Apparently there's deflation

| Wednesday, December 24, 2008
There are more than a few people posting about this. For starters there the Greedy Goblin. He's clearly a heartless jerk and also wrong. There are others on Blessing of Kings, but this is my place to tell you what to think, so stop clicking links for a minute. Or ten. I'm wordy.

So deflation, why? I see two general causes: Less money and more products. I'll start with products.

BoE rares are dropping from the sky. The blues aren't half-bad and they're all over the place. I've even gotten a decent pair of pants from fishing. Also a set of utensils with no spoon. What happens when the supply goes up? The price goes down. Early on I imagine people expected BoEs to be about like they were in BC: somewhat rare and worth a bit of gold if you're not getting run through Kara. This would drive a high price early on, until people noticed the huge supply and prices dropped.

Gathered materials are more common. Why? It's because of how quest hubs are laid out. How many nodes did you hit doing the SSC dailies? Maybe two or three if you're lucky. How many nodes do you hit flying from Dalaran to Dun Niffelem (Sons of Hodir) to Dragonblight (Wyrmrest and Tuskarr) to Borean Tundra (Tuskarr and Wyrmrest) to Icecrown (Horde/Alliance, Argent Crusade, and Ebon Blade)? A lot more than two or three.

People realized that heroics are a joke and that there are a ton of miners. Initially people were just hitting 80 and heroics were still slightly intimidating. Now people run them like they're regulars. The result is a flood of frozen orbs. For miners, their titansteel cooldowns are worth something, but when there are so many competing for business, prices drop. If they don't sell the cooldown directly,t hey use it to convert their own mats. Either way, lots of miners made the arcanite of WotLK into a comparatively cheap material. Why so many miners? Mining has always been profitable, but gathering professions came at the cost of stats from crafted gear. Now gathering professions have innate bonuses, like additional health.

As far as gold goes, the supply went up, but the used supply went down. What? I'll use myself as an example. I made the engineering mount, handing 12.5k gold to a vendor. While getting gold for this I effectively had a 12.5k debt to pay off since I wasn't going to be buying anything except repairs until I had my mount. So while leveling filled my pockets, the mount emptied them far more. Comparing another gem to a mechano-hog, I went with the hog, and the result was a lot less money being moved around. Other people have similar 'debts' like the traveler's mammoth, or even the smaller ~1k gold mounts. This should not be treated the same as normal money sinks like repairs. Those come incrementally and do not give a perception of a massive cost to be saved up for. However something big creates a focus on the goal, and people will radically change their behavior when they accept a goal, including refusing to spend dozens or hundreds of gold on AH items.

Leveling also threw a ton of gold at people, which would have resulted in inflation, except that it allowed for more epic fliers (and the relatively cheap cold-weather flying) which lead to much faster farming. In this case, the leveling gold increased the supply of gold, but it also increased the supply of materials, so the result is no real change in prices. However there is always a price spike at the start of new content before people adjust to the shiny new items.

Getting back to the spread out dailies, being spread out like that discourages doing them. People don't do them and gain no gold and gather no mats, or they do do them and they bring in gold and mats. Either way, they're not going to push inflation much. Another discouragement is championing. Why run around trying to do the Argent Crusade timer when you can just throw on a tabard and get faster rep in a heroic? The major rep grinds, except for Sons of Hodir, can all be done inside instances. I'm counting the Tuskarr as minor since they don't offer much which I see as 'needed.' Besides, they give barely any gold anyway. Stingy bastards.

So, there's deflation. I've explained why. So what? Well, if you like making profits by contributing absolutely nothing, go play the market. Buy the cheap mats now with the gold you have and resell them when prices go up (new raids will push mat costs, though BoEs will probably just drop even more). Congratulations, you're a leech.

2 comments:

Sojourner said...

Hail Mr Buffet.

I kind of got what you said. Not having run through all of the Northrend content yet i'm not in the best position to comment. It is however handy to know about this as i move into the area

Kiryn said...

I've been buying BoE gear a lot now that I hit 80. Supporting my server's leatherworkers by getting my resto drood some new epics, buying some BoEs that drop from heroics I'm not quite running yet. But now... now I'm saving up my gold so I can buy that new dalaran ring when 3.08 comes out.

I hear ya about the dailies being spread out though. But what annoys me more is how Wintergrasp is right in the middle of them. Back in BC, I used to be able to just fly up really high, point myself towards my destination and go read some stuff online while I wait. Now if I want to go from Dalaran to Sholazar for my Oracles dailies, I have to actually pay attention and direct my character to fly AROUND Wintergrasp.

I've actually taken to just paying the two gold to take the flight path there just so I could go get a drink while I wait, which kinda defeats the whole purpose of "buy epic flying training so you never have to take a flight path again!"

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