Northrend's Gross Domestic Product: 719 million gold
by Mike Schramm 
Dec 24th 2008 at 1:00PM
Our friend The WoW Economist started a little project the other day: he added up, according to the top items lists, all of the products sold from Northrend across the servers, and then multiplied each by what he calls a "median" price (though exactly how that's reached, we're not sure), and landed on a huge amount of gold: 719,918,239.7. Obviously I'm not a WoW Economist (I'm not even that good at math), but that sounds to me like Northrend's gross domestic product: players are creating an economy of 719 million gold in Northrend from week to week.Unfortunately, that number alone doesn't tell us much, except that there's a lot of gold moving around in Northrend (it would be interesting to compare this to, say, Azeroth or Outland's equivalent, though the more useful numbers would probably be Outland before the new expansion hit, when everyone was still farming and selling items from there). And it will be interesting to see this tracked in the future: the real GDP is usually used as an indicator of both standard of living and a country's economic health, and while there are drawbacks to using that number to gauge both of those qualities, it's probably fair to say the economy in Northrend is booming. Maybe tracking this in the future will let us see how new content patches or item or even class updates can affect what the economy does there.
Very interesting. EVE Online's creators, CCP, have actually hired an economist to help run their ingame economy, and while WoW's isn't generally seen as quite that complicated, there are still plenty of big numbers to play around with..
Filed under: Items, Analysis / Opinion, Odds and ends, Blizzard, Economy, Making money, Wrath of the Lich King
Reader Comments (Page 1 of 1)
Wakleon Dec 24th 2008 1:06PM
The only thing wow needs is loans. Then it would be a real economy. Maybe you could store money in the bank, and then the bank could loan out money. Maybe also large guilds could loan money out from their guild vault. It would be great way for new players to get some good gear and then pay it off once they were raiding or farming. Hey, it might work.
Kujo Dec 24th 2008 3:19PM
Lets not forget that with loans, we'll need some sort of reliable Interest Rate system in place as well
Doc X Dec 26th 2008 10:48PM
What WoW needs is a version of a 'limit order'. "Here's 200g. If you see Frost Lotus for less than 25g, buy them."
Right now, the majority of sales prices are set by sellers via the AH. This provides imperfect information about the market and makes it take longer for market prices to settle to their steady state. All you know right now is what people would like to sell items for, not what people would buy them for. Having information from both sides of the transaction (without having to resort to the wretched hive of scum and villainy that is the Trade channel) would be very much appreciated.
Ashuntrah Dec 24th 2008 1:10PM
Um, that has very little, if anything to do with GDP. You might want to read up on what GDP is before you start throwing the term around.
There's a reason that the original article doesn't use the term.
Wakleon Dec 24th 2008 4:24PM
For anyone that doesn't know. GDP is the Gross Domestic Product usually per Capita or person. GDP is a general indicator of the state of an economy and the state of living for a country. It consists of 4 different parts. The first is consumer spending. In WoW this would be anything you buy on WoW, either from an NPC or another player. But I think you could probably count money to NPCs as a loss in GDP because that money goes into the void of cyberspace. The second part is Investment spending. Really the only way this affects WoW is buying mats from others to level your professions. The third part is government spending. Now, this really doesn't affect WoW almost at all. The closest thing to this would gold given to you from NPCs for quests. The fourth part is Net Exports. This has no effect on WoW because WoW is a closed economy. The only way this could count is if you could trade WoW items and gold for items and gold of other MMOs.
With that said I would say the majority of the WoW GDP is coming from Investment and Government Spending. With the large amount of people leveling there is a huge gold influx to the game, which is causing on many servers very, very, very expensive Northrend Mats. Also, people want to level their professions and many people don't have gathering professions so they are leveling solely off the AH.
I hope that gives everyone a little insight into how the real economy works and how the in-game economy works as well. If anyone wants to know I would expect prices on most things to stay high until everyone and their alts are level 80. Most people have an 80 main, but alts are now leveling and so the inflation in the economy will continue. On the bright side, NPC items and skill costs don't change, so while everyone is making their thousands on the AH, food and riding skills will seem somewhat cheep. The downside is that it's going to be just as expensive once this rush stops and the in-game economy stabilizes. Although I do hope there is a WoW Recession so Blizz can make their own stimulus package. I love me some free gold.
JALbert Dec 25th 2008 5:15PM
Northrend's GDP would be the value of items produced, plus gold gained from questing and drops. Exports don't exist, but as for Government Spending the closest thing to taxes would be revenue spent on the mail system, repairs and vendor goods, which would count. Investment costs would be money spent on NPC crafting recipes.
Rather than attempt to attribute the traditional aspects of GDP, realise what the GDP formula is meant to examine: The production. Basically, all gold spent in Northrend is a way to track player production. Items are the bulk of this, although IIRC you'd have to discount the prices of intermediate goods from GDP, so crap greens bought to DE would be counted twice. I could be mistaken, it's been a while since my macroecon class and micro is a good bit more fascinating.
I think what's not being observed is the RMT implications of any GDP calculation. It's been a while since I've seen goldspam on /2, but IIRC 1000G was being advertised at roughly 20 dollars. Applying that to the item-only total of 719,000,000 gold gives a figure of about 1.4 million dollars. Now due to the black market nature of WoW RMT, gold isn't as liquid or tradable as real world currencies, thus the exchange figure is slightly high. However, considering that the item-only part of this is certainly an underestimate of the true GDP of Northrend, (and doesn't factor in Vanilla/BC apparently, which is still a massive part of the economy) the actual real world production value of WoW in USD is fairly eye-popping.
