LOTRO ECONOMY UPDATE

The appearance of new content usually provokes rumbles in the LOTRO economy, and Book 14 has been no exception. One major new factor has been the ring lore quests - 70,000 of them per server before the gates to Eregion are opened. Each of the 70,000 quests is rewarded with a chest containing a item of some kind; these range from second-tier rep items all the way up to (or so rumour, or a single post on the Codemasters forum would suggest) a Helchgam's slime - one example of which was sold on the AH about a month ago for 20G. Don't hold your breath, though.

The vast majority of rewards are third-tier rep items, and this has definitely impacted on their price in the AH. Luistins (Lossoth rep items) which were selling for up to 475s in early July are now averaging 150s, and War Dispatches are down to around 300s from 450s. In general, the best-selling rep items are still those for the tougher or more useful factions, namely Lossoth, Council of the North and Elves of Rivendell, and while the price of these has all dropped, the demand is still there.

Interestingly, though Beryl Shards are now dropping (though not very often) from more mobs than before, the price of this perennial market indicator has remained surprisingly firm throughout July, and still averages about 750s. Exceptional Hides, most easily farmed in Forochel, are also maintaining their price, averaging about 400s for fifty.

Slightly more recipes seem to be dropping from mobs. Though down by about 25% on a couple of months ago, top prices can still be achieved by recipes for polished weapons and engraved beryl jewelery; recent examples were 1G, 500s for a Polished Ancient Steel Dagger recipe, and 2G, 100s for an Engraved Beryl Earring recipe. The new woodworking recipes and scholar's dye recipes are also in demand at the moment, but the market for the commoner recipes, including many that are single-use, has sagged badly.

STOCK EXCHANGE LATEST

Time for another look at LOTRO's stock exchange, a.k.a. the Auction House prices. Overall, the signs are that the economy has slowed down somewhat since early February, a steady decline which the introduction of Book 12 did nothing to affect. That perennial economic indicator, the price of Beryl Shards, currently averages about 900 silver, down from just over one gold. Etched Beryl Rings, of which only a few are being offered, range from 12.5G to 15G, with no takers at any price, at least today.

The biggest price drop has affected exchange items from two of the major questing and raiding areas, the Rift and Anuminnas. Battered Arnorian Armour pieces are currently on offer for an average of 200 silver each (800S for 4 pieces, with a buyout of 1,200S), a full 50% down from the February price of 300S each. Rift-Iron Coins average 180S (one lot of four is currently on offer at a starting price 0f 725S with a scarcely larger buyout), again a large drop from an average price of 450-500S two months ago. Not surprising, really, as more and more players are venturing out into the Rift and gathering the coins for themselves - and also, of course, realising that there's not all that much they can exchange them for, anyway. I foresee Rift-Iron Coins hitting a new low of about 80S or so in less than a month. Meanwhile, the Laurelin AH does not offer so much as a sniff of Helegrod armour items at any price whatsoever. Now that would be a good short-term position to take...

AUCTION FRENZY

Action at the Auction House is normally sedate, even soporific; the great majority of items on sale never attract so much as a single bid, and bidding wars are as rare as beryl shards. The only exception occurs when somebody posts one or more items for sale with a ridiculously low opening bid and no buyout. Sometimes this can happen when the poster genuinely has no idea of the value of an item, at other times it may be from nothing more than curiosity, a sense of fun or the desire to stir things up. When one of these unique opportunities is discovered, most players wait until the last moment possible before putting in their bids, so as to avoid being outbid. A degree of uncertainty is provided by the fact that the AH indicates the duration of a sale in hours only, so that the indication "1 hour" could mean anything from 60 minutes to one second to go...

