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Monday, April 19, 2010

Gold Capped: My Thoughts on the WoW Economy

Some of you may remember that I jumped head first into the goblin arena at the end of last summer. I didn't need the gold for anything specific. I did it for two reasons. First, I'm cheap and I don't like being low on gold. I want to be able to buy any gold sink that available that I think is useful with worrying that I will be low on gold. Second, it sounded like an interesting challenge.

Well, the goal has been met. I reached the gold cap a few weeks ago. In the end, reaching my goal was both easier then I thought it would be and harder then I thought it would be. In this post I hope to explain that dichotomy, share a few of my thoughts on how to improve the WoW economy, and maybe give a tip or two on how to make gold.

Easier then I Thought:

Reaching the gold cap was easier then I thought it would be because there is no real trick to it. There are no hidden secrets. I don't know what I expected, but earning 215k gold when you are at about 20k feels like a big task. The bloggers who write about gold making give you all these little tips, but many of them didn't seem to work for me in the way I expected them to. I always felt like there was some trick or secret that I was missing.

As far as I can tell I wasn't missing anything. I didn't find any secret product that I could sell and make 20k gold a week or a magic farming spot (I didn't farm at all in fact). My process of making gold is all about crafting and selling. Buying the mats cheaper then the finished good will sell for and then posting it on the AH. And I wasn't crafting odd things. Most of my gold came from Inscriptions, but I also made quite a bit from selling the obvious things like spellthread, meta gems, and bags. I just looked for markets where the mats cost less then the AH prices, and participated even when there was a lot of competition. So, making gold was a lot easier then I thought because I already had most the tools I needed just by having my professions leveled up.

Harder then I Though:

If you ever have read a gold blog, then you know that some of the claims sound outlandish. They make it sound like once you find the right system the money truck backs up to your house and dumps a bunch of gold in. Gevlon at the Greedy Goblin made it sound particularly easy when he claimed he was making around 15k a week with just 30minutes to an hour a day of work. That may not sound like much but it is more then you may think. If you spend an hour a day on the AH that is 7 hours a week. That is almost as much as I raid each week.

In the end, working the AH is a lot of time consuming work. You are able to automate a lot of things with the right addons, but there are some things you can't automate like crafting and milling. Therefore I spend hours each week in front of my computer hitting a single button. It isn't a lot of fun for me and I know understand why you find very few people to play the AH for extended periods of time. Even Gavlon has taken breaks after reaching the cap.

How to Improve the WoW Economy:

Just so you know, I work in the financial industry. I have a degree in Economics and a MBA. So, I have some experience with economic theory. That is why I find some of the common gripes amount the WoW economy so funny. Everyone seems to think that the goblins out there are ruining the market in one way or another. One guy will complain about getting under cut. The next guy will complain that people shouldn't be able to post a glyph for 50g when it cost 3g to make. They all eventually say that these people need to play fair or be punished and they want Blizzard to put more controls on the market. The funny thing is they are 100% wrong.

The problem with the WoW economy isn't the lack of control that allows people to do pretty much what ever they want. The problem with the WoW economy is the artificial roadblocks that make goblinish activity more difficult and ultimately cause people to quite after artificial goals are completed. This reduces the competition in the market, creates more imperfections, and ultimately increases the prices for consumers. Here are my suggestions.

Allow for more batch processing: When you mill herbs you currently have to hit a button for every herb you mill. The same is true for prospecting. It's not unusual for me to mill 3000 herbs in a sitting. In a perfect world it would take you 10 minutes to mill 3000 herbs, when you add lag and such into the equation you will take at least 15-20 minutes.

Crafting is even worse. When I make my glyphs I usually have to make 50 different glyphs in varying amounts for a total of about 800 glyphs in a sitting. Since most glyphs take 1.5 seconds to create that is a minimum of 20 minutes spent crafting, but longer when you consider lag and such. As you can probably imagine the process is quite boring and I think is the primary cause for most goblin burn-out.

Blizzard needs to create an interface to mill and prospect much like they have for smelting ore currently. That way I can tell it to mill and walk away and use that time to do other things around the house or on the computer. They also need to upgrade the crafting interface. There are several mods that already allow you to queue multiple crafting jobs, but they all require you to push a button to go on to the next step. Removing that button click would again allow the goblin to walk away during one of the more tedious portions of the crafting process.

