The Two Goblins

| Wednesday, October 7, 2009
They're both greedy. They both know what they're doing. They have completely different effects on the server. These effects come from their different approaches to markets.

The first type farms or runs dailies or crafts as he sees the various profits from each shift. That includes the profit of fun. He might know that dailies are more gold per hour than farming, but he's sick of dailies. Or he's sick of farming so he searches the AH for cheap mats and does some crafting. He creates new markets. He finds that people would rather buy rhino meat off the AH than take the time to run out and farm four; so he farms 40 and sells them off on rhino dog day. Or he sees that no one is making an unusual gem type, so he gets that design and starts cutting the new type.

This goblin has three defining properties. First, he's greedy. Second, he understands markets. Third, he adds value to the economy.

The second type does only that which maximizes his gold. You are unlikely to ever see him farm or do dailies. Instead his uses his knowledge of the AH to drive others out of business. He is an anti-capitalist. He gains advantage not by being more efficient or making a better product, but instead by driving away competition through market manipulation. You will never see him add materials or gold to the economy. If he is crafting, he is not crafting in new markets, but instead he is crafting what others would have crafted anyway; he is taking markets. I will acknowledge, there are times that he is taking the market from someone who dramatically overprices and moves small volume, but a type one can do that as well without driving out others but instead demonstrates better technique which can be adopted.

This goblin has three defining properties. First, he's greedy. Second, he understands markets. Third, he adds removes value from the economy.

The first type of goblin, you want. You really want. He is awesome. He doesn't just make himself richer, he makes you richer; he makes everyone richer because he is productive and efficient.

The second type, pray that he is not on your server. Pray that there are not multiples. If there are, good luck trying to craft anything profitably. They will stop at nothing to drive everyone away. All they want you for is cheap mats and an open wallet. They'll find the BoEs, buy them, and then resell for double the price. Then they'll laugh at you for being undergeared and poor and call you an idiot.

Tonight I was briefly the first type. As I looked at the auction house I noticed that there were no raw earthsiege diamonds. My fellow JCs would be out of work, unemployed! It was my duty to fill that gap! After they sold out at 45, 50, and 55g, I was out of gems and clearly the economy needed more stimulus, so I hopped over to my alchemist and whipped up another batch. And only three SP gems in the AH! I helped fill that gap as well. Then for no clear reason someone tipped me 40g for a single cut. I was surprised because this would be the first time selling a cut was worth as much as buying a gem, cutting it, and putting it on the AH. That will be part of tomorrow's topic.


Stabs said...

I'm afraid the various economic blogs have made goblinism extremely popular.

As a playstyle there's a lot to recommend it:
- it's pvp, often against people who can't possibly beat you because they don't understand the game (aka morons of the week).

- it's solo.

- it opens access to other parts of the game you may not have the skill gear or commitment to otherwise access (eg buying raid slots).

- it is metered. You can count your gold and say "I'm doing this well"

In many ways from a selfish point of view it's a very good way to play WoW. If I were still subscribed I'd find it a lot more interesting to do this than to mindlessly run dailies or bgs while waiting for raids.

Is it a detriment to the server?

I don't think so. Sure, you can say it's bad that the auction house becomes almost unusable by non-professionals. But being trampled in the wallet is no worse than being ganked at a meeting stone or having some uber leet raider show off her shinies in front of the Dala bank.

MMOs operate on a certain amount of inequality.

So it may be a bit unsettling to be a casual crafter, tossing a few belt buckles onto the market only to find either they all return after being undercut within seconds or they all got bought out and relisted high. But I think that's just tough.

Anonymous said...

It's funny while I was reading this I started thinking of real life similarities...

Certain supermarket and fast food chains in Australia (and I dare say world wide) approach farmers and say...

your potatoes are worth $5/kg.
I will pay you $2
As I control the market you have no choice but to accept my $2
Did you want to sell your farm?

It's capitalism... but not as we like it...

Klepsacovic said...

@Stabs: I see goblinism as a positive thing: knowledge and action. In practice though, it can be used destructively, as in the case of the second goblin. It's not about the inequality. That's not just inevitable, it's potentially good.

"But being trampled in the wallet is no worse than being ganked at a meeting stone or having some uber leet raider show off her shinies in front of the Dala bank."
These are entirely different. If the average player cannot make a decent bit off the AH, that drives people away from the economy, stifling growth and hurting everyone. I can turn off my flag, I can reroll PvE, I can't turn off AH exploitation. The leet raider is not negatively affecting me in any way.

@gnomeaggedon: I don't see that as capitalism. Capitalism is about investment and innovation and finding markets. What you describe is little more than economic totalitarianism. It is the opposite of free market capitalism, but the lie has been told too many times, people no longer see that what is happening.

Stabs said...

Ah but what's a "decent bit?"

Take Saronite. If it's over-farmed then the price drops to vendor price. Is the vendor price not a decent price? 25g for a stack of something you found for free while doing something else?

If you want to craft that Saronite into armour or whatever you need to follow market economics. Blacksmithing has always been a very badly designed profession from an economic point of view.

Apart from a few hot items like Truesteel everything on your recipe list is useless once you have skilled up. The value of things like Runed Copper Bracers is to skill up or to make one for yourself if you're a lowbie alt.

If people flood the market with the few good sellers (eg belt buckles) then it's bad for casually trading Blacksmiths but the casual guy didn't become a Blacksmith to make money. He picked it for the socket.

WoW has a terrible economy. It's always had a terrible economy. The only way it would not have a terrible economy is if people needed crafted gear for raids and top level pvp AND if gear gets destroyed. Those in turn are terrible choices to make when designing a game for raiding.

What interest there is to be had in WoW's economy is now being appropriated by hardcore players. Where once no one cared about gold now hitting the gold cap is a thing to brag about.

This really isn't any different from other areas of the game where hardcore players dominate. Hardcore pvpers win arena. Hardcore raiders dominate raiding.

The only reason this is a development is because it's a side of the game which was always trivial.

And you know what?

It still is trivial.

So if you're mainly a raider and you can no longer sell belt buckles just run a few dailies. Or grind some eternal fire in WG.

If you grind it you'll notice how little gold you actually need in the game - there's nothing to buy except fluff.

G-Rebel said...

@ Stabs: I agree that the various economic blogs have made goblinism popular. Each week I think I see or hear about a new one pop up.

I don't really know if there are greedy, nasty goblins on my server. I pay attention to the AH when I need to sell something crafted or just to make a quick gold here and there.

I read an article somewhere this week that talked about a study comparing MMO economies with RL economic systems. One of the things they noted was inflation occured on every server they surveyed for a wide variety of products. (Undercutting happens, but overall inflation occured quite a bit).

One way inflation happens is when you create money out of nothing (i.e. the US Federal Government and the Federal Reserve).

In WoW money is created by NPC's when you loot or do a quest. It's created out of thin air, so to speak. It's all fiat.

The result is a flawed economic system and combined with a "hands off" approach by Blizzard that allows the greedy goblins to populate servers at will.

Ultimately, despite the flaws in the system, people still make a choice as to HOW they behave. People choose to be goblin #1, a more collectivism approach, or they choose goblin #2, a self-serving punk.

Either way they have their freedoms, but in the end I think Stabs was right that there's not much to muy other than fluff with all that gold.

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