Usually, when the seller's intention is to provoke a bidding war, he or she will arrange for the sale to time out sometime in the early evening, when most players are online; this morning, however, saw a sharp bidding war on three items posted by Robinn on the Laurelin AH at a time when most players were fast asleep, some recovering from Friday-night excesses and others from overlong Rift raids. The principal item concerned was a single-use Engraved Beryl Earring Recipe; currently fetching an average 2.5-3 gold at auction, the recipe (when critted) yields an Etched Beryl Earring which brings around 13 gold at the moment. Yesterday, it was being offered at the unbelievable starting price of (I think) around 18 silver. The same player had posted two Engraved Beryl Necklace Recipes starting at around 20 or so silver (average AH price 1.2 gold).

The items had certainly been noticed, but by late last night only a handful of bids had been posted on all three; the real bidding war, as expected, began this morning during the last hour and ended up as shown above: a total of 66 bids brought the earring recipe to 1.96 gold and the two necklace recipes to 525 silver each with 53 and 51 bids respectively. I don't know whether 66 separate bids on an item constitutes any kind of record, but presumably both the seller and the final winners went away satisfied: the seller because he walked off with 3G (less commission) having presumably enjoyed the whole process, and the winners because they had secured what was still a relative bargain, even though the initial prices had been driven sky-high. In my case, having acquired one of the necklace recipes for 525S, I was able to sell it on for 1G within five minutes. Not as heroic as killing drakes, but moderately profitable, and should take care of the rent for a few months...

LOTRO: HOME OF THE WHITE MICE?

It seems to me that a successful MMORPG represents, amongst other things, an almost perfect microeconomic model – and what’s more, one based on the responses and reactions of real people, rather than computer algorithms. All the elements of classic market economy theory are present: supply and demand, gluts and shortages, self-interest and a very moderate amount of altruism, love of novelty and brand loyalty - and of course, determined efforts to influence, manipulate or subvert the market…

This conceit is reinforced by the frequently violent fluctuations of LOTRO’s economy as expressed though Auction House prices. Among the reasons for such fluctuations are changes in the supply of specific goods as implemented by the designers (i.e., price control by the government) and the introduction of new and hence more desirable goods (i.e., innovation and marketing by manufacturers). At the moment we seem to be going through a mild depression, with prices for many goods set high while demand is falling. The current price for that perennial market indicator, the Beryl Shard, is floating just above 1 gold, up more than 40% from early January. Scarcity drives up prices, needless to say, but sometimes it does so to the point of also driving out buyers. Bits of the highly desirable Armour of the Aurochs set, for instance, which have the great market advantage of not being Bind on Acquire (BoA), are found almost exclusively in Helegrod – but as we know, Helegrod requires 24-man raids which are difficult to organise and, as far as the individual player is concerned, offer a very poor return on time invested. The result is that not many players bother to raid there, and Armour of the Aurochs pieces are correspondingly scarce; a Helm of the Aurochs may be the most expensive item on the Laurelin AH, offered at 70G with an 80G buy-out.

Not surprisingly, the current scarcity of top-quality single-use recipes has also driven up the price of the very best crafted weapons, armour and jewellery; Etched Beryl Necklaces average 5-6G, Etched Beryl Bracelets 12-14G and Etched Beryl Earrings 15-16G. On the other hand, the general disdain in which Annuminas armour is held by most players and the extreme difficulty of assembling complete sets (is anybody still bothering?) means that the market for Arnorian Armour Fragments and Battered Arnorian Armour has almost collapsed; current prices are as low as 10-20 silver for the former and about 300S for the latter, with no takers. Rift-Iron Coins are on offer for 400-500S each, again with no takers at that price – probably a reflection of the fact that there’s not much of value to buy with them. In general, it can be taken for granted that irrespective of what the developers intended, the price of poorly thought-out or unimpressive goods will quickly go though the floor – another perfect concordance with real-world economics.

Come to think of it, how do we know that LOTRO’s economy isn’t already being manipulated by economists from the Harvard Business School running arcane experiments? Maybe those infamous gold-farmers are really MBAs, and all of us are nothing more than white mice running through a sophisticated economics simulation. A chilling thought.