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Role Playing (Games) The Almighty Buck

Cornering the World of Warcraft Markets 72

Posted by Zonk from the that's-a-lot-of-dosh dept.
Terra Nova has a post up about a financial development on the World of Warcraft server Elune. From the article: "two players recently bought out the entire contents of the Auction House in Ironforge, with the exception of premium-priced high-level weapons and armor (e.g., they bought all the trade goods) and then resold all of what they bought at a higher price." They go on to discuss the event in the context of Massive Game economies and the results that tradeskills can have on monetary inflation.
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Cornering the World of Warcraft Markets More

Cornering the World of Warcraft Markets

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  • I fail to grasp the (perceived) problem (Score:5, Interesting)

    by Lead Butthead ( 321013 ) on Wednesday April 06, 2005 @04:37PM (#12158575) Journal
    Isn't business about "buy low, sell high?"
    • Our guild has a member who made epic mount money this way by level 38, selling some things huge profits. I think her record was 37500% profit on one item.

    • Re:I fail to grasp the (perceived) problem (Score:5, Insightful)

      by Achoi77 ( 669484 ) on Wednesday April 06, 2005 @04:43PM (#12158678)
      The problem lies with people farming gold and selling it for real money. Eventaully what will happen is that the market will inflate so high that only players that have purchased their virtual money for real money will have any substantial coin to purchase what they want/need.

      "What's this? The Big Bad Gun of Slaying costs 2200 gold?? There is no way I can manage to collect that much gold! Hrm, lemme ebay for people selling gold on my server..."

      Ten bucks says that the players monopolizing the market are also the friendly ebay merchants that are selling you money..

      • Sometimes, people just need the money. I've never controlled an entire AH, but I know people that have, and I've cornered certain markets myself, like Jade, Copper Bars, etc.

        It's good for a quick profit, but it's usually hard to maintain.

        Trying to get 1000g for level 60 and maintain all your equipment and skills calls for more than just grinding and farming, I think. At least if you want to get it done in a reasonable amount of time.
        • Real world economics in online game is a serious problem. There is no Alan Greenspan to offset the economy with whatever adjustments.

          The 1st person to own a sword played 10hrs to earn money to buy it. Then sell it at higher price.

          The 2nd person to own a sword played 20hrs to earn money to buy it. Then sell it at higher price.

          The 3rd person to own a sword played 30hrs to earn money to buy it. Then sell it at higher price.

          Repeat, repeat. Afterwards every other sword with the same performance will go

          • Re:I fail to grasp the (perceived) problem (Score:5, Informative)

            by Elwood P Dowd ( 16933 ) <judgmentalist@gmail.com> on Wednesday April 06, 2005 @05:51PM (#12159375) Journal
            There is no Alan Greenspan to offset the economy with whatever adjustments.
            Uh, yes there is. Blizzard may not have anyone as smart as Alan Greenspan, but they can tweak the market a billion different ways. They can make it easier to acquire raw goods, or harder to sell large quantities. Obviously.

          • Re:I fail to grasp the (perceived) problem (Score:2, Insightful)

            by Anonymous Coward
            > Real world economics in online game is a serious problem. There is no Alan Greenspan to offset the economy with whatever adjustments.

            Blizzard has the ability to create a complete fiat economy by simply materializing new goods into the auction house ad infinitum.
          • The problem is exaclty that there is a Greenspan in WoW. Okay, I conceit, Greenspan on crack, possibly also filled up on booze and fooling around with a couple of hookers. There is a constant inflation from the money the monsters drop, money rewards for quests and that it is possible to sell every piece of crap that monsters drop to vendors. The anti inflations messures like bind on pickup/equip items, costs for repairing, learning a skill etc. can't keep inflation in check if gold farmers come into play as
    • Who said there's a problem?

      And besides, I think the advice you cite is for the stock market not business. More along business lines would be, "corner the market, sell at whatever price you want" or "sell $.01 lower than the competitor."

