As gaming pundits, we often make claims that X change or Y addition are terrible design decisions that will cause companies to lose money, subscribers, etc. They are easy claims to make, when there is absolutely no sense of follow-up or acknowledgement that something like stock price is affected by many different factors.
Well, color me surprised when I stumbled across the actual stock prices of gaming companies the other day. That gaming stocks have been pummeled this year is putting it mildly.
ATVI is Activision Blizzard, currently trading at $46.52, and the stock is down -26.53% year-to-date (YTD). If you look at just the last six months, it is down -36%. EA is, well, EA, currently trading at $81.18 and down -22.73% YTD. Again, if you look just at the last six months, EA is down -40%.
It is incredibly easy to say “well of course.” Beta for Azeroth will probably go down as one of the worst expansions in WoW history – or at least give Cataclysm a run for its money – so of course the stock prices reflect that. Then with EA, you only have to look at all the “historical inaccuracies” they added to Battlefield V and the controversies that spawned. Get woke, go broke, right?
Well… hold up.
TTWO is Take Two Interactive, and is currently trading at $101.69. You might know this company as the one who released a little game called Red Dead Redemption 2. The YTD movement has been… -7.87%. That is certainly less of a drop than Blizzard and EA though right? Yeah, sorta. The three month decline has been -24% though, and that’s with a critically acclaimed (Metacritic: 97) title coming out a month ago.
This is not to suggest that what a company does, or any sort of controversies it generates, has no impact on their bottom line and thus stock price. But sometimes it’s good to acknowledge that there is a large gap between what we feel should be the natural consequence of a given design choice, and what actually happens in the real world. On occasion, things line up and we appear prescient. A lot of the time though, we rage in our little bubbles and the world moves on without us.
It has been about 20 days since I’ve been mainlining WoW again, and I have yet to get a handle on economy. Not that I anticipated being some AH genius within a week or two, but I don’t even seen the contours of this beast. And I am beginning to doubt they exist.
Way back in the glory days of Wrath, there was the Saronite Shuffle. This was when you could take a stack of Saronite Ore and – through brilliant AH scheming and a stable full of max-profession alts – turn those 20 pieces of ore into damn near anything. The Shuffle was a cornerstone of my gold gains through Wrath, Cataclysm, and even when I came back to Mists.
In looking back at posts like this, I damn near had to wipe a tear for the nostalgia:
Right now, for example, I buy Ghost Iron Ore at 4g apiece (and below). This ore ends up being:
- Smelted into Ghost Iron Bars –> Transmuted into Trillium Bars –> Transmuted into Living Steel
- Prospected –> Rare gems cut for >60g minimum
- Prospected –> Uncommon gems turned into necks/rings –> Rare necks/rings procs sold for 300g, uncommon necks/rings Disenchanted for Dust
- Disenchanted Dust –> Enchanting scrolls and/or sold for mats
Near as I can tell, the Shuffle is dead in Warlords. At least, if it once existed, prices have warped so much since then as to make it unprofitable.
What’s worse, Blizzard made a number of changes in Warlords that, in retrospect, were probably rooted in heading off PR problems with the eventual WoW Token rollout. For example, players are limited to wearing three (3) crafted pieces of Warlords gear. You know, despite there being enough patterns to completely outfit someone. Why do that? So that someone couldn’t drop $400 in WoW Tokens and be decked out in ilevel 675+ gear at level 91. Unfortunately, that makes the likelihood of someone buying your crafted bracers or whatever pretty remote, unless said person already has better gear in other slots. The sanest path would be to upgrade the most impactful slots such as weapons and the like.
Compounding this issue is the way Blizzard is handling professions in general this expansion. Profession bonuses are gone, which is… understandable in a way. When raiders are willing to spend hours farming mats for a +20 stat boost, having professions grant many orders of magnitude better buffs forced people to make unfortunate decisions in which professions to pick. This also meant opening up profession-specific toys to the general public as well, a direct nerf to Engineering. Then the Stat Squish (and a desire to have raid drops be useful immediately) turned gem slots into extra-rare occurrences, a direct nerf to Jewelcrafting. I don’t even want to get into the problem with opening profession buildings up in Garrisons did to everything else.
The bottom line is I have no idea what’s going on in the WoW economy anymore. I was looking to see if there was a point in doing my Alchemy daily cooldown on Azuriel, and saw this today:
Let me save you the math: the higher-level Strength flask sells not only less than the mats (18g vs 33g), it’s selling for less than the lower-level flask. I had already long-since dropped my Alchemy Shack for a Salvage Yard, but this is making me want to drop Alchemy altogether. Remember those Alchemy bonuses that have been in-game since Burning Crusade? Don’t work for Draenor goods. This is just a class-A market failure. Why is the Alchemy cooldown item tradable whereas nearly all the others are BoP? Because fuck you, that’s why.
Near as I can tell, we are living in the age of The Drop Economy. In other words, you don’t make gold from crafting or shuffling, you make gold from farming drops and selling that to people who don’t want to farm. I have little doubt there are some arbitrage opportunities – the Garrison AH robot parts seem to be going for insane prices considering you can just AH on an alt – but most gold seems generated from one’s Garrison. Which… isn’t unworkable, it’s just unfathomably less interesting to me.
The Shuffle was engaging. It rewarded outside game research, learning in-game mechanics, leveling multiple profession toons, and kept the gears of the economy moving. What we have now? Farming raids and vendoring all the things? I would almost rather farm ore. If, you know, there was actually any gold in doing that. And to an extent, the problem no longer exists under the WoW Token paradigm. Spending $20 on 23,000g is a bad deal IMO. At the same time, I’d prefer not spending hours soloing old raids each week.
I have made around 15,000g so far this expansion. Want to know how? Selling Living Steel and Arcanite Bars. I shit you not. And I will continue doing so until I run out of old-world supplies, grow bored with the current AH nonsense, and “unsubscribe.” I love what Blizzard has done with the Garrison generally, but everything outside of it? I’m missing goddamn Cataclysm over here.
If I have missed anything big out of the above picture, let me know. Otherwise this is just depressing.
It may seem a bit premature to wonder about the Guild Wars 2 economy, considering the game has only be out for a week or so. But a comment by Chris K over on Syncaine’s GW2 Review post got me thinking about whether the game’s structure makes the economy unlikely to ever “recover” from its current bizzaro state:
“The trend [of crafting being pointless] will not persist. Currently people are levelling crafting only for the xp gains. It is, essentially, buying levels with gold. When the majority of these people hit the level cap then you’ll start seeing a decent economy forming.
At least I hope so…”
I have reported before that the GW2 devs made it a point of pride that the crafting system alone can get you to level 80, assuming you feed an alt enough mats. But Chris makes an astute observation that crafting, even when the market is vendor+1c, has a point: easy, scaled XP gains.
So think about it. Going 1-400 in one profession will net you 10 levels of XP at increasingly large costs (primarily in vendor mats, but also karma recipes, etc). Or you could simply go 1-40 (etc) in all eight crafting professions and net 8 levels’ worth of XP much more easily. Why wouldn’t you do this on all your alts? Or your main for that matter, considering that you continue earning Skill points for “leveling” past 80 to spend as Mystic Forge currency.
Changing crafting professions to a new one is a completely painless process with no upfront costs, and all your progress in a dropped profession is saved. Switching back to even a 400-level profession only sets you back 40s – not a completely trivial amount at current gem exchange rates, but way less than I expected. There are no profession bonuses that I know of, and even if there are BoP gear recipes, the lack of gear progression at endgame makes it a mostly moot point.
All of this + the global Trading Post + the existence of Buy/Sell Orders makes me think it unlikely that the Guild Wars 2 economy will ever meaningfully mature from its current state. I have every incentive to start all eight crafting professions on all five of my character slots, and so does everyone else. Doing exactly that will continue to put huge Demand pressure on low-level mats, even if gold inflation raises prices across the board. I can maybe see higher level gear selling for more than vendor+1c once fewer people are leveling crafting past 125 (etc), but the moment it does there will be ten thousand wannabe goblins squeezing into the margins.
Not that I am particularly complaining about the ease in which I can finance cash shop purchases here. I just think ArenaNet really screwed up in the incentive department, on the same level and scale as Blizzard did with Diablo 3. I never thought I would look back on WoW’s discrete Auction House markets and extreme Profession-hopping disincentives with nostalgia, but here we are.
If there is ever a Crafting system failure metric, the “vendor+1c” phenomenon is it.