Economics of World of Warcraft

[pendell]

So someone just completed a wealth survey (http://xsinthis.net/2011/11/report-world-of-warcraft-wealth-survey/) of the online Warcraft world, in which it was noted that 25% of all players control 85% of in-game wealth.

I'm trying to determine why this is, but I don't understand about half the report. I'm not a player, you see. What is the Consortium? What is playing the Auction house? Why are players of the auction house richer than those who farm for gold ? What is raiding?

If anyone understands and can explain the terms in the report, I'd be grateful.

Respectfully,

Brian P.

[Tankadin]

So someone just completed a wealth survey (http://xsinthis.net/2011/11/report-world-of-warcraft-wealth-survey/) of the online Warcraft world, in which it was noted that 25% of all players control 85% of in-game wealth.

I'm trying to determine why this is, but I don't understand about half the report. I'm not a player, you see. What is the Consortium? What is playing the Auction house? Why are players of the auction house richer than those who farm for gold ? What is raiding?

If anyone understands and can explain the terms in the report, I'd be grateful.

Respectfully,

Brian P.

Playing the Auction House means doing small-to-large scale market manipulation--cornering a market on some in-game commodity, undercutting other sellers and crushing them through a larger value, that kind of thing. It can be pretty lucrative, especially because it doesn't take as much time as harvesting the actual raw material or doing all of those gold-generating daily quests.

Raiding refers to the 10/25/40 person instances that are generally the focus of end-game players. It can be expensive, as you 1) die a lot and your fantastic gear is costly to repair and 2) you tend to buy the best equipment and consumables that you can afford...things that you wouldn't generally need for anything else (aside from the Arena player-versus-players matches) in game. The people that make this equipment (usually enchantments or augments for gear) or consumables (various potions) can make a lot of money catering to this crowd. Consumables only last so many hours and most (if not all) enhancements cannot be removed. So, you'll have to buy new for any new piece of gear.

Because most people don't know how commodities markets work AND because the market of a Warcraft server is a lot smaller than any actual commodities market, it is very easy to manipulate the in-game economy. You make money by exploiting inefficiencies and, due to the small scale, there are a lot more inefficiences.

Also, I'm not surprised that a small population has so much gold. I think this happens for a couple reasons. The first is the know-how isn't going to be evenly distributed amongst the population. The second is that the people who can put in however many hours a week to make bank are a small slice of the in-game population.

[The Succubus]

I would be very interested to see if the same applies for EVE Online, which follows a much more realistic economic model....

[tensai_oni]

The Consortium is a web page. You can easily deduce it from the context.

Too many people said yes for "playing" the auction house to call it manipulation. And most likely it was not undercutting and creating monopolies to sell above the price or other such dirty tricks. Just selling your goods on the auction house, and possibly buying underpriced auctions for either use or resale at more fair prices. Nothing dirty about this, it is just economics.

Very few people farm gold because it is not efficient. Best money in WoW comes from the auction house, quests or raiding. Wipes cost you money, but bosses also drop a lot of gold.

This data is mostly meaningless. Above a certain threshold, which is easy to reach even for non-hardcore players, you don't need any more gold than you already have. Optional money sinks like the engineering chopper (which had a price of about 12.5 k, a small sum in Cataclysm money) are like their name suggests completely optional. There are no "luxury" goods. The best gear comes from PvE or PvP anyway. So those who have lots of gold simply chose to spend effort to do so. Doesn't mean those under the line live in poverty.

Also, it's nowhere said there but of course the survey was only among level 85 characters, right? If not then the data is even more flawed and useless.

[Tyndmyr]

So someone just completed a wealth survey (http://xsinthis.net/2011/11/report-world-of-warcraft-wealth-survey/) of the online Warcraft world, in which it was noted that 25% of all players control 85% of in-game wealth.

I'm trying to determine why this is, but I don't understand about half the report. I'm not a player, you see. What is the Consortium? What is playing the Auction house? Why are players of the auction house richer than those who farm for gold ? What is raiding?

