Saturday, February 01, 2014
How the WoW economy works (a primer)

Quite honestly, I probably shouldn't be doing this at all. Responding to a personal attack on the internet only makes things more ridiculous.

So we're going to reference here today, instead of the WoW boards, although there is a touch of the WoW boards in there. In the podcast, the author here tried to explain how the WoW economy works and failed at it miserably. He then went on a personal attack tirade, like everyone else in WoW does when they don't have a point to make. So, in the interests of education, let's take a look at the WoW economy.

Let's begin with a simple mantra:

The Warcraft economy is not the real world.

Keep repeating that line above until it sinks into your head.

Anyone trying to place real-world implications on a fictional economy is not worthy of your time. Stating "you need leather to make shoes in the real world" or "you need leather to make something to attach armor to in the real world" does not understand that tenet above. In fact, this, this, a lot of this, using leather to make chain mail armor, the entire Enchanting profession, and transmutation flies in the face of the real world.

Tailors don't even have to use thread anymore to sew their pieces of cloth together! They don't need leather for shoes anymore! Plate armor hasn't needed an insulating layer of something for a very long time. As for transmutations...well, let's just say that a Philosopher's Stone isn't a particle accelerator that can cause nuclear transmutation. At any point if you are forced into a corner where the explanation is "a magical process" or anything remotely related to that, you have just left the real world.

In addition, you'd have to explain how gold, silver, and copper coins came into existence, since they didn't appear by magic. I know how they came into existence in the real world, and if WoW were the real world, blacksmiths would have absolute control over the economy. How do I know this? Because it's happened in the past! Go and watch The Secret of Oz and Bill Still will nicely inform you about how the goldsmiths were able to control entire nations' economies. By working in tandem, the goldsmiths were able to create prosperity or disaster. There is a small chance, though, that it would have been jewelcrafters instead, though, since the jeweler's kit is supposed to allow you to finely manipulate metals.

This is not a real world economy. Yes, it does have some spots where it can mimic a real world economy, and this is a good thing!

However, there isn't a massive "invisible hand of the free market" like some people want you to believe. Rather, there is Blizzard's hands in the Warcraft economy and their hands are in it all the time! There isn't a lot that happens in the WoW economy that isn't a direct result of Blizzard policies. Thus, WoW is definitely not capitalism. The Warcraft economy is a statist paradise, but it has to be that way, since Blizzard designs the game.

Here's the fun part--because the WoW economy is tightly controlled by Blizzard, it can allow for a lot of experimentation with real world applications. Again, the Warcraft economy is a petri dish and a pretty cool one at that, since the only thing Blizzard doesn't set in stone are prices in the Auction House and, by extension, Trade Chat. Right there is why, as someone with more economics training then Econ 101, I like to peer into WoW.

Let's start with someone that does come from Economics 101: Supply and Demand! We have a supply curve that goes up and a demand curve that goes down.


On the two lines here, I want you to notice there is only one point where the two lines intersect, which is known as the Equilibrium Price. This is the golden spot where everything is in perfect harmony. Supply meets demand at a price that is generally agreed upon. That golden spot is always in a state of flux, though. It's never at one spot for more than a tiny fraction of a moment due to other market forces.

Let's say we have a beautiful Sky Golem and they are selling at 40,000 gold. Sounds awesome, until they don't sell. How can that happen? There are two likely reasons one is a glut of supply, creating a surplus. When this happens, prices have to come down in order to meet where demand really is. The other is that the demand for the item has been satiated, creating an entirely new demand curve, and again, a lower equilibrium price.

Remember: WoW is not the real world. We don't get technological advances in order to streamline production, thus driving prices lower like they would in the real world. Can we apply those two supply and demand items to the game? Of course! Demand is pretty much over for older crafting materials (i.e. linen cloth) and those prices have gone downward.

Now the next part of the WoW economy we have to look at is something called a Production Possibilities Curve (or Frontier, depending on the author). This is that curve:


Points A, B, C, and X are all possible production points in the WoW economy. Point Y is not, since it lies outside of the frontier. Point X is not where you want to be in an economy, because that means you are not making full and effective use of everything. A, B, and C are making full and effective use of the resources available. As I've said before, Blizzard tightly controls the economy here since they are kind of forced to for gameplay purposes. We kind of have Capital Goods (Product A) and Consumer Goods (Product B) in-game, with several instances of overlap between the two.

