Tobold's Blog
Saturday, January 30, 2010
 
500 gold per hour for doing nothing much

Warcraft Econ has a very interesting short post up, in which they did a rather simple experiment: They stood motionlessly for 1 hour near some pool in Wintergrasp and fished, and then sold all the fish on the auction house. The result of that was an astounding 500 gold. And I suspect you could further increase that amount by turning those fish into fish feasts if you have cooking skill as well.

With the glyph market on many servers being shot to pieces, fishing might actually be more profitable than making glyphs right now. In fact, as I recently discovered on a level 59 death knight alt, inscription can be extremely profitable if you don't make glyphs. I haven't timed it, but I'd estimate I made a similar 500 gold per hour through the simple process of buying herbs, milling them into pigments, and turning those pigments into inks that I sold on the AH.

So why is it so easy to make lots of gold with activities which require basically no effort at all? Economic theory would suggest that people take the path of least resistance to earn money, and would be all over gold-making opportunities like this, thereby destroying the market for fish and inks. The reason why that doesn't happen in World of Warcraft is that fundamentally boring activities like fishing and milling herbs just aren't fun, and people value fun higher than currency in a virtual world. In WoW gold has the curious property that it suffers from strongly diminishing returns, much more so than money in the real world. The more gold you have, the less an additional 500 gold buys you. Even if you, like me, use flasks, fish feasts, and runescrolls of fortitude in heroics, where they ain't strictly necessary, a single hour of fishing for 500 gold would finance those consumables and repairs for a whole week.

With people valueing fun over gold, economic activity in World of Warcraft is ruled by somewhat different rules than the real world economy. The basic principle of "opportunity cost" still applies, but now that "cost" is calculated in "lost fun", not in time or effort. Some WoW economists get all upset when people say they "farmed something for free", but that notion isn't all that stupid as it appears: If the activity of farming for some reason is not boring, but actually fun to the person doing the farming, his opportunity cost as calculated in "lost fun" is really zero. Thus it doesn't really matter whether lets say killing elementals to farm them for eternals yields you more or less than the 500 gold per hour from fishing. If killing elementals is fun to you, and fishing is boring to you, the elemental farming is simply the better option.

And that is actually a good thing, because it avoids everybody rushing into the most profitable economic activity. Different players find different activities in the game fun. One guy likes to buy and sell goods on the auction house, another likes to make a thousand glyphs, one guy finds fishing relaxing after a stressing day at work, another prefers doing daily quests for gold. It is of absolutely no use to tell the guy who is doing daily quests or farming elementals that his activity isn't the most profitable, and that he should do fishing or AH camping instead. If the former is fun for him, and the latter isn't, the "fun opportunity cost" of doing something boring is simply too great to be viable. The homo economicus is alive and well even in virtual worlds, it is just the concept of what exactly "utility" is to a MMORPG player that is different in the virtual world compared with the real world.
Comments:
With inscription, it takes around 7 seconds to craft a glyph - 2 seconds to mill, 2 seconds to make 1 ink and another 3 seconds to make the glyph.

Lets round that number up to 9 seconds per glyph creation, now that means you can make about 6.5 glyphs a minute = 390 glyphs an hour. 1G profit per glyph = 390g/hr.. 2g profit per glyph = 780g an hour and so on.

Factor in that cancel/posting takes around 20 minutes (for around 700 auctions) so we must calculate that in our "time".

I set my rate at 3g 50s profit per glyph = 1,365g/hr take away posting time comes to around 1,000g/hr. That is the minimum I'm going to accept making glyphs.

I know farming is looked down upon as a "lesser" way to make gold.. but really if fishing, even if it was more boring, got me 1,500g/hr, I would do that.. if I could only sell glyphs at my minimum amount, thankfully they sell higher.

But with farming, you are usually always set at 500g/hr or 700g/hr.. with crafting you can have huge spikes of sales days getting 10,000g/hr for your time. That is the difference I perceive.
 
Well ... you're right, I agree :)
 
It depends what you enjoy doing.

I found fishing, gathering and refining all to be more fun than fighting mobs in WoW. Fighting mobs in most MMOs is the default activity that's required to bring your character to a level of robustness whereby you can fish, gather and refine across wider range.

I favor systems that allow your character to raise these skills independently of the adventure level, which is one of the main reasons I am no longer subscribed to WoW.

