Guild Wars 2

John Smith.4610:

Also, holding on to Jugs of Karma for any reason is an economic reason. Economics isn’t about money, it’s about scarcity, the reason you hold those jugs is because you’re mitigating risk on a scarce resource.

Actually, the reason we are holding jugs of karma is because right now, there is absolutely nothing you can buy with them (except mediocre exotics with bad stat combos), provided that you do not go for legendaries. * hint *

wintermute.4096:

John Smith.4610:

Also, holding on to Jugs of Karma for any reason is an economic reason. Economics isn’t about money, it’s about scarcity, the reason you hold those jugs is because you’re mitigating risk on a scarce resource.

Actually, the reason we are holding jugs of karma is because right now, there is absolutely nothing you can buy with them (except mediocre exotics with bad stat combos), provided that you do not go for legendaries. * hint *

I think the point John is trying to make with this example is that you are not using them because:
- you might be waiting in order to take advantage of a karma booster
- you might not be certain which character to use them with

Both reasons would be results of the scarcity of karma in relation to the available merchandise you could buy with it.

For me personally that was true, until the jewelery box came into play – here I traded karma for even scarcer items, lodestones (from my point of view) and a unique mini (not lucky with the tonics).

Joiry – I’m not trying to prove anything – I am constantly questioning any statistic I see. Only by understanding how numbers came about can I even start trying making sense of them. Since I don’t know how the number came about I can only assume, without stating on how probable I personally think the number is.

At the end of the day I don’t think it’s truly important whether or not it’s 15% or 10% or even 20%. The important question is does it impact the rest. There is not even a need to justify the answer. I give you an example of why I think so.

A couple of weeks ago I heard a trivia on the radio, one of those polls on what people answered to the question of what they are the most afraid of. The answer supposedly was “to die in a plane crash”. Even if it is statistically the safest way to travel (iirc) – it is not perceived as such apparently.

Edit: Perhaps scratch the last two paragraphs, I’m not sure I finished that train of thought and I don’t have time right now. The whole time I was looking at the British space exploration project and could not understand what John was referring to. grin

Nsain.7531:

15%? Where is that number coming from? A poll of what sample size? Most people seem to enjoy actually playing the game and enjoying content. Not sitting in LA hoarding gold to screw up the market even more. I.E. the hilarious precursor market, yeah, that seems legit.

ANet would be the first company to build a multi million dollar product without doing some market research first. Although I don’t know the answers to your questions, I would guess that somebody at ANet has some pretty substantial numbers on what players tend to like and dislikle.

Also, I don’t remember John Smith stating that those 15% do exclusively play the market and nothing else, as you assume.

~MRA

John Smith.4610:

I wouldn’t even know where to begin pointing out the massive amount of examples that show that this isn’t true, but for the context I’d start with the Daedalus Project.

Also, holding on to Jugs of Karma for any reason is an economic reason. Economics isn’t about money, it’s about scarcity, the reason you hold those jugs is because you’re mitigating risk on a scarce resource.

Um, massive amount showing what isn’t true? I bring up a lot of points and, as is your MO, you cryptically refer to supposed counter examples without ever being specific. However, all that still avoids the central question of what sorts of data mining techniques and behavior econ models you are using to infer why people are engaging in different activities.

Second, no, I’m not holding on to them due to scarcity. There’s a few reasons. One, karma jugs, once consumed, go to a specific character. I am not yet sure which characters should get the karma armors and which armors I should buy. Second, I may be waiting for the right boosts to be available (ie all 4). There’s also the case there’s no reason to consume them until I have a pressing need.

If you’re trying to define all that as economic activity, you are applying such a broad definition of economic activity that it almost covers all activities. Heck, you could define all of biology as an economic activity due to scarcity of resources. Might make for an interesting bar discussion – but you’re not going to answer many biological questions.

(que Darwin used free market examples to explain evolution counter in 3,2,1…)

Calae.1738:

John Smith.4610:

Actually about 15% of the population finds making money very fun, irrelevant of the uses of that money. Ever gotten unnecessarily rich in a single player RPG like Skyrim?

I don’t understand how earning a virtual currency can be fun if the the intent is to aquire more. Sounds more like psychological disorder to me.

