Guild Wars Economy: Who's to Blame?

funny, cuz i used my understanding of real world economics to make millions in this game.

last i checked, you dont see people selling things for 100k+XXX salvage kits...
while the value of gold in relation to solid merchant goods (by that i mean salvage/id kits, etc) never changes, its purchasing power changes FAR more rapidly and radically than in the real world, because its a smaller economy and because there is no "upkeep." all the money thats amassed in the game can be put directly towards items to use, items to collect, runes, materials, etc; preportionally the gold/ectos/whatever hit the market with a far greater speed than in the real world, because players do not ahve to spend money on food, housing, electricity, taxes, etc.


exactly as stated above. this means that the guildwars economy is changes at a faster pace, but for the most part the same laws apply.

a semi-redundant statement, but one that nonetheless deserves an address of greivances. the fact that the prices range dramatically for similar items (and by that i mean identical stats, with different skins, or same skins with different stats) has FAR less to do with the lack of "need-driven purchasing" than it does with the (by comparison) EXTREMELY low level of stat-capping supplied in guildwars. if it was a game like diablo2, where the variances where pracically limitless, and the difference between a highend damage mod and lowend damage mod was far larger (and far, far, far rarer) then you would see the prices gauged more logically. but because guildwars is not itemwars, like most other mmorpgs, the massive price differences are reserved simply for items based on skin and marginally different statistics.
the fact that there is no "need-driven purchasing" leads to an excelleration and exaggeration in price flucuations, but by all means does NOT mean that they are applied with any semblance of randomacy. the laws of economics apply very much so in guildwars as they do in the real world, just at a different scale and speed. the same would apply for any micro-economy.

wrong.
in the world of guildwars, if -as the example you gave- we are referrign to greens and different purveyors of them, then i propose this hypothetical instead.
if sellers of greens stake their prices artificially high, it will NOT lower the price of greens, instead they will just end up with a useless stock, and a large quantity of weapons with a depreciating value, that they do not wish to market them at.
this, by itself, does not lower the prices. however, as the greens are continually farmed and released into the market, their price will naturally go down at an exponential rate. for a few reasons: a; simply supply vs demand, the increased supply vs the demand, equates to a decrease in prices. simentaneously, because they are being made more available to poorer players, they lose their demand among the wealthy, further lowering the prices (very few people of wealth both in game and in the real world, possess zero status symbols). this is what leads to the absolutly unprecidented fall in prices seen by greens, couppled with their hideously high drop-rate, and their absolute fall from grace in the eyes of middle-class to wealthy players, they bottomed out from 500k a piece, to 50k, in a very, very short timespan.
but i digress...
how does this relate to our overstocking-overpricing-green-seller?
well, eventually he will realize that the price is going nowhere but down, and he will sell off his stock for far less than what he paid, and as people see a single person saying "selling X40 of XXXXX green weapon for XXXXX price!" it forces other sellers to match his (now) lowered prices, again, further lowering the price.
all this is, again, seen in the real world market.
dont believe me?
what do you think would happen if tomorrow "Company X," which has been having excellent quarterly reports for the past decade all of a sudden was subject to a news report saying that their stock prices were bound to plummet due to a hostile-aquisition by "Company A?"
even if the repoert were 100% false, the stocks to company x would almost definetly hit rock bottom, untill it was found out the report was a farse.
the market, in GW, and in real life, is subject to what people are told and observe. people trying to sell items at artificially high prices doesnt lower the items value, it just keeps them from making a sale.


wrong again.
the high price of high-quality crystallines is due largely to the small number of high-quality ones in existance, and the small amount of people who are willing to go balls-to-the-wall to bid on them.
think of it this way.
player A and Player B are both bidding on an 8 15>50 crystalline.
player B has 5 million gold to spend
player A has 20 million gold to spend
who do you think will win the bid?
answer; unless player A is very frugal, most likely he will walk with the item.
but, assuming both players are willing to spend the entirety of their spare funds in the bidding war, you will probably see player B place a bid of 5 million; perhaps 6 or 7 if he is willing to do soem farming/trading, or just sell off a few things he doesnt really need.
this forces player A to match the bid, if he wants the item, and because he doesnt have to exert any effort to do so, he most likely will.
this, then, sets the price quite high for said crystalline.
however, if 8 15.50 crystallines are then starting to flood the market, and player A already has his from the last time he bid against player B, theres a good chance he wont go bidding on the second one, unless he really just likes wasting money.
this then means that there will either have to be other players wealthier than player B to keep the price high, or, the price will be lowered as player B commands the high-bid.
of course there are flukes when sellers or buyers dont know the items value, or the means of their counter-bidders, but on high-end items such as crystallines, this is rarely the case.
the VAST majortiy of the rich players who purchase highly expensive items like 8 15>50 crystallines do not resell them. they dont have an interest in keeping the prices high, because they dont resell them.
however, as long as there are wealthy players willing to outbid poorer players on such items, and the supply isnt great enough to exceed the number fo wealthy players who want them, you will see the prices very high.
it has nothing to do with 'controlling the market" and everything to do with the supply vs the demand.


