Guild Wars 2

I’ve been thinking about markets in MMOs and I find that extremely interesting. If you look at GW2 as an example the devs are strongly against gaining gold or items while not actively playing the game (botting) but are perfectly OK with gaining gold or items while not actively playing the game (trading post). Neither are risk free methods of earning gold. Bots can get banned and market traders can lose money on bad trades. But despite the risks you can become digitally rich while you are sleeping, working, or doing laundry with either method.

So why is botting banned and trading blessed? I believe it has everything to do with inflation.

All gold is created from drops, DEs, hearts, dungeons, and selling items to vendors. Each of these primary sources of gold adds to inflation. each time a mob is struck down it’s as if the government (Anet) printed a new dollar bill (copper) and handed it to the character. The monetary supply has increased with each action. This is exactly what botters are doing. They are creating money… but doing it while not actively playing the game.

The trading post does not create any gold. What the trading post can do is concentrate or spread out wealth. What markets tend to do is concentrate wealth toward those that know how to work the market. See the 3800 gold buy order placed on a lemon as an example. Most players can’t imagine that kind of in game money and I honestly have no idea how that person got so much. But lets assume they made it on the trading post instead of botting or exploits. If they bought and sold enough stuff to make 3800 gold they’ve probably destroyed at least 570 gold in fees.

If you consider my two groups; botters and traders they are both bringing in wealth to their accounts, but the botters are contributing to inflation by creating gold and the traders are removing gold from the economy.

The thing I can’t figure out is whether the ability to make so much money on the trading post is good or bad for the game as a whole. Traders help the inflation problem, but they also make it seem like the optimal way to make money is with a market simulator instead of traditional game play. It creates a huge stratification of player wealth. Things that are completely out of reach for some players, see legendaries, are achieved much faster than Anet originally intended. Seems like something that could hurt as much as it helps.

I know I’ve got friends that got turned off by having the end game content seem fairly common yet so far out of their personal reach, since they “want to play a game, not a market.” I’m hoping the new content might help bring them back. But none of them, nor I, have gone back to Diablo 3 and the auction house was the major reason we left that game. For Diablo 3 it was depressing that you could go buy a whole set of better gear than you’ve ever personally found. For GW2 they were turned off by the fact that certain skins feel completely out of reach and grinding for gold to buy a skin doesn’t have the same impact as a player as earning or finding the skin. One friend even quit the game rich. He played the market and bought some really nice expensive skins, but he had no attachment to them. He was walking around with some really expensive stuff but didn’t feel attached to it since his character’s journey was mainly flipping crafting mats in on the trading post while standing in Lion’s Arch.

Your complaint is smart people can make money by investing their money in the buying and selling of goods?

xxxzavulonxxx.8413:

Your complaint is smart people can make money by investing their money in the buying and selling of goods?

No,

“The thing I can’t figure out is whether the ability to make so much money on the trading post is good or bad for the game as a whole. "

I’d be curious to hear the positive impact of this sort of market trading on the game as a whole beyond just combating inflation. I only have negative evidence on how it’s impacted my group of friends, but that’s anecdotal and not data.

Positive:

Impatient trader get his money now.

I make money by making smart trades.

We both win.

Sorry if I’m putting words into your mouth (or text into your keyboard), but I think the main issue you have is how beneficial is it for the game as a whole if the trading post is the most effective means of generating in-game wealth as opposed to actually playing the game.

I don’t necessarily have an answer to this, but it is an interesting question..

I think it’s worth bearing in mind that different players have different motivations, and for some of them, playing the (virtual) markets is the type of gameplay they enjoy. For others however, even if you could conclusively prove to them that playing the market is the best option to gain gold, they will not want to “sit idly watching numbers” and would rather go out and farm in Orr with their time.

In purely economic terms, the market trading in this game is healthy for the economy. As you noted gold is removed due to fees, but in addition traders add liquidity to the markets and reduce the margins between buy and sell prices which benefits “regular” players.

Astraea.6075:

Sorry if I’m putting words into your mouth (or text into your keyboard), but I think the main issue you have is how beneficial is it for the game as a whole if the trading post is the most effective means of generating in-game wealth as opposed to actually playing the game.

Yeah, that is the bigger question.

