Impact of Cataclysm on Warcraft Gold Farming

A quick, and unscientific, summary of the impact of the recent Cataclysm expansion on gold farming in World of Warcraft would be that it simultaneously changes everything and changes nothing. At a micro-level it changes pretty much everything – all of the specific locations and in-game activities that gold farmers would have learned are gone or different, and they are having to re-learn the good spots and specific actions. But at the macro-level, it looks like business as usual: gold is still being farmed and sold just as it ever was.

We can get a bit more of an insight into what’s happening by looking at the virtual currency exchange rate: if Cataclysm was causing an in-game shortage, that would likely lead to WoW gold appreciating against real-world currencies.

Comparing the January 2011 rates to October 2009, there has actually been a depreciation of around 11%: where 2,000 gold earlier cost an average of US$8.35, now it costs an average of US$7.41. This therefore looks like a dog that didn’t bark: the currency is not deviating from the pattern of depreciation that has been seen ever since gold farming began (associated with competition in the market and discovery of better (i.e. quicker and thus cheaper) ways to farm gold).

Looking in a bit more detail, though, suggests something slightly different. In the 14 months since October 2009, WoW gold has depreciated 11%. In the 14 months prior to October 2009, it depreciated by 58%. We can also compare WoW gold with other virtual currencies. Taking a basket of FFXI, LOTR, EVE Online, and EQ2, their currencies depreciated against the US dollar an average of 51% during the period Oct 2009 – Jan 2011.

So that suggests there may have been a Cataclysm effect – significantly slowing the “normal” process of depreciation; possibly reflecting a supply-side impact on gold farming, for example, in the need to build up post-expansion knowledge about gold farming sources and methods.

One final snippet comes from looking at prices for power levelling. This also has been subject to depreciation over time, albeit at a slightly lesser rate than the currency. From Oct 2009 to Jan 2011, however, prices for levelling seem to have appreciated by about 20% (e.g. levelling from 1-60 rose from an average US$69 to an average US$83). That could reflect either increased supply side costs in having to learn the new levelling paths and/or growth in demand from new players wanting high-level characters but in either case it again suggests some sort of “Cataclysm effect”.

Does anyone else have data or experiences to share on this?

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2 thoughts on “Impact of Cataclysm on Warcraft Gold Farming

  1. Great post, thanks! The effect of Cataclysm actually came up in one interview I did for the World Bank study (due to be published next month). A person familiar with the gold farming industry mentioned that they expected a much bigger boost to sales from Cataclysm, but that it had been a disappointment.

    My own speculation concerning the reasons:

    1) The level cap was raised by only 5 levels, as compared to 10 in previous expansions. Less need for powerleveling (and gold to speed up leveling perhaps?)

    2) Gold is becoming less and less important in WoW, as the range of interesting stuff that you can buy with gold is becoming more and more limited. To some extent it is being replaced by a growing number (10+) of micro-micro currencies that are earned in specific ways and used at specific NPC vendors. Often (usually?) these cannot be transferred between players. All this makes RMT difficult.

  2. Might be interesting also to study how and to what extent depreciation in USD has affected this, since a significant portion of sellers seem to come from outside US (i.e. costs are same for them while revenue falls).

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