      Still it's what these people did is a kind of bastardly thing; an equivalent would be MS's tight grip on the popular OS market, and selling their product for whatever they want. If these two actively pursue this, they could effectively set the price point for all of this ty

  • Tradeskilling in general (Score:3, Insightful)

    by faloi ( 738831 ) on Wednesday April 06, 2005 @04:38PM (#12158601)
    I saw similar things happen in EQ. Basically the most dedicated tradeskillers got together and set base prices on what they'd pay for components, and what they'd expect for their items. That trick worked for a period of time, until players that weren't "tuned in" to the system started to lowball them. The auction nature of WoW will probably cause it to take longer for the prices to get back to normal, but I don't anticpate there'll be a long term effect. Sombodies gotten rich though, assuming players buy their stuff...
    • Hard to say about the bounce nature of the AH. The AH is memoryless. You can't see the historical selling price of an item. You can see the ones that are in the AH, but they are only there for 24 hours before they are returned.
      Yes, most people look up the price of similar items when they sell theirs, but there is no item history with the AH. Unlike FFXI, where you could see how much the last 10 people paid for the item (regardless of how long ago those past 10 sales were).

    • Re:Tradeskilling in general (Score:4, Informative)

      by Komarosu ( 538875 ) <nik_doof@nikd o o f . n et> on Wednesday April 06, 2005 @04:59PM (#12158871) Homepage
      Also happend in UO, with popular blacksmiths inflating prices for a week, worked well, lots of money made then the undercutters came in and made a killing. Usually the system adjusts for any arranged price fixing.

      • Just like OPEC (Score:3, Insightful)

        by sideshow ( 99249 )
        This is why OPEC doesn't immediatly raise oil prices to $200 a barrel (well, besides the possibility of every non-OPEC country sending in their armed forces).

        All these guys agree on a high price but after a while one of them breaks ranks and makes a huge profit, lowering the market price.
      • Cartels work because they transform several firms (PCs) into an effective monopoly on the product, allowing them to hold down supply of the product ("don't sell as many armors as you can -- sell less, but for more money, and only at the price we set or higher"). If you don't have a true monopoly, or if the cartel cheats, you just end up getting burned by the Invisible Hand of Flaming Death.

        MMORPGs are almost immune to cartels *if* they don't have systems which allow denial of resources. You can't preven

        • The issue with cornering the market is that your upbidding your buys and downbidding your sells everytime. I.E I know that the market rate for mithril is 5G on my server usually. If the AH is empty I'll just put it up for 6G because obviously supply doesn't meet demand at 5G. Also, eventhough its not too easy to get into the mithril selling market for total outsiders you have to consider the existing miners and blacksmiths. A guy with a blacksmith/mining combo has ever more incentive to sell his mithril ins

  • talking about a market economy.... (Score:3, Informative)

    by ebrandsberg ( 75344 ) on Wednesday April 06, 2005 @04:40PM (#12158622)
    Stuff like this happens often in Eve. People are cornering various products all the time in order to drive prices up, and it works, as long as people will pay the prices.
    • The difference here is that there is no easy way to see pricing history in WoW. Eve has a very robust market system compared to anything else.

      Plus, in my opinion, it is MUCH harder to corner a market in Eve. I applaud any organization that has the capital and the influence to really monopolize a market. How much are Cap Recharger II's going for nowadays?
      • 12-15m. They arn't actually cornered, as several groups have the bpo's for them, BUT they don't undercut each other that much either, so it's sorta a cartel. Other attempts have been to buyout the morphite market to jack up the prices, and a few others I can't recall at once, but it is interesting to watch the game mechanics. And yes, the market interface is awsome.

  • I've been doing this for months.... (Score:5, Informative)

    by Dr. Bent ( 533421 ) <ben@@@int...com> on Wednesday April 06, 2005 @04:41PM (#12158635) Homepage
    Ok, it's time to spill the beans...I'm too busy to do this anymore.

