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Opportunity Cost - The Most Essential Concept in Efficient Gameplay Avoiding False Economies, or, Why You Can’t Afford to Be Cheap

In the prior topic I pointed out that if it takes time to get something that’s “free”, it isn’t really free after all: it costs you the time it takes to get it. We can generalize this to any activity in the game that produces resources or other items that are tradeable, asking ourselves this essential question: are we better off to get the items ourselves, or buy them from someone else and use the time for some other purpose?

That’s the big question, and it’s not a simple one to answer.

Figuring out if we should gather/make/produce something, or instead buy it, requires that we consider how much we value the process of doing things ourselves. In my analysis, I’ve found that this boils down to these six key factors, of which three are financial and three non-financial.

The three financial factors are:

1. The time it takes to get a resource yourself.
   
   
2. The cost to buy the resource.
   
   
3. How much your time is worth doing something else.

And the non-financial factors:

4. How much experience you get for doing things yourself.
   
   
5. The degree to which you enjoy the activity.
   
   
6. The value you place on being self-sufficient.

The first three of the factors described above represent a simple mathematical test of the value of time. To take the yew logs example again, suppose I can chop 200 yew logs in an hour, and the cost to buy them is 350 gp each. This means that the monetary equivalent value of this activity for me is 70k per hour. Since I can easily make more than that in other ways, chopping yews is not a good way for me to make money.

But there are three other factors to consider, all non-financial: experience, fun, and self-sufficiency. Even if I only make 70k per hour cutting yews, I sometimes do it anyway, because I want the Woodcutting XP. Sometimes I do it because an hour of cutting wood once in a while is relaxing. And finally, I may simply prefer cutting my own yews for Fletching, rather than buying them from someone else.

Making skill decisions often boils down to weighing these money and non-monetary factors to decide which we feel is most important. In this case, I can honestly say that chopping yews is only of value to me if I want the XP or the enjoyment from it. It is not a good way for me to make money—though it might be for someone else who cuts faster or doesn’t have better ways of earning gold.

Now let’s take the yew logs example but apply it to something else: collecting eyes of newt to make super attack potions. This involves simply running from a bank to a a store, buying a bunch of eyes, then banking and repeating. Let’s suppose I can gather 1,500 an hour by doing this, and eyes of newt are worth 80 gp each. This means the monetary value of this activity is 120k per hour.

From a purely financial standpoint, this is worth more than cutting yews—but it’s still less than I can make in some other way. It doesn’t do as well as yews on the non-financial considerations either, because it gives no XP and is certainly not enjoyable. What this means is that the only reason to bother getting my own eyes of newt is if I want to do so for self-sufficiency reasons.

I call activities that are required to get materials for skills but that give no XP themselves grunt work—this is because they can generally be done by anyone, usually requiring no skill levels or even thought to perform. In most cases, grunt work is only worth doing either if it makes the player more money than he or she can get in another way, or if the player puts a high value on self-sufficiency. Otherwise, it is not worthwhile.

I personally do not care much about self-sufficiency in most things, and I prefer to avoid grunt work as much as possible. Why? If I’m going to engage in an activity that provides no XP, then it needs to be enjoyable or beneficial in some other way. I’d rather find a fun, rewarding way to earn 120k and then use it to buy 1,500 eyes of newt than spend an hour running from Draynor Village to Port Sarim.

Similarly, when Summoning came out, I actually made a spreadsheet to help me figure out which secondary ingredients for pouches were worth getting myself, as opposed to just buying them. Since the skill was new, some items were in high demand and prices for them rose so high that it was worth getting them myself even at rather high costs. Other items, though, it made more sense just to buy.

It’s worth noting that the utility of certain activities will change as the value of the items they produce does, which is one reason why you should keep track of market changes. Don’t assume that because it makes sense to gather an item yourself now that it will in the future—and vice-versa.

For example, when the Hunter skill was first released, I wanted swamp tar to make herb tars, and I didn’t particularly want to gather it myself. Yet people were paying 1k each for them, and I knew I could get around 1k per hour by killing cave slime: 1 million gold an hour made it an easy decision to do it myself. But now, with swamp tar at under 200 each and my own earning potential higher, it wouldn’t be worth doing for me. The same occurred with Summoning seconds to a certain extent.

Opportunity Cost - The Most Essential Concept in Efficient Gameplay Avoiding False Economies, or, Why You Can’t Afford to Be Cheap