So in WoW's PPC/PPF, we have essentially two kinds of goods. One good is Raw Goods, such as cloth, leathers, herbs, and ores/bars. They have to be molded into something. The Magic Dirt enchanters make also fits into Raw Goods. So Product A can be Raw Goods.

Product B is Finished Goods. This includes items: armor, flasks, glyphs, and enchants. They are items meant to be used, or consumed.

You can't go all the way to Capital Goods or Consumer Goods without dire consequences. Go all Capital and everyone starves, since nothing is made. Go all Consumer, and you quickly deplete the raw good supply. So a happy medium is created here, with a hand in it by Blizzard (remember: WoW isn't the real world!). Chances are, that happy medium is at the curvy part of the PPC/PPF somewhere. Exactly where is up to debate, as nobody really knows where the exact point is that each server's economy is on/in the curve.

So with that out of the way, let's talk about Alchemy. Again, Alchemy cannot stand on its own if Blizzard is forcing other professions to rely on it. Is this a good thing? Some say yes, I say no. The brutal dictatorship in charge of the economy thinks it's a good idea. Anyone with Alchemy is, naturally, going to defend their cash cow, but it's even more artificially created cash cow than the WoW economy is to begin with.

Some people are downright happy with an artificially created cash cow. There is another word for this kind of thing and it's called a bubble and bubbles always bust.

Posted at 09:14 am by greatcow95
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Monday, January 27, 2014
Why I ignore you on the WoW boards

I've taken to ignoring people lately as a method of shunning. So in the interests of fairness I would like to explain why you're being ignored by me on the WoW boards:

Why are you ignoring me?

You are being ignored because you posted forum crap. One sentence responses saying this sucks or fail warrants an ignore. If you wish to state why in another post, feel free to do so, but I will continue to shun you for being an idiot!

Why did you announce that I was being ignored by you?

Quite honestly, you deserve to know that I am shunning you for posting forum crap.

You should at least say something to try and get us to change our behavior.

I will be very blunt here. Telling you to change your behavior is like trying to teach a pig to sing. Pigs can't sing, leopards can't change their spots, and you will likely continue to post forum crap. Since Blizzard isn't banning you, shunning is my only alternative here.

You're just ignoring those that disagree with you!!!

No I'm not. If you disagree and can post a calm explanation of why you disagree, that's great. I will probably reply also and not ignore you. If you disagree by posting forum crap, then it's shunning time.

Is there a way to get un-shunned?

No. Shunning is permanent. I don't click on any post from an ignored person to see their post. I honestly don't want to read anything from you, because you decided to post forum crap.

I've seen you be silly! You even post a "A Goddess of Beauty."

Silliness is different from being an idiot on the forums. Granted, there is a grey area where those cross over, but that is with every type of post. If you believe I've crossed over into that grey area, feel free to place me on ignore.

How many people have you shunned so far?

I don't know and I don't care. All I know is that my forum experience is much better because of it.

Go ahead and shun me. I'll just talk smack about you on the boards

I don't care. I'm not seeing it. I'm not hearing about it. If others would have the balls to shun you for your crap, then maybe we'd have a better message board and a better game (ignore list limits aside).

Did you really shun Crepe?

Yes, and I can post screenshots if you'd like. Screenshots really don't prove a lot, though, since I can always do an ignore and then an un-ignore. So take my word for it--Crepe is being shunned by me. Again, since Blizzard isn't banning Crepe for his behavior on the boards (even after said posts have been reported), I have no other choice in this matter but to shun his behavior.

You should shun Snowfox/insert-other-poster's-name-here!

Not yet. If I catch them engaging in forum crap, then I will shun them. This is not an invitation to show me posts worthy of shunning.

Posted at 10:46 am by greatcow95
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Monday, January 13, 2014
Goodies Via Excel

This is an Excel Chart. It shows the mathematical model that is what I feel is the correct model of subscription losses.

