I miss about the old days of SWG etc, that you could read your mail and do various things while the game ticked along slowly. It's a very relaxing playstyle.
 
"I find it interesting that, given the amount of money that can be made, no-one has been able to create a Cartel"

Many people make cartels in WoW.

A good chunk of Gevlon's morons of the week posts feature angry cartel members flaming undercutters.

In Eve it's trickier.

First auctions are anonymous. If I see someone else trading something I'm making I have no idea who they are.

Second really hot stuff is generally accessed by multiple corps who may be enemies. Farming wormholes for Tier 3 stuff or farming officer spawns for faction loot requires a really strong set up, possibly a 0,0 set up which makes you an enemy of other people doing the same thing.

Third the existence of trade margins makes it harder to cartel. If you could control the prices of everyone who sells soomething I will still pick up some cheap with Buy Orders, maybe from a customer who bought it from your cartel then changed his mind. Anything I get my sticky paws on I will list at an undercut. At that point your cartel members notice an anonymous person is not playing ball in a market the cartel controls so they'll most likely assume the other people in the cartel are being dishonest. So everyone has agreed to sell at 30 mill but someone keeps listing at 29999999.99 and no one knows who. The cartel will break up in recriminations and mutual distrust.
 
Auction House PVP, I like that description. The MMO articles have started to mke an impact. I wrote about this very thing myself.

http://gtfootf.blogspot.com/
 
Markets don't fail Nils, people fail. Especially the ones who try to regulate markets. ;)
 
So wait, you won't play EVE because you find mining boring (which is something only start-up econ players really need to do), yet you spend X hours creating and posting 1500 glyphs to make pointless gold in WoW? Like WoW's actual PvP, the econ PvP is the kiddie pool of the MMO genre. More often than not your buyers don't care about the price of something because they have near unlimited gold, and the end result of being 'successful' in making gold in WoW is you can buy your way into a raiding guild or hit some meaningless gold cap. It just comes off as someone who has mastered tic-tac-toe boasting about it to a chess master. You have a solid understanding of economic theory, it's a shame that's being tested against mod-runners and not tougher competition.
 
Better to rule in tic-tac-toe than to serve in chess, syncaine!
 
@Nees: Markets fail all the time:
http://en.wikipedia.org/wiki/Market_failure

People just behave according to incentives - usually extremely rational. Just not 'rational' in the sense of the standard economic theory.
 
I got caught up in an undercutting war with one seller for a while and was quite intent on winning it until I realized that keeping an eye on my auctions was all I was doing. All day and night long. He came on at least 10 times a day and there I was right behind him.
It went on that way until I decided to go and play the game again :)
 
It's not ruthless, it's free market capitalism at it's finest.

Thats not market pvp. Getting shoved aside by a terrified trader who is a bodybuilder is.

I feel it's healthy competition and it benefits the consumers by creating a balanced (sometimes) market.

If you are ever in New York tobold, look me up. I'll take you to Wall and I'll show you what ruthless businessment look like.

Lol,
Frank
 
@Zode: That thinking is why WalMart will never run out of minimum wage heroes, or why Burger King can indeed offer things my way with such accuracy. Aim low and you'll never miss!
 
Are you sure you're not Gevlon? I'm starting to wonder... ;)
 
”…crafting and posting a thousand glyphs has all the excitement of an Excel spreadsheet.”

What are you talking about? Designing a really cool spreadsheets filled with complex arrays and macros can be more fun that WoW...at times. Stop hatin' on the Excel geek.

I do, however, agree with your last point that the market will crash. With little to no barriers to entry and a massive amount of competition, over-supply just might be a detriment to the profession.
 
The guides never work. I can't tell you how many times I tried to "teach" a friend or guildie to do what I do. I mean, it seems so simple and yet -- they can't execute or adapt. And that's why when the smoke clears, the smart businessmen will still be at the top -- because they know how to adapt.

ALSO -- One thing that always gets neglected in these guides is the real secret (IMO) to winning the Auction House war.

People think it's about undercutting, but it's not. It's about controlling costs.

Minimizing your costs while making it cost prohibitive for your competitors. Or in other words, if you can control (or just manipulate) the market on the SOURCE materials you use to craft an item -- then you can control the primary market as well.

IMO, that's the true art in this whole mini-game. Anybody can undercut, but it's a lot harder to deter people by raising costs (and more profitable for you). To do that, you need a good understanding of the pricing on the source mats and more importantly -- the TIMING of how and why prices fluctuate.

For example, during the daytime, a lot of materials get listed but due to a limited number of buyers -- not much movement occurs on the Auction House. By early evening, more people are logged on and the buying increases.

This is only true on a Weekday. On Weekends, people are logged in all day.

You can use this to your advantage by helping to flood the market with below average priced items in the morning. Naturally, people will start to undercut you. You BUY their auctions, keeping your costs down. As it approaches the early evening. You cancel all your auctions.

Then you buy up everything to (and including) whatever the average or expected price. When the evening rush begins, the only mats left are those that are above the price you paid. The net effect is that you minimized your costs, while raising everyone elses.

Which means you can now afford to undercut everyone else AND still make a reasonable profit.
 
@Nils: I don't think you completely read the article you're referring to. But anyway, it's offtopic.

@sid67: your strategy sounds like it will require you to log on multiple times a day, which isn't an option for me. I do think you're right, I'm currently trying to deal with the problem of rising costs, since I do not have any other source than buying from the AH late in the evening.
 
I was laughing at the morons in Aion last. The market is so saturated with random green drops that I typically just vendor them. I was checking vendor prices, then comparing them to the AH prices and found that people were selling items below vendor price on the AH.

I started buying the stuff off the AH and vendoring it. I'm going to take some pictures tonight and send the to Gevlon I think.
 
Actually I not just read the article, but studied this kind of stuff. But you are right. It's offtopic.
 
Please, please, please - for the love of god - stop cutting off your nose to spite your face and just play eve. Mining may be boring and there may be non-concensual pvp, but no game will ever have everything you want and nothing you don't.

Until you develop Tobold Online, I can't think of any game out there more suited to you than eve. Don't let the couple (in your eyes) bad things stop you from enjoying it. Everytime I read one of these posts of yours, i just think - he needs to play eve.
 
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