500k

After being stuck at ~435k for what felt like forever, I finally cleared the hump and sped past the 500,000g finish line this weekend.

My normal revenue is around 3k a day with just gems, but it is amazing what you can pull out of your hat when you know you can (finally) go back to not caring about hitting arbitrary goals if you just get that last little bit. That last little bit came partly from not re-investing my capital for a whole weekend (and there were some nice deals like fifty stacks of 30g/stack Azshara's Veil that will probably pop back up to 80g-100g in the next few weeks), and also cashing out some investment material like ~14 bars of Truegold. I had a few Darkmoon trinkets up on the AH too, and it was sorely tempting to fire sale them on Trade for 10k when I knew they will go for 16k-18k eventually.

The interview with WarcraftEcon is done and will be posted sometime in the coming weeks. In the process of writing the interview, I happened to look at the MySales data that has been captured since Cataclysm:

Minus the BoE epic flipping (Fury of Angerforge, etc), my top 5 revenue streams this expansion:

1. Darkmoon Trinkets (169k)
2. Flask of Draconic Mind (33.8k)
3. Volatile Air (28.3k)
4. Inferno Ink (21.5k)
5. Enchant Weapon - Landslide (20.6k)

One thing that floored me right away was the Volatile Air. Obviously MySales does not differentiate stack sizes as it states I only sold "40" when I have basically been selling 13-16 Air stacks * 40, but damn. Hope you guys have been doing your daily transmute in Uldum on a regular basis! The Inferno Ink was another head-scratcher up until I realized that my average Volcano sale was 20,000g when that card has been below 10k for months now - in the heady days of the new expansion, I must have been pushing inks out like crazy. Oh, wait... I was. Finally, I am happy to see that the Maelstrom Gambit so far has been paying out some healthy dividends.

Incidentally, still have not sold the Windwalk scroll from before and Power Torrent is barely profitable. If there is one piece of sage advice I can offer people though, it would be this: bet on 2H Strength classes. In my experience, either more people have 2H Strength classes or 2H Strength classes are more willing to pay their dues. Or maybe it is harder (or easier!) to gear. Or something.

OT: What Players Actually Want

If you come across anyone on any forum related to WoW exclaiming that Blizzard is nerfing content "because of the (baddies/Wrath babies/etc) whining on the forum," you can correctly call them morons. This quote from Bashiok officially dispels such nonsense for what it is.

Blizzard, you do how little people post on the forums yes? how about doing some in game polls to really see what people want, and not what the idiots on the forums want

You want them to not be nerfed, you're on the forums...

Just saying.

By looking at actual stats, actual progression, time spent playing, where, and to what extent, we can see that most people are looking for more accessible raid content, so yes, we absolutely are able to tell without a doubt that the plan we're enacting is actually what players playing the game want and need, and are not just listening to people on the forums.

No reading between the lines is necessary, but let me emphasize this again for posterity:

By looking at actual stats, actual progression, time spent playing, where, and to what extent, we can see that most people are looking for more accessible raid content, so yes, we absolutely are able to tell without a doubt that the plan we're enacting is actually what players playing the game want and need, and are not just listening to people on the forums.

"Want and need." Blizzard's words. I sketched the writing on the walls way back in March, and nothing has changed since that time... well, other than even more players leaving for lack of content tailored to their skill level. That is why Morhaime's investor call comments are so thinly-veiled:

As our players have become more experienced playing World of Warcraft over the many years, they have become much better and much faster at consuming content. And so I think with Cataclysm, they were able to consume the content faster than with previous expansions.

As of this writing, WoWProgress states 55,797 guilds have killed Magmaw, among the NA, EU, KR, and TW population it tracks. Looking at MMOData's WoW sub numbers, there are ~6.5 million non-Chinese accounts. The average raiding guild probably has 15 members killing bosses (most WoWProgress kills are from 10m), but let us also be charitable and also use 30 member guilds. Plugging in those numbers results in this:


55,797 * 15 / 6,500,000 =12.87%
55,797 * 30 / 6,500.000 = 25.75%


Cataclysm has been out for 6+ months and at best ~26% of the population has downed a single raid boss. The comparison is not entirely fair since not everyone is even interested in endgame raiding. Then again, I do consider it a fair question to ask how many of the 74% would be interested in raiding if things were not being designed around catering to hardcore players and/or being difficult out of principal. Only Blizzard knows for sure, but the answer appears to be "enough to matter."

Bread and Butter

One of my favorite Enchanting niches back in Wrath was the "Everyone actually needs this all the time" niche. It does not make any sense logically, but for as much Enchanting competition there is on the AH, everyone independently assumes the (max level) starting enchants are covered. In Wrath, for example, the +28 spellpower to gloves was something every single spellcaster would want for every set of gloves they ever got. Moreover, the mats were ridiculously easy, leading to some pretty crazy profit margins as I was able to consistently sell them for 120g+ despite it costing barely 15g to make.

Welcome to Cataclysm:

Pictured above is +15 Stats to chest for 180g, +50 Mastery to gloves for 195g, +50 Haste to bracers for 144g, and +50 Haste to gloves for 249g. These four are just a representative sample, not an exhaustive list, although Mighty Stats in particular is the de facto enchant for basically everyone. So unless Greater Celestial Essences are selling north of 270g apiece on your server, chances are that you can make a serious margin peddling bread and butter enchants that will always have a deep pool that consists of anyone who gets gear above ilevel 318.

One unforeseen complication of the Maelstrom Gambit I was talking about a few weeks ago that I wish I had foreseen is the dearth of non-dust enchanting materials. No, seriously, I am talking about Heavenly Shards consistently at 100g each. Greater Celestial Essence is also high, but less so because it is part of the Shuffle. It makes sense that there might be fewer people running "normal" heroics and thus less shards coming in, but I also think the other half is simply the sort of Gambit I am engaging in. Power Torrent, for example, takes 8 Heavenly Shards each. All it would take is a few people doing some high-end scrolls to chew through the entire AH supply, just like what happens to Volatile prices anytime a JC takes a gamble on the crafted rings/necks. As for the Gambit itself...

Not anything hugely impressive. If you math it out, that is a revenue stream of 16,419g minus 6,000g for the Maelstrom Crystals to purchase the patterns (haven't sold Windwalk scrolls yet), leaving 10,419g split among the five scrolls, or 2083g per scroll. Based on TUJ's current numbers, Landslide would cost 2257g to craft while is Power Torrent 1947g and Windwalk 2563g. In all likelihood, I ultimately broke even on the Gambit on Week 2 after learning the patterns. Going forward, this will be an additional revenue stream, although obviously I was aiming for a bit of a killing before prices reach their future lows. We shall see.

OT: By The Numbers

It is old news by this point, but I wanted to talk about the 600k subscription drop and what that actually means in the scheme of things. To be honest, my first reaction was "I told you so!" but without an actual breakdown of those 600k accounts no one outside Blizzard really knows what kind of people left - if the unsubs were from people who never zoned into a heroic dungeon let alone a raid, for example, then difficulty obviously would have nothing to do with that. Well... maybe they never zoned in because they were too difficult, but nevermind. In any case, here are some things to keep in mind:

Point 1: The numbers are actually significant.

The reactions among a lot of blogs and forum posters seemed to be almost dismissive of the numbers. "It's only 5% of 12 million, /yawn." While technically true, it is pretty inaccurate. Take a look at the following graph, which is a slightly modified graph you can see at MMOData:

The first thing you should notice, of course, is the huge dip that represents when WoW was banned in China for several months. It is worth noting because it indicated there are ~5 million WoW "subs" in China alone - the ~1.75 million subs still on the blue line represents the remainder of WoW East, which includes Korea and maybe Taiwan (the "does Taiwan count as China" deal is tricky business). With that in mind, here is Michael Morhaime:

Looking at the World of Warcraft side of the business, we were pleased to see record sales following the Cataclysm launch in the United States and Europe which helps drives growth and subscribership. During the first quarter of 2011, as players have eagerly consumed the new content, we have seen subscribership return to prelaunch levels in the West. We finished the quarter with more than 11.4 million subscribers worldwide. Moving forward, our objective is to continue delivering new content to players in all regions to further energize our community.

 Key words: in the West. As in, that red line in the graph that has been largely stable since the release of Wrath. Now, there is nothing in the call itself that specifically says all 600k subs were solely from the West, but if they were, the drop suddenly goes from 5% to ~12% of anyone you or I could possibly be grouping with. Which leads me to my next point.

Point 2: WoW is not dying, but that is largely irrelevant to your individual experience.

I strongly believe people understand this point on a gut level, but sometimes get caught up in "logical" arguments over the internet. So picture this: did your daily WoW routine change at all when 5 million Chinese players suddenly could not log on? Assuming you are not Chinese, probably not. Ergo, anytime someone talks about 12 million 11.4 million WoW subs, they are really only talking about ~5.15 million WoW West subs that could possibly impact them in some way - using the bigger number just makes you feel better by identifying with a larger group, as opposed to it meaning anything in-game. It should even be broke down further into NA and EU, but that level of data is sadly no longer being kept by the MMOData people. A rough extrapolation from the chart would probably be ~3 million NA subs total.

And so that is the rub. If WoW lost, say, 2000 subs... but they were all from your server, that suddenly is a (personal) disaster. You either have to fork over some cash to transfer to other servers, or probably just quit the game. I do not know how many servers there are across NA and EU, but if we assume 400 total servers and 300k subs down (it's possible the 600k drop came from post-peak Wrath launch in China), that still equals out to be 750 accounts per server. Drop in the bucket for Mal'Ganis with its 10k+ population, but a bigger deal on Auchindoun with our maybe 4k population.

Bottom line: any drop in your region is significant. WoW does not have to be dying overall for it to die for you.

Point 3: Ignore the vapid "there are always post-expansion peaks and drop-offs" argument.

It is literally true that more people buy the game/re-sub after an expansion is released than will be still playing the game several months later. However, I have seen this argument bandied about as if the exodus between Cataclysm's release to post-Cataclysm was par for the course. Do I really need to remind people that Blizzard did not get from 0 to 12 million 11.4 million by having a 100% oscillation? At some point over WoW's lifespan, it retained more players than it lost. Right here we have evidence that Cataclysm failed to retain as many players than it lost in the entire West region, e.g. where Cataclysm was released. Vanilla retained more players than it lost. TBC retained more players than it lost. Even Wrath retained more players than it lost. Cataclysm, thus far, has failed to do so.

That essentially sums up what I think about that.

A transcript of the Activision Blizzard investor call is available on Seeking Alpha for free, and I suggest reading it for yourself. Among other things, it has Michael Morhaime mentioning things we are starting to see now vis-a-vis even more "premium services" for WoW. For the record, I do not care that cross-realm RealID LFD groups can be formed for $3/month or whatever it ends up being. What I will say is that it is dangerously close to crossing into the Uncanny Valley of F2P-esque cash shop design where features that would have been free now suddenly cost extra money.


Calling it now, though: tri-spec and Dance Studio will cost $3/month. On the plus side, maybe that would get them to actually finish the latter. After all, we sure as hell get new $10 companion pets pretty regularly these days.

Maelstrom Gambit

As expected by everyone, the prices of Maelstrom Crystals have plummeted with the release of the quasi-farmable ZA/ZG heroic duo. Prices on Auchindoun have a floor of ~400g but it can creep up to 850g depending on availability. As is often the case however, just because material prices have gone down, that does not mean the prices of finished products need follow. At least not yet.

If you have a max-level enchanter, I suggest looking at the high-end scroll market.

I am talking about big-ticket items like Landslide, Windwalker, and Power Torrent. I am also talking about things like the wrist enchants. The weapon enchant patterns take around 2000g to purchase with Maelstroms at 400g, which is a reasonably expensive barrier to entry, keeping competition low. But just because Maelstroms are 400g does not mean you have to price them accordingly. Landslide might not be going for 26,000g anymore, but a "reasonable" 6,000g is still a particularly ridiculous margin now that Maelstroms are low. This is a sweet-spot time in terms of high-end enchants, insofar that everyone knows Maelstroms are less valuable than before (although still nothing to scoff at) but before the greater server groupthink expects weapon enchants to be cheap.

And as I mentioned in New Crafting Paradigm and/or Using the AH as your Bank, do not forget to put your leftover supplies on AH while waiting for the scrolls themselves to sell. I had four Maelstrom Crystals left over after making a Windwalker scroll and I simply undercut someone in the mid-level of crystal prices. Next day? 

.

Flipping 400g Maelstrom Crystals for 650g might not be particularly glamorous, but that 250g is damn far more than I have ever made trying to sell things like the buff potions that I am tempted to just vendor out of spite at this point. Mythical and Mysterious? Sell well. Other potions? Not so much.

One final thing that I will drill into your head at every available opportunity: I highly recommend never crafting something that you could not eventually use. This applies more to the high-end scroll market or other markets that require steep up-front costs than, say, cut gems or potions. My first Maelstrom Gambit was actually a scroll of Windwalker that I can up and enchant my tank's weapon with right now if I felt like it. Merely knowing that fact gives me the psychological freedom to price it more aggressively (e.g. at the upper end of the price curve) without worrying about what happens if my gambit "fails." Worst case scenario: I (likely) have the cheapest Windwalker scroll available anywhere. Conversely, if you make a Power Torrent scroll and have no spellcasting toons, you might end up getting into undercutting wars with someone in a race to the bottom, or maybe discover there appears to be no market for the scroll above the cost of mats. Stranger things have happened, but this sort of uncertainty period is precisely what we will be capitalizing on.

Gemocalypse

...because "Gemmass" just sounded lame.

Jewelcrafting has been one of my go-to professions since I started playing the AH in TBC, but this latest patch has been the biggest jump in profits I have seen outside the introduction of epic gems (in both prior expansions). This was my haul on Friday, for example:

Here is the local Undermine Journal graph for Inferno Rubies in the last week:

The new average in the above graph is ~90g. There are some obvious reasons for this surge, such as the shiny new epics from ZA/ZG and some additional sockets on the crafted gear. Then we had the near collapse of the Obsidium Shuffle when the botters seemingly abandoned mining ore on even the possibility that the vendor floor would drop, constraining the supply of gems - suddenly I am turning around and selling Obsidium Ore I was too bored to prospect for 150g a stack. The third factor? More people coming back, or at least having a nominal reason (e.g. new content) to log back on more often.

I generally try not to spend time on the "whys" of market upticks like we see with gems, because a player simply undercutting whatever gem cut is currently selling higher than the cost of the uncut gem will achieve 90% of the success with 0% of the effort. Indeed, that is exactly what I have been doing lately as Auctionator makes it particularly easy.

Props to Alto for being the one that pointed out the More tab in Auctionator last month that was staring me in the face for half a year without ever having clicked on it. Basically, click the More tab, press Check for Undercuts, wait a bit, and then spam-click Cancel Auction Track & Field-style. I used to get fancy with undercutting prices, but the gem market is sufficiently busy that you are liable to be undercut within a few hours no matter the price - it is faster to just let Auctionator undercut by the standard 10s anyway.

Like all upswings, the gem market will be correcting itself before too much longer. DPS queues went from the Wrath-like 8 minutes on patch day to the depressingly standard 35 minutes tonight, for example, which is a sign to me that all those people "coming back" are leaving out the same revolving door they came in on. Ore bots are also returning, correctly reasoning that guaranteed 30g sales is better than the hit-or-miss herb sales.

While the market is going to correct itself, one thing will remain different going forward: we are approaching the sweet-spot of sockets in gear. There are only 40 items (8 of which are relics) with sockets in the ilevel 318-339 range. In comparison, there are 51 items with sockets that drop out of ZA/ZG alone. Percentage-wise, the number of pre-raid items with sockets rose 18.4% (225 --> 276) in 4.1. If Blizzard sticks to the word circa September 2010, coming along in Patch 4.2 will be the ability of Blacksmiths, Tailors, and Leatherworkers to craft Bloodthirsty Gladiator gear, which is currently only bought with Honor points. So not only will ZA/ZG become more fashionable (and possible) to farm by solo-queueing in LFD and Valor gear hitting the Justice vendors, you can probably expect a second renaissance on the PvP side of things. And a lot of those PvP items have sockets that will need to be filled by somebody.

Bottom line: if you haven't been selling sackfuls of gems since the patch, you have been missing out. And if you don't start soon, it will only be worse for you/better for your competition.