Tuesday, 24 March 2009

The Mining Myth

If you frequent any of the Warcraft forums (official or fansite), you will constantly see threads pop up asking for gold making advice. The most common answer will be to get a gathering profession and preferably Mining. Whilst this is good for a new player or someone who is extremely bad at managing their WoW finances, it's not really good advice. Mining is a solid profession, with a guaranteed income but it will not lead to your riches.

The economy in WoW is build on inflation/deflation (increase/decrease in prices), which is very cyclical i.e. the economy rises and falls depending on the timeline of the game; how close it is from a patch/expansion. There are other factors such as realm population & supply/demand issues, but they're less relevant in this case. If you simply judge Mining on inflation, it's not a great profession. Let's just look at some basic stats from within the game to explain my point:

Stack of Fel Iron & Adamantite ore during TBC; 20-30g
Stack of Cobalt & Saronite ore during Wrath; 20-30g

20-30g might sound like a good price, but considering the value of gold today compared to 2 years ago, it's not so valuable. The biggest gold sink in Burning Crusade was the 5,000g for epic flying, today it's 16,000g (after rep) for a Tundra Mount. In simpler terms, to pay for my flying I would have to sell 200 stacks of Ore at 25g a stack, but to buy the Tundra mount I would have to sell 640 stacks. I realise this mount is less vital than epic flying, but this is just a simple example to illustrate the deteriorating value of your mining. Even basic daily costs like repairs or flight paths will need you to sell more ore to cover.

This diminishing return seems even worse when you consider the alternatives. Many other professions have seen a rise in auction house prices (herbalism and cooking for example). Even daily quests offer more gold than they did in the previous expansion. So in relative terms mining is no longer as valuable, and this is a trend that will likely continue.

I'm not suggesting mining is a bad profession because I have it on my main, but you'll have to think outside of the box if you want to increase the cash flow.


Carl said...

I completely agree that mining isn't the best option for currently making gold in Wow, but as you say the nature of the wow economy is cyclical.

At the release of the expansion Cobalt and Saronite Ore was selling for more than 10x it's current price. It's a simple supply and demand issue though, with new content usually always containing new recipes etc that create demand. If you had spent the early weeks of WotLK mining you would certainly need far fewer than 600 stacks of Ore to purchase your mammoth.

Basic advice to those wishing to increase their wealth would be to start studying wow market conditions. Identify niches in the market and then exploit them.

At the beginning of WotLK people were waxing lyrical about the profits available from JC, hardly surprising when everyone was getting new gear from raids on a daily basis. Unsurprisingly a large influx of new JCers combined with a much reduced need for gems now that everyone is geared up has seen the gem market plummet.

Does this mean JCing is no longer profitable? Hardly..you just need to identify the new niche.

The best advice at the moment? Considering that a new large content patch is looming you might want to think about how best to exploit what is liable to be a very short but volatile market window.

What will you need come Ulduar? The likelyhood is almost everyone else will need it too.

wowconomics said...

There are 3 ways to make gold. Gathering professions, Crafting professions, and the AH. Most people say mining because its the most straight forward.

Actually with mining now, you can make more gold farming thorium on most servers than any other ore.

WoW Trader said...

wowcononomics; Gathering profs are better used to go besides your normal questing & travels, IMO. Mining for the sake of Mining, is just farming, which I'm not really a fan of, but I'll make a post on my thoughts about farming soon.

Carl I don't think that first 2 months of an expansion count for judging any profession really. Pretty much all of them will be out of sync during this time, and if you're ahead of the curve you'll make huge profits regardless.
- Sure JC is not as great as it was 4 months ago, but every JC'er can spend 5 minutes doing a daily quest and earn 100-150g on a Dragon's Eye. How long would it take to earn this gold in mining? So really mining again here is a big loser.