The Economic effect of 6.1 and why it leads to partial deflation

[Pur1tas]

Hello Everbody,

Patch 6.1 is live on US and is going to be live in a few hours on EU and from what I am reading on Forums considering the Profession Vendors I have some issues with how this works and would like to share my thoughts on why this leads to a massive amount of deflation in the economy of the more populated servers.

Before we start I would like to give some background information so you guys do not have to look everything up about 6.1 or how the new Profession Vendors work.

First of all blizzard added 5 new Profession vendors that allow you to buy recipes for the phase 4 upgrades, Transmute recipes and most importantly allow you to trade 5 Raw mats (Fur, Leather, Dust, Ore, Herbs) for 1 Primal Spirit. They also added 4 (or 5?) other NPCs which offer some quests and stuff but I will not take these into account here because they are not relevant for my discussion. So you have a chance of 1:5 to spawn a Profession vendor and another chance of 1:5 on which vendor will appear. As of the US servers it seems like the whole region has the same vendor. So there is only 1 of the 5 Vendors in the first day, and everyone that had a Vendor spawn it was the fur vendor if I am not mistaken. Blizzard said this was intended, which brings me to my point.

So if we look at a whole Server there will be 1 of 5 Vendors every day. This means statistically there will be the same Vendor every 5 days.

E.G.
Day1 : Ore
Day2 : Herb
Day3 : Leather
Day4 : Fur
Day5 : Dust
Day6 : Ore

So to get to the actualy discussion on the Economic effect of this I will use the example posted applied to the EU server Thrall. Assuming that people will actually want to trade their Ore for Primal Spirits at least on the first day in order to make profit of the selling of Salvage blood or in order to push out extra Daily CDs (which is possible now with the use of Primal Spirits, similar to Spirit of Harmony in MoP).

Using the Example I gave there lets look at what effect this would have on the Auction House prices of Ore. So Before I logged of Yesterday night the minimum Buyout for Ore was around 60-75 silver per Ore, with about 8000 Ore in the Auction House. If we assume that of the 170.000 Characters on Thrall about half of them (85.000) are level 100 and active chars. Now we Asume that half of them do their mine and Herb garden Daily (42.500) and we use an average of lets say 200 Ore per day we get a total income of 8.5 million Ore a day, that would be available to the economy, if people decided to sell it. From my experience this is a lot less, especially since 6.1 patchnotes were released as a lot of people (like me) stocked up a bunch of ore. So I myself have about 50.000 Ore stacked up at the moment in preperation of the patch. I think I am on the lower end of that because 50.000 is aquired pretty fast. Lets just say we have about 1 Billion Ore stacked up at the moment (this would be 20.000 players each having 50.000 Ore).

So we have the scenario described now lets get the game going. In my example from earlier we had a Ore vendor on Day 1. So now there are two strategies that are Viable now. For the purpose of making an educated guess I will asume that half the people use strategy 1 and the other half use strategy 2 (they both result in the same but have different impacts on the market). Strategy 1 is to trade in all your ore for Primal spirits and buy Savage blood to sell. This would mean that 500.000.000 Ore would be traded for Savage blood (2 Million Savage bloods). Strategy 2 is to sell the Ore itself in order to abuse people using strategy 1 or who have not prepared as they will be buying Ore in order to exchange it for Primal Spirits. So in the End we have essentially traded the whole billion Ore into Primal spirits. As probably not all of that will be used to purchase Savage blood we will use half of it (the 2 million from earlier).

So while this obviously is very theoretical lets look what would happen to the Ore and the Savage Blood markets. If all ore is bought the prices would stay pretty constant for the first day. They will probably drop a little but I do not think they will drop below 50 silver. In fact if everything is bought they might even rise in price for a short amount of time. If we look at the Savage Blood prices they will drastically drop to a point where there are in equilibrium with the Ore prices. If I had to take a guess I would say they would drop to about 150g (asuming a 50s ore price). So we have successfully flooded the market with an excess of profession goods. The Savage bloods will be used to craft upgrades on mass (using more primal spirits to get out as many Daily CD Mats as possible) while the ore will be used to get more Primal spirits.

