Guild Wars 2

The term its not correct. it’s not a tax just an exchange rate spread [ More info : http://en.wikipedia.org/wiki/Bid%E2%80%93offer_spread ]

You are right that if each gem gives more silver, then players will have a better incentive to exchange them for gold. But its not the spread that needs to change (though a reduction would be nice), simply both rates (buying and selling) need to go up.

The downside would be that buying gems with gold becomes prohibitive.

Never under-estimate the psychological aspects of this. When you see gems are worth 70ish silver, and then you only get offered 50 you feel short-changed and that impacts willingness to spend money.

Think of “that other MMO”, they had an XP penalty for resting in the early days, if you didn’t rest you got your XP penalised players were deeply upset by this… They kept the concept but switched around it’s wording; you no longer got an XP penalty for not resting, but you now get an XP bonus for resting – suddenly players were happy.

The same goes here, right now the perception players have is they’re being short changed by the system, somehow we need to make it feel like the gem trader is getting a better deal buying for money and selling for gold than vice versa

Aww, I missed the unedited response.

I’m curious about what I assumed that wasn’t true, though. In fact, I can’t even see anything I assumed at all. All I see is law of supply and demand being applied.

I agree with the OP, and the other posters in this thread.

I feel massively short changed buying gems, because as soon as you buy them, they are less valuable. That’s like buying a “New” item on ebay, then receiving it in the mail to find out it’s obviously “Used”, except for us it’s even worse because we’re not ‘finding out’ they’re worth less.. we know they’re worth less but we have to do it anyways because it’s the only option.

Very sad indeed.

While I am less than thrilled about the 30% transaction fee on Gold/Gem exchanges I have to say it serves a purpose.

And while I don’t know what John Smith’s purpose for it is, I’m grateful that it serves the two purposes I see. One of which is to prevent short term speculation or “flipping” in the Gem market. The other is as a money sink to help prevent triple digit inflation.

But frankly the Gem market needs a complete overhaul. I’ve started a thread, Who Sets Gem Prices?, to address the main issue – the complete lack of transparency in how the Gem prices are set on the Gem market.

Change the Gem market to be a double blind Dutch auction with only the last 25 sales, how many hundred buy orders, and how many hundred Gems for sale visible. Make the 30% transaction fee a 15% listing fee for the Gem seller and a 15% transaction fee for the buyer. Allow buy orders.

Are you sure there’s a tax on Gem > Gold sales?

I’ve got this crazy theory that the gem market is really a sham, completely controlled by A-net.

Do you ever set the prices on the gems you sell? No? who are you selling them to? The people putting out buys for gems? Nope, no one can put out orders for gems, I think you’re selling directly to a-net, and getting gems directly from a-net, maybe based on current gold prices of goods, maybe not.

Darnis.4056:

I’ve got this crazy theory that the gem market is really a sham, completely controlled by A-net.

Do you ever set the prices on the gems you sell? No? who are you selling them to? The people putting out buys for gems? Nope, no one can put out orders for gems, I think you’re selling directly to a-net, and getting gems directly from a-net, maybe based on current gold prices of goods, maybe not.

Current gold prices on good are going down, whilst on the other hand Gem prices are going up. Your theory doesn’t hold.

Yes if you’re only basing it on this one thing alone which has almost nothing to do with the theory…. anyway as I said the theory is crazy, but since there has been no transparency what can a man do but make crazy assumptions?

Darnis.4056:

Yes if you’re only basing it on this one thing alone which has almost nothing to do with the theory…. anyway as I said the theory is crazy, but since there has been no transparency what can a man do but make crazy assumptions?

I’m not basing it on one thing alone, if you go and look at a batch of 50 random items on GW2 Spidy, you’ll see that, on average the overall trend is downwards in value over the last month.

In the same time, the overall trend in the value of Gems is upwards in gold value.

That seems normal considering the amount of gold in the system. I know a lot of people who have thought about parking extra gold in gems but they would need a 30%+ return to get away with it.

In that regard it makes sense.