Allow for Batch Mail Retrieval: This may be easier said then done, but the next big time sink in a crafters process is picking up the mail. I list 1200 - 1600 glyphs a day across 3 alts. Since you can open only 50 mails every minute it takes at least 25 minutes to go through all of my mail generally. I recently found the addon Mail Opener that allows me to go AFK through that process, but I think it can be done better.

The Auctioneer addon currently allows you to download the entire auction house in just a few minutes. Why couldn't we have the same thing for mail. The only issue I see from a player point of view is what would happen if your bags were full, but I think we can find a work around. Gold requires no bag space and therefore could always be pulled in a lump sum. The cancelled and expired auctions could also be consolidated into fewer mails to make them easier to view and empty.

Allow for more stacking: I made some of my gold with Jewelcrafting, but avoided it for he most part. Since cut gems can't stack it is very difficult to mass produce gems and achieve the economies of scale that you can in the glyph market. This is one of the things that I think seriously holds back JCing as a profession.

Reduce some deposit costs: Another key thing holding back Jewelcrafting as a profession is the fact that it costs several gold just to list a gem on the AH, but Glyphs and Enchants have little or no cost to post.

Why I think these Changes are Necessary:

Don't get me wrong, I understand that these suggestions would hurt a lot of the producers currently in the market. This would likely push all prices down to the materials cost of those professions. However, it would be good for consumers, because it would be easier for people to enter and stay in the market. This would increase competition and push prices down.

The key to the WoW economy's problems and the solutions is the fact that it is a fictional economy. No one's kids are going to starve because daddy didn't sell some glyphs last night. Participating in the market is purely optional and has few real world consequences. The fact of the matter is that the problems with a perfectly free market in the real world don't apply to the virtual world. If someone trys to monopolize the bag market, all you have to do is go farm a few mats, list the goods cheaper and their monopoly is broken. Since it is impossible for any player to control the market for any length of time then there is no reason to not allow perfect competition.Tips for Making gold:

Use Addons: The key to making a lot of gold on the AH is selling in volume. To sell in volume you have to do a lot of things, and addons are required to automate those things. Without this automation you would spend all of your playing time on the AH and not out killing stuff.

Sell Armor Vellum and Runescrolls: It's funny whenever anyone talks about Inscription as a money making profession they always talk about selling glyphs. I rarely if ever hear anyone talking about vellums or scrolls, but I swear I've made 50% of my gold off of these two products alone. The key here is that they are in high demand, but not an obvious market. You don't need vellums to make enchants, and you don't need runescrolls to raid.

I think the primary purchasers of Armor vellum is the guy that needs to send an enchant to an alt. Therefore thy are not going to bat an eye at spending 4g to pick up a vellum.

Watch Trade Chat: I know that this can be a horrible experience, but trade chat is the best place to find deals. For some reason some people don't like to post things on the AH and will sell their goods for much less then they are worth in trade chat. I've bought Herbs for a third of their market price. You may also be able to pick up some BoE epics cheaply and flip them. Also, always bargain with trade chat sellers. Never offer to pay their price from the start. Most of them can be talked down.

Recruitment: My guild has had a bad run of some real life issues and burn out, and we are recruiting once again. If you are interested in a serious progression guild that only raids 3 nights a week you may want to consider Lords of Eternity. You can find more information here.

Just another Tips. Use an auto-click software (10lines of C# max). It's not against Blizzard's terms. And coupled with a miling macro and Q2A queue list. You can AFK during the miling and crafting part of the job.

I'm fine with most of the functions you listed remaining in mods. Batch mail makes sense, but the profession UI changes would make the default UI even more complex than it already is.

Lil Sparky's workshop is pretty helpful if you want to queue up several items to craft. Some pretty simple macros help make milling and prospecting easier. Reloading your UI drastically reduces your time waiting at the mailbox (unless your computer is slow). You can even edit postal to open mail more quickly than its default 0.5 second/mail.

I know I am not an expert on law or the ELUA, I have an extremely hard time believing that any form of auto-click software is not agains the ELUA. That is entirely what the Glider case was about wasn't it?

@CharlieI know and use all the tricks you've mentioned. That does not change my arguement at all. I have a macro that allows me to mill all my herbs using a single button, but I still have to click the button for every mill a want to do.