Astraea.6075:

In purely economic terms, the market trading in this game is healthy for the economy. As you noted gold is removed due to fees, but in addition traders add liquidity to the markets and reduce the margins between buy and sell prices which benefits “regular” players.

Right, clearly you are adding liquidity to the market, but how important is that to the health of the game? Or, further, why should you be the one playing the role of market maker? Anet could do it, which would take gold out of the market, provide liquidity, and prevent some of the centralization of large amounts of money on player accounts. Anet playing the role of “market maker” would further combat inflation as their profits could be taken out of the economy all together. In this scenario you and I could still play the market but not as effectively in the short run.

Magikker.9243:

why should you be the one playing the role of market maker? Anet could do it, which would take gold out of the market, provide liquidity, and prevent some of the centralization of large amounts of money on player accounts.

Because John Smith is an economist not a communist (to my knowledge at least) and wants a healthy player driven economy. The thing missing from most MMO’s and GW2 to a lesser but still huge extent is a stable money supply. If you look at inflation rates in game compared to real world you’ll be hard pressed to find any game that makes Germany post WWI look anything but ideal, and a truck load of marks at that time still couldn’t buy food for a family… unfortunately the only way to avoid hyper inflation in the game is to take out the ability to sell to vendors and require item to be bought from them on a regular basis (item condition degrades over time w/o death) thus restricting trade to between the players for wealth transfer or dumping money into a gold sink .

you’d have to have a “job” in game and be good at it to make enough to progress… too much like real life there. I like how it is… would like the TP to have an auction option though.

@ Magikker:

I did say I didn’t necessarily have an answer for you… lol.

Given ArenaNet play this role in the gem exchange, I’d say there’s probably no technical reason why they couldn’t do this for whole trading post, but I don’t think many players would react positively if they did so. There are numerous posts where people speculate about them manipulating the gem exchange, given some of the recent price spikes in ectos, T6 mats, dyes, we’d be deep in tinfoil hat territory if ArenaNet was the only market maker.

Let me add another piece of “anecdotal evidence” for you. Due to other commitments (work, family, etc.) I don’t have as much time to play the game as I would like to, so it sometimes feels that I’m not progressing my in-game goals very fast. I can usually manage however to log in when I’m getting ready for work in the morning and put up a few buy and sell offers. I don’t make a lot of money during from these sessions, but it does help me feel that I’m making some progress with the game even if I haven’t managed to find the time to level/explore/complete DEs/etc and the supplemental income has been useful to me while I’ve been levelling.

I don’t really agree with the idea that wealth inequality is harmful when taken in the context of a video game.

As for ArenaNet serving the role of a market maker, how exactly are you suggesting they would do this?

I don’t think the gem-gold exchange model would be a good fit if you applied it to every single item on the TP. It would add a lot of complexity and a lot of work for ANet in monitoring it, while having many more potential vulnerabilities due to different behaviours and trade volumes for different items (hence requiring “tuning” for each individual item). At the same time, you would lose a lot of transparency (which people already complain about on the gold-gem exchange alone).

Another alternative would be for ArenaNet to have some kind of automatic trade-bot, but then it would need to be highly robust in order to handle variable market conditions without being exploitable. They could pay humans to do it, but that seems like a wasteful expense to me.

If you have a good suggestion, I’d be happy to hear it. On the whole, my view is that ArenaNet acting as a market maker for every single item on the TP would take much more work, effort, and added complexity than it’s worth. The TP as it currently is performs its intended role very well and I see little reason to change this.

I’m not so sure about the argument or the point we are making here. I think what you’re trying to say is that GW2 is lack of some content to really attach to the people. It could be anything besides trading post, legendary skins, dynamic events, world vs world. But for your friend leaving the game the reason could be more complicated than we would’ve known.

This is a very interesting discussion. Much to the extend of a personal interest. So it only depend on what you’re looking for in this game. Is it social recognition? Simple pleasure, fun? Pvp, sense of winning? Being smart, accumulate wealth? GW2 is more like a platform to those things and as for a platform I’m satisfied for the content it provided. There are definitely more work to be done and we can see it coming our way. I think this is more like a suggestion thread and how to make this game more attractive? There is nothing wrong with playing trading post, and botting is in it’s nature unfair in all senses.