If anyone understands and can explain the terms in the report, I'd be grateful.

Respectfully,

Brian P.

25/85 is not a huge wealth gap. That's pretty normal. See, some people hoard wealth, some spend it wildly. I've known both types of players, and the latter essentially buy things whenever they have available funds. In addition, players that have not yet hit high levels will invariably have trivial amounts of gold compared to more long term players.

Hell, I'd have expected the spread to be larger. The top 1% having almost 25% fits, though. Those are your market manipulators. I used to be one, back in classic, and it was fun for a bit.

[Brother Oni]

I would be very interested to see if the same applies for EVE Online, which follows a much more realistic economic model....

CCP have actually employed an economist to look at Eve Online's economy and he publishes reports at irregular intervals.

The latest one published was for last quarter 2010 back in April this year (http://www.eveonline.com/devblog.asp?a=blog&nbid=2299).

[Emmerask]

Hm outside the play the market explanation while this could very well be I think the much simpler explanation is that a large majority of players are just casuals.
They log in maybe once every 2 days do one or two instances perhaps a little bit of pvp and leave again.
With so much less time spend in the game it is only natural that they also gain far less gold/items to sell and hence have less money.

And 25% pretty much would be my guess of hardcore gamers in wow so that actually fits quite nicely ^^

[Sith_Happens]

So someone just completed a wealth survey (http://xsinthis.net/2011/11/report-world-of-warcraft-wealth-survey/) of the online Warcraft world, in which it was noted that 25% of all players control 85% of in-game wealth.

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OCCUPY AZEROTH!!!

:smalltongue:

[Kish]

I have some things to say to this.

None I can legally say here, however.

[pendell]

I have some things to say to this.

None I can legally say here, however.

My PM box is open. I promise not to complain to the mods provided you can avoid commenting on my personal hygiene, sexual orientation, or terrible work habits :).

Respectfully,

Brian P.

[Cogwheel]

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OCCUPY AZEROTH!!!

:smalltongue:

Occupy Azathoth?

[Cheesegear]

CCP have actually employed an economist to look at Eve Online's economy and he publishes reports at irregular intervals.

The latest one published was for last quarter 2010 back in April this year (http://www.eveonline.com/devblog.asp?a=blog&nbid=2299).

...I was not prepared for that. That's...Incredible that such depth can be applied to a game.

[Brother Oni]

...I was not prepared for that. That's...Incredible that such depth can be applied to a game.

It gets even scarier if you know something about the game and can apply it (population density, ship types flown and top sold modules can be critical information for people trying to play the market).

The ingame market interface (http://wiki.eveonline.com/wikiEN/images/b/b1/Market4.jpg) shows moving averages for the past 5 days and 30 days, median price and the donchian channel as standard.

Eve has a massive amount of data available for those who like number crunching and we haven't even gone anywhere near the shooty stuff yet.

[SlyGuyMcFly]

There's a reason it's called Spreadsheets Online by some. Unfairly derisive, but not entirely innacurate :smalltongue:

[Tyndmyr]

My PM box is open. I promise not to complain to the mods provided you can avoid commenting on my personal hygiene, sexual orientation, or terrible work habits :).

Respectfully,

Brian P.

I also this.

And yes, Eve's economy absolutely crushes everyone else's in terms of complexity. I played that for a while, and was taking in money sufficiently rapidly that I didn't need to even pay for my subscription.

The spreadsheets online name...while harsh, is probably fair. The learning curve for the game is notably wicked, and it's got some pretty severe complexity.

[pendell]

I read the economic report for EVE. I regret I understood little of it. The main thing I took away is that the same pattern shows up in EVE that shows up in warcraft; according to the 'owned spacecraft types', the single largest type was 'starting player ships and shuttles' -- some 300,000 vessels. The big ships, the supercarriers and frigates owned by the serious players, seemed to be in the tens of thousands.