That said, I have little or no interest in fishing, gathering or refining to make a profit. I am drawn to those activities in MMOs because they are fun in and of themselves (where "fun" is defined as "an activity that makes one feel positive about oneself", otherwise known as "having a good time"). The secondary benefit is the making or obtaining of items to dress your character or decorate your house (no housing in WoW is another reason I am no longer subbed). Making a profit comes only from selling the surplus and is of little interest.
 
@Bhagpuss did you ever try FFXI? It had a house and a pretty robust crafting system. As far as I remember you really dont need to level up to craft in FFXI - buy reagents in auction house, sell results, repeat.

The grind is the worst part of FFXI anyway, so avoiding it might actually make it a good game :-)
 
Regarding the "cost = lost fun" argumentation, I think it's only a small part of the reason why people do low-profit activities like elemental farming or dailies. Most of those who grind do so because they're unaware of better moneymaking techniques.

As a result of the above, I don't agree with the statement that it is of no use to tell a grinder that his activity isn't the most profitable. In many cases, doing so will result in them learning of more profitable activities, and switching to them. One reason not to do it is that you'd be creating competition for yourself. :)

On a sidenote, the WG fishing strategy is hardly a new discovery.
 
The "cost = lost fun" is absolutely not alien to the real world. I mean it's much cheaper to find worker to the McDonalds than finding a prostitue, simply because being a prostitute is much more "not fun" than selling burgers.

Also you misunderstand "I farmed for free". The problem is that he WASTES his wealth. He says that since he "farmed it for free", it's a profit to sell it for 50% of market price.

If he finds farming eternals "fun" or at least "not too much suck", it's a good reason to farm instead of selling gems. But it's not a reason to waste his eternals.
 
When the enchanting discussions where going on I posted multiple examples of fishing vs Enchanting showing profit bs time using real AH values. It did'nt make any difference, enchanter are seen as rip off merchants making vast profits even if i was making less then I could make by simply fishing,
 
Well said. I haven't played since TBC but I always used to do the daily quests for gold while my friend preferred playing the AH. He would get really annoyed at me and call me "stupid" for "wasting time" doing that, but the fact is I found it more fun to be running about killing mobs than staring at lists of numbers and calculating prices. It's all about personal preference.
 
Best post in a long time, Tobold.

*FUN* is the name of the game, regardless of how it manifests itself for a specific player. Now, if we could only appoint you as ambassador of WoW, we could get you to write a post about how fun it is to take ones time running thru a dungeon. There's something to be said for someone who can stand in place for an hour and fish, and at the same time find it fun.

I think you also need to look at the multifaceted nature of how rewards work with activities within WoW. When fishing, a person is rewarded with a catch. That same player is then rewarded a second time with gold from selling these "catches" on the AH. That player can then be rewarded a 3rd time by using this gold to buy themselves an upgrade BOE item from the same AH. That BOE item can then in turn reward the player with better stats, allowing the player to advance further in content and receiving even more rewards as a result of spending a single hour fishing. Amazing isnt it?

As simplistic as the above sounds, some people will enjoy some of the above steps, and some will not...but letting a player do what they want to, to reach whatever ends they desire, is the magic of WoW. I will never understand those who play a game like WoW and treat it as a job. Efficiency is one thing to take into consideration -on a personal level-, but the people who tell someone they arent playing the game correctly "because they do the same thing better" are very short sighted in my opinion.

BTW...Did Gevlon just agree with you?
 
Having a number of alts at 80 on one server... I recently invested a wee bit of time in getting 3 of them upto 450 in JC and Alchemy (all transmute).

I have a miner too... will grind one night for 2 to 3 hours for ore to get gems for dailies. Works out to be 30 mins investment for each days dailies and transmutes.

The following takes about 20 mins to 30 mins.

- 3 JC Dailies done - 3 Dragon's Eyes.
- 3 Cardinal Ruby transmutes (proccing an extra 4 on average over 7 days)
- 3 Icy Prisms a day, usually proccing one Dragon's eye or Epic Gem every 3rd or 4th attempt.

Making between 1200 and 1500 gold a day for about 50 mins work (including the ore grinding).

Good thing is, there are only about 6 or 7 auctions to place a night. I nearly always sell within 24 hours.

Bores me witless though.
 
Brilliant, especially after reading much of Gevlon posts. )

But it is true in real life too.

All activities are more or less fun. Work can be fun too. And with such work there is no need to spend a lot of money on entertainment - even in forms of good car and house. So the lower income may be better.

Some decisions are irrational and bad from economic point of view, but very profitable from "fun" point of view.

It's works exactly as described in your post.
 