Astraea.6075:

@ Magikker:

I did say I didn’t necessarily have an answer for you… lol.

Given ArenaNet play this role in the gem exchange, I’d say there’s probably no technical reason why they couldn’t do this for whole trading post, but I don’t think many players would react positively if they did so. There are numerous posts where people speculate about them manipulating the gem exchange, given some of the recent price spikes in ectos, T6 mats, dyes, we’d be deep in tinfoil hat territory if ArenaNet was the only market maker.

Let me add another piece of “anecdotal evidence” for you. Due to other commitments (work, family, etc.) I don’t have as much time to play the game as I would like to, so it sometimes feels that I’m not progressing my in-game goals very fast. I can usually manage however to log in when I’m getting ready for work in the morning and put up a few buy and sell offers. I don’t make a lot of money during from these sessions, but it does help me feel that I’m making some progress with the game even if I haven’t managed to find the time to level/explore/complete DEs/etc and the supplemental income has been useful to me while I’ve been levelling.

I couldn’t help to reply to you that I really like your altitude to treat things. Similar situations will happen for me too (not right now ;p). keep it up pal and enjoy the game!

Most of the trading in real life North American markets are done by trading algorithms. There’s actually course on how to write your own going on at Coursera right now. It’s not quite rocket science, though it’s not trivial either. They could hire a grad student with the right background to work it out for them if they are interested.

I think the question for me keeps coming back to whether the consolidation of wealth in the hands of a small number of players is good or bad for a game world. I’d love to see the data on the wealth distribution in and I’d be very curious to see what the dev team would think of that data. I’d guess what looks normal under the lens of Austrian Economics might not look so good under from the point of view of community manager or content developer.

Magikker.9243:

. I’d love to see the data on the wealth distribution in and I’d be very curious to see what the dev team would think of that data. I’d guess what looks normal under the lens of Austrian Economics might not look so good under from the point of view of community manager or content developer.

I asked this a while back, John (Calling devs on first name basis xD – hooray for having a dev who actually participates in the forum) pointed out quite rightly it hasn’t even been a full fiscal quarter since the game launched, but it does sound like something he’ll post up when there is more data too look at.

As for whether trading is bad; trading arbitrage works in everyone’s favour as it narrows the gap between buying and selling price on goods. Farmers get better value for their produce, consumers get products at a better price and it keeps the economy ticking over so the crafters actually shift their piles of products.

There really isn’t a bar to entry in trading, I make over 100 gold a week and rising fast, and I didn’t start trading til 1 month or 2 after launch; well after the exploits and cheap precursor shenanigans. Fundamentally the bar to entry isn’t funds; it’s being confident with mathematics – being both willing and able to look for places to make a profit, put gold on it, and get your calculations right so you actually make that profit

Magikker.9243:

I think the question for me keeps coming back to whether the consolidation of wealth in the hands of a small number of players is good or bad for a game world. I’d love to see the data on the wealth distribution in and I’d be very curious to see what the dev team would think of that data. I’d guess what looks normal under the lens of Austrian Economics might not look so good under from the point of view of community manager or content developer.

I’m no economist, but I think this would only become a problem if this cartel of wealthy traders decided to try and corner the market on highly valued items, which could result in items like Charged Lodestones (just as an example) getting priced out of reach of the average player. A player could still get them by farming them himself, but that’s subject to luck and it may not be “fun”, which is ultimately the goal of what ANet seeks to achieve for its player-base.

In such a situation, ANet could take steps to address it by simply increasing the drop rate of the item in question. ANet pretty much has the ability to destroy any monopoly overnight just by making a coding change. This is something that real world economists can’t do.

Absent of such a scenario, the super-wealthy players would eventually hit a ceiling where there is simply NOTHING for them to do with their money. They’ve made a Legendary (or maybe even several Legendaries). What else can they do? Apart from the “monopoly” idea I raised earlier, which I’m sure ANet would not tolerate, the only things one could do would be to finance the purchases of other players (effectively “giving it away to charity”), or just quit the game, in which case they have just removed themselves from the economy and are thus no longer an issue.

