With the recent news of Blizzard banning the use of input broadcasting software everyone took to reddit or twitter or youtube to share their thoughts. I shared mine in last night’s podcast, so today we will focus on a specific question, the question of inflation or deflation.
Will this cause inflation?
This post was sparked by WTBGold. He expects this change to lead to inflation in prices due to significantly less supply for various farmed materials. This is certainly a possibility, but absolutely not a certainty outside of the immediate short term. I’m not so sure, as it depends on a couple of key unknown factors.
Inflation for what?
This is the big one. Most current high gold volume items on the AH are BfA items. Most of whom will become very low value as soon as SL launches. Of course many of these items have already spiked in price, but what happens long term is not certain. The only items that could conceivably see meaningful inflation over the next year will be items with significant sustained cosmetic value like mounts and materials in the mount crafting value chains.
Outside of that we can and should expect prices to fall. For other long term “value items”, like battle pets, we could also see inflation.
A model for inflation
Let’s look at a very simple model for prices in WoW. There are three key dimensions, the amount of gold available to players to actually purchase items, the amount of an item that is available (impacted by farming rates and number of farmers) and the rate at which the item is removed from the economy through crafting or item use (e.g. the number of herbs needed for a regular progress raid night).
You can see the summary of effects in the table below.
What will multiboxing only impacts item supply and gold supply
Multiboxing will only impact the top two rows. To know if this will cause an inflation or a deflation we would have to know how much multiboxing impacted gold generation versus item generation. From what I’ve seen most of the superhardcore multiboxers did raw gold farming. Many of course also did gathering. Knowing the balance is impossible, but to me it seems more likely that the raw gold effect will be more pronounced than the supply effect for items. The last time Blizzard turned of a gold spigot (the order halls) we saw heavy deflation in many long term value markets (TCG pets have gone down significantly since their Legion peaks.
Shadowlands and beyond
This will be even more pronounced with the release of Shadowlands. In Shadowlands the item usage and generation rates will be balanced around single gathering and less efficient multibox gathering. As such none of the Shadowlands items will even see any inflation, but price equilibrium will be formed without multiboxers. Blizzard has balanced item generation and usage rates in the past to make sure consumables are not too expensive and I expect they will do so again.
Token prices to fall
Lastly we have the token effect. Multiboxers bought a lot of tokens with gold. With demand for tokens with gold going down we should see token prices falling. This would mean less gold in circulation for casuals who buy tokens, and thus they can afford fewer items at the current price. This is essentially tied to the gold supply effect and will depend on to what degree multiboxers propped up the token price and to what degree they contributed to gold generation.
Who knows what will happen?
I try not give concrete predictions as it’s way too easy to be wrong. I think both scenarios could happen, but ultimately the inflation effect would only matter for currently multibox farmed items. For everything else the decrease in raw gold generation is likely to be a significantly more pronounced effect.