Guild Wars 2

I was thinking yesterday of the effects of the gems to gold exchange rate if a “gem sale” were to happen. Say for example I have 100 gems going for 1 gold, and Anet announces a bonus 10% gems with purchase event, or something similar. Chances are, those 100 gems will go down a decent amount and only go for 80-70 silver. It might rebound back, but the next event would just pukitten back down, maybe further than before. Does anyone else think if these kind of “sales events” were to happen, gems would become a lot less valuable? Would it effect the overall economy?

The gem-to-gold exchange rate not being fixed already affects the economy, IMHO. I think it’s ridiculous that a currency (gems) has one fixed exchange rate (cash) and one flexible (gold) rate. It seems like it would be frustrating for customers in both directions, and not beneficial to anyone.

“Blast it, I wanted to buy another dye pack, but now it costs almost 1g instead of 50 silver!”
“What the heck, I spent $5 on gems last week to convert for gold, but this week I’m getting 10% less for my money? Forget that!”

Maybe the intent is to discourage people spending real money to get gold? Or to say that cash-to-gems is a better option, so just use that? Either way it kinda sucks to me.

In the case of a gem sale, you’d see the price of gems in gold drop as well – so you’d get more gems for your gold, or less gold for 1 gem. The precise amount would depend on the elasticities of the dollar/gem and gem/gold markets, which I could only speculate about.

The impact on the gold/item economy would be presumably be pretty minimal; you’d have a price increase from velocity effects (the gold being sold is presumed lower velocity, bought gold high velocity), and likely a shift in the demand structure (holders of low velocity excess gold buy different things than people who buy gold).

You’d have a spike in those effects when the sale was announced, that would sustain during the same, and then gradually decay after the sale ended – the effects would linger since there are time lags involved – until the market eventually returned to ‘normal’ after enough time had passed.

The gold-gems exchange rate has been pretty steady for the last 2 or 3 weeks and has been a slow increase since about 2 weeks after launch. If you read the graph on the exchange window, it shows the peaks and valleys and you can see if you are getting a deal or not. I don’t think 1 person can effect it much unless they are exchanging 1000s (or even 10,000s) of gems.

Remember also that Gems and Gold aren’t freely interchangeable. There is a “Tax” applied by Arenanet on this market as well. My tests show that if you convert Gold to Gems and back again immediately you lose 28% of your wealth. I don’t have a way to determine which “side” this Tax (Gems to Gold vs Gold to Gems) is applied on (as there isn’t a third commodity to compare it to) so I assume that its half (14%) on either side.

I’d assume the entire tax is applied to the gem side, because that’s what anyone competent would do.