As I was browsing the prices of herbs and ore the other day, I was struck by the disparity in prices. Twilight Jasmine was tanking down below 100g a stack whereas Heartblossom was still going strong at 300g, seven weeks after the expansion hit. As most of us remember, Blizzard nerfed the spawn rate of herbs and ore pretty hardcore a week after release, but that apparently had no real effect on Twilight Jasmine and other select herbs, right? After all there were 100+ stacks up on the AH for way less than market price... all from the same seller... in 12 hour auctions... with a name like Hlakwjerna...
Ladies and gentlemen, we are dealing with a bot farmer.
More specifically, what we are dealing with is someone with an insurmountable competitive advantage when it comes to farming ore and herbs. Although WoW is played on Blizzard servers (as opposed to private servers), most of the terrain features are actually handled client-side, which means illegal 3rd-party hacks can cause your toon to zip around the map, farm inside terrain features, and otherwise eliminate the tedious flying time between nodes. Then the bots off-load their ill-gotten gains on the AH as a way of farming gold, which they turn around and sell to other players at a premium, which they recover later by the keyloggers they festoon their pages with. There is a sort of sick, predatory logic that probably sends marketing directors' black little hearts aflutter.
The reason I bring all this up is because I never quite realized the role bot farmers played in the complex AH ecosystem until... they were gone. Perhaps it was a ban or perhaps the botter went on vacation, but most of last week saw the soaring of ore and herb prices on my realm as the cheap supply all dried up. My normal routine, like most auctioneers I imagine, is to log on, loot mailbox, relist unsold merchandise, and then eyeball the AH to see about replacing sold goods or exploring new markets. The problem was... I couldn't. Or, rather, it did not make any sense to.
When Obsidium Ore is below 54g a stack, the sky is essentially the limit. You could prospect the ore, cut the gems, and sell them to a vendor. You could try selling the raw gems. You can take the gems and transmute them into Shadowspirit Diamonds. You could even turn the gems into Fire Prisms for kicks (and probably a loss) or just to see if you could squeeze a Chimera Eye out of the deal. Or, hey, how about smelting the Obsidium into bars and selling those. Or smelt the bars and then make gear/weapons via Blacksmithing. And so on and so forth. When ore is that cheap, not only do you profit, but generally other people further down the chain also benefit, perhaps by flipping your own goods or further processing your product.
When Obsidium Ore is north of 150g a stack however, things start to slow down. Prospecting the ore and vendoring cut gems is off the table. Selling uncut gems only makes sense if you can fetch more than 25g per gem on average. Even then, there really is not much of a reason for you to even attempt the endeavor since you are taking on huge risk (deposit fee of 3g per gem) for a slim-to-none profit margin. Getting 18 gems for a Shadowspirit transmute would take 450g worth of ore in a perfect world, but likely closer to 750g; selling uncut Shadowspirit Diamonds for 375g apiece sounds good, but only because we were getting them out of 54g Obsidium Ore stacks.
Expensive Obsidium Ore causes everything derived from Obsidium Ore to become more expensive to compensate. "Duh," right? But expensive ore also causes aunctioneers like myself to withdraw from those markets as the profit margins similarly shrink, further constricting supply, driving prices higher. Buyers dry up as they are priced out of the market, further reducing demand pressure. The supply/demand logic would normally dictate that high Obsidium prices would mean more people farming it, but that only holds if that Obsidium is actually selling for 150g. If it is selling at all, it certainly wouldn't be to me - while I am not egotistical enough to believe I represent even a signifigant portion of the Auchindoun AH market, I do believe I am a decent enough precursor to the behavior of other aunctioneers. Less demand, less supply, and that ineffable quality of less AH activity period, which further depresses the market as players start to decide "this realm's AH sux" and either transfer or don't bother using it.
Ladies and gentlemen, we are experiencing stagflation in a videogame.
There is no question that bots (usually temporarily) ruin gathering profession markets. With Obsidium Ore at 54g, it makes almost zero sense at all to go out mining for the purpose of making a profit. Bots also sell gold to gold-selling sites who then gum up Trade with spam and force us all to type in 7-8 digit Authenticator numbers every time we log in for the rest of time.
That said... cheap materials light up the AH like a Christmas tree. People buy more, turn what they bought into more stuff, and everyone in the AH ocean rises together as the water rains down (though some of us are in bigger boats). Items which make no sense at all to make at the true market price of their mats (i.e. potions) sprout up like mushrooms. The volume of activity encourages more people to get in on a piece of the action, and everyone generally profits thereby.
Are bots strictly necessary for a healthy, functioning WoW economy? Ehh... right now, I would actually argue yes. The reason why you see a bot posting 100 stacks of ore/herbs for ridiculously cheap is because whatever gold he/she is losing by selling below the market price is more than made up by the competitive advantage the bot has in terms of time spent farming it. A human player may not farm for anything below 100g a stack because they probably will only collect X stacks in an hour, and they will want more than the Y gold they could have gotten by doing dailies for that same hour. A bot could probably farm X*5 stacks in comparison, so profit is being made even at 20g.
Blizzard cannot directly dictate farmed material prices, but what it absolutely has control over is how long it would take to farm various things like Obsidium or... Heartblossom. Indeed, Heartblossom is really the control group in my argument as its nodes were nerfed just like the others, but it is a market untouched by the botters (presumably because of the level requirement to zone in). Right now, Heartblossom is at 300g a stack, with there only being 2-3 stacks up at any given time. At 300g/stack, you would assume the market would be all over Deepholm farming the crap out of the herb, but that is precisely what you do not see. With how difficult it is to farm post-nerf, the price should actually be even higher, but no one really wants to buy any at 300g, let alone higher. The market has essentially given up on Heartblossom, to everyone's detriment.
Things might be different on a larger server. The sheer, crushing number of warm bodies might be enough to sustain a non-bot-driven economy. All I know is that on my small pop server, when the bots unload their warez on the AH it feels like two tons of bottled water was air-dropped onto the deserted island that is Auchindoun. Twinks get geared, potions get brewed, fortunes are made. When they don't show up? The AH turns into The Road v2.0.