Greedy Goblin

Friday, June 18, 2010

Business summary of a dead server

The PuG update: on the first day already 30 people transferred/rolled, did VoA25/10, and did some ICC without wipes. Join!

Concluding the ganking project I'd like to analyze one of the goals: revitalizing the server economy. At first, let's summarize some facts:
  • I started the project with 5K, ended it with 35K, while spending gold on normal purchases
  • The AH had 2K auctions before start, had 5-6K while the project was in progress
  • We could get anything we need from either the AH or from a guildy
These mean complete success. On the other hand an 5K auctions AH is not really what someone would call a "stunning success". Also the fact that we used the services of guildies mean that the AH was far from perfect. This contradiction must be solved.

The solution is that the definition of "healthy economy" is very different for a successful goblin and an average guy. The difference lies in the management of money and items:
  • The average guy buys stuff at the last minute. For him an AH where you can't buy Runed cardinal ruby is terrible. For a goblin the AH is only terrible if you can't buy it for a whole week. If I want one now, I just pick one out from my bank, and check the AH now and then to refill my stocks.
  • The average guy wants gold now! If I list something and it sells (or gets undercut) in a week, it's a healthy AH. If the average guy lists now and does not see gold in the mailbox today, "AH is such a fail lol".
  • The average guy is oblivious to crafting ways. If there is no titansteel bar in the AH, it's fail for him. I can't care less as long as I find saronite ore, eternal fire, earth and shadow.
  • "Why shud i pay for a museklick lol?" A goblin is aware of the opportunity costs of having a crafting profession instead of gathering, and also the worth of time, so pays his crafter well. Therefore he can easily find crafter. The average guy who gives tantrum if he has to pay for a craft can spam trade forever. So for him the lack of product in the AH is bad, for me it's just minor problem as long as materials are available.
  • Eternal fire? Surely! White kitten? Don't count on that. The goblin wants what he needs. The average guy often wants fluff. However such fluff can often be missing from the AH. Maybe there wasn't a single White Kitten sold in the AH. How could I know? I never wanted one.
So if we ask the question "can a bunch of goblins revive a dead economy?" the answer is "it depends". If you are a fellow goblin, then yes, you can buy whatever you need. If you are an average guy, the answer can easily be "no". In a low population server there are not enough suppliers to cover fluff markets, to craft and sell everything, to have everything on the auction 24/7. But even a few goblins can change a dead server into a "supports survival" server. And gets rich easily in the process.

About my businesses:
  • I sold glyphs - with QA3! I'll make a post how can you deep undercut with QA3.
  • I transported green and blue quality gems from horde to ally
  • I transported ally-only pets and recipes to horde
  • I transported primordial saronite to horde
  • I transported saronite, leathers, eternals, cloths, herbs to ally
The lot of "transported" could happen because the raw materials supply is mostly bot-powered and on a terribly unbalanced PvP server it's stupid to run bots on the weaker faction. However this is not a limiting factor on low-population server, as lack of bots only mean higher prices as people has to farm. And they do!


Gevlon said...

@Xaxziminrax: why should I know the WHOLE AH? There are thousands of items in WoW, I can't and don't even want to trade with all.

@Okrane S: your comment was replaced to "The PuG", please check which post you comment to.

Anonymous said...

There were White Kittens sold. By me. For at least 200G per piece. It's funny how on Magtheridon you actually meet lil Timmy quite often, so it's very easy to pick some kittens up casually while doing business in SW... I still don't get why people bought it from me in the AH

Bobbins said...

The guild leveling one gathering skill also seems to have failed. There were continuous shortages of all materials throughout your period in Mag except for right at the beginning. After the initial surge and people leveled towards 80no one seemed to sell any raw materials.
Was this due to an internal market forming within the guild, people consuming the resource themselves or them deciding it was not worthwhile to 'farm'. I suspect mainly the later.

Price spikes in materials were also common which reflected very unstable supply sources.

Kauzmo said...

