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WoW Gold Price research: A World of Warcraft economic study

Together with some students from the University of Sheffield, we have done some research into World of Warcraft Gold USA, and what that tells us about the realm-by-realm economies of the European and American servers. What came out of the study was astonishing- and seems to indicate a phenomenal bias on behalf of Blizzard towards their American clients.

All data gathered by this report was retrieved at the very start of 2007.

We have included a complete, realm by realm price chart.

Our study investigated the price of gold, both Horde and Alliance, from third party vendors on every single server on both WoW Europe and WoW USA. The difference was astonishing.

The average USD value for 1000g (Alliance side) on the US realms was $255.25. Horde gold was slightly more expensive, averaging $263.79. This gives us an overall average cost of $259.52 per 1000 gold on the American servers.

However, the European average for the same 1000 gold was just $31.78 for Alliance players and an even lower $30.72 for the Horde. That is an overall average price of $31.17 per 1000 gold.

This means that European gold is 8.33 times cheaper, costing just 12% of the price of the same gold on the US realms.

So why is this? Generally speaking, the same company and same employees farm currency on both the US and EU realms. This is what we hope to answer, in economic terms, in this article.

One theory is that the US servers have more demand. However, realm population statistics (see WarcraftRealms) indicate no statistically significant difference ?so we can rule out population arguments. (The number of realms is also roughly equal: WOW EU has 185, while WOWUS has 166.)

Another theory is that American players have more disposable income, and so are disproportionately likely to spend more real life money on virtual gold. This will probably be true to an extent, but we can rule out this reason too. Why? On this scale, the supply adjusts to the demand. All things being equal, companies will farm gold where there is most demand. Proof of this can be found in the incredibly similar prices for Alliance and Horde: overall, prices are almost identical, despite a considerable disparity in population. The difference in demand is equalled out by the economy of scale (sheer numbers involved) and by the demand adjusting to meet the supply.

So, with these two possibilities exhausted, economics lead us to a third reason ?one which has implications regarding Blizzard's equality of service. The cost involved in producing (farming) gold on Europe must simply be lower than the cost involved in producing the same gold on World of Warcraft USA.

What this means is that Blizzard is policing its American realms far, far more rigorously than it is policing its European realms. The figures are so very different, that they suggest an extreme imbalance, even extreme negligence on behalf of Blizzard Europe.

This suggests that in America, it's actually harder for a farmer to produce gold than it naturally would be, because of an active and ongoing purge of these accounts, and indicating rigid standards, and good policing. Now, World of Warcraft has famously banned huge numbers of gold farmers ?including a reported 105,000 accounts during the month of November ?with over 12 million gold removed from the economy. So this makes sense, and Blizzard can only be congratulated on this.

However, it seems as if Europe is practically ignored. Where it is harder for gold farmers to operate than normal players in America, the figures suggest that here, gold is many times easier to produce than it normally would be. Almost definitely, this means that some very unfair advantages are being used, with farmers likely using bots and cheats on a regular basis to great effect ?relatively unchecked.

In fact - the situation is so bad that for an English player on the Aman'Thul server (horde side), you could buy an epic mount for less than a small Dominos Pizza. On some well policed USA servers, the cost is 14.26 times this price.

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