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Reader Comments (7)

Posted: Apr 27th 2008 4:54PM (Unverified) said

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Vaule chains work well in games if economy ist implemented. Eve in example has a very well working value chain.

WoW has no economy for the simple fact that every item you craft stay for ever and that you only have very few crafting skills so that every guild can be self-catering. Raw materials are more worth in WoW than the ready item because the effort to gather the raw materials (hours of grind) greatly outclass the efford to finish the product (spend 5 mins in combining the materials).

Posted: Apr 27th 2008 4:54PM (Unverified) said

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Alexis - thanks for the thought-provoking post. I'm the guy who wrote the article you referenced, and I'll try to expand a bit upon what I said. (The post title was actually a joke - I actually run a business self-education site, which advocates business learning via good books and personal experience.)

With regard to crafted items, you're right - most crafted items aren't worth the value of the raw materials. There are two primary reasons for this: non-economic motives and supply & demand.

First, most people in WoW don't create items simply because they want to use them or sell them - they're created primarily to advance in a specific crafting skill. Hillman's Shoulder's aren't created by Leatherworkers because they want to use them - it's simply the fastest / easiest way to advance in the profession. When it comes down to it, people don't care about the value of the item itself - they care primarily about the skill point, so they create the item at a loss. In a true economic environment, the item simply wouldn't be made in the first place.

Second, since many crafters are creating these items for non-economic reasons all at the same time, supply outstrips demand very quickly, driving the auction price lower. It's really difficult to sell the early-level crafted blue items for this reason - everyone is making them at the same time, for the same reasons.

Unfortunately, the really good crafted items in WoW have been made bind-on-pickup, further limiting the market value of crafted goods. I knew characters who learned Dragonscale Leatherworking just so they could wear Dragonstrike Leggings. There would be quite a market for those leggings, but alas, it's not possible. This artificial market constraint truly makes the vast majority of crafted items inferior goods.

Economically productive value chains definitely exist in WoW - think active consumable markets like Health / Mana / Swiftness Potions, or mains mailing alts green items to Disenchant into mats, but they're less common than they are in the real world. When you find one, however, with patience you can ride it to a very respectable level of in-game gold.

Posted: Apr 28th 2008 7:18AM (Unverified) said

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Value chains might not always be valid in WoW, but knowing some about this isn't a bad thing at all.

How many people you know combine lets say Herb with Alch, saying they can use the alch profession to make potions using their own herbs and earn money selling those pots on AH. Pointing them to the fact that the Alch prof doesn't add any value to their herbs is something a lot of people fail to realise. If they knew the concept of the value chain they would see that making the potions doesn't add value and even sometimes destroys value.

Posted: Apr 29th 2008 3:46AM (Unverified) said

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In both real and virtual worlds, value chains exist. The skill of the crafter is in identifying which chains provide value and which destroy it, according to supply and demand.

Jewelcrafting is the most obvious example; some cuts are always flooded, others provide a constant stream of income. Some of the least profitable cuts are also the most in demand. Flashing Living Rubies actually sell, and I make up to 26g a time o.O

Posted: Apr 29th 2008 1:58PM (Unverified) said

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This is because everyone's skill is maxed at that level so skill points are no longer a factor. Also, the primary barrier is the cost of the recipe.
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Posted: Apr 28th 2008 1:19PM (Unverified) said

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The creator of the sword is also reimbursed in a rise in crafting skills. In other words, the making of the sword is an educational experience. When you write a program as part of an assignment for a course, you do not generally get reimbursed for it, plus you have to pay tuition. Once you max out your skills, hopefully, you can start to make money.

Posted: Apr 28th 2008 7:57PM (Unverified) said

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I would say that in an ideal MMO, value chains DO exist. This is one of the very few things that I like about EVE Online, they are closest to a functioning economy of any MMO that I can name.

If only EVE Online was actually FUN. But I digress.

Value chains in WoW are broken because of the nature of skill points. If there were some other way of limiting skill increases that didn't depend on the scarcity of materials, you could fix it so that value chains work like they do in the real world.

But off the top of my head, I can't think of anything.

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