Now comes the really interesting part in my opinion. If we say everything we put on the auction house is getting sold, the market will be empty of Ore at the end of the day and empty of savage blood. Now we get into day 2 and we get another 8.5 million ore for the server. No one needs ore though because we have the herb vendor active now. So the ore is getting stacked again or people put it on the auction house for a high price (as it is empty of ore). Now we have a total of 5 days till we actually need ore again. that means we have 42.5 million ore ready for the next ore vendor. The price of ore will therefore stay pretty constant over a long period of time. The big impact is on savage blood. We get savage bloods every day. Every day of the week people will be buying Primal Spirits and sell Savage bloods for lower and lower prices. So the price for savage bloods will stay low for a long amount of time. As I stated earlier I would expect it to be at 150g as an equilibrium price. This mean that while we did not change the price of of any raw mats (in this example ore) we did Decrease the price of Savage blood by a lot (it used to be around 500g before the patch).

So lets look back at this. While first the patchnotes suggested that Blizzard wanted to take Raw mats out of the game a bit as they obviously made them way to accessable with the mine and the herb garden, they actually did not change anything for the amount of raw mats that will be available. The thing they really changed was the price of Daily CDs and Savage bloods. They decreased that price while keeping every other price nearly constant. While this obviously is pretty impressive, I think it is a step in the wrong direction. This action results in a deflation of imense dimensions. The fact that they did that results in a pointlessness of using the auction house at all.

So while in MoP the auction house was used to sell everything and there was the possibility to actually make profit from everything, we have no chance of doing this anymore. The prices and profit margins for almost every items is decreasing on a daily bases from now on, as everything can be done on his own by a player with 3 characters. Gem prices will decrease, Crafted gear prices will decrease (resulting in BoE gear prices to decrease as well), Raw mat prices will stay about constant as they are not able to be decreased more. The only thing that will stay at the same price will be Luxury goods such as Trading Card Mounts etc.

What impact does this have on players? Well for the players that did not use the Auction House to make profit they benefit from this in a way that they are spending less money, while they will have the same income meaning their Gold will increase. For people that used to make profit of the auction house the amount of gold they make will decrease drastically and force them to make their gold in different ways (farming etc.). For people that did both their Gold income will become the same as for people that did nothing on the Auction House. So as we all know even if you are doing nothing but follower missions you still net about 10k gold a week. This is nothing and I know that, but your costs per week just decreased from lets say 2k gold to 500 gold. So the new Net from follower missions and everything else you do has just increased by at least 1.5k gold.

So because the prices in the auction house are lower the amount of gold in the game will increase (lower auction "taxes"). Gold will start to stockpile even more and finally bring the whole economy to a fullstop. The worst part is though, that there is the possibility for an Ore Vendor to not even spawn at all ever. This whole example is based on a statistical display of Vendor spawning. So it can be even worse if one vendor does not spawn for weeks. The amount of randomness involved in the Economy now is huge as the Vendor system was seen by players of a way to actually get the economy in the game going again. This did not happen. In contrary, this patch will cripple the economy of larger servers by a lot.

So obviously there are a lot of assumptions in this scenario and the numbers are just estimates, but the result should be the same no matter the numbers. By decreasing prices on Crafting Mats and Raw Mats people spend less gold and therefore there will be more gold in the game, decreasing the value of every item. Even Trading Card Items will be achievable by a lot of people very fast, just because of how little they need to spend on everything else.

I think this is a step in the wrong direction, removing one fun and interesting aspect of the game, making it more and more a single player game. I hope you guys understand what I am trying to say and I hope we can discuss about this a little. If I made any crucial errors please tell me and also tell me what you guys think of the new system compared to what everyone expected from it.

[Mascotte]

Way to many assumptions.
Its a nice post, ill grand you that, but 1 fourth of a random realm being lvl100, active, have a lvl3 garrison AND clearing the mine out every single day?
I know alot of people, including here on these forums, that just dont bother with clearing it anymore.
I barely do it.
And 20k people having 50k ore?
Yeah no.

[Polarthief]

Way to many assumptions.
Its a nice post, ill grand you that, but 1 fourth of a random realm being lvl100, active, have a lvl3 garrison AND clearing the mine out every single day?
I know alot of people, including here on these forums, that just dont bother with clearing it anymore.
I barely do it.
And 20k people having 50k ore?
Yeah no.

The number assumptions are definitely hyperbole, but the effect is still the same.

[Pur1tas]

The number assumptions are definitely hyperbole, but the effect is still the same.

Yeah ofc those numbers are just asumed but even if it is only 1 million ore a day and only 1k people having 50k ore prepared. The effect is the same and possibly even happening faster as the supply on raw mats will drop faster.

[Polarthief]

Yeah ofc those numbers are just asumed but even if it is only 1 million ore a day and only 1k people having 50k ore prepared. The effect is the same and possibly even happening faster as the supply on raw mats will drop faster.

