In today’s news – firstly, I’m not dead, just haven’t been blogging. I’ve been on holiday, been watching the spectacle of politics here in the (still, just) United Kingdom, been bracing myself for a change of job (same employer but after seventeen years in the same team I will now be doing something other than call centres) and been caught up in the preparations for both Tremaynelettes to be attendants for the village May Queen. All of which left time for either a bit of gaming or a bit of blogging about it, but not both.
Secondly – year, WoW’s subscriber numbers have dropped again as more and more people are ‘done’ with Draenor. Just to make sure that things are in perspective, that horrible decline still represents levels of profitability that other games companies would kill for, especially when you consider that WoW still has subscribers and not a pack of freeloading leeches who bitch bitterly about what’s available to the handful of whales actually picking up the tab for their gaming.
Thirdly, Tobold has been looking at the Wow Token prices on wowtoken.info and come to the conclusion that that the market is behaving oddly and predictably, which lets players game the cycle and generate gold out of thin air (or at least Blizzard’s ass) which nobody could possibly have foreseen
Hmmm, I think I can see what’s going on. In “real” markets the price reflects all the information available (including expectation of future movements) so the only reason to buy and sell in the same market is if you have information nobody else does which lets you bet against the market with confidence. Trading on information others don’t have (e.g. I’m CEO of a company and I know we’re announcing the launch of a new product tomorrow) tends to be labelled as “insider trading” and disapproved of by the authorities because it screws with the efficiency of the market, which ultimately means it diminishes the prosperity of society as a whole even though it’s very good for the prosperity of the inside trader.
The way to get rich in a perfect information market is to figure out what that information means to the price faster than anyone else and buy or sell as appropriate before everyone else does. This is why financial markets traders spend a lot of money on very good software and very fast computers, and why if you have mad coding skillz you’ll make a much better living working for them than making MMOs unless the MMO in question is WoW. But I digress.
However, what we have here isn’t an efficient market, it’s an algorithm doing a half-assed job of being an efficient market. The algorithm reacts slower than eagle-eyed market traders competing to make a profit, and taking a gradual approach rather than making sharp adjustments. That sine curve effect looks like players are indeed riding the cycle as Tobold suggests, selling high and buying low while the algorithm is compensating too late, and then having to swing the other way. This creates a predictable cycle that makes it easy for players to see when to buy and sell, which just perpetuates the cycle. Yet another case of Free Markets 1, Central Planning 0.