Both patterns in world of warcraft and EVE seem to follow the Pareto Principle (http://en.wikipedia.org/wiki/Pareto_principle), also known as the "80-20" rule. In the case of the game, it seems that about 20% of the players are seriously hardcore and therefore have the best ships or lots of gold. The remainder are casual players who have little skin in the game; they don't have much in the way of assets, but evidently the game suits them or they wouldn't keep their subscriptions up. True?

Respectfully,

Brian P.

[Brother Oni]

I read the economic report for EVE. I regret I understood little of it. The main thing I took away is that the same pattern shows up in EVE that shows up in warcraft; according to the 'owned spacecraft types', the single largest type was 'starting player ships and shuttles' -- some 300,000 vessels. The big ships, the supercarriers and frigates owned by the serious players, seemed to be in the tens of thousands.

'Starting player ships, shuttles and capsules' is a misleading comparison to the other ships and that category covers 9 different ship types. The Other category covers over 150 other ship types.

Everything that's ranked is a single ship type and most of them don't take much effort to get into - you could be flying the kestrel or rifter (both frigate class ships) in less than an hour of starting the game.

Supercarriers I agree are owned by the big boys, but they're almost exclusively used in PVP activities and require the support of a corp (Eve term for a guild).

I assume you're unfamiliar with Eve mechanics, but they are significantly different from WoW - if you put 5 one month old players against a level 60 character, the level 60 is going to win hands down.
In Eve, put 5 one month old players in frigates versus a 100 million SP character in a typically fitted battleship, the battleship's going to lose.



Both patterns in world of warcraft and EVE seem to follow the Pareto Principle (http://en.wikipedia.org/wiki/Pareto_principle), also known as the "80-20" rule. In the case of the game, it seems that about 20% of the players are seriously hardcore and therefore have the best ships or lots of gold. The remainder are casual players who have little skin in the game; they don't have much in the way of assets, but evidently the game suits them or they wouldn't keep their subscriptions up. True?

Mostly. The market system is different in that you can pretty much run it with minimal effort once you get past the initial setup costs and have some investment capital.
You could only play for 20 minutes a day and still make more money than someone who plays for hours on end.

In addition, PVP in Eve is mostly loss-making, so your assumption that the seriously hardcore PVP players are always the richest isn't always true.
Serious marketeers being the richest is true, but that's because money is their way of keeping score, rather than how many kills you get under your belt.

[CarpeGuitarrem]

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OCCUPY AZEROTH!!!

:smalltongue:
DANG YOU I thought I was gonna be the first one who thought it....

[Sith_Happens]

DANG YOU I thought I was gonna be the first one who thought it....

Now what I really want to see is an Occupy Falador. Darn merchanters walking around with their party hats while I'm scrounging up enough cash for a dragon longsword...

[Weimann]

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OCCUPY AZEROTH!!!

:smalltongue:Because that went so well for the Burning Legion.

[Tyndmyr]

I read the economic report for EVE. I regret I understood little of it. The main thing I took away is that the same pattern shows up in EVE that shows up in warcraft; according to the 'owned spacecraft types', the single largest type was 'starting player ships and shuttles' -- some 300,000 vessels. The big ships, the supercarriers and frigates owned by the serious players, seemed to be in the tens of thousands.

Eh...see, here's the thing. Yeah, there's a ton more smaller ships, but the reason for that isn't just cost. Yeah, big ships tend to cost more, but smaller ships still have a place. For example, as a fairly old, fairly wealthy player, I kept around a number of fitted frigates for high sec pvp. They are going to die as a result of game mechanics, so they are geared entirely to produce damage cheaply before they do, and are intended to be used in a swarm.

Also, shuttles? Everyone uses shuttles. They're cheap and fast. It's an easy long distance transit method for a great many things. I probably own thousands of the buggers.

On the flip side, it was rare for me to have more than two big PvE ships on a char. The risk of losing one is comparatively low, so one fitted backup is quite sufficient.