What I am doing now

You are most likely here because you enjoy crafting. I have been reading up on some of the WoW issues regarding gold making, which make me realize that WoW is not the game for me.

If you want to play a game where gathering and crafting is the cornerstone of the economy, and are not faint of heart, I recommend EVE Online. EVE even has releases purely to support industry. You can play for free if you are good enough manufacturer or trader.

Be the builder in a villainous world.

My journey can be seen at http://foo-eve.blogspot.com.au

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21 September 2011

What inflation? There would be without goblins

WoW Insider has an article about WoW needing gold sinks. Fox's complaint is that the genuine newbie can't afford glyphs, enchants or gems while levelling.

TLDR (too long didnt read version):  Skip to the bottom of the page for the ultimate gold sink.

You can't always get what you want.  But if you try sometimes, well you just might find, you get what you need. (apologies to Mr Jagger).

There is a gold sink - the biggest one there can be.  If your reading this site, the chances are you already know about it.  This gold sink already keeps inflation in check.   It's not perfect, but still does a pretty good job of it.

Economics 101.
  • Inflation is where prices of bought goods rise.
  • Deflation is where prices of bought goods fall.
  • Your expenses are someone else's income. (This can be player or NPC).
  • If the total gold spent increases but the total goods bought stays the same then you have inflation
  • Similarly if the total gold spent stays the same, but total goods bought decreases you also have inflation.
  • If the total gold spent decreases but the total goods bought stays the same then you have deflation.
  • Similarly if the total gold spent stays the same, but total goods bought increases you also have deflation.

Fox's complaint on behalf of newbies
Newbies can't afford what they want.

My view is that they can afford what they need.
  • First of all, a naked toon could level 1 to 60.  It would not necessarily be fast, and you might die a lot.  When I levelled first I didn't have addons, had very little clue as to what I was doing, and could barely keep my current level spell on my toolbar.  I was slow, died a lot, always broke and had a lot of fun.  Quest/dungeon bind on pickup gear can keep you well enough clothed.
  • There is always cheap basic gear, gems, glyphs and enchants, even for a levelling toon.  There are always players levelling professions selling items well under cost.  They are not 'best' items, but an improvement on naked.  (Glyph of Voidwalker - I am looking at you specifically)
  • A first time levelling toon can make a comparitive fortune by taking two gathering (mining, herbalism or skinning) skills, and keeping them in step with their current level.  They even get additional XP for mining or herbalism; worth 4 mob kills per node.  More than enough to cover those additional expenses.
A newbie might not be able to afford the best possible potions, elixirs, bag, glyph, gem, enchant, gear and mount.  They can afford basic training, bags, glyphs and mounts.

Fox's complaint that there is too much inflation
But where is the evidence? Taking the pre cata numbers from Oct 10 to Sept 2011 from WoWMidas - WoWflation (Sep 2011) (Thanks to WoWMidas for the update)
  • Classic WoW mats have increased 40% 
  • BC mats have increased 120%
  • Wrath Mats have increased 260%
  • Cata Mats have fallen 40% since Feb 2011 (early days); with 10% of this last month.
From a mats perspective, the inflation is real, and ... kinda what you expect when the 'government' prints money.  The exception of Cata Mats, which have fallen, and continue to do so, and to be honest - is where the majority of the player base is at.  But it's not out of control inflation (well not by many definitions anyway).

But what does this mean to the first levelling toon, with the traditional advice to level two gathering skills? More gold for them. A stack of copper ore sells for 13g, stacks of light leather for 20g, and silverleaf for 9g.  These are all items a level 5 can gather.  With a minimum of effort, they can be swimming in gold (compared to their costs).
 Ok, but surely there is inflation in crafted mats
As a Scribe/JC, I will readily admit that top end glyphs and gems are selling well (the odd 'bodycheck' aside), with my highest cost items well outside the reach of a newbie.  But for every Epic Northrend gem sale at a huge profit, there is an uncommon gem sale at a huge loss.  For every expensive glyph, there are three cheap ones. On my primary AH, glyphs range from 85 silver for an imp glyph (surely someone has to buy these at some price point), up to 300g for a glyph of aquatic form.

50 glyphs, (average 5/class) are at or below 10g, and roughly double that below 20g.
Basic 'bold' cuts for a levelling toon go for 10g, and a bold carnelian (+30 strength) is also available for 10g (while uncut carnelians cost 30g). 

These prices are well within the price range of any gathering toon, regardless of level or quest rewards.

There is a shortage of 'best', but no shortage of 'second best' giving 80% of the bonus of best.

But there is a huge injection of gold into WoW, surely there is huge inflation.
Every quest you do, every item you vendor, every mob you kill 'creates' gold, (silver or copper at lower levels).  Lets say 16g per quest reward.

Every repair you make, everything you buy from a vendor 'destroys' gold.  The AH cut (5%/15%) also 'destroys' gold.  Lets say 1g destroyed per quest reward.

Everthing else you spend goes from one player to another.  Buy something of the AH - the majority goes
 to another player.  Sell something via trade chat - you get all the gold from that other player.   Gold is neither created or destroyed by these transactions.

So yes, we are definitely earning more than we spend on repairs, training or AH cuts.  If there were no huge goldsink, there would be huge inflation, until the cost of what we consume equals the cost of what we earn as rewards.

So what is this gold sink? The gold cap.  
Saving up for the next big expansion, or simply because you can.  It's a mini game all of itself.

The one time players with deep pockets bring out their purses is when a new set of gear or recipees drops.  Who buys that 80k gear?  Goblins.  Who pushes the new prices up at the start of a major expansion - also Goblins.  It's when we pay.

Take any player from the Warcraft Econ Hall of Fame. They are the gold sinks.  2 Million gold, at 16g per quest, is the reward from 125,000 quests.  At 3 minutes per quest, these players are soaking 260 days of quest rewards each.  Even a 'lowly' 50,000 is still soaking up 6.5 days of questing rewards at max level.

As a side effect of such a huge gold sink, goblins are removing from the economy, preventing otherwise huge inflation.

Without the players seeking the gold cap, we really would need that gold sink that Fox was talking about.

1 comment:

  1. Certainly an interesting perspective. Something else to consider - with all of the players leaving them game, you have to wonder how much gold they are removing from the economy as well.

    Regarding your overview of various expansions' mat prices, I'll play devil's advocate and suggest that the deeper we go into WoW, the further we remove ourselves from the usefulness of mid-range profession mats. They become merely a means to an end, so to simply look at the pricing changes of BC or WotLK mats isn't necessarily the best statistical measurement.

    I don't think it detracts from your conclusion, but I do think it doesn't do as much to support it as you might think at first glance. Obviously, an item's value is an intricate combination of many factors, including availability and usefulness. Therefore, as the level cap climbs higher, the majority of non-current profession recipes become less useful, which absolutely has an impact on their value and subsequent pricing.

    Good Read.


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