There will be a lot of major problems well before the Yet Another Halving expansion happens. Probably at Another Halving Point, if not before, we'll start to see Connected Realms really hit home as lots and lots of servers become connected to avoid the "Low Population Realms" debacle that will happen even with the current Connected Realms.

Now before you start defending Blizzard by saying there are THAT MANY EXPANSIONS LEFT before going under one million, we won't make it that far. At some point before the insanely great Under One Million expansion, WoW will not be profitable under the current model.

No amount of items sold at the Blizzard store will make up for losing a ton of subscribers. There are server costs, development costs, salaries, etc that have to be paid for. Cut wages and the staff will look elsewhere for work. Get rid of servers and shareholders will panic. At some point, the rest of the population will just say "screw it" and REALLY BEGIN leaving en masse.

To those that think Blizzard doesn't care about the numbers in the chart, FUCK OFF! You heard me. FUCK OFF! Blizzard has wargamed this out, especially considering how closely MoP subscription numbers are getting perilously close to the model in the Excel chart. If they haven't, they are damned stupid for not doing it and they deserve to start hemorrhaging money in addition to subscriptions.

To those that say most of the quitters come from Asia, FUCK OFF! WoW Census says there are somewhere around 2,048,913 active characters in the US and 1,224,071 active characters in the EU. Note--ACTIVE CHARACTERS, not accounts. I'm very willing to bet quite a few of those active characters are on the same account. My liberal estimate is somewhere around 3,000,000 total accounts in the US and EU combined. My conservative estimate is around 2,000,000 total accounts in the US and EU combined.

No matter what the real number is, US and EU accounts are still a minority compared to Asian accounts. Yes, Asians pay for time, not a flat per-month fee, but they still pay. They are still a number and are still the majority of the current WoW playerbase. So, as you will see at the bottom of the Excel chart, I estimated the number of US/EU players using a flat 40% (taking the liberal estimate and dividing it by the 7.5 million remaining players as of the last quarter).

Those figures are rather iffy compared to the exponential rate of decay model, because it requires a lot more things to be true. However, you will note there are under 1 million estimated US and EU players at the WoW We're Dying expansion. Again, though, the second set of figures is little more than an exercise in futility, but maybe it will serve as a prophetic warning.

Posted at 09:15 pm by greatcow95
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Monday, January 06, 2014
The last post in the locked thread

So here is the start of the thread. This is likely a carryover from the weekend topics of silliness of drama. The last comment before the thread was locked could be telling:

Agreed

There was only one time where it had something to do with the game itself (The Blizzcon Incident) and even had GLAAD correctly do a media outreach to Blizzard. The results of that outreach, though, are still unknown and will probably remain that way.

(while it was probably a case of oddly perfect timing, it could have also been a "last straw" as the GLAAD media outreach might be forbidden fruit for the boards)

Posted at 12:45 pm by greatcow95
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Tuesday, November 19, 2013
Why things are being taken away

Well, let's take a good look at this post first.

GEMMING: Gemming just plain sucked. Now I'm sorry, and I know it will ruffle some feathers, but it just sucked. Everyone kind of knew exactly what kind of gem you needed in every socket. It used to be all red, primary stat gems (strength, intellect, or agility). Then Blizzard tried to make the other varieties of gems more enticing by buffing the stats on the gems. That obviously didn't work, since gemming is going away completely now.

REFORGING: Well, hit, expertise, avoidance stats (dodge, parry), mastery, resilience, hot lesbian sex, and maybe even haste and critical strike stats on gear are going away. There will be about three secondary stats in the next expansion. That's it. Blizzard is hoping there won't be a need at all for reforging, since there are only about three stats. That and reforging just plain sucked. There was always one or two stats you always reforged to (usually just one), and one stat you always pulled from to make the reforge happen.

Both items just plain sucked. Sucky things need removed. So, the two beasts shown above are getting removed from the game.

Posted at 10:37 pm by greatcow95
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Saturday, November 09, 2013
We're on the Expansion Loss Model

I'm going to call the internal debate I've been having between whether or not we're on a quarterly loss model or an expansion-based loss model over and done. For Blizzard, World of Warcraft, and its playerbase the debate is over. We appear to be on an expansion-based loss model from the original subscription models and math post. It looks like the doom and gloom predictions of the quarterly loss model aren't going to happen, INCLUDING THOSE MADE BY ME.