Arbitrage doesn’t quite benefit everyone, since the more savvy consumers and farmers who put up their own buy or sell orders rather than accepting those that are already up end up making less. Arbitrage also works against arbitrageurs, in the sense that the competition between traders narrows profit margins until there are none to be had.

That said, I agree that arbitrage is a natural and useful function of the market; the resulting wealth inequality is a relatively benign side effect.

Another useful function of trading is the tendency to reduce periodic fluctuations in market price, e.g. the tendency for prices to differ on weekends and during peak U.S. hours.

Zaxares.5419:

I’m no economist, but I think this would only become a problem if this cartel of wealthy traders decided to try and corner the market on highly valued items, which could result in items like Charged Lodestones (just as an example) getting priced out of reach of the average player. A player could still get them by farming them himself, but that’s subject to luck and it may not be “fun”, which is ultimately the goal of what ANet seeks to achieve for its player-base.

That’s something of a possibility, though cornering markets in GW2 is much more easily said than done. The massive number of players involved in the game, combined with very low barriers to entry (such as the ease of reaching level 80, or level 400 in a craft), make it extremely difficult to genuinely corner a market.

Attempting to artificially raise prices tends to drive things to correct themselves – fewer people will want to buy those items if they are so high, and many more people will be looking to farm them. This tends to drive prices back down, often causing whoever attempted this to lose money.

Basically, in the “cartel” situation you mentioned above, it becomes very profitable for other traders to form a “counter-cartel” and benefit by selling items to the cartel attempting to buy them up. This behaviour, in essence, the kind of thing that drives markets to correct themselves. Since there aren’t really any available mechanisms for coercion in GW2, attempted monopolies should inevitably fail in the end.

Of course, markets aren’t perfect, and due to the poor spread of some important kinds of information (such as historical price trends – most people don’t look at GW2Spidy), it’s possible for people to benefit from this in the short term – the “pump and dump” scenario is a typical example.

BlueStoat.9157:

Magikker.9243:

why should you be the one playing the role of market maker? Anet could do it, which would take gold out of the market, provide liquidity, and prevent some of the centralization of large amounts of money on player accounts.

Because John Smith is an economist not a communist (to my knowledge at least) and wants a healthy player driven economy. The thing missing from most MMO’s and GW2 to a lesser but still huge extent is a stable money supply. If you look at inflation rates in game compared to real world you’ll be hard pressed to find any game that makes Germany post WWI look anything but ideal, and a truck load of marks at that time still couldn’t buy food for a family… unfortunately the only way to avoid hyper inflation in the game is to take out the ability to sell to vendors and require item to be bought from them on a regular basis (item condition degrades over time w/o death) thus restricting trade to between the players for wealth transfer or dumping money into a gold sink .

you’d have to have a “job” in game and be good at it to make enough to progress… too much like real life there. I like how it is… would like the TP to have an auction option though.

Part of your analysis makes me wonder how much money actually is exhausted between the TP fees and Mystic Forge. As I place no real value on coins except they’re good to buy things like siege weapons for WvW and exotic gear and runes.. those types of things.. I often just farm and buy up rare items to dump into the mystic forge in hopes of a precursor or something.

Zaxares.5419:

Absent of such a scenario, the super-wealthy players would eventually hit a ceiling where there is simply NOTHING for them to do with their money. They’ve made a Legendary (or maybe even several Legendaries). What else can they do? Apart from the “monopoly” idea I raised earlier, which I’m sure ANet would not tolerate, the only things one could do would be to finance the purchases of other players (effectively “giving it away to charity”), or just quit the game, in which case they have just removed themselves from the economy and are thus no longer an issue.

Given that GW2 is a multiple player game player’s bank rolls of do have an impact on other players. This is were it gets really murky for me because now we’re into social sciences, but let me give an example. If I see a legendary in the wild it might impact my motivation. If I look up the total cost of creating a legendary and see that it’s around 1000g that might impact my motivation. If I see guys with multiple legendaries and I only 30 gold in my own bank, maybe I start to think that I’m playing the game wrong. I know some of my buddies cited that to me as one of the reasons that they’ve moved on to other games. The impacts are of centralizing large sums of money are broader than the in game markets. It starts to get into issues that are a lot more personal and probably can’t be quantified in the same way market liquidity can. I think this is where it gets into the differences between a healthy game economy and the economy’s impact on the game world and the players.