wrong again.
its quite possible to lose money in guildwars, i assure you of that.
bad investments can lose weathy players millions. good ones, can make them millions.
this applies to any player-class in guildwars, preportionally.

this, is true.
because this is a direct example form real-world economics.
the people who stand to gain and lose the most are the wealthy and destitute.

on the other hand, these same people also stand the most to gain, if they invest propperly and have reasonable market predictions.
its a fact of economics, that the larger the risk, the larger the profit potential; and vice versa.

Akh,

Are you saying I shouldn't keep buying orange dye in the hopes it will reach 100k a vial?

go buy 50,000 orange dye...


...shortly after i buy 20,000.

'

**hides the 4 mules already loaded with it** Ok!!!

Akhilleus,

I'm glad that you and I come to the same conclusion, and that you took the time to debate my points of view. Let me, however, retort in the details:

Firstly, I didn't say that an understanding of real world economics wasn't valuable in the simple simulated economy, I simply said that the complexity of real-world economics isn't completely accurate. You'll note that I quote several economic theories in my text, applying the generalities as to real life. If you've managed to use this understanding to amass millions then I can only respect your dedication.

Second, where you discuss salvage kits, I believe you missed my point somewhat. I was only attempting to say that the value of gold never changes in and of itself. The value of traded items varies, of course, but I simply used salvage kits as an example of a fixed price staple item. I could have easily said Grey Dye, or Crafter Weapons.

Further to that, although you speak as if we are in opposition, if you re-read my points, you'll see that we are in agreement that the lack of an upkeep cost facilitates more variance in the economy, and although I did not consider the time frame of these changes, I certainly agree that they are quicker thatn you would observe in the real world.

Where you retort to my consideration of want-driven purchasing, I invite you to note that I never implied that any randomness on the part of item pricing. I simply observed that many purchases are valued based on other factors than their worth in terms of game statistics.

I had to requote that last, sorry. If you read your text, then my quote, you'll note that you have simply said 'wrong' then gone on to repeat my point in more detail. We are in complete agreement that artificially maintained prices cannot stand in the face of supply and demand.

When it comes to your point on Crystallines, I find that I agree with your retort over my original point, I had not considered people who re-sell (or not, as you succinctly point out) only those who originally obtain and then supply. I'm sure you can agree with me that the limited number of HoH winners that drop a Crystalline Sword can and do control their prices to an extent.

I stand by my point that players will only increase in wealth unless they wish to do otherwise. You say:

Possible, yes. Neccessary, no. My point was that unless a player chooses to invest (in commodities, re-sale items, new characters or whatever) they are quite able to never experience any form of depreciation of wealth. This is an observable fact and is quite undeniable, I'm afraid.

To sum up then, I think if you reconsider my first post, you will find that we come to the same conclusion from very similar observations, using real world economic principles modified for the simplified economy of Guild Wars. I apologise if you, in fact, misconstrued some of my points, and I thank you for bringing some points that I had not considered to the discussion.

Wow. Some of you are taking this economy thing pretty seriously. It's just a game economy and such an economy should always be catering to the casual player considering this is a casual player's game. I think the economy is fine now. I really couldnt care less if people are complaining about their precious stash dropping in value or getting that superficial thrill in buying something ridiculously overpriced.