Take a gander here for the proof. While WoW is still losing subscriptions, it is not a sub hemorrhage. Subscriptions are down by 100,000 to 7.6 million players. Now unless we're going to see a massive 2.5 million players leave in the next quarter, the debate is over. We're on the expansion loss model.

Believe it or not, this is the good loss model. The quarterly loss model predicted the WoW playerbase to be around 5.1 million players in the next quarter. Under the expansion model, during the next expansion, we will be around 6 million players. So not only is this a good thing for Blizzard to stop the losses, it also means the players get to enjoy more time with the game.

And again, I don't think 2.5 million people are going to leave before the next expansion hits. This has not happened in the history of WoW. There will actually be a spike upward in subscriptions as we get closer to Worlds of Draenor, the fifth and newest expansion. We have empirical evidence of this. Burning Crusade caused a spike right before it hit. Wrath of the Lich King caused a spike right before it hit. Cataclysm caused a spike right before it hit. Mists of Pandaria caused a spike right before it hit. I expect this to do the same.

Now where the arguments will begin is over if the game will keep going up or if it will start the hemorrhaging for a third straight expansion. To that, we don't know the answer and won't until all this comes to pass. However, we can look at recent history and see the spike followed by significant drops. I'm going to place my predictions right here, and am basing it on the Cataclysm and MoP models:

1. There will be one more quarterly loss. It won't be the 2.5 million necessary to make the quarterly loss model hold any water, but it could be very shocking results if MoP follows Cataclysm's history. I just can't imagine that many leaving at this point. The maximum will probably be around 1 million, maybe around 1.5 million, but that is the maximum. Subscriptions will not go up in the next quarter, because it didn't happen in Cataclysm either.

2. Subscriptions will have a spike right before WoD hits. In this spike, the end result will be somewhere around 8.2 to 8.5 million. It will not go into 9+ million territory without some extreme bribes to bring people back to the game.

3. The bribe of a new expansion and a free level 90 will lose its sparkle and shine within six months after release. I expect sub losses afterward, probably dipping the subscriber base to the halving point of 6 million toward the end of the expansion. I am basing this on recent history and the original mathematical model of an expansion-based loss model. If the halving point is to happen under the expansion model, it has to happen DURING WoD.

4. WoD will be relatively short, compared to Cataclysm and Burning Crusade. Blizzard is wanting to push more content out faster and shorter expansions will become the norm, not the exception. If the expansion is long, there will be multiple content patches.

5. MoP will be viewed as a failed attempt to keep the subscription losses from happening. Starting at 10 million and being right now at 7.3 million means that 27% of the playerbase left during MoP. If we start at 9.1 million (the last Cata quarter) and end with the current 7.3 million, we have a 15.38% loss from MoP. Either number is an absolute failure for subscriptions. You can't keep losing people and continue to make a profit from the Blizzard store. It isn't feasible in the long term.

6. Cataclysm will still be seen as a failure. Anyone still praising Cataclysm at this point needs to just get over it and accept that Cataclysm lost 24% of the playerbase and should be seen as a failure.

7. The new expansion is going to increase nostalgia for Burning Crusade and possibly Wrath of the Lich King. Now for the rub in this prediction: ANYTHING coming back from BC is going to just screw everything up. People requesting this and that from BC will screw everything up if their ideas are implemented to "bring back the BC feeling." It's not coming back and this is coming from someone who started on the cusp of BC's beginning.

Blizzard, the ball is in your court once again. Now is the time to stop screwing things up and make a good game.

Posted at 06:45 pm by greatcow95
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Sunday, October 20, 2013
A Tale of Lily Pads and Fish

Let's pretend for a minute here. We are all now in a pond full of 12 million World of Warcraft subscribers. Within this pond, there is a parasitic lily pad that is killing off the fish and we'll call this lily pad subscription losses. As the lilies grow, fish die because the lilies wind up choking the life out of everything there. And right now, the lilies are killing off around 11% of the remaining fish every three months growing to a more dominant position in the pond. As it grows, that area of the pond become uninhabitable. The fish have the capability to fight back, as does the pond.

