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Second Life is a virtual world in which every single item and location is designed and created by its users, commonly referred to as ‘residents.’ However, what sets it aside from many other virtual worlds is the fact that it has a booming economy. Even in the face of recession, residents continued to spend Linden dollars in world, purchasing anything from virtual services, to pixel furnishings and virtual clothes for their ‘avatars.’ 2009 saw the economy total 567 million US dollars.

The currency of Second Life is Linden Dollars. They are bought through the exchange, better known as the Lindex. These Linden dollars can then be spent on a variety of goods and services made or offered by other users or residents. The residents earning Linden dollars in Second Life can cash them out into a very real currency! This means that Second Life is actually a means of real income for many people.

But what do people in Second Life actually spend their money on? Well, virtual land is big money business. Residents pay both an upfront fee and an ongoing monthly fee to rent the virtual space on which to set up homes, stores, clubs, relaxation or romancing locations or even spoken word venues. There’s also plenty of money gets spent on avatar appearance, Second Life fashion, skins, virtual hairstyles and shapes. People like to have their 3d representations looking great.

Another big money area is in that or services. People may pay talented marketers to run the marketing campaigns in world for their brands or they may pay a live musician to perform over microphone at their event.

For many people who have never been involved in Second Life, to hear of people spending such copious amounts of money on items and services that simply do not physically exists is often difficult to understand. However, the economy within this booming virtual world is a real income for many talented designers. And for anyone who still can’t get their head around it… you pay for your internet connection right? Can you touch it? Thought not.

Skylar Smythe

The Auction house is where the most profit potential is in Warcraft. The reason for this is that in the Auction house there is a lot of price variability. One day Titanium Steel is 150G a bar, the next it’s 160g a bar (or 130g).

It is these variations that give you the potential for profit, and of course for loss. The NPC vendors do not give you a variable price, the amount of Warcraft gold they pay per item is fixed. It’s a fair price, but if you have uncommon or better items to sell, they will rarely give you the best value for them.

Playing the market in the auction house requires that you first do some research, and collect some data. You need to know if a bargain is as good as it seems, or if you could get more profit for the items you are selling.

My initial advice would be to download the Auctioneer add-on. This tool allows you to run a full scan of the auction house, and collect all the prices people are asking for every item in there. Run the scan, and then get on with powerleveling

Once you have run auctioneer once a day for about ten days it will give you some decent average averages that are being asked for items.

Auctioneer will record all the asking prices and then put a percentage against every item you see in the auction house. This percentage is a ratio of the average asking price that auctioneer has found. So 90% means that the item is priced 10% below the average. Whereas 110% means it is priced 10% above.

Using this detail, you can make decisions on what to buy and sell and more importantly when. But low and sell high. It works in Warcraft as well as the real world

However, before you rush off, there are a couple of very big potential pitfalls

As I mentioned, Auctioneer records the asking price, and not the selling price. People ask stupid amounts of gold for trash sometimes. Have you seen trash items in the auction house for 1000 gold or more? It happens all the time. This can massively skew the figures that auctioneer is collecting for you.

Another issue is the fact that the game changes all the time. Items are useful, and then a patch is issued that makes them worthless. Perhaps they were part of a crafting recipe that is no longer the best available. Or the stats for an item have been changed. Blizzard increase and decrease drop rates for items all the time. In a matter of days rare items become common and worth far less, or the opposite can happen. Auctioneer will not tell you this. If you have invested heavily in one or two items, a patch can wipe out loads of your profit of you don’t know what’s coming up

Auctioneer is a great tool to start with, but it is just a start. It’s not the holy grail of gold making in Warcraft. If you want to be a World of Warcraft Gold Generator then you will need auctioneer, but you will also need a lot more besides.

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Everyone faces a similar dilemma in Warcraft. You want to progress in the game, but you also need more gold. Often the one issue takes you away from the other. Do you farm gold? Or do you level up?

Using the auction house is a good idea as far as gold making goes. Here, you leverage your skills rather than your time to make the gold you need

I have found a new system on the market that promotes cross faction trading as the main way of making Warcraft gold. Cross faction trading is where you have characters at Alliance and Horde auction houses. You compare the price of an item at both. If there is a substantial difference you buy at the lower and sell at the higher. Transferring the items through a neutral auction house in the process.

Great idea. However there are one or two major drawbacks in using this as you main gold making method.

Firstly, the mechanics of the game will not allow you to perform cross faction trading on one Warcraft account. You cannot, for example, roll a Horde character and get them to post cheap items on a neutral auction house for one of your Alliance characters to pick up then remarket at a Horde auction house. You can’t share a guild with characters from the opposite faction, nor can you post to characters of the opposite faction. In fact there is no way of getting items from one faction to another on the same account

You need a second account or a friend to assist you. A second account means actually paying Blizzard for two Warcraft accounts. Having a friend help you means splitting the profits, normally halving them. Not so profitable now is it?

That’s not the end of the problems though. Just buying massive amounts of cheap stock is not going to work straight away. You risk flooding the market, you need a large (and by large I mean several hundred spaces) areas of storage. Your own storage that no-one can steal from, then drip feed to market. Also, this is a common method used by far eastern gold farmers (who have many accounts). You need to be quick. Remember it costs gold to put items on at auction. Flooding the market will end up losing you gold very quickly.

At the end of the day there is a place for cross faction trading. But any system that relies solely on it for profits needs to be scrutinised carefully. There are some very big issues with setting the system up, and ensuring you are careful with your stock levels.

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