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Wednesday, April 16. 2008The Gold Farming War - Who's winning?Trackbacks
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I can say that prices for many games go up during chinese new year. Since they are on holiday the supply dries up while the demand stays constant. This last year several gold sellers attempted to run specials to get customers to load up to hold them over the holiday. I don't know how successful they were but several of them attempted it this year.
The WoW RMT trends broadly mirrors what I call the Learn2Play trends (guide selling - http://timhowgego.com/learn2play-the-new-real-money-trading.html ). Ergo, the trends reflect reduced pressure on players to generate gold, more than other factors like competition between gold sellers.
(I still find the Google Gold vs Guide graph an interesting benchmark too - http://www.google.com/trends?q=wow+guide%2C+wow+gold&ctab=0 .) Less pressure on gold-making has been clear to regular players since the end of last year. And the most recent patch effectively hands top-level players 50-100 gold each day just for logging on and killing 10 boars. Some of the boars are even fun to kill. And critically Blizzard are not creating enough new money-sinks for players to spend the extra money on. What is not yet known is whether this devaluation of gold is pre-emptively balancing the economy before the launch of the next expansion, The Freezing Ji...Wrath of the Lich King. The first expansion, The Burning Crusade, effectively halved the value of gold by doubling the earning potential of top-level characters. In TBC that change happened relatively quickly, but the pattern was understood months beforehand. That allowed the clever players to ruthlessly exploit inflation. In contrast, nobody knows what will be valuable in the next expansion, so nobody can use advanced knowledge to maintain the real value of their gold. Yet everybody is seeing the real terms value of their gold decline right now. But that may be irrelevant to this discussion, since the average gold farmer doesn't seem to understand concepts like inflation. I think this time next year, we should have a clearer picture on Blizzard vs RMT.
I find your analysis, while in-depth, to be extremely obtuse regarding intervening factors. It assumes that gold prices are macroeconomically related solely to supply.
1. Most obviously, where is your analysis of demand mechanisms? When Blizzard released Burning Crusade, each player immediately inherited a 6000 gold cost for the top flying mount. Conversely, when Daily Quests were released, all players gained an easy, low-time commitment to earn a small but guaranteed amount of gold every day. These two events played a huge role in determining demand by players, but yet are unmarked in your graphs. 2. You also assume that goldfarming costs are somehow static and play no role in determining your source's price. Labor costs of employees, availability of player-bought gold, attrition of accounts, and (most obviously) competition from other goldsellers would play a huge role in pricepoints, but escapes your purvue. 3. As a third and admittedly weaker point, you also assume that these companies are performing the maximum level of enforcement possible. It seems ridiculously easy to mine transaction information of toons which receive and give out gold for no apparent reason, but Blizzard and others must weigh the resulting loss of accounts as a loss of revenue. If game companies really wanted to shut down goldselling, they would ban the offending buyers, not the sellers, and publicize very broadly that if they identify a goldselling account, they will ban anyone who receives gold from it in exchange for no visible item or service. This atmosphere of fear would immediately infect every player for whom a ban is the worst possible punishment on their huge investment of time. But they don't, due to the loss of revenue and consumer base. The fact is we are simply unaware of what initiatives are undertaken by game companies regarding goldselling, therefore preventing us from properly analyzing what effect their actions have on the market. Minister.Kel'thuzad
One of the reasons for the downward trend in WoW gold has to be the proliferation of the daily quest system. It is now so easy to make 150 gold a day that the only thing worth buying gold for is epic flight skill... and even that is not nearly as much of a chore.
The daily quests also make farming the gold easier, driving up supplies and so blizzard has managed to attack from both sides of the the economic equation and we see a very clear continuing downward trend in WoW gold prices ever since patch 2.3. When gold is as easy to get as it is for both player and farmer alike, there's no justification for selling over $10, and I think prices will fall further to under $5. When the single largest market cannot maintain a worthwhile selling price it's a major success for the developer.
Thank you all for your comments.
This was hardly an effort to provide a comprehensive assessment of gold farming. Most of the comments have been related to World of Warcraft which I carefully did not say much about. There is very little data provided by game operators or gold farmers, so any analysis is more akin to reading tea leaves. Volume data would be critical to completing this analysis. I'd like it, but I don't have it. Any additional hard data is welcome. As my area of interest is in security and costs to the business, I am most interested in games that are in a steady state condition and particularly those that are discussing their security efforts. Thus, Square Enix's Final Fantasy XI and Jagex's recent changes in Runescape are particularly interesting. Blizzard has not published any security data for about 18 months, so it is impossible to do any meaningful analysis of World of Warcraft... and I have avoided doing so. YES, I am making tons of simplifying assumptions... there is little else that is possible. I'm assuming that the price of gold farming is more-or-less constant, that game companies are making fairly consistent efforts against gold farmers (except when they've noted a change as with Runescape), and that volume of transactions is uniform... Lacking alternate data, there is little else I can do. Most of these games have fairly stable populations at this point and, with the exception of World of Warcraft and Runescape, there have been few notable rule or game changes, there is no reason to expect much change in the costs for gold farmers (except marketing), as gold farming is a relatively unskilled job. There seem to be more gold farming operations coming online, not less, indicating that companies seem to believe that they can make money.
"Volume data would be critical to completing this analysis."