    Trade goods (Linen, Wool, Silk, Iron Bars, etc...) will consistently sell at the AH if you set a decent buyout price. For example, on my server, you can sell stacks (x20) at these prices:

    Linen: 25 silver
    Wool: 40 silver
    Silk: 45 silver (which sucks!)
    Mageweave: 1.2 gold
    Runecloth 3 gold
    Copper Bars 45 silver ...

    and so on and so on. My guild would buy everything we could below that price and resell it. We'd get it from other players, from low buyouts at the AH, poorly priced auctions, wherever...At one point, as a level ~20 mage, I was spending maybe 2 hours a week doing this and making ~80 gold for my efforts. It was huge.

    Then I leveled up to the point where 80 gold a week isn't that special.
    • I am no economic genius, by any means. I had been selling linen, for example, at a 24 hour auction with no buyout price. For some reason, they sell between 6 and 13 silver consistantly, and I was happy with that. (Like I said, I am no economic genius)

      I took your advice, and set a 25 silver buyout on linen, and sure enough, I got 25 silver. This argues that convenience is worth at least 19 silver, (i.e. getting the linen NOW for a higher price rather that waiting 24 hours and maybe someone outbids you b

  • Let me get this straight (Score:5, Funny)

    by Anonymous Coward on Wednesday April 06, 2005 @05:05PM (#12158935)
    Two guys started playing a MMORPG to escape from a money-grubbing humdrum reality, where they spend their time money-grubbing into a humdrum reality?

    Oh yeah, and then someone has to write about how interesting that is. Maybe-- to their psychiatrist.

  • inflation.. (Score:5, Insightful)

    by gl4ss ( 559668 ) on Wednesday April 06, 2005 @05:07PM (#12158943) Homepage Journal
    is huge in wow.

    which isn't a surprise as basically everything you can kill drops money(or something that you can sell for a buck for a npc) - so a lot of money enters the world.

    it needs some serious tweaking.. as now theres professions which simply are not worth doing. you don't get items that are really worth jack from them and selling them for a buck isn't that good business either - basically as said out in the post the best way to make a buck is to be on the raw material side of the business and not on the refining side, as you can get endless amounts of those raw materials(but if you're a refiner you're going to need a lot of those materials to train your skill to be on any level of use, at which point you quite probably already have gotten better equipment than what you can make).

    and getting skilled is a lot easier(faster - there is no playing skill involved beyond patience) if you got the cash to just buy the raw materials out of AH - so don't rush into refining(it's not particularly exciting to make copper pants anyhow so you can't justify it with that either), you can change the skills later anyways if you want and later you'll have the cash to buy the raw materials to get the skill up faster.

    (no.. fun does not begin at lvl 60.)

    • Re:inflation.. (Score:1, Insightful)

      by Anonymous Coward
      I'm reminded of the economic system as implemented on Shattered World [shattered.org] (where I used to code for a while; gave up last year for various reasons.) The principle is simple: most online games simply haemorrhage gold out of monsters. The end result is that gold eventually becomes worthless, in effect.

      What's happening here is that all these fancy schmancy MMORPGs, like Everquest, WoW, and their ilk, are rediscovering things that the old, geriatric text-based MUDs have known for years. There's nothing new happen

  • Interesting (Score:3, Interesting)

    by elid ( 672471 ) <eli DOT ipod AT gmail DOT com> on Wednesday April 06, 2005 @05:07PM (#12158954)
    At least they're not selling the goods for real $ online. Perhaps this isn't as big of a problem as it seems; I wonder what Blizzard's stance is.

    • Re:Interesting (Score:2, Insightful)

      by llevity ( 776014 )
      No, but in a way, it encourages people to buy gold for RL money. How else can they afford these inflated in game prices, when the price is beyond what they accrue during normal gameplay?

    • Re:Interesting (Score:3, Interesting)

      by Hydrogenoid ( 410979 )
      You have to account for the fact that Elune is a French server, and only opened onf February 11, so the number of level 60 is still relatively low. Besides, Elune isn't a PvP server, hence competition is at a lower level.
      • Hmmm, sorry, after ready the forum post linked in the article, I realized that my point is moot, servers are actually named the same on both sides of the pond.

