WoW Token is a new in-game item that allows players to exchange gold and game time between each other. Players can purchase WoW Tokens from Blizzard Entertainment and sell them to other players for Gold. Those who purchase WoW Tokens can then redeem the items for 30 days of game time per Token.
Blizzard Competes With RMT Sellers With the WoW Token system, Blizzard Entertainment is competing head-on with RMT sellers in the Gold selling business. Blizzard earns from the WoW Tokens bought from the in-game store and hopes to starve out RMT sellers.
Gold buyers now have two ways to buy Gold - either purchase a WoW Token and sell it in the exchange or buy from an RMT seller. Blizzard argues that the WoW Token system is simply easier and safer than the alternative, and is confident that enough players will migrate to WoW Token to significantly reduce the demand for RMT sellers.
''We've heard feedback from players that they'd be interested in a secure, legitimate way to acquire Gold that doesn't involve the use of unauthorized third-party Gold-selling services,'' said Blizzard.
''We also know players who've amassed large amounts of Gold through regular play would be interested in the ability to trade some to other players in exchange for game time, helping cover their subscription costs.''
''The WoW Token feature gives players on both sides of the equation a secure and straightforward way to make that exchange. It opens up anew kind of payment option for World of Warcraft players, and we hope that it will also help lead to fewer account compromises and a better game experience overall.''
Blizzard's Trump Card Over The RMT Market From the statement above, it is clear that Blizzard Entertainment is offering two main advantages for using WoW Tokens: Safety and convenience.
In order to ensure security and speed of transactions, Blizzard Entertainment created a dedicated Token exchange in the Auction House located in a new Game Time section. Virtually all players know how to put their items for sale in Auction House, so it is easy for them to also sell a WoW Token in a similar manner. Those who want to sell a WoW Token can also do so anytime they want, even without a ready buyer. The system locks in the Gold price of the WoW Token, guaranteeing a player a certain amount of Gold which will then be sent to their mailbox once a player purchase the Token.
WoW Token Prices Vs. RMT Seller Prices Moreover, Blizzard is trying to beat RMT sellers in terms of price. When WoW Token went live in the Americas region (North America, Latin America, Australia and New Zealand) on April 7, each Token can be bought $20 USD from the in-game shop. The Token can then be put up for sale in the region-wide exchange for 30,000 Gold each.
Compare this with the prevailing average Gold price among RMT sellers of $20 USD for 23,624 Gold, based on MMOBUX.com data as seen in a chart below.
World of Warcraft Gold Price History
April 7 Prices WoW Token NA: $20 USD for 30,000 Gold RMT Sellers: $20 USD for 23,624 Gold
On April 7, buying a WoW Token and selling at the Token exchange nets players more than 6,300 Gold per $20 USD spent than what they could get from RMT sellers.
Blizzard has said that WoW Token prices will fluctuate depending on player demand and supply, but assuming that a WoW Token continues to fetch for 30,000 Gold each, then it will be a tall task for many sellers to match that price without taking a margin hit.
In the past six months, RMT sellers sold WoW Gold for an average of $20 USD for 23,551 - or 21.5% less Gold than WoW Token's launch exchange price.
RMT sellers were only able to breach the $20 USD for 30,000 Gold price during the month of January, a period that is known to see high Gold buying demand among WoW players as they come back from the holiday break and begin spending their salary bonuses and cash gifts.
Blizzard was wise to know that there will be players that will continue to buy from RMT sellers if they will get more Gold or a lower price from the latter.
But one main weakness with the WoW Token is that the exchange price is highly determined by player demand and supply. Since its impressive price launch, WoW Token has dived in value to almost comparable to that of RMT sellers.
April 22 Prices WoW Token NA (as tracked by WoWToken.info): $20 USD for 24,491 Gold RMT Sellers: $20 USD for 30,969 Gold
The RMT seller average is being pulled up by certain price-focused RMT sellers such as Bank of WoW and Guy4Game. As of April 22, Bank of WoW sells at $20 USD for 50,000 Gold. Guy4Game sells at $20 USD for 40,000 Gold.
The Market Shift Among WoW Gold Sellers Given that it will be hard for RMT sellers to compete on convenience and safety of delivery, it can only hope to compete on price or volume. In the coming months, WoW Gold prices among RMT sellers will likely plummet to better match the prevailing exchange price for WoW Tokens.
To do this, RMT sellers will have to either streamline their operations to lower costs, or try to sell at higher volumes but at lower margins. Expect to see bulk purchase offers in the hundreds of thousands of Gold that make it more attractive for Gold buyers to continue to patronize RMT sellers.
Competing on price and volume means that there will likely be consolidation in the industry. Smaller RMT sellers will find it increasingly harder to compete not only with their larger peers, but also against Blizzard's attractive pricing.
Many smaller RMT sellers rely on great customer service and faster delivery speed to carve out a niche but the name of the game these days will be low prices and large volumes. Bigger RMT sellers will look to acquire many smaller RMT sellers to better improve their margins through economies of scale, and go toe-to-toe with the prevailing WoW Token exchange prices.
For more creative RMT sellers, another strategy could be to pick their battles. Each of the World of Warcraft regions will have its own Token exchange, while certain countries will have unique local currency prices for WoW Tokens. This means that sellers that can crunch numbers and scan for opportunities can try to operate in markets where there are higher margins and lesser demand for WoW Tokens.
Granted, this is easier said than done since a large portion of the WoW Gold buying market is in the Americas and Europe regions, but sellers might want to explore this route.
But in the same vein, RMT sellers may find certain markets inoperable, especially those where there is a huge demand for WoW Tokens than those that can sell them. When this happens, WoW Token exchange prices will skyrocket - too much for RMT sellers to match.
If margins in WoW Gold prove to be too small for RMT sellers - either because of dwindling demand or the inability of sellers to match WoW Token exchange prices - then you will likely see many RMT sellers leave the game altogether for greener pastures.
Weaning Out The Weak To answer the title question, yes, WoW Gold sellers will survive in 2015 even with the introduction of WoW Token. But only a few large ones, most likely, as smaller players either close shop or get gobbled up, and other sellers migrate to other games with higher operating margins.
World of Warcraft is not the first game to implement a time-for-Gold exchange system. EVE Online, Rift and a few more have rolled out similar systems and sellers continue to thrive in these games, albeit fewer in number. The RMT sellers that will thrive in the post-WoW Token environment will need to be extra vigilant in tweaking their prices to compete with the in-game exchange, excellent in service to keep what smaller number but bigger-buying customers they have happy, and more efficient in operating their businesses in the face of lower margins.
