The Warcraft Economy, Patches, and Planning
Posted in Uncategorized on December 19th, 2009 by Polestar – 2 CommentsEvery few months Blizzard releases a new “patch.” Patches are evolutionary changes in the game, and some of them include changes that affect the WoW economy. Smart, experienced players learn how to take advantage of these economic changes to become rich in game. The process for doing so is strikingly similar to the process of getting rich by playing the market in real life.
As discussed earlier, playing WoW effectively requires gold to, among other things, repair equipment, acquire gems and enchantments that upgrade gear, and buy potions, flasks, and food that enhance abilities. As in real life, gold can be made through professions, such as gathering herbs or leather or metals and selling them, making gear and selling it, and producing food or potions or gems and selling them. As in real life, the WoW economy is driven by market forces: prices rise and fall according to variations in supply and demand for products and services provided by characters with professions. Changes to the game can affect professions and the ability of players to make gold for their characters.
For example, almost all players use Inscriptions to enhance their character’s abilities. Inscriptions are made by players known as “Scribes” using herbs. ”Herbalists” gather herbs and sell them to Scribes using the Auction House; the Scribes then use the herbs to make Inscriptions that they, in turn, sell to other players on the Auction House. For players selling herbs the only cost of the herbs is the time spent gathering them, so the cost of goods sold (COGS) is time based. However, the Scribes using the herbs to make Inscriptions have the cost of the herbs and other materials in their COGS, so the upper end of pricing for herbs is defined in part by what customers will pay for Inscriptions. Scribes will not pay a high price for herbs if they cannot get a high price for their Inscriptions. If the cost of herbs goes up or the price of Inscriptions falls, Scribes stop working. Conversely, if the price of herbs falls or the price of Inscriptions rises, Scribes go back to work. Market equilibrium is reached when enough Herbalists are competing with each other to keep the price just right for Scribes to create Inscriptions in the quantity that matches the demand for Inscriptions from other players.
The patch released on December 8th contained changes that affect the WoW economy and savvy players, as in real life, anticipated those changes and planned accordingly. Continuing with the example of Inscriptions, new Inscriptions were added to the game in the Patch. Those inscriptions were immediately in demand from players whose characters can use them and, as in the real world economy, for the first few weeks prices for those Inscriptions will be high. Scribes will, because of the high prices for the Inscriptions, make lots of them, creating high demand for the herbs used in those Inscriptions. Therefore, logically, just as in real life, prices for those herbs (and only those herbs) will jump for a few weeks. With the high price for those herbs, Herbalists will make a point of going out and getting them. Over time, demand for the new Inscriptions will subside because most of the players who want them will have gotten them (Inscriptions are not consumable). Because supply is high and demand will be slipping, prices for the new Inscriptions will fall. As prices fall, the supply of Inscriptions will also diminish as Scribes stop making them, reducing the demand for Herbs. As demand for the herbs falls, their prices will fall, too, and herbalists will stop making a point of gathering them.
In the normal course of patch releases, smart players who have limited time resources, make a point of learning about changes that affect the WoW economy in advance. They can learn about such changes by reading the draft patch notes on the Public Test Realm (PTR) or reading discussion boards and announcements on the Blizzard community forums. Players who knew in advance of the most recent patch that there would be changes in the Inscription profession and that there would be an increase in demand for certain herbs would have gathered herbs before the patch was released. This applies both to Herbalists collecting herbs and holding their inventory until the patch was released and demand jumped and to Scribes who bought up the necessary herbs on the auction house while prices were still low. Of course, this resulted in increased demand and reduced supply prior to the patch release, so prices of commodities like the herbs in the example rose slightly even before the patch, but the big jump in prices (and profits) came after the patch was release when demand for the Inscriptions actually hits the market.
Once again, we have a good example of how WoW reflects the real world. Just as in the real world, the majority of players don’t pay much attention to the ebb and flow of market forces until those market forces affect them directly, but, as in the real world, the few players who go to the trouble of studying market forces and successfully anticipate trends can make a small fortune.
Below are three web sites devoted to the discussion of and news about the WoW economy: