Black Box Pricing – WoW Tokens

I’d been thinking a bit about the WoW tokens and their pricing for a minute when Wilhelm posted about them, WoW Tokens Five Years Later. I had intended to write a nearly clueless analysis of the pricing, but paused long enough to do just some basic reading and have come to the conclusion that I don’t know how useful it is as an indicator.

This probably isn’t really news to anyone else, as I’m the one late to the party here.

The WoW token is such a strange form of currency. It has only one purpose, which is determined by how you choose to purchase it. Pay real money, you can only “sell” it for gold. Buy it with gold, and it can only become subscription time. No resale, no profiting from speculation. You don’t “invest” in WoW tokens, you consume them.

As a way of manipulating currency levels, it’s quite impressive. Its utility, though, is derived from the same feature that makes is rather unhelpful to me, its pricing. Now, I could be wrong, but as I understand it, the people buying and selling these things don’t get to decide how much they buy or sell for. That number is dictate by Blizzard, who claims it’s “algorithmic” and based on supply/demand. In other words, Blizzard can manipulate the price as they see fit and would like us to believe it’s all player-driven.

Perhaps I’m being overly cynical here. It quite possible that Blizzard set this thing up and takes a fairly hands off approach. The fact that “legal” WoW gold is a little cheaper than “illegal” WoW gold is likely not due to an accident, though, and would likely require Blizzard to monitor and change the algorithm regularly. Otherwise, any gold seller with two brain cells to rub together would be at least matching the official price. Alternatively, it’s possible that they’re actually buying gold via tokens and reselling it with a markup. I’m sure they could con enough people into buying that it’s worth their time.

Still, there’s the big question. When I look at the graph in Wilhelm’s post, how can I be certain that any one price change is a supply/demand change instead of an algorithmm change? I don’t know if we have visible (or accurate) numbers on how many tokens are being bought and by what means. If not, some sort of polling would probably have to be done on a regular basis to establish the player activity. Then you could compare the poll data to the price data to see how/if they’re correlated.

Part of me wants to do that, but most of me says it’s not worth the effort. Does it really matter how/why the price changes? The people buying and selling will adjust their behavior to the price, regardless of what drives the price. Still, I would like to begin tracking non-token goods on Classic just so I can see what happens when the Token is introduced there. What is the overall economic impact of token v. non-token economies, which seems more efficient, and what costs and benefits does it involve?

So many questions…

Y’all take care. Onwards and upwards.


blapril-2020-200Hey, it’s Blapril time! The goal is to simply promote and stimulate the blogging community by encouraging people of all skill levels and backgrounds to post. The official post can be found here and it’s never too late to start.

One thought on “Black Box Pricing – WoW Tokens

  1. A couple things to add. 🙂 To my understanding, Blizzard-Activision only employs one economist and their job isn’t just for WoW, but to oversee the currencies in every ActiBlizz game. So, I’m inclined to believe that it’s pretty hands off, if only because Blizz doesn’t care enough or have the manpower to manually adjust things.

    And this you know but wanted to fill in a goldmaker’s perspective. Tokens can be used for more than subs, as they can be converted to bnet balance. I’ve bought about 60 tokens over the years for sub time, but at least 250 more to get other ActiBlizz games and in-game content. It complicates using the token as a marker of inflation though since it makes the exchange dependant on Activision’s release schedule and the popularity of the company’s games at the time.

    Only thing you can’t spend BNet Bucks on is stuff in the gear store. My understanding of the reason though is that, because some of the methods of making gold are up to chance (boss drop RNG, pick-a-barrel world quests, etc), that method technically falls under “gambling” according to EU laws, but only if the reward currency is fungible. So if you can buy an Alliance hoodie and resell it on Ebay, then farming BoEs is gambling, and a kid buying a WoWToken is a minor participating in gambling. Or something. The legalese gets pretty dense at this point and my eyes glaze over at how out of touch lawmaker interpretation of value is. Good post, and it was fun reading the comment section over on Wilhelms.

    Like

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