And not just on Savage Bloods mind you, but anything that Primal Spirits lets you bypass daily cooldowns! This includes, but isn't limited to:

- Enchants costing Crystals/Crystals themselves
- Crafted BoE gear/weapons
- Any Engineering item that takes Gearspring Parts (including the Hunter weapon "Enchants")
- The new 30 slot Tailoring Bags: Hexweave Bags
- Greater Gems from JC
- Greater Flasks from Alchemy
- Sorcerous, due to being buyable via Primal Spirits, but also converting any kind into any other kind using Alchemy Transmutes

I mean this list goes on and on, and only items that aren't directly affected by Primal Spirits will be unaffected (or even be worth more!) while all other items will drop.

[Deleted]

So in SHORT you are saying Savage Blood will drop in price. thats NOT a big revelation and not really a reason to make a post about, is it?

[Polarthief]

So in SHORT you are saying Savage Blood will drop in price. thats NOT a big revelation and not really a reason to make a post about, is it?

Savage Blood, all other non-raw materials, and finished product items from crafting. See my post above yours for a partial list.

[Psidum]

They have shifted the glut from raw materials to the whole line of production. Yes there is a use for all that ore and herbs, raw materials > rare materials and the cost of this conversion is quite high (a guild bank tab full of ore will net you less than 100 savage bloods for instance). Add the garrison production speed up items and whow.

The problem is there is no long term demand waiting at the end of this new production line, 680 gear has its market but it is not like highmaul were it was the difference between 670 perfectly itemized epics and crappy dungeon blues.

I don't think what they did was bad per say but what was really really needed was something at the end to soak this flow of materials. A cosmetic thing, a mount, an item that is practical but not tied to player performance, something, anything?!?

Once the short term demand has been soaked up we will see a return of the glut except this time it will effect everything. Professions are ironically one of the worst long term time/profit investments atm especially if you have a number of L100 toons set up right.

In terms of pure deflationary pressures I think the sheer amount of gold flowing in through various sources is having an equal if not higher effect. As i said professions are not the best time/profit investments. There are much better activities that are providing a direct flow of gold in to the economy. Again there is nothing at the end to soak this up.

[Pur1tas]

They have shifted the glut from raw materials to the whole line of production. Yes there is a use for all that ore and herbs, raw materials > rare materials and the cost of this conversion is quite high (a guild bank tab full of ore will net you less than 100 savage bloods for instance). Add the garrison production speed up items and whow.

The problem is there is no long term demand waiting at the end of this new production line, 680 gear has its market but it is not like highmaul were it was the difference between 670 perfectly itemized epics and crappy dungeon blues.

I don't think what they did was bad per say but what was really really needed was something at the end to soak this flow of materials. A cosmetic thing, a mount, an item that is practical but not tied to player performance, something, anything?!?

Once the short term demand has been soaked up we will see a return of the glut except this time it will effect everything. Professions are ironically one of the worst long term time/profit investments atm especially if you have a number of L100 toons set up right.

In terms of pure deflationary pressures I think the sheer amount of gold flowing in through various sources is having an equal if not higher effect. As i said professions are not the best time/profit investments. There are much better activities that are providing a direct flow of gold in to the economy. Again there is nothing at the end to soak this up.

This !

I was just using the example with savage blood in order to show that absolutely everything will drop in prices while the income is no decreasing. Professions are no good income source since the release of WoD you are right (except for Enchanting maybe) and at the moment they are just pushing Gold into the market without giving us anything to buy. Also they pushing Mats into the market without giving us anything to do with them. There is nothing that can be done with anything at this point in time. You can save up for 850k gold and buy a Spectral Tiger but thats about it.


@Fummockelchen: No I am not saying savage blood prices will decrease. I am saying EVERYTHING related to carfting will decrease in price. And the amount of gold and mats available will increase drastically without anything to use them on.

[Xfighter]

Have to remember though, the non herb/ore materials aren't exactly the easiest/fastest to come by, so people will stock up on ore if they are really interested on off-days and unload on ore-trader days, leaving the other mats pretty much untouched. Which should drive up ore/herb prices pretty steadily, which are still useful for gems/chants/potions/flasks etc. So gear-crafting wise prices decrease, other aspects though should see an increase in price overall. Least in my opinion.

[Pur1tas]

Have to remember though, the non herb/ore materials aren't exactly the easiest/fastest to come by, so people will stock up on ore if they are really interested on off-days and unload on ore-trader days, leaving the other mats pretty much untouched. Which should drive up ore/herb prices pretty steadily, which are still useful for gems/chants/potions/flasks etc. So gear-crafting wise prices decrease, other aspects though should see an increase in price overall. Least in my opinion.

