Saturday, February 8, 2014

The Big Dump

The release of the next expansion, Warlords of Draenor (WoD) is being predicted as somewhere between July and September. The trend has shown increasingly long beta releases of at least six months. So, there is still a very long wait for the actual release. However, the beta release could be very soon - this month, even, or, more likely, March.

The waiting game has started to have a rather dramatic affect on Happy's business. The last two weekend cycles have been chaotic. Many items were being dumped on the Auction House and bargain basement prices, as if the sellers suddenly realized their huge stocks were about to become worthless. The flood of goods began to subside in the second week, and prices rose . . .  and rose. Was there a buying frenzy now? No. Buyers stopped buying.

One would think that if no one was buying, then prices would go down. That wasn't the case. Items on the AH would expire, and someone would post a higher starting price on the item. Without buyers, though, the stock just sat there, with minimal reductions. It would expire again, and an even higher price would be posted. A good example are volatiles. Volatiles stack up to 200, and Happy had a whole 24 slot bag full of the five types. In the run up to the dump Happy sold a lot, and I mean a LOT of volatiles. The prices kept rising and Happy kept selling. Happy's problem now is that the prices are now sky high, and the buying has stopped. No one is posting new volatiles for sale, either, so Happy can't replenish his stock with discounted goods. The same thing is happening with most of the things that Happy sells.

Weird things start happening when the market does the unexpected. Happy sells various bags. High end bags don't sell in volume, but bring a pretty high profit for the cost. Happy knows exactly what price to pay for the mats (cloth and dust) required to make a bag for the price Happy wants the customer to pay. Those prices are pretty resistant to change, because of the comparatively low volume. Well, the price of cloth climbed with the other stuff on the AH and has stubbornly stayed there. Paradoxically, Happy's competitors have been significantly dropping the price of bags, even though their costs have to be rising. That doesn't make sense to me. If they think the old bags will become useless, I beg to differ. The price of last expansion's Frostweave bag (20 slots) sells for around 250g. The current expansion Embersilk bag (22 slots) run around 500g. The newest bag is a 26 slot bag that sells for 2500g. Imagine the cost of the next bag in WoD. Frostweave and Embersilk bags are still going to be good sellers. For now, Happy is waiting them out because the margin of profit has gotten pretty slim.

Predicting when the next release will come out is a dicey game. But, predicting when the player base decides that the current "stuff" is no longer valuable due to the coming next expansion is even more difficult to predict. This may just be a bubble that will burst. Or, it may be a sign of further upheaval as we all try to predict what will remain valuable and what has become trash that no one will buy anymore.

Happy may be wringing his hands over his profits, but he blows off steam flying around on his new mount, the Iron Skyreaver. The two-headed dragon is a sweet ride with a set of afterburners that light up when airborne. The dragon has a menacing roar and can do loops and rolls in the air. Truly cool. JB also took it out for some herb farming and had a blast.

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