Supply and Demand at IGE

Over at Grimwell Online, Mank points to a post by Edward Castranova over at Terra Nova in which he mentioned IGE has stopped buying WoW gold. That post, and the thread at Grimwell, cover some of the significance of this.

I have some other thoughts.

Yea, supplies may be up. Yea, Blizzard banning 50,000 accounts is pittance against the millions they have. But, demand is still down. I think there's three more reasons for this:

1. WoW is a virgin territory for new farmers, but the amount of buyers has not increased at the same pace as the number of farmers. Maybe that's because the game is easy enough people don't want to cheat. Maybe it's because so many players are new to this genre they don't even yet know how much time-sinky stuff they really want to put up with. Or maybe:
2. The game rules don't compel RMTing because the best stuff most sought can't be bought just with gold (either requires Honor Points or being on a Raid to loot it)
3. Blizzards rather contrarian view to the practice is pervading the business end of the industry. How much can IGE actually grow if the biggest portion of the space in which they operate (not the genre all over, but the diku-inspired Black Market end) adamantly opposes them? WoW is the Wal*mart of the genre. If you're a supplier of something Wal*mart would carry, and Wal*mart decides not to carry it, you're in trouble. They're not the only game in town, but they make and break companies thataren't as diversified. IGE might be in a number of games, but WoW's market is clearly the largest in this subset of the genre. Not tapping into them means not being able to grow as a company beyond the size they are. And a company not growing is a company generally seen as being in trouble.

What do you think?