For one to truly understand why crafting sucks in most MMOs they must have a basic understanding of economics. Now don’t be scared of the word economics, because to be honest economics is easy to understand and economics is a law, meaning it can be applied anywhere in the real world or virtual world. It is not so much as a theory as many proclaim and it cannot be re-structured as governments claim. It is like physics and you cannot break the laws of physics.
The most basic rule of economics is supply and demand. The rule is, if supply is up and demand is down prices fall. However, if demand is up and supply is down prices rise. Really this is as simple as it gets and when it comes to economics and it’s really the main thing you must understand. But this understanding does not describe in great detail as to why crafting in MMOs suck. To describe why crafting sucks in most MMOs I have to break it down into segments. The segments listed each are not are not a representation from good to bad because each play a major role in why crafting and player economy well... can just plain suck.
In traditional MMOs the main way to progress your character is through levels. The problem with the level system is that not only does the player's character have levels but so too does the gear. Therefore, as the player's character levels up the gear he has acquired previously begins to depreciate. Eventually the player will have no desire to maintain his lower level gear; he will at this point find gear that matches the appropriate level of his character. Now why does leveling matter in a player crafted economy? Well in most MMOs the level process is rather quick, meaning a player will out level his gear in a matter of minutes through hours and with a short life span on gear, the player has no desire to spend a great deal of time or money into acquiring gear from other players especially when gear is easily available through quest or drops.
Quest Rewards and Random Drops
For the average player many quests can be boring and often times for players to complete these quests the devs throw in rewards, such as, money, gear, or even random drops to encourage players to complete the quest content. However, the quest rewards diminish the need for crafted gear. If a crafter decides to craft a nice piece of leveling gear and throw it on the AH, chances are it will not sell for a profit because the demand has been so distorted and driven so low due to the massive supply of gear through quest and drops. But wait, can't I just sell the random drops on the auction house? Sure you can try. But due to the leveling system chances are most players will not run to the auction house to spend money on gear that will be obsolete within the next one through three hours.
NPCs and Rep Vendors
Just when you think the market could not get any more saturated with gear from quests, drops, and also let’s not forget other crafters, there is another player in town. NPCs. Introducing gear on NPCs drives the value of crafting down even more. There is now even more supply of gear in the economy while yet demand for crafted gear still remains non-existent. NPCs only make it more convenient for players to purchase gear, I mean why run all the way back to the AH to get gear when you can just buy something off the nearest NPC and continue on your journey without any interruptions?
The Crafting System
Yes, the crafting system must be interesting but most importantly tedious or at the very least a hard slow and expensive process. If a player can simply power level a tradeskill in a matter of hours, then crafting will not play a major role into the economy. The reason why, is that there will be too much supply and competition to where players will either break even or slightly make a profit that will ultimately will not make crafting worth the time or effort. There's nothing worse than being a master smith only to find out that just about everyone else is also a master smith as well.
What is also important is that mats cannot, I repeat cannot be on a teir system. All mats should be valuable and usable in all levels of crafting. In other words copper should not be obsolete after level 10 and finally, crafted gear should be differentiated by player skill. The higher the players skill is compared to the item being made should increase the chance of the item being a higher than normal quality item or result in producing more than one item.
As a general rule, you must remember that economics is a law and that you cannot change the laws of economics. For a simple understanding of whether an MMO will have a good crafting or tradeskill economy that's player driven, you must inform yourself on whether or not any of these rules apply towards the game you're interested in. If they do apply then it's given that crafting will not have a huge impact on the game or the economy and if you're looking to be the guy who makes money selling his goods to other players it will not be the game for you. Your best bet is to look for a game that's more market driven and doesn't subsidize gear through means outside of player trades.