Anyone who has relied on purchasing WoW tokens in the auction house as their way of paying for game time is well aware of their current high cost. When it was first introduced three years ago, the price in North America was pegged at 30,000 gold. It rapidly sank to around 18-20k and hovered at that level for well over a year. Now, the cost is over 200k. (It has always been significantly higher in European and Far East realms.) The real money cost, meanwhile — $20 in the U.S. — has not changed. This means that the real exchange rate between dollars and WoW gold has gone from $1 for 1000g to $1 for 10,000g. In other words, the Blizz-sanctioned “price” of gold has taken a nosedive, while the gold price of game time has undergone huge inflation.
The token system also allows us to gauge the real world cost of gear and mats. For example, when tokens sold for 20,000 gold and the most expensive mount in the auction house was approximately 200,000 gold, that meant the mount cost about 10 tokens, or $200. Pretty pricey, imo, but the token system enables you to make those kinds of equivalencies and cost computations. These days if you buy a mount or piece of gear for a million gold, you can consider that to be a real world cost of about 5 tokens, or $100. Of course, not everyone actually pays the $100 directly, but still it gives you a way to make cost comparisons not bound by game economy inflation.
Which leads me to mention a rather remarkable forum exchange in the Blizz forums. Basically, the original poster posited that the cost of the token would soon skyrocket because Blizz just announced that it could be used to pay for the very popular Call of Duty game. I have no idea if that is an accurate prediction or not. The Blizz Blue poster pooh-poohs the idea, and he may also be right.
But what I found interesting about the forum exchange was the number of Blue posts it brought forth, and the insight we now have into the token mechanisms as a result of the posts. It is actually quite fascinating. (If you do not want to scroll through all the forum pages to find the Blue posts, they are extracted here on MMO-C.)
So what did we learn from them? Well, mainly Blizz reiterated that the token system is not completely market driven, that Blizz intervenes as they deem necessary to keep the token prices from fluctuating wildly and to keep the overall game gold economy on an even keel. We have known this from the start, of course, but now we have a tiny bit more insight into exactly how Blizz does it, and more importantly how they see the overall WoW economy.
Blizz’s underlying theme on the tokens is that they are a net zero in terms of the overall game gold supply. That is, within the game, a seller gains gold but only because a buyer transfers that gold to them. This is true, but as one forum poster pointed out, there is a cumulative effect on gold distribution within the game. The poster did not elaborate much on this theme, but I think it has some pretty noticeable consequences, mainly that the people with a lot of gold soon become the population that most controls which items in the economy are important for trade and which ones are not. What they will buy dictates what the cash-starved players will gather and craft, which in turn drives up those prices and drives down the prices on wealthy players’ undesirable items. Even if the token system is a net zero for gold supply, it eventually has a big effect on the economy.
Within the population of players, there are those who have real world money but not a lot of spare time, and there are those who have a lot of time but not a lot of real world money. The token system basically means that the “wealthy” players buy a month’s worth of game time for the cash-starved players, at a hefty 33% increase for Blizz ($20 for a month’s game time as opposed to the standard $15). In return, the cash-starved players convert their time into gold that they give to the wealthy players. It is an ingenious system, and in principle, everyone wins.
However, over time and much like in actual capitalist economies, we start to see greater and greater imbalances in wealth distribution. People with real world cash get to the point where they have enough gold in the game, and they are less willing to plunk down $20 for a piddly 30-40k gold. Think about it — if you are sitting on, say, close to a million gold, is it worth it to you to spend $20 on what amounts to petty cash for you? No, you will hold onto your $20 until you feel you are getting some value for it. Meanwhile, since fewer moneybags are offering tokens for sale in the auction house, the asking price for the ones that are there will go up, even if Blizz has its thumb on the scale to prevent rapid escalation.
In general — and I have nothing but anecdotal evidence for this — I think there are more game-time buyers than there are $20-for-tokens buyers in the game. No matter how much time you may have to devote to playing WoW, eventually the gold cost of game time becomes too much. I know, for example, that several of my guildies who used to pay almost exclusively for their game time via tokens form the auction house have in the past couple of months unsubbed because they cannot keep up with earning 200k a month to pay for their subscription. And it seems that people who used to rather regularly plop down their credit card to Blizz in order to buy enough gold to make them happy in the game no longer are willing to do so. (Also, — as in real life — some people must spend every bit of gold as soon as they get it, while others feel like they always need more gold even if they have millions. Go figure.)
It is true there has been some significant overall inflation in the game. We saw a big jump in prices in WoD, when Blizz was pretty much handing out bags of gold through garrison missions, just to keep as many people playing as they could. The idea in Legion was for that kind of easy gold to go away, so as to tighten the gold supply and keep inflation in check. It absolutely did not happen. If anything, the inflation rate has increased in Legion. It is nothing, for example, for people to offer BoE gear in the auction house on my server for close to or even over 1 million gold. Even worthless crafted blue gear still goes for a couple thousand gold.
I suspect we are on the verge of, if not actual deflation, at least a temporary halt to more inflation. It is the end of the expansion. Pretty much no one will be buying gear at this point, whether expensive or cheap. Also, within a couple of weeks we will likely see a massive sell-off of all that leather, fish, ores, herbs stashes, etc. many people have been hoarding in their banks. It is all pretty worthless now anyway in terms of value for crafting. Even things like flasks and runes will be used less and less, driving down the cost of mats even more. Finally, some number of players who consider the game time tokens to be too costly will just unsubscribe for a couple of months rather than waste their gold on game time in a worn-out expansion.
So get those stacks of mats out of your bank now and throw them up for whatever gold you can get in the AH. You will be helping to stem the tide of inflation, and you might even make some gold. Whether it will be enough to finance your WoW habit for long depends on how gold-greedy the game’s wealthy players are. If we accept my premise that there are more players wanting the tokens from the AH than there are players — especially at the end of the expansion — willing to fork over real money for gold, then it seems likely the price of the tokens will remain very high. When BfA launches, there will be more players wanting the game tokens and also more players needing gold to buy expansive flasks and gear initially, so we will see what happens to the prices. But if there remains an imbalance in the number of players selling them and the number buying them, the bad news for many is that the gold price will continue to rise unless Blizz steps in and does some selective flooding of the token market to bring prices down.
As you can all tell, I am not an economist. But I know prices have gone up rather spectacularly in Legion, and I do not expect that trend to change in BfA. What that tells me is that it will become even more important for me to get my critical-profession alts up to speed as rapidly as possible, not necessarily to sell stuff, but as a gold-preserving measure allowing me to make my own stuff rather than deplete my gold stash paying for run-of the mill flasks and such.
And now my brain hurts. I need a beer. And a weekend. See you on the other side.