One thing all these discussions on how to play the AH for maximum profit instead of doing dailies miss, is that the gold has to come from somewhere. If nobody did dailies there would be no gold entering the system, and that would mean that sooner or later there would be no gold left due to all the various goldsinks in the game.

If everybody plays the AH there would be no gold to get from it, it's as simple as that. The WoW economy needs lots of players doing dailies to work. Heck, most probably it needs way more people doing dailies than who play the AH, or it would collapse.
 
Nice post, good points.
(Nope, got nothing more to say on this, you said it all)
 
I appreciate everyone loves explaining WoW using traditional economic theories. But.

If you ask people why they like fishing, only about a quarter of the reasons have anything to do with what is actually caught. 3/4 irrationality?

If you (analytically) watch how people actually fish, you make some interesting discoveries. Like almost 20% of all fish catches are while trying to complete a daily quest. Another 20% are caught while idling in Dalaran (which contains nothing of auctionable value). Something similar is due to leveling cooking (most of which is similarly worthless). I could go on.

Of the fish caught that are "valuable", the "social economy" can be as important as the "production/resale economy": For example, only a quarter of the Fish Feasts cooked are actually sold at auction. One wonders what Marx would make of that?

My analysis isn't perfect, but you can see what I'm driving at: Most WoW economy writing is so blinkered by narrow assumptions, that it misses the vast majority of what is actually happening. If an economic theory is only explaining (say) 20% of what I see, how valid is that explanation?

(Lengthy supporting evidence - http://timhowgego.com/category/why-we-fish )
 
@Fremskritt

Most WoW economics presume that working the AH takes financial advantage of dumber or lazier players.
 
When I played WoW I had more fun working the AH then playing the actual game. Had no interest in PvP or endgame and had a few bad guild experiences so just focused on making gold for myself and alts. Keeping up with trending items on AH and having "battles" with other sellers was the fun for me. I would log in for 1-2 hours and make anywhere from 200g-500g per hour (2 years ago).
 
Of course you shouldn't discourage the farmers. You should offer them a deal and let them work for you!
 
"people valueing fun over gold, economic activity in World of Warcraft is ruled by somewhat different rules than the real world economy. The basic principle of "opportunity cost" still applies, but now that "cost" is calculated in "lost fun", not in time or effort."

You don't count lost fun in terms of real life jobs?
 
Even completely ignoring the "lost fun" aspect, the opportunity costs besides that are a good reason why farming isn't "for free".

I have a guildie who insists that because he farmed all of his own herbs, that his flasks are free. (He also has a lot of other terrible AH ideas like "No one should undercut lower than a copper!" but that's besides the point)

I try to point out to him that he is wrong, but he won't listen. On my server, the mats for a Flask of Endless Rage run for about 83g. 70 for the single lotus, 8 for the Lichbloom and Goldclover (on a good day when prices aren't jacked up), and 5 for the vials. The flasks themselves sell for 37g each.

They sell below mat costs because the guys who make them are Elixir spec and the procs make them somewhat of a small profit. I tell my guildie "Don't make the flasks. Sell the herbs. Buy the flasks. You come out with your flasks, plus 9g for each pair."

That's the cost besides the lost fun: Lost potential money. 9g on my server, your milage may vary.
 
Really good point. I'd rather have fun than do something boring. However, I'd rather stick to a pattern which has guaranteed results. This is why I stick to inscription on two servers, even though it takes an hour a day or whatever. It's guaranteed huge profit so i can have fun the other hours I play.
 
The whole argument is a bit silly since it assumes there is a motive to make money. I recognize I need gold for some things, but I usually acquire gold I need on-the-side while I focus on the things I want.

My fishing skill is at max. Will I fish to make money? Nope.
 
Many have applied the "fun" principle to the real world in the comments, but I think the principles being discussed here are actually the "intangibles."

When it comes to real life, perhaps that higher paying job isn't as personally satisfying, questions ones personal morals/beliefs, or maybe simply has a long commute or is too much of an indoor desk job for someone who prefers to be out and about.

The intangible personal preferences perhaps dictatesreal life decisions more than we think.
 
I guess economic theory doesn't really predict that players would endlessly make gold in wow.

The value of gold is limited to the activity of playing wow itself, whereas money has many more uses than this. And even with 200'000 gold, you can't just buy a legendary set of armor.

Therefore, the more gold we accumulate, the smaller the marginal utility of the next unit of gold. I think it's a bit like the so-called paradox of value/diamond-water-paradox.
At a certain point, you can't be bothered making any more money, because another activity nets you more of whatever you desire than that extra gold piece.
 
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