We will be using actual numbers supplied by Blizzard. It takes a quick search to find and verify these numbers.

So we started out with 12,000,000 fish. 600,000 fish die in the first three months as a result of the lilies. We are left with 11,400,000 fish in the pond with everyone saying it isn't much of an issue.

Then comes the next quarter and suddenly 1,100,000 fish die, leaving us with 10,200,000 fish in the pond. The fish respond by saying they are mostly Asian fish and Asian fish don't matter (seriously, I am not making this up!) because they don't pay a constant rent to the pond.

The next quarter saw the pond trying to keep their fish with the Annual Algae Pass promotion, and only 100,000 fish die. 10,100,000 fish remain in the pond. The fish celebrate having such a small defeat against those dreaded lilies.

However, the fourth quarter happens and a shocking 1,100,000 fish have died to the encroaching lilies. This leaves us with 9,100,000 fish. The fish say that they will live forever as Fishaclysm ends. However, some fish, this one included, publicly state something is fishy (ugh) and start using models to predict the loss rate. Those fish are publicly crucified by the others.

We then get to head forward a quarter with Mists of Fishes and actually gain 900,000 fish to make an even 10,000,000. The fish celebrate, and celebrate they should! This event might be the turnaround in the pond they so desperately needed. They damn the lilies to hell, proclaiming this victory and many more ahead...

Until the next quarter and 400,000 fish die to the lilies, putting the fish back at 9,600,000 and pretty much negating any progress made against the lilies. The fish decry these figures and say those losses are acceptable. Other fish, this one included, start the warning signals yet again and yet again are crucified by the other fish.

In quarter seven, though, 1,300,000 fish die at the hands of those lilies and we now have 8,300,000 fish left. The fish decry this gradual decline, saying there are more fish in this pond than in the FishRIFT pond or the Fish Wars pond. Other fish are now starting to understand what the numbers are actually showing--the pond is going to become devoid of life and it's only a matter of time.

Now we come to the most recent quarter, showing how 600,000 additional fish have been murdered by those damn lilies. 7,700,000 fish now remain, which is lower than the Burning Fish expansion. More and more fish are slowly coming around to the knowledge of the gradual decline. They are met with the standard fish excuses and pond apologists.

The lilies are clearly winning. The lilies are clearly gaining ground.

36% or 4,300,000 of the original 12,000,000 fish are now dead. The fish are still cheering about how 64% or 7,700,000 of the fish are left, but they refuse to see the math of the situation. Growth and/or stagnation have been the exceptions, not the norm lately. While the grand majority of fish still believe there is nothing to worry about, THEY ARE ALMOST HALFWAY DEAD!

One or two more bad quarters will place the fish at the halfway mark of 6,000,000 fish. Even at that point, though, fish will still scream from the highest rooftops how World of Fish will last forevah!!! Those fish are also nearly halfway dead, too...

Posted at 11:08 am by greatcow95
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Thursday, October 17, 2013
Bad things I have done in-game

I'm still not playing, but felt like telling some of the evil things I have done. These things have been done for no reason than to tick people off.

1. I abused the Toy Train Set. It's been set in the AV cave, on Ultraxion, and any other fight where the group stacks and just stays there for a long time. I've dropped it in Auction Houses also.

2. Same as above, but with Piccolo of the Flaming Fire. That one is even more fun because it can't be destroyed.

3. I tell people to go to zones much higher than their level when they ask a "Where is X" question. One actually responded and asked for directions. I guess they went to a painful death.

4. Lowbie killing. If you were a low level and flagged...well, I killed you if you came near me. Many times.

5. I used the Frost Mage exploit to kill everyone, even if they were unflagged. I used it so many times that I lost count. There was no way they could take revenge on me either, since my Mage was unflagged and stayed that way. And this was on a PvE server.

Posted at 11:25 am by greatcow95
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Thursday, September 19, 2013
I left WoW again

For people wondering why I have not been posting on the boards lately, it's because I left WoW again. It's not because the game is old. It's not because of some kind of weird problem either.