  • Nothing new (Score:5, Interesting)

    by SmallFurryCreature ( 593017 ) on Wednesday April 06, 2005 @05:17PM (#12159052) Journal
    SWG uses "food buffs" to raise your stats so that a bunny biting you does not instantly kill you. One of the best buffs is "vasarian brandy" as it raises your mind stats wich are not only weak but also used for doing special moves AND an easy target in PvP.

    However only a tiny percentage of players take the time to simple prepare themselves for a hunt so it is was not unusual to see people desperately trying to shop for brandy ONLY after having arrived at the remotest planet.

    Simple money making scheme? Buy stacks of brandy and sell them at a nice profit at remote locations. The makers of brandy don't want to spend the time to distribute their wares and the customers don't want do spend hours shopping.

    In the period it worked before SWG went terminal it gave me so much income I never even bothered with running missions. I don't think resellers themselves are a bad idea. Basically I got my money by providing the same exact service as it exists in the real world.

    Buying up every single item is an extreme step but perhaps in some future MMO game with a properly thought out economy some players will be making their game by shipping resources between supplier and user.

    Imagine a more spread out game were you cannot reach every corner in a few minutes. Perhaps it even takes hours if not days to go into the deep. Ranger type players will be out alone or small groups hunting and doing their survival thing. Once in a while they will be bringing their loot to small villages were they put up for sale. Now these items are in demand but the crafters that want them tend to be in bigger cities as they would be in real live and don't want to constantly be on the move and fend of all kinds of nasty just to get the resources they need. Two groups, the more solo minded explorers who are playing a hunting sim, the other the more social minded creators who are playing a home improvement sim. Add a third group, the money grabbers and they might get their fun out of buying low and selling high. Travelling the lands in search if items to buy.

    So I don't think this is such a bad thing in itself. What has me wondering is how badly upset the basic economy is that in such a new game two players can already have gotten so rich as to buy every item on the market. Even SWG economy ain't that broken.

    • Re:Nothing new (Score:5, Interesting)

      by Comrade64 ( 799539 ) on Wednesday April 06, 2005 @06:11PM (#12159570)

      This worked well for me in SWG too. I was/am a Master Chef and I started out my business by crafting crates of stuff like that and the much loved (at the time) Tatooine Sunburn, and I would take these to a remote hostile place and sell it. After I made quite a bit and established a solid list of clients, I finally set up shop and raked in the credits! I had shops on four planets, another chef making stuff for me, and I was still turning special orders away because I had too many orders. My customer base blossomed and spilled over quick!

      And then they revamped the Chef profession overnight and 90% of my inventory went from awesome to novelty. I was faced with a steep learning curve, so many bad crates that I had to just destroy all but one of my shops and in that remaining shop I destroyed all but one of my vendors, and still had 30 crates in the basement I had to destroy because they were now useless components.

      Nowadays I sell the occasional crate on the street, but my days in the fast food business are over.

    • Re:Nothing new (Score:3, Interesting)

      by donatzsky ( 91033 )

      Imagine a more spread out game were you cannot reach every corner in a few minutes. Perhaps it even takes hours if not days to go into the deep. ... ... Add a third group, the money grabbers and they might get their fun out of buying low and selling high. Travelling the lands in search if items to buy.

      Sounds a lot like EVE Online [eve-online.com] to me. While I haven't played it myself, most of the reviews and official blurbs pitch it as being very open-ended and capitalistic (Machiavelli's name crops up a number of tim

      • Having played EVE off an on for a while now, I can say its definitely the most open-ended MMO I've seen (that still works, but I'll save my rantings about Second Life for another post). Ironically, it's often *too* open ended for a lot of players, since after you go through the training mission sequence, the game kinda says "yer on your own!" (sure, there are mission agents and stuff, but it's not like a "now you can go to THIS city and buy from THIS vendor" type thing).
      • Very deep game, very open ended, and a very steep learning curve. I've played it almost since release, and it is a great game.