@ Anon- They bought it from you because they have no idea where it comes from hence the term morons & SLACKERS.

The Gnome of Zurich said...

"you shouldn't. But you should know your customers. The majority of them are M&S, as you say, so it should be a easy job for you."

One reason that many goblins can survive on the same server is that you don't need to be in every profitable market to make a ton of money. Lots of people have gold capped from inscription alone. Others from JC, with using enchanting solely to deal with their waste products profitably (disenchanting rings). Others from enchanting scrolls alone.

It makes sense to specialize in markets that you know well and can handle more productively than others. If you try to do everything, you will do none of it as efficiently as you could do a few things, and you won't be competitive wherever you encounter other goblins. It's one thing to be aware and looking for opportunities, as one never knows when something will happen to one of you prime businesses, but as long as the money is rolling in on many front already, it doesn't seem important to know every single profitable niche on the ah.

The Gnome of Zurich said...

One to note is that you had the ability to trade with a faction that had a more developed economy. Yes there were costs and difficulties associated with that trade, but it was obviously profitable enough to cover those.

If *both* factions on a server were dead, it would have been much more difficult to revive the economy. I have no doubt that a bunch of goblins would figure something out that would make it playable, but you'd have been doing a lot more of the kind of work goblins don't normally do (farming), because you would have been forced to, and the overall economy would not have been as good.

It's analagous to a country trying to build up an industrial base. If you can trade with other countries that are much richer and more productive, you have a huge advantage, over trying to do the buildup in a vacuum. Could china's economy grow 10% a year if they did not have rich and well functioning markets in US/Europe/Jap/SKorea etc. to trade with, but instead only similar or even less industrialized countries? No way, not even close.

This is one reason blizzard has missed the boat. There should be some way of trading goods and gold between servers. If it costs something in time (or an in game tariff), there will still be big differences in server economies, but it would much much easier to revive a dead server.

Xaxziminrax the Second said...

Talk about identity theft. Fake nils/Andru/everyone else strikes again!

As always, easily told by the lack of capitalizing first letter in the paragraph.

Gevlon said...

Fake xaxziminrax deleted

Okrane S. said...

"In a low population server there are not enough suppliers to cover fluff markets"

Fluff markets shouldn't be one of the primary targets since they're very profitable and require much less farming?

Gevlon said...

@Okrane: fluff markets are very profitable but not liquid. You can sell white kitten for LONG before you sell one (for insane profit). In large pop server more buyers.

Anonymous said...

I'd have used a better comparison than the white kitten. Maybe a... moth, or something equally worthless. The kitten in question runs 50-200g, usually. I'm sure even the highest of standards can see that it's not an entirely worthless pet. I'm sure you don't turn your nose up at the whelplings.

...okay, you probably do, but that's because you're crazy.

Lupius said...

The notion of "opportunity cost" in having a crafting profession over a gathering profession does not really exist in a serious raiding guild.

Crafting professions generally give better stats bonuses than gathering professions, so within a raiding guild, everyone is happy to craft for free for each other since their maxed crafting professions come as a by-product of min/maxing.

Serious raiders (ie. non M&S) also often hold full time jobs during the day (so they have time to read blogs/theorycraft at work). They have very little time to actually go out and farm for materials, so having a gathering profession is effectively having an empty slot, which would incur higher opportunity cost than having a crafting profession.

Okrane S. said...

haha, looks like your forum troll/clown impersonator has starting using my user ID as well...

I wonder how its done, cuz I have a google ID

john said...

you did a great job and I applaud you for bringing some life to a dead economy

Breevok said...

QA3?!? I'm impressed Gevlon. It takes a real Goblin to review their decisions and make changes when they realise an addon can perform a function that they required , even when they've previously dismissed the addon as useless. I look forward to your post.

Bronte said...

This is really random, but any chance you could start one of your projects on the US servers? I am itching to be a part of one of your ventures, but I am not sure if I want it bad enough to get an EU account...