Another example would be how it effects the design of content. If you can have a wealthy class who are so rich that “end game” purchases become fairly trivial does that effect the way you design the game? The devs have expressed surprise at the rate which players achieved the first legendaries. But imagine for a moment an alternate GW2 with no trading post… how many legendary weapons would be in that version of the game? The trading post allows for a greater stratification of wealth and I would have to imagine that had a huge impact on the rate at which some players are achieving “end game” content. Is that a problem? I don’t know. Is there a benefit to this stratification? I’m still looking.

Magikker.9243:

Zaxares.5419:

Absent of such a scenario, the super-wealthy players would eventually hit a ceiling where there is simply NOTHING for them to do with their money. They’ve made a Legendary (or maybe even several Legendaries). What else can they do? Apart from the “monopoly” idea I raised earlier, which I’m sure ANet would not tolerate, the only things one could do would be to finance the purchases of other players (effectively “giving it away to charity”), or just quit the game, in which case they have just removed themselves from the economy and are thus no longer an issue.

Given that GW2 is a multiple player game player’s bank rolls of do have an impact on other players. This is were it gets really murky for me because now we’re into social sciences, but let me give an example. If I see a legendary in the wild it might impact my motivation. If I look up the total cost of creating a legendary and see that it’s around 1000g that might impact my motivation. If I see guys with multiple legendaries and I only 30 gold in my own bank, maybe I start to think that I’m playing the game wrong. I know some of my buddies cited that to me as one of the reasons that they’ve moved on to other games. The impacts are of centralizing large sums of money are broader than the in game markets. It starts to get into issues that are a lot more personal and probably can’t be quantified in the same way market liquidity can. I think this is where it gets into the differences between a healthy game economy and the economy’s impact on the game world and the players.

Another example would be how it effects the design of content. If you can have a wealthy class who are so rich that “end game” purchases become fairly trivial does that effect the way you design the game? The devs have expressed surprise at the rate which players achieved the first legendaries. But imagine for a moment an alternate GW2 with no trading post… how many legendary weapons would be in that version of the game? The trading post allows for a greater stratification of wealth and I would have to imagine that had a huge impact on the rate at which some players are achieving “end game” content. Is that a problem? I don’t know. Is there a benefit to this stratification? I’m still looking.

What utility does a legendary weapon have over an exotic weapon?

And it appears you are looking at wealth from the lens of envy rather than scrutinizing what it actually means to be wealthy in GW2. If wealthy TP traders want to speculate on the market, they have to buy up supplies. What does this do? It turns money over to farmers. It gives incentives to suppliers. Is that such a bad thing?

xxxzavulonxxx.8413:

What utility does a legendary weapon have over an exotic weapon? And it appears you are looking at wealth from the lens of envy rather than scrutinizing what it actually means to be wealthy in GW2.

I believe, and please correct me if I’m wrong, that utility of a legendary comes from it being a long term goal for players. It’s really the embodiment of digital bragging rights. It’s meant to shown off and it’s meant to be envied. Legendaries and every other cosmetic item in the game work on psychological and social levels. So yeah, I guess I am asking what it does to the player base when the purchase of end game content is trivial for some and seemingly out of reach for others. I’d argue that game economies can have a huge impact on player satisfaction. We only have to look at Diablo 3 to find a recent and well covered example of how things can go wrong. I think envy has something to do with it but so do goals and motivation and probably a lot of other things.

xxxzavulonxxx.8413:

If wealthy TP traders want to speculate on the market, they have to buy up supplies. What does this do? It turns money over to farmers. It gives incentives to suppliers. Is that such a bad thing?

I don’t think it’s necessarily bad, but a corner stone economic principle is, and I’m paraphrasing here, is “reward things you want more of and tax things you want less of”. Would it be a bad thing if the single most effective way to make money in the game was the trading post? Is that the behavior that devs want the most of? I make no money in sPvP, very little in WvW, a decent amount in dungeons, even better farming Orr, but I do best with my time on the trading post. It’s got the highest reward ratio for my time. Is that what the devs expected in their game?

And I just feel the need to say this is one of the best and most reasoned MMO related discussions I’ve ever had. yall are awesome.