Why would they increase in prices? The price of 250 Ore will never be above the price of 1 Savage Blood. So if Savage blood prices decrease to 125-150 gold the prices for Ore will stay low. People will just not buy them for a higher price if they are not desperate. So while Dust, Leather and fur will probably decrease less in price than Ore and Herbs it does not really matter which one you use to get your primal spirits. The price of everything involved in crafting will decrease with Enchanting probably the lowest change and Ore/Herb stuff the biggest.

[Deleted]

And not just on Savage Bloods mind you, but anything that Primal Spirits lets you bypass daily cooldowns! This includes, but isn't limited to:

- Enchants costing Crystals/Crystals themselves
- Crafted BoE gear/weapons
- Any Engineering item that takes Gearspring Parts (including the Hunter weapon "Enchants")
- The new 30 slot Tailoring Bags: Hexweave Bags
- Greater Gems from JC
- Greater Flasks from Alchemy
- Sorcerous, due to being buyable via Primal Spirits, but also converting any kind into any other kind using Alchemy Transmutes

I mean this list goes on and on, and only items that aren't directly affected by Primal Spirits will be unaffected (or even be worth more!) while all other items will drop.

The raw costs of the bypassing the daily CD are huge though, I really don't think anyone will be doing this.

For example daily you get 1 enchating crystal for 1 shard.

If you bypass the cool down you get 1 enchanting crystal for 5 shards and 5 primals.

[leVo]

Actually due to raid wipes we are paying good chunk of gold to repairs.

[Pur1tas]

Actually due to raid wipes we are paying good chunk of gold to repairs.

You do but to be honest you make more gold a week without actually doing much than you spend on repairs. At least for me with 9 Hours of raiding a week.


BTW Europe has Fur trader as well for today -.- WHY blizzard

[Deleted]

Savage blood is good mat dump on my realm. Dumped most of my 40k sumptuous fur into it, selling at 500g+ each currently which is 200% profit. Not too keen on making tailoring upgrades. If anything, ill go with inscription ones.

We don't have alch trader yet so I'm unable to get cheap sorcerous mats from my 3k+ sorc water stockpile. Earths are over 100g each currently.

[Raiju]

Savage Blood, all other non-raw materials, and finished product items from crafting. See my post above yours for a partial list.

Which is natural to happen by the next tier regardless.

oh noes, it got sped up a few months.

[Nianif]

Fur trader first is not that bad. Fur is more expensive than flowers or ore and most people have not too much on the bank.

I created ~120 blood today what is ok - much better than 1000+ with ore and blood has no value at day one. I hope Leather Trader will come tomorrow, Herb trader on friday and Ore Tader on weekend.

[Deleted]

The raw costs of the bypassing the daily CD are huge though, I really don't think anyone will be doing this.

For example daily you get 1 enchating crystal for 1 shard.

If you bypass the cool down you get 1 enchanting crystal for 5 shards and 5 primals.

People are underestimating the cost indeed. Without the daily, it's 1500 fur right now for 100x hexweave cloth. The only change I can see this giving is mat prices going up a bit. I bought 200k fur for 0.70-1.00g in the last month and today it's 2.50g lowest on AH. Obviously this won't stay but I don't see it going lower than what it used to be given there's now some form of possible dump (albeit expensive). Assuming 1.5g for a fur and 10x sorcerous earth for 25g a pop, a hexweave bag would be 2500g to craft for example, which is only slightly below market value. So yeah, it probably won't be worth rushing it tbf.

More curious about the work order rush missions. If they pop up on a daily base (kind of doubtful, but still...) it could change things quite a bit.

[Deleted]

WoD professions and gathered mats are fucked up, like most in this expansion. Although about the profession mats they ruined it during MoP.

Facebookgame for the win....

I dont even think that Blizzard like this expansion, and why would they. They pretend to be happy about the ~10 millions at Q4 2014, but who would expect that much less when its an expansion launch and everything. I wouldn't be surprised if Q1 2015 has half the numbers.

[Polarthief]

The raw costs of the bypassing the daily CD are huge though, I really don't think anyone will be doing this.

For example daily you get 1 enchating crystal for 1 shard.

If you bypass the cool down you get 1 enchanting crystal for 5 shards and 5 primals.

*Shrug* I have over 900 Primals and I didn't even turn in my buttload of Ore. I plan to bypass a lot of CDs for ENG as I just picked it up and I want the toys and crap, plus Ore will probably continue to be worth not that much.