Tuesday, July 5, 2011

So what's "free" anyway?


The more I play the more annoyed I get that things are being crafted under material costs. But on the flip side I'm beginning to understand WHY this is and it's not as bothersome as it was at first. "Free" is typically defined as something without cost weather or not it has a value. But as any businessman will tell you value is the same as cost when it comes to deciding what to do with it. If I gave you the keys and pink slip to a brand new Porsche I don't think you'd believe it was without value.

You could either drive it and look all "mid life crisis-ey" or you could sell it off for half the price and probably finish paying off your home. Or you could launch it in a catapult for the lulz. Either way that car has a cost and a value. The cost is what it takes to use it and the value is what you can get out of it. You can either get 20 seconds of entertainment, a warm fuzzy feeling when you give it away, or a few years of security when you use the money from selling it to pay off all of your bills and debts.

The wise man will bear this all in mind before making a decision.

So what to do? Since we're talking hypothetically with a sports car let's keep rolling with that and move onto why I think so many crafted pieces are selling under material costs. Lets say you decide not to give away the sports car and don't have access to a car-a-pult (such a travesty, I know) and you decide to sell it off for the almighty dollar. So how are you going to do that? Maybe you're in the know and I'm just a fool, but I have no clue where I'd go to sell a brand new sports car for a halfway realistic price without a trade in arrangement. Just like I don't know who to sell these hard to find materials to in rift.

Starting to tie it all together now?

The fact is that these materials and recipes can be a pain in the ass to come by. This is partially because of their rarity and partially because of the fact that not many people are even capable of getting them on their own. Be it gear or level requirements for the zones that they drop in and what not. You can't have a value or a price tag without a prospective buyer. With the great rarity of the mats the price is naturally high, but they're not selling because not many people can afford them while the rarity keeps it high even with lack of a significant demand. What is the price or "value" of these rare mats if nobody is buying them then? I'll tell you, it's value is precisely what the vendor will pay you for it.

That's right, just like with everything else if you can't AH it then vendor it. Crap sitting in your bank makes you exactly ZERO profit. Even if you can put something on AH for 500 plat that doesn't mean shit if it'll never sell, which seems to be the case with a lot of mats. So if we go under the assumption that the materials X, Y, and Z are never going to sell for more than a smidgeon over the vendor price we can effectively remove them from the sale price equation.

Do that and then all of a sudden that 5 plat loss becomes a 15 plat profit. Isn't economics fun kids!? Imagine if the demand for gold IRL entirely vanished. It would still be just as useful as before for both practical purposes and vanity, but the value it once had would be meaningless.

Not to mention economic collapse.

But people would then be trying to sell it for whatever the hell they can get or would just use it to make things that DO sell. Things like wedding rings and computer parts. That's exactly what is happening in rift. People won't buy the mats but they will buy what they go into, the whole is greater than the sum of the parts. This is going to be very difficult to wrap my mind around if this winds up being true across the board. I know of a few rare mats that do sell consistently for a regular price and base my values off of that. But for anything with purple text that's an entirely different story.


Thanks for stopping by!

2 comments:

  1. I lost you when you said a "5 plat loss becomes a 15 plat profit."

    Are you saying because the mats are coming so close to the vendor price you can consider the mats free?

    Am I understanding this post to say:
    - Mat X can only be gotten by Awesome People.
    - Awesome People can only use Mat X.
    - Non-awesome people have no use for Mat X.
    - People (Awesome and their not-so-awesome counterparts) want things that Mat X helps make.

    Taking all of that in consideration, Mat X only has value when it has been used with other materials to make another item.

    Could Mat X be likened to Handful of Cobalt Bolts (and similar items) from WoW? (Apologies for using a WoW item on your Rift post, but WoW is what I play and can relate to.) The Bolts can only be gotten and used by Engineers, and other people want things made from the Bolts. This example breaks down because the Bolts have value to other Engineers since some do not want to take the time to make them, but it was the closest thing I could come up with.

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  2. Stok - I think something else that could be going on is market manipulation. If you (the goblin) have a good supply of a somewhat rare mat X, list a few on an alt at a very high price. Then craft some things and list those at a normal price on your main. This makes it look like you're taking a loss, keeping competitors out of the market, and makes your crafted goods look cheap, getting you sales.

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