Heh. I pretty much only came here to say this. Also, fwiw Groundhog Day also occurred in February, that could have accounted for the price spike. Not saying it's not the Chinese Holiday (New Year?), but that's a pretty unwarranted speculation thrown out there without any backup data.
Is anyone else getting really tired of these "researches" right now?
This research is OLD. Your conclusions are OLD. Proven years and years ago by several predecessors. When will you people understand the simple fact that gamers WANT us to sell them gold? Make statistics, analysis and figures all you want, none of it comes closer to the truth than being owner of a top10 Google ranked WoW site, and seeing 1 visitor looking for gold every 20 seconds! Please take my advice: # Start your own RMT operation, considering how awfully attracted you are. OR # Be a man and state the facts: "Gamers will Cheat to progress". Years of graphs and statistics wrapped up in a single sentence. OR # If none of that suits you; put your sensationalist reports in the closet leave us the fuck alone!
I love the random farmer who responded trying to defend the practice. Unfortunately, it seems most gold-farmers have no grasp of basic economics, i.e. how it crashes game markets, much to the annoyance of casual, every-day players. He even said "be a man" in his post, even though he's basically defending the concept of making a living by helping people cheat at a video game...
How come Lineage2 is not mentioned? It is infested with Gold Farmers and NCSoft does nothing about them. The Gold Farmers have ruined a great game.
Comments on comments:
1. This was not meant to be a comprehensive study. Without detailed data from both game companies and gold farming operations, it is not really possible to do much. 2. Personally and professionally, I am indifferent to gold farming. It is a reality that should be acknowledged by anyone operating a game. If I am asked to help fight it, I will. If I'm asked to figure out how to manage it well, I will. What I won't do is wish it away. The most important part of the article is the first portion focusing on Final Fantasy, it pretty much shows the limitations of "adding more people" to fighting gold farming without changing the game's basic economic systems. 3. I have not tried to cover every game .. I don't have time or data. There is some good anecdotal evidence that companies that do not manage the reality of gold farming have gotten into a lot of trouble. This is also true with exploits. 4. I was actually informed by someone i the gold farming business about the Chinese holiday effect. As groundhogs have little involvement in MMOs (to the best of my knowledge), I didn't choose to focus on that correlation - I may be wrong however.
...So you decide to join the RMT research bandwagon?
I've discussed this article with some colleagues today. Our conclusion: RMT news reporters and researchers are no different from celebrity paparazzi. Looking at the industry, every ingredient to sprout paparazzi reporting is there: # Unregulated, wild-west "megacorporations". # Notorious $100 million dollar individuals. # Showbizz-worthy corporate stories. # Instant shock and awe at "controversial" revelations. # Attention and fame to anyone providing reports. # [...] Furthermore, your personal standpoint of being indifferent is severely questionable. Someone who'd truly sympathize a cause for 50% would not devote a website to constant sensationalist reports. Anyone in the industry can tell you such news only serves unwanted attention and will end with repercussions. Eiher way, congratulations dude, you're RMT's very own tabloid reporter. Now please jump in a lake!
While what was presented is interesting, my first thought was that it was more of a clever ploy at providing advertising for MMOBUX.
There are a number of "gold price aggregators" out there, most of whom only provide current data on a server by server basis. The guys at MMOBux have little reason to provide long term historical pricing as no one but the various MMO researchers and security guys like myself care.
They actually were helpful to me and had to do a bit of work to put together the data and had no control over what I was going to do with it.
I kind of doubt your findings about Guild Wars gold rising in price. I actually play the game and know that since march, great steps have been taken to RMT by ArenaNet (the developers of the game). I hardly think it has anything to do with some Chinese holiday. I ask you to follow these links:
http://wiki.guildwars.com/wiki/Developer_Updates#.5BDev_Update.5D_RMT_Policies_Details_.E2.80.93_3_April_2008 http://wiki.guildwars.com/wiki/Developer_Updates#.5BDev_Update.5D_Changes_for_New_Accounts_.E2.80.93_18_March_2008 http://wiki.guildwars.com/wiki/Game_updates/20080318 All trial accounts have been put to a halt. This has been done because of the excessive advertising (and sometimes bots even stalking you through whispers ingame) of RMT. Now I don't work for Arenanet, or for any other game company. This means I probably don't have the slightest idea of how many accounts get terminated over two weeks for any game. But I do find it more reasonable to consider these changes have been more of an effect to the prices of Guild Wars gold than a holiday where more "farmers" are farming more gold. Which should normally come to a deflux, in stead of a rise. Rereading the article, one could say you have not given this as a reason. If you were merely noting opposed to connecting or relating, consider this as a little info added to your article. Thank you
I think one thing we've got to be really careful with when researching RMT is appealing to a purchasing power parity framework (i.e. exchange rates reflect price levels). Since RMT is an industry (not an economy), it is bound to experience wide fluctuations of output that respond directly to the demand for RMT, which in turn is not strictly or even mostly a function of the in-game price level (imho). Your US server graphs would suggest price surges and drops of more than 100% over a very short time; I'm disinclined to believe this would happen without some very harsh retaliation from Blizzard.
No, if you want to get a good sense of the price level, you've go to do it the old-fashioned way. Five or six months of acquiring, compiling, cleaning, and judiciously analyzing price info from WoW's auction houses on multiple servers is going to give you a far better picture of the price level as it changes over time and/or in response to 'policy changes' (like implementation of daily quests). I appreciate the info. Like you, I'm neutral on RMT and more interested in it on an academic level. |
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