Tobold's Blog
Monday, August 24, 2015
 
Economic downturn

A MMORPG is not one game, but rather a collection of many interconnected games. Different people pursue different personal win conditions; and the game has different counters telling you your iLvl, your various currencies, your achievement points, your PvP rank, and so on, so that you can follow your progress in your chosen goal.

Now I am one of the players interested in the economic subgame of World of Warcraft. I count my gold pieces (one and a quarter million at the moment) as indicator of progress. And I observe what is going on in the economic game. Which, right now, is an economic downturn.

Part of the problem is the major business cycles of World of Warcraft: Every expansion, every raise of the level cap, also increases the amount of gold in circulation. So long-term the game is inflationary, a stack of copper ore today on the AH costs a lot more than during vanilla WoW. Overlayed on that long-term trend, during each expansion there is a strong deflationary trend: The very first time an item drops it is worth a lot, and the price declines from the start of the expansion or patch that introduced this item. The bind-on-equip epics (crafted or looted) that were interesting and expensive in patch 6.1 are much less so in patch 6.2. Felblight went for over 700 gold when it was new, then dropped to around 400 gold, and now is frequently sold for less than 200 gold.

For an economic player, that is a problem. In spite of the term "gold farmer", very few people actually farm gold directly. It is a rather inefficient method of making gold. Instead you gather resources, maybe craft them into stuff like epics, upgrades, or 30-slot bags, and sell those to other players. So the lower the AH prices are, the less gold the economic players make. Long periods with no new content lead to market saturation and fewer opportunities to make gold.

In addition to this general trend that has happened before, I am observing a new effect: Blizzard in their infinite wisdom have decided that economic players like me are really the best of the best, and should be able to play for free. Which we do. Any economic player with the most basic skills can earn more gold per month than it costs to buy a WoW token, even on European servers where they cost nearly twice as much as on American servers. So there is really no reason for us economic players to cancel our subscription, as it doesn't cost us any real money, and every month we stay subscribed, we earn even more gold. I have 4 WoW tokens in my bags, and enough gold for 2 more years of subscription even if I didn't earn any further gold.

The same cannot be said about the other World of Warcraft players. The *do* have good reasons to cancel their subscription. Apart from flying, which people didn't want to lose, but probably aren't so interested in that it drives subscriptions, there will be no more new content until the next expansion. And it becomes increasingly unlikely that the next expansion will release anywhere soon, presumably the beta only starts with Blizzcon in November. Furthermore I believe that the WoW Token market is real, as Blizzard says. Okay, I don't see the person who is selling me his token for my gold; but historically MMORPGs had a lot of problem with third-party gold sellers, which suggests that there is no lack of players who are willing to spend real money on gold, and there is no reason why they shouldn't be willing to do so when the gold buying becomes legal. The difference in price between regions for a WoW Token for me is proof that this is a real market, and Blizzard is neither injecting gold nor tokens, every sale has a player buyer and a player seller. So while I pay nothing to play, other players pay double: Their subscription and mine. They pay my subscription by buying a WoW Token from Blizzard, selling me that token for gold, and then handing me that gold back by buying my stuff from the AH. Which is a rather good deal for me, and a rather bad deal for the non-economic player. I wouldn't be surprised if in view of the lack of content and the cost, non-economic players would quit the game at a higher rate than economic players.

The result of that is observable on the AH: Supply and demand are out of balance; all the stuff that economic players usually make money with, like crafted epics, essences to upgrade crafted epics, or bags, are present in large numbers on the AH, with nary a buyer in sight. That is leading to price wars driving down prices. You can get epics or 30-slot bags for less than 1,000 gold now. The upgrade essences are being sold for the price of the savage blood / felblight needed to craft them, giving away the soulbound resources and sorcerous elements for free. The flow of gold from the AH into my coffers has slowed down to a trickle.

In a way that is okay with me. My interest in the economic game is to observe the market and to develop new strategies to make money. Grinding out the same strategy for months is far less interesting. I'm growing bored of farming trapped animals for my barns, even if that is still a good money maker. I'm growing bored of logging on every character twice a day to collect resources from the garrison and do missions and daily crafts of soulbound resources. I think I have demonstrated that I can make gold in Warlords of Draenor, and that I have more than enough for the next expansion. I just need to decide how many tokens I still want to buy. Do I want to continue playing my alts and just don't bother with my level 100 characters any more? Do I want to try something else with those characters, like finally visiting some dungeons? I don't know yet. But the economic game for this expansion has lost its luster for me.

Comments:
You know it's funny because I'm the non economic player that you just described. While I'm not buying tokens for gold I fit the description pretty nicely.

