Friday, 31 May 2013

Sources and sinks

How do you make your money in Azeroth? Farming (harvesting herbs, skinning beasts, fishing, mining) or crafting (tailoring, leatherworking, smithing, engineering, jewelcrafting, inscribing and so on). Or maybe you are a trader on the Auction House, buying low and selling high. Or perhaps you make your money by questing. Most likely it's a bit of all of these. However you get your gold, it might surprise you to know where the gold comes from. The short answer is: new gold comes from NPCs only.

You might think that when you're mining copper ore you're basically digging money out of the ground. But you aren't creating any money at this point. Eventually you sell the ore (perhaps after processing it into another form): if you sell it to another player, you still haven't created any new money - you've only transferred money from another player to yourself. You only create new money if you sell the ore to an NPC.

Think about that.

Farming, crafting and trading in general don't create any new wealth. They simply transfer wealth from the buyer to the seller. NPCs are the only source of new money in the economy. They generate this money spontaneously only as a result of a player interaction with them. So the real source of new wealth in the economy is mostly players who make their money through questing (especially dailies), running instances, killing mobs and sell questing rewards and mob-drops to vendors*.

Where does the money go? What takes it out of circulation? Again, NPCs take gold out of circulation. For instance NPCs take money when you buy something from them for gold, or when you repair your armour. Probably the most effective sink is the least noticed: the auctioneers, who take fees on listed items and sold items.

Blizzard tries to control the amount of money in circulation through these sources and sinks. Without effective sinks, the amount of money in circulation would climb rapidly, bringing inflation. So Blizzard has been aggressive in adding gold sinks: mounts such as the Mekgineer's Chopper, the Traveler's Tundra Mammoth, the Grand Expedition Yak; services such as armour repair, bank tabs, transmogrification and void storage; pets like the Hyjal Bear Cub (strangely, no expensive vendor pets were added in Pandaria). These all act as a way to suck gold out of the economy.

Without gold sinks, the Azerothian economy would fill with gold, and the the cost of stuff we buy from other players would inflate very rapidly, since we could all afford to pay more for everything, since we would have more money.

* "Vendor" is the biggest misnomer in the whole of Azeroth. These guys sell virtually nothing. They are really "vendees".
Two other misnomers are "fear" and "equip". How often do we hear players complain that they were feared? The opposite is usually true! When "Fear" is cast on somebody, they feel so afraid that they run about like headless chickens, losing all muscle control. Nobody fears them! 
And when I put a piece of gear on, I do not equip it; I equip myself.


  1. I actually wonder at this point what portion of the economy's gold comes from the "guild banks get a copy of 10% of all looted player gold" and the Guild Rewards challenges (1k per week for one dead raid boss, etc). There's also LFR consolation bags, LFD tank bribe bags, LFD random queue bonuses... As someone who does the bare minimum of daily quests needed for mogu coins, I feel like mob drops and quest rewards are probably only around 50% of my non-player income.

  2. Indeed, Celendus. There's quite a lot of money flooding into guild coffers through various mechanisms. My guild is able to support almost all our armour repair bills that way.