What You Should Know About the Alliance and Horde AH Merger

We have a bombshell, ladies and gentlemen. That's right, come 6.0, the neutral AH is being abolished and the Alliance and Horde Auction Houses are going to merge. I'll give you a minute to freak out, run around the room with your arms flailing, and then come on back and we'll figure out what this faction AH merger means.

Ok ok, this breaking news is a couple weeks old aleady, but I did want to do a full blog post on it, and I'm sure some of y'all may not know. First, yes, it means you will be able to buy and sell things to the horde if you're Alliance, and vice versa. What it DOESN'T mean is that the world is ending, WoW is exploding, or the Auction Housing are going to be destroyed. So, what have we got here?
On every realm, we'll essentially be going through a realm merger, where population increases and competition increases, pushing down prices of most markets slightly. Raise your hand if you've been through a realm merger. Wasn't as bad as you thought, was it? If you haven't, essentially, the few days beforehand, everyone gets nervous, the auction house starts to go a little crazy, and then the merger happens. The three days after the merger, everyone yells at each other to "GET OFF MY REALM," makes awkward one-word combinations of the two realms' names, while the AH is adjusting to the increased competition. Eventually AHers get tired if bidding wars and buying each other out to prove who is top dog (aka. someone runs out of money). After four days...everything is fine.

Will prices fall?
Yes, but not necessarily on everything, it won't be anything to worry about because you might actually be making more profit in the long run. So, if you're a miner or herbalist, chances are you already have a lot of competition. Even on a low-med pop, 6-10 farmers are out and about. So, a merger doubling 8 miners to 16 won't affect the market as much as Blacksmithing, where the number would double from say 3 major competitors to 6. Of course you'd have the smattering of 10 or 20 half-hearted posters, but I'm talking about the people who run their professions like they own it. (People like you, the kind are prepared and read blogs)

But Why Would I Be More Profitable?
So, prices generally fall according to the inverse log of the number of people on the server. Blah blah blah, math, what this means is that if you double the number of people, the price won't be cut in half, but less than that. If you triple the people, prices will be less than a third of what they were. Taking Sky Golems as an example, on the day they were released, on low pop realms, they were selling for 300-400k gold, and on high pop realms like Stormrage, they were at 60-80k within a few hours.

Left: Graph showing inverse log function.
Right: Google related image search. Nailed it, Google. Nailed it. -_-

So, let's say you've been selling 10 gems a day for 150g each. 1500g in revenue. Well, when the population doubles, if you stay on your game, you can expect 20 gems a day, but prices won't be cut in half. So, 20 gems a day at (for instance, but realistically) 100g each, which would total to 2,000g in revenue.

But That's Just Revenue. What About Profit?
Yah, this eats into low-profit-margin crafted professions a lot more that it does other trade professions, true. Miners could essentially mine forever, since small servers are now medium pop and mediums are now large. However, with WoD, they're changing the structure of professions to be higher priced on average. Fewer gem sockets, by itself, raises the price of each individual gem. With items like Sorcerous Earth, and the Alchemical Catalyst, there seems to be incentives to deplete materials by selling goods to other profession users rather than using them yourself (or building up your Garrison or course). Either way, this expansion should not be a "dump all raw materials from Halfhill on the AH." The professions you know and love now are being altered to sell for a higher price in the future. Still, it's early. It's Beta.

So, am I worried about this? A little bit, but not really. There will be a pretty significant adjustment, especially for people on servers who have 15% Horde and 85% Alliance where the Horde prices would plummet, but in reality, most of those server have been merged already and won't be drastically affected. Furthermore, if you've already been through a server merge, pat yourself on the back, because you know what this is going to be like, except this time, you don't have to deal with all the BS in Trade chat. :P

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