It’s like a minigame. I’d venture to say that any MMO with a form of currency and player trading has a group of people for whom making money is a fun part of the game. I remember a WoW forum full of people whose goal was reaching the gold cap. When they did, many of them would give it away, buy expensive items for their guildmates, or do other creative things. I know I have some ideas for player run “dynamic events” if I ever get to a point where I have so much gold that there’s nothing else I need or want to buy for my own characters.

MRA.4758:

Nsain.7531:

15%? Where is that number coming from? A poll of what sample size? Most people seem to enjoy actually playing the game and enjoying content. Not sitting in LA hoarding gold to screw up the market even more. I.E. the hilarious precursor market, yeah, that seems legit.

ANet would be the first company to build a multi million dollar product without doing some market research first. Although I don’t know the answers to your questions, I would guess that somebody at ANet has some pretty substantial numbers on what players tend to like and dislikle.

Also, I don’t remember John Smith stating that those 15% do exclusively play the market and nothing else, as you assume.

~MRA

That’s funny you mention market research on what players like and dislike. There is an overwhelming majority that the market is SEVERELY destroyed in several aspects atm. It would take a chimpanzee with a calculator to do that market research. Yet they do nothing about it. I take whatever market research they have done with a grain of sand, as they have not acted on the most apparent and destructive trends.

Also, the blatant fan boy-ism does not suite you, or anyone for that matter, well. Try looking at it from the average player’s perspective. Not your knight in shining armor, always here to save the day, Anet. Beer goggles may help someone look nice for a night, but once you take them off you realize the mistakes you have made.

Nsain.7531:

That’s funny you mention market research on what players like and dislike. There is an overwhelming majority that the market is SEVERELY destroyed in several aspects atm. It would take a chimpanzee with a calculator to do that market research. Yet they do nothing about it. I take whatever market research they have done with a grain of sand, as they have not acted on the most apparent and destructive trends.

That’s funny. Wanna tell me how you get know of this “overwhelming majority (of people who believe the market is SEVERELY destroyed, I’m assuming, because your sentence doesn’t make sense)?”

Personal anecdotes and forums don’t count~

If you mean you think the overwhelming majority of the MARKET is SEVERELY destroyed, I’d like to know how too! No diatribes on how pricey luxury items are please~

There is no such thing as too much money. If anyone feels that this is actually a thing please feel free to send me whatever amount you need to help you sleep at night.

Awesome.6120:

There is no such thing as too much money. If anyone feels that this is actually a thing please feel free to send me whatever amount you need to help you sleep at night.

Absolutely agree.

I have to question the thought process of half of the poster on this thread who are questioning why players make excessive amounts of gold when they can. If any of you like, just send me a PM and I will gladly have my 10 yr old son reply with a basic explanation of economics and its relation to individual desires to compile wealth.

These are the same posters who get a reply on this ridiculous thread, then berate the Anet employee replying, only to complain on other threads, claiming they never reply on the forums.

I wouldn’t reply either if you berated me when I replied. Particularly to something that has little effect on game play and game experience.

Slightly aside but if there are people with too much money and many with too little, yes grin you know where im going Viva la reveloution.

Why not a sliding scale on the TP? People starting out say till they have their first 20g (based on gold held or gold earned over time in game ) pay 0% first 50 5% up to say for those with 100,000g in the bank or a single item over 500g a nice Francois Hollande rate of 75%.
You may need to rename one server Belgium for those wanting to jump ship or if you set your language to Russian you get a flat 30% rate.

I love making gold in MMOs because I like trading and being a merchant. The act is what is fun.

To this whole gold business… I come as someone who has enough to be pleased. BUT, did they not stipulate that this game would not be a grind? Yet, pre-cursors have such ridiculous prices its just unreachable for those who cannot spend money for it. Other than that, most prices on things seem to be fairly OK. ( Might of missed something, but generally).

Secondly, we all know there is quite a few problems at the moment in the game, like profession balancing and economical stuff. Point is, accept the fact that Anet does what they want, if its not always entirely to please the community, whatever.

MRA.4758:

ANet would be the first company to build a multi million dollar product without doing some market research first. Although I don’t know the answers to your questions, I would guess that somebody at ANet has some pretty substantial numbers on what players tend to like and dislikle.

~MRA

EA dumped 200-300 million on launching TOR and its post-launch performance was disappointing to them. Or how about TSW that couldn’t even meet sales expectations? FF14 delayed subscription fees for over a year because of horrible reception. Getting accurate market research and following it can’t be as easy as it sounds.