I understand and agree with "working" to get stuff, but some of you take it to ridiculous heights. I'm pretty sure most GW players would rather not grind and grind mindlessly to get the gold to pay 100k for a rune.

its because i "take this economy thing pretty seriously" that i do not have to "grind and grind mindlessly" to get the gold to pay for what i want or need.
if the average farmer thought about economics and practiced it for half as much time as they farmed, they would probably make 2-5 times more money.


i suppose you;re right, though perhaps i was misinterpreted.
what i meant was that, in relation to the vast majortiy of the item market, golds purchasing power does change. for example; 300k gold will get you much, much further than it does now.
same goes for actual currency. while the numerical figures dont change, their ability to purchase items relatiove to the supply, does.
however, this is one area thats different than in real life.
example; in the 1700s-early 1900s upwards of 80% of the average family's income went towards providing food, which dominantly consisted of bread for this period of time. this figure is probably somewhat reminiscent of expenditures seen by families from the roman period up untill then, but no cencus on familial expenditures were taken untill the 1700s, mostly because of a lack of interest on the part of governing officials. why do i bring up this particular period of time do you ask? because it was in the 1700s-1900s that the birth of modern economic theory and practice came to fruition.
i dont think it facilitates differences, i just think the lack of such a massive level of upkeep allows for an excelleration in changes. you'd find that should 80% of a GW players income be forced to be diverted to character upkeep, most people would have their characters starve to death, and subsequently quit the game. very, very, very few people in-game are capible of money-management, and why would they be? its a game.

agreed, i do not dispute this point. i merely wished to rephrase it. i maintain that the pricing of items still strcly follows supply and demand, but unlike most games the GW economy is not as simple as "this item has better stats, therefore its worth more."


amybee i misunderstood you. the way i read it it seemed that you were saying that the fluke in the economy is people who hoard items and try to sell them for prices other than viewed as generally acceptable by the public.
this is what prompted by retort that people who hoard items dont change the economy (an exception may be noted here for items whose prices are at least partially subject to merchants. theoretically if someone possessed enough ecto, they could manipulate the market, but it would have to be an absolutly substantial amount to make any notable changes for more than a few moments) .

you'd be largely correct to believe this.
however, there is 1 factor that supercedes it; the number of wealthy players willing and able to put money on the table for them, as seen in my example.
as another example; if a perfect crystalline dropped, and 1 very wealthy player convinced a certain other half dozen people to abstain from bidding on it, they could probably lower the price by a several million. the more they lower the price, the more people they would have to convince to drop from the bidding (because more people would be able to afford a top-notch bid).


this is where i disagree, simply because of purchasing power.
that 20m gold will get you the same amount of skills and salvage kits, but it would get you further in terms of weapons and shields and runes.
if a year ago someoen stored 20m in gold, and didnt touch it till now, that same 20m would get them far more in the way of items than it would have a year ago...but it could ahve easily gone vice versa.
granted, while 20m would have gotten you less back then, preportionally there were far less people with that means, and thus it was a far more impressive number back then (most people who could even afford a single gold item a year ago, probably did not own more than that single gold item).


likewise.
when it comes to economics, i am very, very picky on wording and examples. as one should be. because with economics 1 change in details in thinking can mean a massive difference in practice.
if, you tried to make the same points as me, then i apologize for coming off as an opposition to your opinions.

I certainly agree that buying power increases over time for a given amount of currency, but only for unnesseccary items.

Lets say that a year ago I stored 100k on a character and never logged into that character until today. In terms of neccessary items to continue playing the game at the same level I was when I stored the money, I would spend no more and no less cash than i would have the next day.

Armour; neccessary, and at a fixed price. Crafter weapons; neccessary, and at a fixed price. Staple items; neccessary, fixed prices. Certainly weapon mods (alone or atttached to a green weapon) are advantageous, but not essential. Weapon skins are desirable, but not essential.

The point I was attempting to make clear was simply that the design of the game is such that the less wealthy players are not disadvantaged by their lack of wealth, since all essential items are available from fixed price sources such as Collectors, Crafters and Trainers, who are not affected by supply and demand.

A corrollary effect of this price fixing is of course that any player at any level of wealth can be certain that their currency will always hold its value unless they wish to take the risk of investing it in the player driven economy.

I think this is a very wise move indeed, and before deciding that the economy is broken, players should look at their position within the spectrum of supply and demand and ask theselves if it is indeed the fault of the economy, or their own perhaps uniwise investments.

Imagine if all weapons were sold by players, and no npc carried them. That would indeed 'break' the economy for a large number of players!

