EU WoW token launch

Previously, I expressed my opinion on RMT and my hypothesis that the WoW token was not really subject to supply and demand as they are normally applied. That was a week ago, go back and read those posts if you haven't. You'll need that info as a starter point for this one.

Again, I'm referring to the WoW token as two separate tokens. The "RMT token" that you buy for cash in the Item shop, and the “Game Time token”, which you buy for gold in the AH. All the price fluctuations take place on the AH side. The RMT token's price is fixed.

Just under 2 days ago, the WoW token was released in the EU markets. As with the US one, the site www.wowtoken.info immediately started recording price data. The data so far is both completely different, but at the same time the same. Here is the EU chart:

Notice that it's the same kind of waveform, a sloped line with a discreet slope. You can easily see the points at which the slope changes. It hasn't started forming a triangle wave yet because it hasn't changed directions enough to stabilize. But what we can determine from what we know is that the slope of the price change rate (What I will call the drift) is based on how long they set the intervals to. The rate of change is always 1% per interval, and it appears that they can set the interval is 15 minute increments. It has been as low as 15 minutes (When the US graph dropped very fast near the beginning.) and as long as 2 hours, which is where the EU graph is at now.

Right off, you can see that the EU prices are higher. And the simple reason for that is they started higher. In both cases, at launch, the slope of the drift is set to "up" driving the price even higher.

Think about that for a minute. At launch, buying a Game Time token was impossible. None of them existed. By any concept of “supply and demand” the trend price had to be downward at that point. As you had to have a supply before demand could step in and raise the price. But in both cases, US and EU, the price instantly started drifting upward at a 1% per hour rate. Then, at some point, the drift direction changes and the price drifts down at the same rate.

In the US graph, whoever is controlling the drift rate decided it was too slow, and cranked the interval down to 15 minutes, which set the drift to 4% per hour, it dropped like a rock until they set it back to 1 hour, where it has remained. In the EU graph, whoever is controlling the drift rate decided to set it up to 2 hours per 1% change, slowing the decent of the price. Why? I have no idea. 1% per hour seems like the perfect rate given the apparent rules of the drift. I would have designed the system to use “% per hour” where the % could be any value, but that's just me.

As a result, the EU price had just continued to drop at .5% per hour. It will likely do this until it reaches whatever point the controllers want to stabilize the price at and then start the triangle wave like we see on the US graph. It will probably be several iterations of an asymmetric triangle before it finally stabilizes at... Oh I don't know, 25K to 30K gold per token?

So. What determines the point at which the drift changes direction? Of course I can't know for certain, I can only speculate. but I think they monitor the time it takes for the Game Time tokens to sell and then try to keep that reasonably low, like 12 hours or less. Essentially focusing only on supply. Remember that the point is not to sell Game Time tokens, but to sell RMT tokens to combat illicit gold sellers. That is the WoW token's reason for existing, and is the logical reason for adjusting the price.

Once that timing pattern is stable, then there is little reason for them to not partially delink the RMT tokens from the Game Time tokens by giving gold for the RMT token immediately and just adding a Game Time token to the AH for eventual sale. They already know it's GOING to sell, and probably within 12 hours... so while this would be “directly buying the token by creating gold” they know the gold will be remove when the RMT token actually does sell. It's a futures contract. Now you can see why the sale price of the RMT token on the AH was fixed at listing, rather than getting what you got at sale.

This scheme works as long as the true time to sell the RMT token is stable. If it's open ended (I.E. gets longer and longer) inflation results. If it's closed (I.E. the demand for Game Time tokens exceeds the supply and the true time to sell is zero no matter WHAT you set the sell price on the Game Time token to.) then deflation results as the Game Time tokens cost Blizzard real money in subscriptions and become a gold sink in game.

The inflation side can be prevented by simply holding the price steady and only selling the Game Time tokens as they become available. No problem! The RMT tokens sell immediately, which is good for the fight against illicit gold sellers, and the Game Time token buyers have all month to buy one, so the delay for them is less of an issue. It might happen that not all of them get one, but that's life, and can be blamed on “hoarders.” The Deflation side is win win. Illicit gold sellers get slammed and a gold sink to get rid of what is clearly a lot of excess gold is created.

This is looking like a really clever design on Blizzard's part. Assuming they can avoid the moral hazards of directly selling gold.