        Worth checking out, but expect to be frustrated in the beginning.

    • Re:Nothing new (Score:3, Interesting)

      by MMaestro ( 585010 )
      Simple money making scheme? Buy stacks of brandy and sell them at a nice profit at remote locations. The makers of brandy don't want to spend the time to distribute their wares and the customers don't want do spend hours shopping.

      The problem with this comparison is that you can justify this kind of 'scheme' by say its a 'service charge' (I'm pretty damned sure I don't burn $5 in gasoline while riding a taxi a mile in New York City.)

      The problem with this 'scheme' is when you always buy out your competition

    • You just need to add rarity to the MMORG equation... After all, you should need a bigger ship to haul all that brandy. If it's worth money, somebody should be able to attack you and take it, right! Monsters should start attacking the peasents directly... then they'll have someplace to take gold from!!! from Blizzard's point of view, players don't want their villages wiped out by the 10,000 point dragon, but in the real world that's how it works... If people get too rich, somebody battles them to take it
      • Most of these MMO got money growing on trees wich is bad because if you just keep pumping in money (through mission payouts) then inflation will be insanely high. So they add all kinds of silly things to get money out of the system. But why not simply add taxation on money in the bank, where it is safe from everyone but the blizzard goverment OR let you keep it on you but make you risk loosing money if you die AND make bandits not bother with the poor ranger but go after the rich merchants like the RIAA aft

  • Alts (Score:3, Interesting)

    by BrookHarty ( 9119 ) on Wednesday April 06, 2005 @05:35PM (#12159245) Journal
    I currently sell all my low level buyout for 1g for 10s items, 10x the price. Since I'm the only one with a buyout, the alts have massive gold, and will buy it out.

    Its stupid not to put a buyout, even it 10x the price, if someone wants it bad enough, and wants to win, they will pay.

    BTW, the Alliance side of the AH on our servers, is 3x as large. I am running AH scripts to watch prices, and buy when stuff is under vendor sale price, or its under the market average. Good for me to make a few bucks.

    But, I've started loosing interested, its moved from a game to a chore, screw that. Wheres the next new MMORPG... Not sure if Battlegrounds will save wow from churn.

  • Still not the biggest scandal in WoW (Score:5, Funny)

    by JVert ( 578547 ) <corganbillyNO@SPAMhotmail.com> on Wednesday April 06, 2005 @05:55PM (#12159413) Journal
    What about the monopoly NPC's have over souldbound items? These NPC's are screwing the players over because of their GM given monopoly over these pieces. At the very least these venders can sell back the items to the enchanters, however I have reason to believe the venders work for the defias brotherhood and other shady organizations. I will sell grey items it a vendor and suddenly they will appear on the corpse of a monster that I had just killed after leaving the town.

    NPC vendors are aiding and abetting terrorist and must be stopped! I welcome the "opposing" faction to swoop down and destroy these tyrants and liberate use from our evil oppressors!
  • If they made it so you could put in a request at the auction house for an item, and list an amount that your willing to pay, then people who have product for sale would better know the value of the things they're trying to sell, and they could get an sell their items on the spot, walk away with their cash, and the people who want a resource but dont want to sit all day in the auction house looking for cheeper prices could get their items at a reasonable price.
  • exact phenomenon in an interesting piece earlier this year, arguing that Blizzard and others should not hesitate to stop this sort of game-gaming.

    "Normally, this newspaper's devotion to free trade is unwavering. Yet curbing the trade of in-game items is defensible, since game economies are run to maximise fun, not efficiency."

    A model economy: Should links between real and virtual economies be encouraged or banned? [economist.com]

    • again, it's a game, change the rules!!

      The problem with a game like WOW is it's not realistic enough.. After all, if you've got a million gold, you should need an army of carriers, not just grab it from your digital bin. They just need to introduce more ways to make wealth harder to keep.. introduce raiders, spoilage, pirates, etc into the mix. You make the cost of having wealth defending to keep it!!!

