Sunday, 4 July 2010
Need lubricates World of Warcraft markets!
Blizzards World of Warcraft is an on-line multi-player challenge appealing to young and old, educated and uneducated, smart, and not so smart. World of Warcraft has some players who defy the understanding of mere intelligent adults.
Within world of Warcraft, as a character progresses from level one and making their way to level 80, they will undergo many changes. Learning new skills and gaining intoxicatingly simple abilities, gaining interesting and exciting new experiences and working with others to gain ever better equipment, materials, weapons and armour.
New items come from either non playing characters as a ‘drop’, purchased from vendors or manufactured by players in the game. To manufacture items, raw materials need to be found, and they in turn, come from non playing characters a ‘drop’, purchased from vendors or made by other players.
Once a player has made a new item, they can elect to use it, sell it to a vendor for a few silver coins, or sell it to anyone else on the Auction House for gold coins.
The Auction House can be found in the few key cities within the game of World of Warcraft and functions like a short-lived clearing house. Sales can exist for up to forty eight hours and are then, if unsold, are returned to the person selling the item, less a small fee of course.
In truth, there is an entire internal economy, varying from server to server, all with the aim of people selling things to people. Simple!
The game economy is an abused one, it is fragile and it is by and large, totally misunderstood. Sadly, a good many of the people using the Auction House to buy and sell, have no idea how it works and treat it rather like a shop. Two or more players can easily craft many of the items independently, say a cloak for example. No matter who makes the cloak, the cloak is identical to the same cloak made by any other person. Quality of goods does not enter into the equation. Availability is instant for the most part, therefore the only thing that will differentiate vendors, is the price.
The big thing in World of Warcraft is the vendor can fix the price. The vendor can choose to sell the cloak for any price that comes to mind, such as 1000 gold, 10 silver, or 10 copper and this is where the two rules of selling in a MMORPG come into play.
Rule 1. Any player, can sell anything, at any price.
For the seller of the 1000 gold cloak, he is speculating another player will ‘need to have’ the cloak and will be willing to pay anything to get it. The vendor pays a 15% deposit when he tries to sell it, and if no-one buys it, the vendor gets the cloak back, and loses a percentage of the deposit, as much as 150 gold.
Selling the cloak for 10 copper would lead to someone finding an incredible bargain, and that buyer, may well be tempted to put the cloak back on the market for 20 copper and double their money. This we find rule 2.
Rule 2. The customer will normally pay the lowest price.
No customer will pay 1000 gold for an item, if at that time, another vendor has the same item for sale at 10 silver.
Clever customers have skills in manufacturing something. For example, tailors can buy from the auction house, the materials used to manufacture bags. The tailor can then sell those manufactured bags for a great profit.
Blacksmiths can buy Iron and craft it into steel swords; alchemists can buy herbs and produce health giving drinks.
As many Clever Customers as there are using the auction house to realise good profits, so there are many more consumer customers who buy at whatever price simply to enable them to play their own version of the game.
For some players, the game is in manipulating the auction house and creating incredible wealth without raising a sword in anger, or attempting to defeat a single monster.