Garg Dec 24th 2008 1:26PM
It was sad going through Outland the other day. Shuttered shop windows and little NPC orphans begging in the streets. Maybe if they built a casino...
Brannon Dec 24th 2008 1:18PM
WoW's economy is (thankfully) nothing like EVE's economy, since the former is an enjoyable fantasy MMO and the latter is a tedious economics sim.
The only way that would be the 'GDP' of Northrend would be if you argued that Northrend was its own country and that was the total economic output of that particular country. Given that Northrend is a largely empty frontier occupied by many different quasi-governmental entities, the term doesn't quite apply.
That number is essentially the economic throughput of the Northrend region, very roughly estimated. I'd think it could vary considerably server to server and week to week, so I don't know if it's particularly useful, but it's entertaining nonetheless.
Eric Dec 24th 2008 1:25PM
Oh man loans could make the game real messy really fast, take out a big loan, and then when you start getting bills scrounge and then you go under and can't do repairs and you can't get loans because you obviously aren't good for them and then we have a bunch of financially unfit wow players panhandling in capital cities trying to get out from underneath their debt since they had to have Epic flying and that Traveler's Mammoth in the same week.
Joelock Dec 24th 2008 1:30PM
yeah someone else mentioned it, and Eve online really is like 80% economic sim.. The game has a legit stock market lol its got its fun points, but takes a certain type of player to really enjoy it
wrathmist Dec 24th 2008 1:45PM
Every major virtual world (secondlife, imvu) and MMO (wow, eve, etc.) has at least one person (though their title might not be "economist") tracking & modeling virtual currency sinks, faucets, inflation, fraud, etc.
Bigfish Dec 24th 2008 2:28PM
All that number tells us is the economic activity concerning Northrend goods. It certainly isn't equatable to GDP, which is the value of all final goods and services, which means items that are transitionary are being double or triple plus counted. It also doesn't factor in services, such as enchanting, smithing, jewelcrafting, etc that players do in the trade channel, or players using auctioneer to but low and sell high.
Acrowley Dec 24th 2008 2:34PM
That beats the Gold Sellers by miles :-D
Kujo Dec 24th 2008 3:24PM
This would be more like trying to calculate total GDP of the entire WORLD. Highly un-effective. Better would be to attempt it for each realm respectively, instead of server-wide.
Not factoring trades outside of the AH are still acceptable...since in the real world, not every single product sold in any given country is tracked. Imagine being FORCED to sell your car, house, household items through something government sanctioned.
Eric J. Dec 24th 2008 3:41PM
"At Kalimdor Mounts, your Profession is your credit!"
jackfinished Dec 24th 2008 3:45PM
719 million /11.5 million= ~62.5 gold per week...not that much actually
Of course this is hoping my math is right :-D
jmurphy Dec 24th 2008 4:07PM
Hey everyone, just thought I would chime in on that data you're looking at. It's raw, first pass alpha database data. I thought it would be an interesting to look at none the less. But there is much more work to be done. The number provided is not a GDP number. Over at the WoW Economist we're just getting started on doing some data base modeling and have a whole bunch of things we're looking at and trying to figure out how to do. Things are coming together quite nicely and after the 1st of the year we should have some pretty regular and more detailed information available for those that are curious about the WoW Economy as a whole.
The number just represents 1 week of transaction data balanced against a median average price on those commodities. We still need to add a few more northrend materials. We're looking at adding zones like azeroth and outlands. We want this to be a collective effort so hopefully you'll participate with comments to make it a great and fun project.
The WoW Economist :)
Eisengel Dec 24th 2008 5:33PM
It may be interesting to segment things more. Compare per server, per faction vs things like class and level. Valid points were brought up about WoW being a closed economy, this is certainly true. In this case any of these calculations are only really indicative of changes in the economy itself... meaning... 1 data point tells us pretty much nothing. Once we have about 20 or 30 data points though, we can get cooking.
Using the Armory and Armory-viewing sites/utilities it may be entirely possibly to track, or at least sample, the gold earned by players per unit time, as well as take census data. If a character gains 2 levels in about 20 hours of activity, it is pretty safe to assume their gold gain is likely due to quests. If they have a slower level gain (or new instance achievements), you could presume some instancing. If they gain lots of gold but have no level increase, they are likely seeing AH gains.
Actually at one point I started offering 'stock' (well, more like a mutual fund) out to a few friends so they could buy in to my AH escapades. I had locked the health potion market up for Superior+ for quite a while on my server. At the time I was regularly bringing in about 50+ gold a day. Weekends were a bonanza as the raiders stocked up. The Alchemy reagents were a great sell on Wednesdays and Thursdays... when all the raider alchs would stock up. At one point I just needed more raw cash to buy out competition, so I offered some friends a buy in. Their gains were proportional to net gain weekly, and I'd pay out on Sundays unless they wanted me to hold it or roll it. I didn't want to complicate things more with interest, but the more people allowed me to roll their profits back into the pool the more I would truncate up on their profit calculations.
This was back in the pre-BC days, when the epic mount training cost of 1,000 gold was incredible, and people would groan about shelling out 100 gold to train regular riding at 40.