      Programatically, this is a job for Will Wright's idea of procedural-based games. They need to develo

  • I'm not familiar with WoW, but isn't there a thief class? I can imagine that there might be ways actual shopkeepers could prevent thieves from making off with their stock, but how are these two guys going to deal with the problem? Seems like a bunch of thieves could team up and take turns sneaking over to them and pilfering a few of the items, until they have too few remaining to turn a profit. What am I missing?
    • Rogues (the thief-like class) can only steal from hostile mobs.
    • There is, but you can't stealth into a shop and steal stuff, nor take anything from other players. The best you an do is to get some random things of humanoid mobs, but they just nerfed pickpocketing too. It might be all that you can get now is just cash off the mobs. I have a feeling that this is what blizzard has put into WoW to partially offset the lack of end game stuff. As it stands now you can't hand down stuff to alts, they have to go get the good stuff themselves.
    • That's what wars are for!!! They need some orcs to come scramble up everything.

      Sure, it doesn't sound fair, but that's the point. Perhaps Blizzard could put some cap on how much stuff you can have in one store...or you have to get another. The game deals in gold pieces, not credit cards... a million gold pieces should take an army of helpers to carry. They need to make massive wealth require vunerability to keep it... Why can't the angry mobs mug a very rich guy? Then he'd have to learn to fight...or


    • I'm not familiar with WoW, but isn't there a thief class?

      No. There is the Rogue class, but it is much more of an assasin / fighter than a thief. (In close combat, the Warrior class is best able to withstand damage, while Rogues are best at inflicting it)

  • Short Term Effects (Score:5, Interesting)

    by node159 ( 636992 ) on Wednesday April 06, 2005 @08:18PM (#12160754)
    After having done various micro experiments, it seems apparent that price inflation/depreciation is a short term effect. If for example there is no mooncloth listed on the AH, listing the first item at an inflated price will result in most new items placed to be at a price just below that inflated price, effectively artificially inflating the 'standard' price, however testing has shown that this is a temporary effect as the cost of AH fees causes people to undercut other sellers until the 'globally acceptable' price is reached again.
    Relisting the entire AH is an effective strategy for slowing this natural trend, however it effectively ensures that all newly listed items will undercut the existing artificial price, resulting in a loss of sale for the relisters, or requiring the relisters to actively purchase and relist all new items at diminishing returns.
    Being on one of the most overpriced servers I'd have too say that the main effect of gold farmers is to increase the price of epic items, but also increases their availability.
    Either way it is a short term effect. By purchasing items at the AH you are buying into a free trade economy and as such its effects. Ultimately it all comes down to supply and demand.
    • I tend to agree.

      I'm on Proudmoore, one of the higher population servers (I guess thats most of them now) and have been watching AH prices on a few items. Most are fairly stable with a slight overall downward trend. I've seen all of a particular item bought out and relisted at double the price and within a day prices were back to normal.

      Blizzard has adjusted a few things, sending prices higher by raising the number of ingredients required to make a particular item.

      Coarse stone was an interesting one, f

  • I love the idea...if I played WoW I'd probably be trying to do the same thing...btw, did you see that guy get busted for posting replies to himself with his alts?
  • ..would do well to check out EVE Online. There's a 14 day free trial at mmorpg.com if you're interested enough. In any case, the market in EVE is absolutely insane. Instead of the really good weapons being Bind on Equip and not being able to make them yourself, you can make anything that you can possibly equip, from Miner II turrents to Kestrel ships. Much of the focus in EVE is on joining a corperation (either player owned or NPC corp), and filling out a role in it.

    You could be

    • * Mining (similar to
  • The only flaw in the 'Monopolist' system is that there is no barrier to competitive entry. The only way they can make money on this system is if they purchase at a price lower than the 'fair market value'. While this might sound unlikely, there are actually quite a few ways for goods to drop below an equalibrium price and this is just a capitolistic way of reestablishing equialibrium.
  • I hate buying anything from monopolies, in the real world or online. If this happened on my server, I would sell stuff privately through trade chat instead, and with the inflated prices there would probably be more interest than usual.

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