Tobold's Blog
Friday, April 24, 2015
Europeans buy less gold than Americans

Curiously the price of the WoW Token is rising again in Europe, hitting nearly 40k, while the US WoW Token is down to just above 20k. As the price reflects the relative supply and demand, it appears as if the players on the US servers are far more enthusiastic in buying gold, while the Europeans are more interested in selling their gold. I find it hard to explain why there should be such a huge difference, with the tokens twice as expensive (and thus gold being half the price) in Europe. Any ideas?

Maybe the US players have more money on average?
More likely european players have more gold, on average. Gold cap is common, lots of people have hundreds of thousands of gold just lying around.

The only thing we know for sure is that, on the US servers, the ratio of gold buyers to gold sellers is higher than in the EU. That does not tell us if there are more people in the US that buys gold than there are in the EU, or if it's about the same and there are more gold-rich people in the EU who spends some petty cash on a free subscription or two.

Or US players simply spend more real money. We can't tell.
I would expect this to be a function of the disposable income available in different terratories. state the following on their website regarding disposable income in the US vs ROW 'the average household net-adjusted disposable income per capita is 39 531 USD a year, much higher than the OECD average of 23 938 USD'
There is russian segment here. For them 20 EUR for even 40k is still too bad deal compared to goldsellers. So these people are mostly buying tokens for gold.
Maybe a higher variation in income between different countries in the EU.

Basically, in a low-income EU country A, earning 15 EU (for the sub) takes a longer time than in high-income country B. But earning 1000 gold takes the same amount of time in both A and B.

Thus we have arbitrage between A and B, and the price of gold goes down. Pretty much the same as off-shore outsourcing, really.
Is there any reason not to think that time will be the equalizer here? I think a couple of more weeks will close the gap in pricing.
I think Ulrik is basically right. Right now Tokens in EU are selling in under 30 minutes, while in the US they take over 12 hours.

I don't think you can rely on the reported "time to sell" estimate. In an effort to test my hypothesis, I bought one from the Item shop and sold it on the AH. The reported time was "2 to 12 hours", but it sold before I could even close the AH window.

The entire process: Clicking on the item shop, buying the token, selling it, going to the mailbox to get my gold was frighteningly easy and fast.

Kicking and screaming, online games are being dragged to "free to play."
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Europe includes Russia and "East Europe", income here is a little more then in China. So... subscription cost is not "just 15/m", it is "15/m!dmt!", but gold amount is the same.
Your conclusion assumes ceteris paribus, but we have no idea if all else is equal.

The value of a gold coin could be significantly less on a European server. To really compare the values of U.S. and European gold, you'd need some sort of a cross-server price index.

The best I can come up with at the moment is the AH feature on A brief, very un-scientific examination of the price disparity between EU and US gold indicates that EU gold is worth less. Like items are typically priced significantly higher on EU servers. If the purchasing power of EU gold is lower than that of the US, it makes sense to me that it tokens sell for more.

Anyway, even if your assertion is true, I suspect it is because US players probably have far more disposable income than the average player in the EU (since, as someone else pointed out, your version of the game includes players from countries that are severely depressed economically).
Wouldn’t it be the opposite? Less supply and more demand should equal higher prices for the token, shouldn’t it? The inverse being, more gold than demand for said gold the price should drop, or am I missing something here?
Less supply and more demand should equal higher prices for the token, shouldn’t it?

Only if you count in gold. Less supply of tokens and high demand of tokens equals higher prices for the token in gold in Europe. But less supply of tokens means that less people bought one for dollars. So less Europeans than Americans want to buy WoW gold via WoW tokens.
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