No, one problem stems from not wanting to level in Pandaria yet again. My Alliance characters waited for AV weekend so they could power-level to 90 in a weekend or so. I'm just plain tired of Pandaria and what it offers.

I also quit due to a real lack of anything real Alliance-wise. The brick wall was finally hit again with the stupid "Help the Trolls" patch. The Siege of Org was, as predicted, a Horde moment, as was the Pandaria expansion in general. Cataclysm was a Horde moment. It made my Horde characters actually fun to play, but how fun is it to go through the same zone for the third or fourth time? At least in Wrath and BC I had a choice of zones to hit.

So I left WoW yet again. Hopefully, Blizzard is going to do something magnificent that makes me want to come back. Hopefully, things will go in a better direction and will make me want to come back.

I will continue to beat the math of the subscription loss situation when October comes out, as chances are we will see a loss yet again. Mists of Pandaria has lost 20% of the remaining playerbase (meaning what was left over when Cata left us with 9.6 million). We are only two quarters away from a clearer picture. If WoW loses around 1.3 million people in the October report, we're in heap big trouble, as we are barreling our way to the halfway mark of 5.1 million subs.

By losing 24% of the playerbase, Cataclysm was an abject failure and should be remembered as such. So far, losing 20% of the playerbase means that Mists of Pandaria IS an abject failure. It may or may not claw its way back from the realm of failure, but only time will tell.

However, I will leave you with this: Kalganism is not dead. I will continue to comment as needed.

Posted at 07:01 pm by greatcow95
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Friday, July 26, 2013
The largest QQ fests/forum explosions ever

These are presented in no scientific order, as I never took a measurement of how many threads hit the boards. Anyhoo...

1. RealID. This has to be the single largest forum explosion.

2. Kalganism. The reason this blog gets its name is from way back in Season 3 when Warlocks were nerfed because Kalgan played a Warrior back then. It can be interchanged with the next item for second largest forum explosion ever.

3. Shaman boards/Bus Shock. Things got highly personal during this time, leading to an exit by Tseric, who posted the truth about his job and threats made against Blizzard.

4. Blizzcon 2011 aka "The Blizzcon Incident." Filled with hate for the Alliance and equally filled with gay bashing, Blizzcon 2011 still makes for good forum explosions from people that just don't understand homophobia and gay bashing.

5. Blizzard favors the Horde. Oh my! Nothing can create a good explosion of posts like making a topic such as this. Players that do primarily Horde will come out of the woodwork to defend Blizzard's decisions. Players that do primarily Alliance will come out of the woodwork to support you. And those that play equally don't understand the inherent forum hatred of these kinds of posts.

6. Looking for Raid (LFR). There are pro-LFR explosions and anti-LFR explosions. All of them result in spectacular forum explosions that have happened since the start of LFR.

7. Anything having to do with the Blizzard Store. This one goes all the way back to the Celestial Steed. Every time there is something released, a wave hits the boards.

8. Wrathion's Legendary...Cloak? This is a small fish in this pond, but it's gaining momentum as people are getting ugly about the legendary cloak. Speaking of Wrathion...

9. Wrathion and Anduin in "Love Knows No Boundaries." This is a guaranteed forum explosion because of homophobia. It also crosses inter-species love and possibly age of consent (I have no idea about Azerothian law). However, I've placed it so low because it just doesn't approach the levels of the other ones, even the cloak. Still, there is a certain explosive quality to their love.

10. Subscription numbers. If they're bad, expect an explosion every three months. If they're good, expect an explosion every three months. They are highly timed, though, so that's why they are ranked so low on my list.

HONORABLE MENTION: Mages, Mages, Mages! The developers all play Mages! Mention anything about Mages and they come out of the woodwork.

Posted at 04:09 pm by greatcow95
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Next Page
Welcome to the unofficial World of Warcraft Kalganism blog. The purpose is to resurrect people's ideas that got banned due to Kalganism, as deleting users isn't the way to win an argument. Many good posts got destroyed because of Kalganism, and this will become the new home for those posts. All posts, however, are presented in their original form, with any and all errors intact.

In addition to this, there will be new and exciting meaningless tripe!
   

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