In the last column, we discussed value chains and how, in World of Warcraft, they work when dealing with NPCs but not the auction house. Today we are looking at another game and how it deals with value chains to ensure that they do not work when crafting by NPC purchases/sales alone.
Lord of the Rings Online offers players vocations - sets of three linked professions that cannot be chosen by themselves. In any given vocation, there is usually one "useful" gathering profession which supports one of the craft professions in the set and another, unsupported, profession. In other words, vocations are structured to enforce cooperation and trade between players by ensuring that no one can gather all the raw materials they will require to level their craft. But that doesn't mean that the supported profession is good to go from the start.
Most recipes also require some items that cannot be obtained in any way but purchase from a vendor. Non-gathered items such as a Ball of Twine for the Woodworker to create a Rowan Bow, the Bolt of Rough Cloth for a Tailor to sew Rough Cloth Armour, or the Small Clay Pot needed for a Cook to mix up a Pot of Crude Honey and Oats, actually cost MORE than the final product sells for at said vendor.
The spread between the cost of a vendor-purchased item and the sales price back to the vendor is usually 300%. That means that, for example, the Rough Cloth mentioned above can be purchased for 1s 60c but selling it back would only get you 40c. The Rough Cloth Armour made from it can be sold back to the Novice Tailor for 1s 13c, netting a loss of 47 copper per sale.
LotRO has an interesting feature to aid in lowering the per-piece cost of crafting. They use housing neighborhoods as a discount seller. When you purchase a house, you are informed that if you shop locally (meaning within your neighborhood) you save 10% off the usual NPC price. So for that same Bolt of Rough Cloth you would spend 1s 44c and lose only 31 copper per piece sold to the vendor.
Due to the markup, the NPC actually is abiding by value chains, even with the discounted rate in neighborhoods. But unless you can sell your crafted item for more than the vendor gives you, you may never see it that way. That means you have to find someone to trade with. The auction house is supposed to help with that.
Unfortunately for crafters trying to skill up and make a profit simultaneously, there are other crafters out there too. These are your competitors on the only market available where a profit is possible. They create excess demand for the same non-crafted items you need and excess supply of crafted items that you also want to sell. It's a vicious, but predictable, cycle.
For those players who choose to craft starting at early levels, there is no great way to get through without losing your hat unless you have a wealthy benefactor to provide supplies. Aside from being a reason to complain on the forums, the seeming oligopoly of NPCs serves another purpose - it is a continual gold sink. Sadly, it only really works as such at very low levels. From my experience, by the time level 20 or so comes around I can pretty much afford to buy the ingredients needed to max out my chosen trade.
What can be done to potentially fix this? Maybe the devs could do something to increase the time it takes to become a Master Artisan (though I feign to think what comments that would elicit from players). Or perhaps an update could include some new levels to achieve including new items to be made much as The Burning Crusade did for WoW.
So is this system actually flawed or does it work "better" than other economic systems out there? Do you think that NPCs should be a profitable way to sell crafted items? What about the gold sink that is the non-crafted component of the recipe? Are you about ready for some new recipes and crafting levels?
Alexis Kassan is a numbers nerd. She spends her days with statistical programs and her nights with spreadsheets and textbooks. She's also a MMORPG addict, having gotten sucked into Ultima Online at a formative age. In her time away from work, books and games, she can usually be found drowning in pools of sprinkles. If you have a question about in-game economics or how crafting fits in with them, hit her up at alexis DOT kassan at weblogsinc DOT com.