Khift.4706:

Their goal is to earn the most total profit from the sale of gems as is reasonably possible (i.e. without harming their brand); I think that is fairly evident and normal and to be expected.

I do not think you can take this as a given. Profit maximization is but one of many design objectives for the gem store.

Khift.4706:

A trade of gems and gold between players currently has a massive percentage sales tax.

As best we can tell they are sinking 15% from both sides – eating 15% of the gold from gem sales and 15% of the gems from gold sales. I’m not at all sure what the objective of the 15% gold sink is, as it should be only a very minor gold sink for the in-game economy, but is a pretty large drag on their gem to gold sales, which should end up costing A.Net a non-trivial amount of real money.

If I’m incorrect and they’re sinking 15% of the gems on both sides of the transaction, this goes out the window and what they’re doing is fine, there’s just the question of whether or not the big spread is actually revenue maximizing.

Khift.4706:

So why on earth is there a tax? What good could it possibly do? All the tax does is make gems less valuable.

The tax on the gem side of it is valuable to A.Net. Not only does it put a non-trivial spread on the prices to keep away speculators, but it’s a true gem sink, meaning they make a real money cut off of people spending gems on gold. I see that being totally justified and a great idea.

If they’re sinking gold, they’re basically throwing away money for essentially no reason.

They don’t want people speculating in gems (as in, flipping them for a profit) as a way of making gold. This is a tamper-proof measure, at minimum.

Think about it. If you can speculate in the gem market with hope of making a profit, then so can the gold sellers. If you can mess with the gems-to-gold exchange rate, so can the gold farmers.

Who has more money to mess up the gems market? You or the gold sellers?

Gold sellers also have a very high motivation to screw with the gems-to-gold conversion rate in order to make their gold prices more appealing, or to give themselves room to raise their profit margins on each sale.

There is no trade of gems between players. The faster you realise that, the more the system makes sense.

You do NOT buy gems with gold from another player.
You buy gems from Anet for gold.
You do NOT sell your gems for gold to another player.
You sell gems to Anet for gold.

There is also no real fee of 15% when you buy gems with gold nor another 15% the other way around. No, they have just decided to buy gems at 30% less than what they sell them for at the same time.

Anet said that the gem/gold market is based on players, everyone assumed this meant a “free market”.

Its pretty obvious this is not the case, but its also not a lie by Anet ( and its not a bad thing).

I would venture that Anet established their own “Gem Reserve” ( a sort of Federal Reserve or Central Bank depending on where you live you will be familiar with one or the other).

Now in this “Gem Reserve” Anet started out with X number of gems and set a starting price for buying gold with gems and a selling price for gems to gold.

So as more players demand gems Anet has to adjust the buying price higher so that their “Gem Reserve” does not deplete. At the same time Anets “buys back” gems with gold (or sells gold as we perceive it) from players to re stock their “Gem Reserve” and stabilize the price.

You can read about Central Banks here http://en.wikipedia.org/wiki/Central_bank and see if we agree.

Yeah, I think that’s roughly the right idea, Cancer. Also relevant is the idea of a market maker (http://en.wikipedia.org/wiki/Market_maker).

Although the “Gem Reserve” analogy is reasonable, it’s not quite right because ArenaNet can’t actually run out of gems.

Basically, you could think of it as the “reserve” having a default level of 0 gems, but with ArenaNet being able to go into “debt” on gems. Presumably, this is how it currently is – ArenaNet is in “debt” and the price of gems in terms of gold will keep rising until people are buying gems enough to even things out, and ArenaNet gets back to a zero on their balance sheet.

All in all, I think this is a good system. It’s still driven by market forces (i.e. the players), so it has a tendency to balance things out, and yet it’s much more convenient to use than buying/selling from and to players, because you’re guaranteed not to be ripped off or forced to wait a long time.

The large gap between ArenaNet’s bid and ask prices also serves an important role in ensuring the stability of the market, as well as creating an additional gold sink. If there was no gap, gem speculation would abound, and the opportunities for profit would cause the exchange rate to behave much more insanely than it currently does.