How WoW economics doesn’t make sense at all

A while ago I wrote an extensive paper on neoclassical economy in MMORPG, and here is its sumary. The world of RPGs is filled with people trying to recreate the smallest of experiences that a human may encounter in one’s daily routine. While games usually succeed at it (some better, some worse), creating a working economic model usually is either abandoned at the start or passed in the hands of players themselves as soon as the game releases. We know good examples of this approach, e.g., Diablo III pre-auction deletion. Still, today I’d like to talk about the rare presence of a developer in an economical surface of the game: Blizzard Entertainment in WoW.

How it all started

When World of Warcraft was initially launched in 2004, it was an understandable game finance-wise — pay-to-play RPG with a promising subscription model that allowed for more long-term profits, which either created a particular limitation for the players based on the level of income (i.e., an average 6th grader back in the days couldn’t afford to pay for that) and gave players hope that the new project of Blizzard would become long-term, as paying for subscription implies sustaining a certain level of interest for the players. As we see now, in 2021, this model proved to be rarely working, but WoW is more of a reasonable exception of how the subscription payment model can benefit both players and developers. But we are here for “subscription,” the term. Back in the days, it was a novelty to ask people to pay for the game once in a while rather than buy it all at once. It was an ambitious idea that wasn’t unanimously accepted by a gaming community, which led to the creation of in-game tokens as the game continued growing — said tokens allowed players to pay for their game time using in-game gold instead of actual finance. The price of tokens varied in different regions drastically, with 216k gold on the Taiwanese server being compared to 22k on the European server at some point. It was an economic boom because it allowed for money that started hoarding in players’ pockets to be spent on something worthwhile. But it also had its’ downsides:

  • The difference in pricing created an understandable discontent on behalf of Asian players, whose prices were much higher
  • The imposition of such option made black market services more popular as people wanted to upgrade characters to a level where obtaining the needed amount of gold is easier
  • Some players perceived this opportunity as a “money well” and ignored it

“Money well” is a term specific to in-game economies. It is a leisure item/service that provides no practical assistance for players in-game and is used by the developers to balance the economic situation. As such, mounts, being animals or other beings used for movement in WoW, were used as money wells to decrease the amount of gold that players do possess by being priced so high that players had to “grind” for those for mere months.

Conclusion

With tokens being included in the game, developers were still facing the issue of increasing inflation. The number of new players coming and playing the game while benefitting the profits of Blizzard itself was damaging the in-game economy. The amount of gold in circulation was increasing, and there was nothing that the developers were able (and were willing) to do about it. Then the unexpected happened: the black market, the almighty enemy of developers, helped them. Not directly, but still — by boosting accounts, black market representatives had drastically decreased the amount of gold and resources obtained by players during leveling period and thus decreased the inflow of gold into the economy, slowing down the inflation. While this solution is far from perfect and factually illegal, it, combined with some obligatory spending that WoW players have to go through (such as equipment, potions, etc.), allows a relatively sustainable economic model to be present nowadays. And while this was the end of my initial paper, it still raises the question of if it is possible to create and control an economy that would be self-sustainable inside a computer game even if you are in control of all the NPC factors of gameplay?

I'm Sean and as a student of CUoL I write about economy and computer games, and especially - how these two collide. Can be found under @irangnim on twitter