I have to say that both Faith and Akhilleus are right on this one. There is still plenty of money to be made. You just have to invest wisely given the rapidity with which the GW economy changes.

what about runes?
yeah, its true most items arent necissary. but my simple point was that necissary or not, they follow the rules of economics. ^-

I'm probably a "noob" for saying this... But it never really occurred to me that the economy was broken or that anyone needed to be blamed for it. I've been able to afford to very nicely equip a pile of characters just by playing the game. Isn't that how a good game economy should work?

What about them?

Runes provide a bonus to an attribute; by definition a bonus is over and above the norm. Runes are extremely advantageous, of course, but by no means neccessary. Contrary to what a lot of self proclaimed elite players would have us believe, no situation makes 16 in any attribute essesntial.

Even if it was essential to success in a given area it isn't essential for accessing that area: Certainly the 'rules of economics' define rune prices as you say, but they are a non-essential item.

just like a weapon with a damage mod, or any mod for that matter, isnt essential?
virtually impossible for them to operate on the same level of another player without them.
while on paper, the difference of 1-3 points doesnt seem that big, if you actually look at it in practice, its quite substantial.
runes are CERTAINLY more essential to the function of your character than ID kits, which are at a fixed price.
oh...and armor and crafter weapons both require materials; whose prices DO change. :P

I'm not going to get too involved into this discussion, however, I'd like to give another view on the Guild Wars economy.

When I had first started the game (a couple months after Factions' Release), I thought it was impossible to get enough money for my Shing Jea Armor. It's 50g a piece plus crafting materials. Now I carry no less than 200k in storage at any time, and frequently give away tens of thousands of gold.

I originally made money through PvE questing, which obviously is slow. I later tried farming, 55 farming even when I bought Prophecies, because I became so desperate to earn money. Then I turned to buying and selling to make a profit. One day I had make 100k alone, in about 2 hours. Now instead of buying/selling I invest in Black Dye, Ectos, etc.

The lesson to be learned is, if you want a million gold or more, you're going to be playing a lot of Guild Wars. I use blue collector shields, I'm not ashamed to say I saved 50-100k buying a perfect gold shield when I could have given that money away to guildies or other people who were in need. I rarely play for more than an hour, sometimes 2 a day now, and I am still making a good deal of money. Simply put, I personally feel it's not too difficult to make money, but don't expect a million gold in a day, a week, a month, etc unless you're devoting a lot of time into the game, or are very good at HoH

I would recommend a global maximum population for all green items (and perhaps other types of items as well - weaps or other items that are chapter specific for example).

The population of items should be high enough that there is a legitimate chance that there would still be drops until the next chapter came out, but not so high that they would be treated as they are now...

This would of course mean - no new green drops unless an account is deleted or the item is deleted from inventory.

It would also mean that the players who get the items first will be active players and consumers of the anet product... late comers will still be able to buy them on the open market, but at significantly higher prices.

The absolute downside of this suggestion would be if someone put a bunch of greens into an account and then for whatever reason never logged in again... there would then be a situation of greens that could not drop and that were not an active part of the world economy.

just my two cents

I don't believe in a maximum of total items, once that has been hit, new players would be crippled in their abilities to make money. Finding a green when you're new is like winning the lottery. Not only is it awesome, they can be sold for a decent amount of money.

Akh, when did you become so long-winded?

and is Faith Angelis the reincarnation of Lady Blue Steel?

Money is worthless in this game... spend a couple days trading seriously and you will have more than you could ever spend.

Anyone can preach with text book material.

but few can extend it to the painfully long degrees i can

Try your luck on the stock market. I dabbled one day for a little fun and have been hooked since.

Why can I quit the game, but not the board?

Simple. Many of the posts here are like a terrible car wreck ... you just have to look.

lol I had that problem...kinda addicted to the forum (thats lame) + reading all the ghey threads by newbies is laways fun

OMGZ!!!!1111 THEY NERFED 55'S (crying followed by more crying)

this is by far the best explanation of forums (in general) that i have ever seen.

QFT yet again. Best explanation ever.

I rarely find myself agreeing with leprekan, and this is one of those times I do. I often read way much more than I post for this exact reason. There are so many threads that I just can't bring myself to post in, not because I don't have something to say about the matter, but because I just don't want to get involved.

Brokeback Guild Wars....