Wednesday, June 20, 2007

On the wings of a farmer

I don’t buy gold. I’ve never even considered it, and I doubt I ever will. I believe that the game would be better off if the option to purchase gold with real-world currency wasn’t there. First, addressing a fairly common sentiment regarding purchasing gold that seems to come up every time the issue arises –

“Grinding for money is the least fun part of the game. I can go to work for two hours and make twenty dollars and use it to buy 1000 gold. If I were to try to grind that money in game, it would take twenty hours and be very boring. Therefore, I buy gold. It's my hobby, and I enjoy it more this way.”

I don’t think anyone would argue that buying gold makes sense from a purely economic standpoint for many people. Not everything that is economically sensible, however, is ethical/fair/good for the game/in line with the EULA, though with the exception of the last one there’s room for debate.

Now, one other argument that comes up every time the issue of gold selling arises is the idea that the availability of purchased gold is bad for the WoW economy. While this would be a powerful argument if it was true, there’s a lot of complicated factors. Both the way in which the gold companies make gold to begin with and the extra free gold on the market could affect the economy dramatically.

First: Where do gold sellers get the gold in the first place? I honestly have no idea, and if anyone can enlighten me, that’d be a big help. (I don’t want “All the Khorium in Terrokar always seems to be gone. That must be ‘cause of the farmers.” There’s lots of speculation, but surely someone knows how sellers actually make the gold to begin with.) Here are my best guesses –
Killing mobs in the field, getting the money they drop and selling the things they drop to vendors. This is the closest thing I can think of to generating money from nowhere. Assuming that they farm in out-of-the-way places, as it would be advantageous to do anyway, this method of generating gold doesn’t affect the economy. This method means that the gold they are selling comes from NPCs.

Collecting gathered items and selling them on the AH. This would drive the price of gathered items down due to the increased supply, which would be bad for folks like me, who rely on the sale of gathered items to make money. It would be good for people power-leveling professions and for people who make more crafted items than they have the time or inclination to farm for, such as an end-game raiding alchemist. This method means that the gold they are selling comes from the players.

Running instances and selling the BoE drops on the AH. This would lower the price of BoE things due to increased supply. This is good for people looking for new gear and maybe a little bad for people trying to sell BoE things. Unless the gold seller’s volume is huge, I don’t think this would affect the economy much. This method means that the gold they are selling comes from the players.

Second: What is the effect of purchased gold on the economy? This depends entirely, I think, on what people who purchase gold use the gold to buy. (Note that what this actually means is “what do people who purchase gold spend most of their money on?" If someone regularly buys herbs on the AH, and as a result needs to purchase gold to afford an epic mount, it’s the same thing as if he had bought a bunch of gold to buy herbs with and then used his ‘own’ money on the epic mount.)

If people use their gold to buy consumables or the raw materials to make them (herbs and cloth, mostly), then the price of those things would be driven up, which is good for people like me who make their money selling herbs. It’s bad for people who want to buy herbs. Based on WoW Insider comments I’ve read, I’m inclined to believe that this is what most people who regularly buy gold spend the money on.

If people use their gold to buy teh phat epix (or an epic mount), it drives the price of those items up. For epic items, that’s good for people who regularly sell those items (which there probably aren’t many of, since BoE rares and epics are hard to come by and there’s no reliable way of getting them) and very slightly bad for people who want a purchased epic of their own. I believe that this is what people who buy gold once or very infrequently are most likely to spend it on.

Anyway, based on that analysis, gold selling is probably actually –good- for me as a player. If people are willing to pay 25 gold for a stack of Terocone, I’m happy to oblige; if they’d get stingier without an outside source of gold, that’d hurt me. Since I never (or very rarely) buy consumables and mats on the AH, I’m not hurt by it at all. Still, in the interest of fairness, I’d like to see gold selling eliminated, even if my herb business takes a hit. What about you? Are you riding on the tails of gold sellers without even meaning to? If you’re better at economics than I am, please correct me.


Sylvina Solaris said...

I think a lot of Burning Crusade gold has been appearing from hacked accounts unfortunately. Somebody is hacking the accounts, writing poor english forum posts, etc. I blame this on how Gold has skyrocketed in Outland compared to Azeroth, the money you make by killing a level 60 mob in Outland is almost on par with killing a 58 Elite or so in Tyr's Hand.

Galoheart said...

I'd like to know where all that gold is hidden myself in Outland. Because i can use more of it not less.

Seanna said...

Interesting to know.