Using a combination of Skillit, KTQ, and Altoholic, I am able to queue all the glyphs I want to craft in less then 10 seconds, but I still have to click a button for each type of glyph I want to craft.

If you are a major producer of glyphs then you know that both of these tasks can take a ton of time and you are requird to sit there and hit the buttons. All I'm asking for is a way to hit one putton and run through the entire Queue.

You say it will make the default crafting UI more complex, and I agree. However, it would be no more complex the the UIs created by Skillet or ATSW that are in high use today. If they wanted to they could also create a toggle in the interface options to include an advanced Professions UI that most players wouldn't want to see. I don't think that is to much to ask or over burdensome.

I moded QA2 to write another Array of my current glyphs. The second step is a Excel VBA-Script to read and modify the lua file from QA2 in the wtf directory. That way i can track all sells and also calculate what i need to recraft.

As i only mill / craft when i watch TV i dont bother hitting 1 button over and over again.

Great tips. Being a enchanter/tailor, I dont have many things to put on the AH. I used to buy frostweave, and DE the greens I made. Before the DE option, which pushed stacks of dust from 200g a stack, to 30g.

I would say i'm not an expert neither. But glider seems far more complex. What I do is just telling windows to simulate a click. It does not interact with WoW or whatever. I just let the mouse over the area of the screen I want (my milling macro button or Q2A queuelist) and go away. It may have been discuss somewhere, i will be interested to know but i really can't go back to clicking myself when i'm crafting 600glyphs :)

I love this post. I have the AP tests for micro and macro in three weeks, and I find it hilarious, yet insightful, on how well real-world econ works with WoW. Economies of Scale, Perfect Competition, I love it.

An interesting idea I have came about from your post that since there is no need to be in the market, and pricing power is not attainable in the LR, WoW might as well be perfect competition. What if there could be Guild Shops. I imagine these as a separate tab within the AH. Since the ability to have pricing power is created by barriers to entry, WoW could establish some. ie.-New, high level crafts (450+), only available to those in Guild Shops-Licensing (300g single time cost to sell as manyl gems as you want) This would also create economies of scale

This may be a little "I have been studying too much econ, get it out of my head", but right now I think it could be an interesting idea.

I bought some of Graylo's Glyphs. They were absolute trash; barely worked half the time, and two of them broke on me within a day. I asked to get my monies back for these defective products, but Mr. Lo only laughed at me. Don't buy from this man!

I used a variety of professions when pushing towards gold cap. Here was my experience with each:

Inscription -- A majority of my gold came from this. I would make about 4 of every glyph that could be sold for 10g or more and post them. The competition got incredibly stiff on my server when one enterprising soul pushed the prices down to 4-8g per for about 4 months. I stopped making glyphs entirely during this time. Vellums and Runescrolls continued to sell at this time. Also, Rituals of the New Moon isn't bad, esp. if you advertise once in a while on /2.

Jewelcrafting -- When the inscription market dried up, this became my new priority. I'd pick out new cuts by using a site like WowPopular (http://www.wowpopular.com/Epic/gems) and buy up lots and lots of raw gems (since they stack). When the price of cut gems went high enough that I could turn a profit, or when a gem went out of stock on the AH, I'd cut a few and post them. JC market was very competitive, so I usually posted with a Short duration so I could cancel and repost. The rings and necklaces don't do so hot anymore now that much higher ilvl stuff is in dungeons. Don't forget metas! And, if you've been a JC since start of WotLK, your rare ("blue quality") cuts are probably still worth a pretty penny.

Enchanting -- I made a lot of money with this before the price of enchanting mats dipped with the advent of Dungeon Finder. Since I also had Inscription on a character I had cheap access to vellums. I'd craft anything that was profitable, but I'd only stock one or two of the oddball enchants that don't go used often. Don't forget about BC enchants: Mongoose and Cat's Swiftness are still good sellers.

Tailoring -- I was surprised at how quickly I was able to sell the pants enchants. They're a great item because you can stack them to 20 in your inventory and just let QA post whenever you're at an AH. On smaller servers, buy Iceweb Spider Silk whenever you see it for sale. Netherweave bags may sell well on your server, too.

Leatherworking -- Pants stack work the same way as Tailoring, and now that Arctic Fur is widely available, you should be able to have a bunch of these for sale.