Why do the insanely rich in the real world continue to make money ? Sure they might get a bit more generous with there fellow man… but they don’t stop making money.

I myself like to get filthy rich in every game I play, it makes the game more enjoyable for me. I have been here since the Start of Jan myself… I have one 80 toon with a full exotic set of armour and weapons… and around 50g in the bank… in the next month I will no doubt hit 200g and another 2-3 toons at 80 full geared… and then ya I’ll start helping friends. For me its one of the funnest parts of a MMO… being able to say ya your right that would work good for your toon… hey check your mail. Not every person that works the market is evil… some people in fact find it fun as Mr. Smith is suggesting.

comes back after 1 day to check topic
This isn’t a thread about RMT vs gold hoarding!!

Topic changed

This is a bit unbecoming of a developer, I think.

As soon as you begin referring to luxury goods as an inflationary issue I start skimming instead of reading. Within the last hour I’ve specifically said that you’re mistaking inflation for what is not inflation. Precursor prices aren’t changing due to inflation.

There’s an important fallacy at play here that is an important distinction to make between a virtual and a real economy. It’s a game. There are no necessary goods, and by that same token there can be no explicitly defined luxury goods. Every item in the moving economy is a luxury good, it’s an entirely luxury-based economy. You can’t separate out some types of items as “not mattering” just because you decide that they shouldn’t matter. The highest priced Legendary or Precursor on the TP is no more a “luxury good” than a level 5 white sword or a lump of copper ore going for a few copper (less if there weren’t a floor).

If some items available in the marketplace are going for far more than the players believe is reasonable (determine whether that is true or not however you feel necessary but don’t just assume that it’s not true), then something is wrong with how the economy is functioning. Either wealth is too concentrated in too few hands, or the quantity of certain types of items are far too limited to approach demand. ANet has a lot of levers they can pull to balance this situation out, and so far you don’t seem to be doing so. Yet.

Ohoni.6057:

As soon as you begin referring to luxury goods as an inflationary issue I start skimming instead of reading. Within the last hour I’ve specifically said that you’re mistaking inflation for what is not inflation. Precursor prices aren’t changing due to inflation.

There’s an important fallacy at play here that is an important distinction to make between a virtual and a real economy. It’s a game. There are no necessary goods, and by that same token there can be no explicitly defined luxury goods. Every item in the moving economy is a luxury good, it’s an entirely luxury-based economy. You can’t separate out some types of items as “not mattering” just because you decide that they shouldn’t matter. The highest priced Legendary or Precursor on the TP is no more a “luxury good” than a level 5 white sword or a lump of copper ore going for a few copper (less if there weren’t a floor).

If some items available in the marketplace are going for far more than the players believe is reasonable (determine whether that is true or not however you feel necessary but don’t just assume that it’s not true), then something is wrong with how the economy is functioning. Either wealth is too concentrated in too few hands, or the quantity of certain types of items are far too limited to approach demand. ANet has a lot of levers they can pull to balance this situation out, and so far you don’t seem to be doing so. Yet.

You’re off topic.

I think you’ll find that Firegoth changed the title again after John Smith did.
It was something along the lines of “Why do the rich keep making money” rather than the current demand for apotheosis.

Very nicely played, Firegoth. It made me smile!

On topic – I wish I had John Smith as my roommate back in college. My business degree would have been much easier with his mind around.

Calae.1738:

Olfinbedwere.5049:

Why does every other form of accumulating wealth in this game get nerfed but not the TP?

Because the TP acts as a currency sink. The 15% tax on all transactions is used by arenanet to curb inflation. Traveling, repair, mystic forge ingredients are also other currency sinks.

Except that it doesn’t curb inflation it fuels it. Inflation is the rise in price of goods and services over time. The price of certain items are suffering heavy inflation because of the super wealthy 15% that are able to control those markets and drive the prices up.

So, whether it’s a gold sink or not it’s still causing inflation.

Olfinbedwere.5049:

Except that it doesn’t curb inflation it fuels it. Inflation is the rise in price of goods and services over time. The price of certain items are suffering heavy inflation because of the super wealthy 15% that are able to control those markets and drive the prices up.

So, whether it’s a gold sink or not it’s still causing inflation.

