TruthScape.com - Why Do So Many Skills Lose Money?

The title of this topic has always been one of the great questions on the minds of many RuneScape players, and that is even more the case today, when many players feel it is harder than ever to make money. Of course, some skills, like Construction, are intended to be “money sinks”; I’m speaking not of those, but skills like Herblore, where you are transforming raw materials into a finished good. This production process should earn you money, yet it usually does not.

Players point fingers in many directions to explain what’s happening; they blame the Grand Exchange, “greedy merchants”, “greedy skillers”, the end of Wilderness PKing and much more. Yet most of these are, at best, secondary factors. The real, primary reason why skills lose money boils down to one simple reality: skills lose money because skillers are willing to lose money.

In a free market (or “reasonably free”, as RuneScape’s), the price of items is dictated mainly by two factors: how much of it is in existence (the supply) and how much of it people want (the demand). The problem with most skills is that the supply of finished items is far, far higher than the demand for them. And the cause of this is skills that can only be raised by mass producing enormous quantities of goods.

Consider someone who is trying to raise the Herblore skill, for example. Many players, upon hitting level 76, would start making magic potions, since they give the most XP for the time required, and the ingredients aren’t that hard to get. They’d stick with this usually until hitting level 81, when they’d start making Saradomin brews.

Well, it turns out that you have to make 4,965 magic potions to get from level 76 to level 81! Now, how many people are actually going to use anywhere near that number of potions themselves? Virtually none. So they try to dump them for whatever they can get for them, and that’s why magic potions are ridiculously cheap: they sell for only around 600 gold pieces each. Yet the ingredients for making magic potions cost over four times that amount. This means the net loss on each potion made is over 2,000 coins, as shown in Figure 132. Multiply it out, and the results are pretty bad: someone who makes 4,965 Magic potions to get Herblore from level 76 to level 81 will lose over 11 million worth of gold compared to just selling the ingredients used in the potions!

**Figure 132: Expensive Experience**
You can get lots of XP by making magic potions, but boy are you going to pay for it!

It’s important to understand that the Grand Exchange has not caused this imbalance between raw material and finished good demand; it has simply made it more visible. Before the GE, the price of magic potions was much higher than 500 gp, but it was nearly impossible to sell them in volume, so players just stored them in their banks where they couldn’t be seen. (I still have hundreds that I made over a year ago, in fact.) The glut of supply was always there.

Okay, so the problem is too much supply of finished goods, and that’s why they are so cheap. But given this, why do people keep making those finished goods at all? Why would a player be willing to lose 10 million gp to raise his Herblore by five levels?

Consider that in the real world, nobody would ever bother. If a business made a finished good worth less than the materials that went into it, it would be bankrupt very quickly. A real world chef or pharmacist or blacksmith would never spend hours working just to lose money. Therefore, why are RuneScape cooks, herblorists and smiths willing to do work and lose money for their efforts?

There are several answers to this, which underscore essential differences between RuneScape and the real world in three areas: experience, work and the availability of money.

Someone who is learning a trade or starting a business in the real world might well be willing to forego earning money, or even take a loss, while they learn the ropes. Consider, for example, an apprentice photographer who works for free under a master to learn his secrets, or a gardener with a new business who cuts lawns for free to develop a reputation. This is only done, however, as a means to an end: the photographer plans to make money from what he learns when he goes out on his own, and the gardener is hoping he’ll get customers who like his work. If this doesn’t happen, they have to try something else.

This is true to some extent in RuneScape as well. For example, I can remember deliberately losing money powerleveling Runecrafting up to level 44, so I could make nature runes. The money I spent getting to the goal was more than made up by the money I made when I got there.

But at the same time, this game has thousands of players for whom experience is not a way to enable making money; rather, experience is the goal itself. I mentioned in my skills overview that there are many reasons for training skills other than money, and the folks training for those reasons don’t mind losing money to get XP. Since they are willing to sell items at a loss, they set the tone of the market for everyone; after all, nobody will pay 1k for a magic potion if someone else is willing to sell for 500 gp.

Special features added to the game can also have a big impact on item values if they enhance XP. Goldsmithing gauntlets are a quest reward that, when worn, increases the XP you get when smelting gold ore by a massive 150%. Naturally, players want to take advantage of this, resulting in huge demand for gold ore, and a lot of gold bars clogging the market as a by-product. This is why gold ore costs over double what gold bars do, which sets up the classic trade-off of speed versus money.

A related issue is the skillcape. Players want to get skillcapes to show them off, and they don’t mind paying to get them.

It’s common to hear players in RuneScape talk about particular skills being “hard work”, but in the context of real work, this is rather silly, is it not? How much work is involved in forging 100 sets of steel armor in RuneScape, compared to what it would be in the real world? Or baking 1,000 cakes? Or growing a crop of watermelons (much less a bunch of trees? J)

Sure, it’s a game, and it’s supposed to be fun, not work. But this is also why players don’t mind losing money in the game, when they would in real life: it’s not really hard work at all, it’s just a few mouse clicks and some time.

Even if a real world blacksmith were willing to operate a loss just to get experience, he could not do so for long—where would he get the money to buy more materials to keep his business going? Assuming that being a smith is his career, that’s what he spends his working time doing, and is how he expects to make his money. He doesn’t likely have any other significant sources of income.

In contrast, a RuneScape player is a classic “jack of all trades”. I can be a smith one moment, a fisherman the next, then a lumberjack, an apothecary, a powerful wizard, a deadly archer or a fearsome warrior. If I want to lose money leveling up Herblore, for example, no problem: I just earn it raising some other skill. In fact, many players deliberately finance the losses in raising a skill like Cooking by making money with other skills like Runecrafting. That’s obviously not an option in real life!

In considering the possible solution to money-losing skills, we must first ask ourselves: is it really a problem? Is it written anywhere that all skills must be moneymakers, or is it just that some players assume they should be? After all, there are many other reasons to raise them.

That said, I do think it would be nice if those who devote a lot of time to increasing skill levels saw some sort of tangible return for their efforts. The problem is that there really isn’t any way to resolve this without making major changes to how RuneScape skill works. As long as you have to produce tons and tons of unwanted finished products to get XP, there will always be huge oversupplies.

I think that this is one reason why Jagex has been implementing minigames that give XP in various skills: to provide ways of leveling that don’t involve making mountains of “stuff”. My hope is that this trend will continue, but also that Jagex will explore more ways of tweaking skills so they don’t really so much on grinding out products in quantities far greater than players want.