All WoD I've been hearing how easy it is to make gold and that people now all have millions and blah blah blah. I decided to launch a bit of an experiment and see how hard it would be to jump back on with my single lvl 100 (which I haven't touched since a few weeks after the xpac came out) and start taking in all this money that's supposedly falling from the sky...

It is actually incredibly difficult for someone like me to make money at this stage in the game. Everything I can gather is dirt cheap. Savege bloods are cheap. Felblight is cheap. BOE epics are cheap. Garrison missions hardly provide me with any meaningful income because I have only one lvl 100 and I don't have my followers all maxed out.

In the past two weeks I have in fact made some gold but that gold has been primarily through questing and redoing zones because I faction changed and can do that and lfr. Made about 6k in all.

For me to make a serious amount of money without playing the AH (which I hate) I'd have to have several 100s and just play garrison management all day...

I totally see why the average player is tempted to buy tokens. I was hoping to play WoD until Destiny's xpac came out but I have already stopped playing it and doubt I will renew my sub past this one month.
 
The end of the expansion is the worst absolute moment to jump into the economy. All the money I made in the past has been at major patches or at the beginning of the expansion, when the markets are as far as possible from saturation.
Additionally, Blizzard tends to nerf things as the expansion advances, increasing yields or adding alternate routes, all stuff which contribute to i creasing the offer at a time when demand is low, since people know that the at the next expansion everything becomes vendor trash....
Blizzard's approach to kill off any lower-level crafting and gathering also contributes to the prpblem, as it removes some niches which can remain profitable and accessible to a player who doesn't have an army of alts with maximized professions.
We'll have to wait for Legion to go back to "interesting times"....
 
The best money making method at the end of an expansion is the building up an army of max-level alts ready to start milking daily cooldowns on day one of the next expansion. We aren't there yet but we are getting close.
 
It strikes me that you guys are keeping too much of "liquid" gold instead of buying tokens. When the next expansion arrives, the price of token will eventually rise a lot to reflect the increased gold supply. Gold is a continuously depreciating currency in wow given how the expansion are structured.

As times goes and people get bored, I also would expect more and more people stop paying their subscription and live out of gold instead, resulting in the value of the token going up. This is exactly what is happening in EVE Online right now with PLEX. Players loose interest so they stop paying hard $ and use their ISK instead. Demands of PLEX increases a lot while price of regular items is stable because there are no more people playing actively (if not less).
 
Yes, with the inflation tokens are a better long-term option, but in order to make some real money at the start of the expansion you must make sure to have enought gold to utilize at 100% your army of alts, so keeping 100-200k in cash is pretty much a minimal requirement.
 
Big eye as tobold said as the expansion gets older it gets harder and harder.

Having said that dungeon bags which now pop for dps ,healers and tanks are 600g+boe 650 blues+chance of 5k gold work of rep token or 695 empowered token, t6 and sunwell drop pets that lazy people will buy, cata raids drop good gold and vendor items.
 
About to start on a new vanilla server in a few weeks. I am a terrible economic player (will probably go lock so I can have a mount @ 40). How do you recommend making gold on a brand new server? I feel like it will be very difficult to mine or pick herbs due to the competition for nodes.
 
Ngita is on the right track. There are several things from older expansions that still sell for just as much. I used to sell Mekgineer's Choppers whenever I could get the materials, for pretty much exactly the same price they are going for right now.

Aside from that, it does seem rational to spend the first 3-6 months of an expansion raking in gold, even if you aren't all that into the economic game. You should make more than enough during that time to play for free until the next expansion.
 
David, as that sounds like an illegal private server, there's no way for us to reasonably answer that question, even if someone wanted to. For all we know everyone starts with 5000g or admins give favored players gold or more gold drops from mobs or resource nodes are quadrupled or whatever. Not to mention I doubt many (if any) other people here besides me actually played Vanilla WoW back in the day.

"Apart from flying, which people didn't want to lose, but probably aren't so interested in that it drives subscriptions"

From the crying people displayed on the WoW and MMO Champion forums I'm not so sure. If you mean a major shift then no, but I've at least seen *claims* of people unsubscribing because they have to play in the same manner outdoors as they do in a dungeon, raid, battleground, arena, interior area, etc.

Also, you seriously still even listen to Syncaine at all? Got fed up with his drivel and mindless (and/or incorrect) bashing of stuff long ago.
 
Also, you seriously still even listen to Syncaine at all? Got fed up with his drivel and mindless (and/or incorrect) bashing of stuff long ago.

I stopped reading his blog long ago. But how could I not link to a blog post calling his latest drivel "hogwash"? :)
 
Well, when you put it that way... ;)
 
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