RNG and the law of large numbers

Randomness is a factor that can play a crucial part in some gold making strategies. This is mostly caused by doing things that have some form of random proc chance. For a lot of players this is a large source of annoyance and stress as a bad batch can feel terrible. I personally don’t care at all about how any prospecting session goes, and today we will look at why. You can quite easily set up your gold making so that you do not have to care about any RNG.

What is RNG?

RNG is short for Random number generation. It is usually used to describe any process in a game with a random outcome. Some examples in world of warcraft include drops from mobs, the number of procs from rank 3 alchemy recipes, what gems you get from prospecting and the warforging system for item level.

The problem of RNG in gold making

The problem of RNG in gold making is quite simple. Randomness makes it hard to know if you are making a profit or not. If your crafting cost can vary from 10-300 gold you need to find out what level in between you should use. For crafted goods you want to set your minimum price so you are guaranteed a profit.

 

The law of large numbers

The law of large numbers is a statistical concept that is extremely useful when analyzing anything with a random outcome. It states that as the sample size increases the average value gets closer to the expected value of the random process. Or more simply with a World of Warcraft perspective: If you prospect enough ore, eventually you will get the same distribution of gems as the actual drop rate.

Applying it to gold making

A lot of profitable markets have some level of randomness in the output. The best examples include rank 3 alchemy procs, prospecting (especially felslate) and darkmoon decks.

The simplest way to figure out what the profitable level is is to use the average outcome. Because of the sheer number of players that play World of Warcraft it is generally quite easy to find the true average yields of any random event. This is because you can find data from tons of other players and put it together to get a very large sample. By the Law of Large numbers the average of this sample will be so close to the expected value that the difference does not matter.

We want predictable profits

I use TSM to automate most of my decision making. This means that I need to be able to tell TSM to value my items in a completely predictable manner, so that I can be sure it is correct. TSM cannot compute the crafting cost of your flasks automatically based on how many procs you have gotten, so you will need to know the proc rate to set your minimum price correctly.

Once we have the average yield the question becomes: How many materials do I need to process to feel safe that my rate is fairly close to the average? This obviously varies between markets. Our goal is to figure out what this level is. That is the minimum amount of materials you need to process or items you need to craft to feel comfortable entering the market.

Some specific examples

These ideas are already integrated into several of my TSM operations that I have published. This means that for these markets there is a minimum threshold you need to reach to be certain that you are making a profit. Otherwise you are just gambling with the random number generator. I process so many materials that I can feel certain in all my RNG markets that my rate is close enough to the expected rate that I am making a profit.

Jewelcrafting

Jewelcrafting is the most obvious one here. Especially felslate prospecting, which has really high variance. There has been a very large number of posts on r/woweconomy throughout Legion of players getting a bad batch and asking whether or not the drop rates were changed. This is usually accmopanied by sample sizes in the 200-1000 ore range. This is way too little to say anything certain about the drop rate as my analysis showed in October last year. Empyrium seems to be closer to Leystone Ore in drop mechanics.

All in all you need to prospect 10 000 felslate at least to feel reasonably certain that your yield is close to average. For Empyrium and Leystone you can get away with 3-4000 and still feel OK. For all the ores I would suggest at least doubling your samples long term, if not more.

Alchemy

The Legion alchemy recipes have a chance to proc extra flasks and potions at rank 3. For the flasks you can get between 1 and 20 flasks extra. This can have a huge impact on your crafting cost and it is quite hard to tell exactly what your crafting cost should be. The average yield is about 1.45 flasks per craft. I currently use a factor of 1.3 in my minimum price settings. I know that Gumdrops does not take procs into account at all in his setup.

I have not tracked my procs, but they are quite regular, but the range is wide. I expect you need to craft a couple of hundred flasks to feel certain you are averaging a 1.45 rate, which is why I use a lower one for my calculations.

Darkmoon decks

When you craft darkmoon decks you get one out of 32 cards at random. Completing a full deck requires 8 unique cards of the same type. This gives a hefty amount of randomness in how many cards you need to craft per deck. You will end up with some amount of leftover cards that increase your crafting cost.

I have already covered the RNG quite extensively in this post. The TL;DR is that you should craft at least 1000 cards, and even then you will need to craft 10 cards per deck on average. This is a very substantial investment, so at this point in the expansion it might actually be too late to enter this market unless you are planning to be very aggressive in your re-posting.

Card of Omens

Card of Omens is Warlords of draenor recipe. The cards can be flipped which turns them into a random card that can be sold to vendors for some amount of money. The most valuable card vendors for 6000 gold. As this reddit post outlines, the average value per card is most likely above 4.5 cards. The flip side is that you need to craft at least 20 000 cards to feel certain your average is close to this as the 6000 gold cards are a large part of the value and they are exceedingly rare. As such you need to know that you can move several thousand herbs to guarantee a profit from this.

In conclusion

Do not enter RNG-based markets unless you can stay for the long haul. You need to be able to craft enough that you can just disregard the RNG. This is what I am doing, and it means I can use simple TSM settings to guarantee a profit. I don’t even bother tracking my RNG results as I am that confident in the long term drop rates.

If you like my blog, you should consider follow me on twitch and twitter because it will give you a live glimpse into my gold making adventure!

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