AH Lessons From Organized Gambling
Let’s start off with this: I do not promote gambling. Also, I discourage everyone from gambling illegally. If you’re under the legal age, or live in an area where gambling is not legal, don’t gamble. Furthermore, I am not a gambler. I don’t gamble with real money or fake money. Even in WoW, where my virtual assets are vast, I don’t gamble. I don’t play poker with friends, I don’t walk down the street to a bookie, and I don’t travel to Vegas or Atlantic City to lay long odds at the beginning of a sports season. However, with all that said, I am fascinated by gambling. And, I think that there are some good lessons to learn from gambling that can be applied to the WoW AH. Why? Because right now, at the end of WotLK, there are a few items in the game that should be thought of not as commodities, but rather as bets.
We’re right now entering the 4th week of games (of 16 weeks of games) of the NFL regular season. I think that (American) football betting is interesting for many reasons- the changes in odds over the course of a week, betting trends, the “sharps” vs. the public money, “steam” betting, etc. I follow this throughout the course of a season, and on any given Tuesday of the NFL season, I could probably tell you the Vegas line for any of the upcoming games, or at least what I think the line should be.*
(*Basic Gambling Explanation: American football is usually a difficult game for non-Americans to understand. However, the basics of football betting are very simple. Football points come, usually, in groups of 3 or 7. The most common way to bet is to bet which team will win based upon a “spread.” So, if it is known commonly that Baltimore is a better team than Cleveland, the Vegas oddsmakers will “handicap” Baltimore by a number of points. If, for example Baltimore was “giving 6 points” or was “-6”, that means that you take away six points from their score at the end of the game. If you bet on Baltimore at -6, they have to win by 7 points or more in their game over Cleveland for you to win your bet. That number, the “Baltimore -6”, becomes what’s usually referred to as “the line.” Whichever team wins the bet is said to have “covered,” so if Baltimore beat Cleveland by 14 points, they would have easily covered the 6 points. If, however, instead Baltimore had won by 3 points, Cleveland would have covered.)
The thing that NFL betting and the AH have in common is value of an item over time. In an NFL bet, the “item” is the bet itself, and the odds that one can secure for that bet. For the WoW AH, it’s whatever item you’re trying to sell (and how well it fits this analogy). From week to week, the value of NFL bets changes as information changes; the same is true in WoW for the value of items. Over time, as more information is known, item values change.
NFL example: The Green Bay Packers were one of a few teams favored to win the Super Bowl at the start of this season. At the start of the year, the odds were between 9–1 and 12–1 that they would win it all. After a Week 2 trouncing of the Buffalo Bills, the Packers looked unstoppable and those same odds dipped as low as 6–1 or 11–2. Now, after a tough loss to the Chicago Bears in week 3, the odds are hovering around 8–1.
Why does this matter? It matters because some items in WoW show similar fluctuations in value over a period of time, and those items should be thought of as bets, not as commodities. With this approach, you can take advantage of the fluctuations to make some gold. How? Well, the WoW AH allows you to do something that you can’t do when betting the NFL- you can sell the item when its value is highest. If I bet the Packers before the season (Week 0) at 12–1, I can’t sell that bet to someone after Week 2, when their value is 6–1. That’s illegal. However, those 12–1 odds have some serious value if the rest of the market is only offering 6–1 for the same bet a few weeks later. If you could sell that bet, you’d be able to make some money selling to someone who wanted that risk.
However, unlike Vegas, (or, if you’re in Hong Kong having some dumplings with Zekta, Macau) WoW allows you to sell these items! Admittedly, there are very few items that I’ve found that fit perfectly into this comparison. However, most of those items are identifiable because they deal with something that will not exist in the game after the release of Cataclysm.
WoW Example 1: Tome of Polymorph: Turtle. This, as has been covered extensively, currently only drops in ZG. ZG is going to go away with the release of Cataclysm, and there’s a chance that the Tome could go with it, and so the only way for a Mage to have access to the Polymorph: Turtle spell is to buy from an ever-decreasing supply of these tomes. However, there’s also the chance that there will be another, cheaper way to train Polymorph: Turtle after the release of Cataclysm, ie: via a Mage trainer. Right now we simply don’t know. But the rampant speculation and buzz about the possibility that the tome will be gone for good (a la: The ZA bear, Atiesh, etc.) is pushing the value of the Tome up right now.
If you have a Tome right now, the longer you hold onto it, the greater the risk. Every day that passes brings the chance that Blizzard will announce something that submarines the value of the Tome. But, if they don’t, the Tome could be worth a small fortune in Cataclysm. You can choose to sell now, with value at an all time high, or you can hold onto it, effectively hoping that your Tome bet comes through and, to mix my examples, wins the Superbowl.
WoW Example 2: The Battered Hilt. Right now, Battered Hilts are (I am told) being sold on the Cataclysm Beta by a vendor for a few gold. Blizzard probably wants everyone to have a chance to see that excellent quest line (and they should), so they’re making it cheap and easy to access. So, even though the traditional supply (from the Icecrown heroics) of Battered Hilts is dropping in Cataclysm, there will be an outside source for them. In this case, more information has killed a market, and I am sorry for anyone who has a bunch of money tied up in Hilts.
Other Potential WoW Examples: Anything that is going away: Hakkari Bijous, Black Tabby pets, the ZG raptor pet, etc.
I’m rambling a bit and I’ll stop now. But here’s my point: a select set of items have value if you think of them as “bets,” and you should behave accordingly. Find these items and flip them, if you can! If I had a Tome of Polymorph: Turtle, I’d try to sell it now for a good amount of gold. However, if I couldn’t find the right buyer, I’d hold onto it and hope I get lucky.
One more final, pseudo-related note: I fibbed a little bit at the beginning of this post. In the interest of full disclosure, there is one game I do like to gamble on: Craps. I think that I am fascinated by numbers, movement, and speed of the game. Essentially, you’re betting odds that one number will be rolled before another. I do like to play craps, but I’ve only ever done so where gambling was legal (read: Las Vegas).
I hope this made sense. As ever, we look forward to any and all feedback. Thanks in advance, Dear Reader.