Sunday, January 10, 2010

Market Forces

I don't post much about the gold economy, partly because I am pretty complacent when it comes to AHing, and have a nice ~10k nest egg that I maintain for the occasional gem-buying bonanza. It's faster than dailies, and an honest way to make a buck. Which got me thinking (eventually), how does the market of WoW translate to real-world sectors? The answer is: INSANITY.

I've gotten a few derisive comments shot at me for making my money off the AH rather than farming or grinding dailies. There's this weird pre-conception of people who use the AH as horrible goblins who refresh whole parses every 15 minutes to ruthlessly undercut and suck the blood of casuals. I suppose you could call me lazy, at worst: I take the mats others have farmed with their precious time, cut gems/enchant scrolls, and re-post them at profit to myself, all in the course of 10 minutes. Crafting is one of four ways to make money in WoW, the other three being questing, re-listing, and farming.

Starting at the bottom, the foundation of it all, is farming. Farming is like the production sector of our economy: the miners, the actual farmers, the ranchers, the people who come up with raw materials. In WoW, these are the people who leverage their gathering professions, as well as those running Strat and SM for cloth and disenchantables, gathering various meats and fishes, etc. Pretty much if a profession uses it, and you have to go outside to get it, that's a farmer.

On the backs of those farmers, are the crafters. They are the manufacturing sector: the automakers, the bricklayers, and so on. Their defining trait is taking otherwise-useless farmed goods and turning them into things many players want. Uncut gems are themselves useless, and help no one, until a JC makes them into something someone wants. Same for all the BoE craftables. This is another essential service to make the AH work, and gives players something directly useful to buy.

Re-listers are those who buy low priced goods and put them right back up on market for a higher price. These are private investors (kinda), making profit off futures and direct investment. It's important to notice that this is NOT a hurtful practice (AH fee aside, which is negligible), it merely distributes wealth over several people. For example, let's say a Cardinal Ruby goes up for 150g. Either A: I buy it, cut it, and put it up for 240g or B: someone re-lists it for 200g, I buy it anyways, and put the cut gem up for 240g. The same amount of gold has been gained no matter what, it is just more dispersed. This is a fine way (though not the only one) for low-level players to still make lots of gold. It's also probably the most difficult, as it takes a broad knowledge of what something is worth to profit greatly off it.

Questing is the service industry, and this is where things get interesting. Every gold-NPC interaction either creates money out of nothing, or destroys it forever. This is what drives the economy of WoW, and gives it the ability to expand. Very little of the wealth in WoW comes from farming raw materials; most of it is created through quest, vendor trash, and gold drops. The amount of gold the environment offers ends up determining how much gold is worth. The value of questing/hour is essentially minimum wage, and determines the wealth available to the general buying public. Note that NPC-related gold values are the only things that rise over time and added content, and in turn cause the inflation that is clearly evident. 100 gold for an epic mount was tough to muster in vanilla, yet you can make twice that in an hour helping the Argent Crusade.

I debated writing this, but it ultimately comes down to mentality. I've seen a lot of players who are normally devoted to excellence in WoW be very uninterested in this aspect of the game. Granted, the economy plays like PVE and PVP double-teamed Microsoft Excel, but it still supports your character in all other aspects, and you should think about HOW you make your gold, and how it can be more fun or at least expedient for you. And unlike the real world, you can participate in all sectors of the economy if you want, so go nuts and see what you like. And if you start making money hand over fist because you read this, send me over a Battered Hilt to say thanks (worth a shot).

1 comment:

  1. I didn't think this was a tortured analogy at all, BTW. :-)

    I've actually been using WoW to teach T-Man basic economic concepts. He's not quite an auction house king yet, but he's grasped the basics of supply and demand, and that if he blows all his gold on vanity pets then he won't have any left for training (a concept many lowbies seem to have trouble with).

    I also used to get weird static over my time and effort invested in Tailoring. For all I know I still do, but it's really hard to hear QQ over the roar of a sweet hog. ;-) And it's nice to have sufficient funds that I can have cool things without worrying about breaking the bank.

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