Er, no. You’re wrong. Inflation is the erosion of purchasing power of currency (gold.) Too lazy to explain to you so I’ma link you to my explanation of what inflation in an MMO is.

https://forum-en.gw2archive.eu/forum/game/bltc/The-bl-TP-being-abused/first#post1343223

Also just because certain items are rising in price, it doesn’t mean inflation is happening.

https://forum-en.gw2archive.eu/forum/game/bltc/Playing-for-the-inflationary-compensation/first#post1342260

Olfinbedwere.5049:

Calae.1738:

Olfinbedwere.5049:

Why does every other form of accumulating wealth in this game get nerfed but not the TP?

Because the TP acts as a currency sink. The 15% tax on all transactions is used by arenanet to curb inflation. Traveling, repair, mystic forge ingredients are also other currency sinks.

Except that it doesn’t curb inflation it fuels it. Inflation is the rise in price of goods and services over time. The price of certain items are suffering heavy inflation because of the super wealthy 15% that are able to control those markets and drive the prices up.

So, whether it’s a gold sink or not it’s still causing inflation.

The super wealthy do not own enough wealth to control high volume trade assests. They can control rare items though and artificially suppress supply in the same way Da Beers suppresses supply of diamonds to keep the prices high.

Ursan.7846:

Olfinbedwere.5049:

Except that it doesn’t curb inflation it fuels it. Inflation is the rise in price of goods and services over time. The price of certain items are suffering heavy inflation because of the super wealthy 15% that are able to control those markets and drive the prices up.

So, whether it’s a gold sink or not it’s still causing inflation.

Er, no. You’re wrong. Inflation is the erosion of purchasing power of currency (gold.) Too lazy to explain to you so I’ma link you to my explanation of what inflation in an MMO is.

Also just because certain items are rising in price, it doesn’t mean inflation is happening.

The definition of inflation is the rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. So, I’m not wrong.

Because of DR and gold sinks, players that earn money outside the TP will never be able to keep up with the rate at which power traders make money. So the markets that are controlled by the power traders will inflate in relation to the amount of money the power traders have.

Because the majority of players aren’t participating in those market. Those certain markets have become exclusive to the super wealthy. When those players average wealth is in the thousands the legendaries they control will be listed in the thousands. When they have tens of thousands they will begin listing them in the tens of thousands and so on.

How is that not inflation? The rise in the cost of goods because of the 15%, disproportionate to the increase of wealth of the 85%, and the erosion of that 85%s buying power.

I guess if you’re only considering the 15% then yeah they’re not suffering from inflation. They’re experiencing a natural rise in the cost of goods proportionate to their wealth. So that’s all good then?

Olfinbedwere.5049:

The definition of inflation is the rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling. So, I’m not wrong.

You definition is correct. Your explanation of why it’s happening, (if it’s happening. It’s not) however, is wrong.

Olfinbedwere.5049:

Because of DR and gold sinks, players that earn money outside the TP will never be able to keep up with the rate at which power traders make money. So the markets that are controlled by the power traders will inflate in relation to the amount of money the power traders have.

Because the majority of players aren’t participating in those market. Those certain markets have become exclusive to the super wealthy. When those players average wealth is in the thousands the legendaries they control will be listed in the thousands. When they have tens of thousands they will begin listing them in the tens of thousands and so on.

How is that not inflation? The rise in the cost of goods because of the 15%, disproportionate to the increase of wealth of the 85%, and the erosion of that 85%s buying power.

I guess if you’re only considering the 15% then yeah they’re not suffering from inflation. They’re experiencing a natural rise in the cost of goods proportionate to their wealth. So that’s all good then?

I’m going to refer you to my previous post. You should really read it more closely, because I don’t think you understood it.

You’re looking at increases in prices for a few luxury goods, and concluding that inflation is occuring. That is not the case. The rise in price of a few luxury goods is not indicative of inflation. Please look at the prices of other non-luxury goods (less desired exotics, less desired runes, etc.). You’ll see that most of the prices in these commodities have remained remarkably steady since november or so.

Also, as I stated in my previous post, the mere act of trading these high priced items is a GOLD SINK in an MMO, and hence cannot cause inflation in the economy.

Hence, inflation is not happening. If prices of EVERYTHING was steadily increasing, yes, that is inflation. But that is not what is happening.

To add to Ursan’s posts, inflation is usually caused by the Gold supply outpacing the economy’s growth overall.

What we’re seeing here is simply a higher demand for items by a larger population with more disposable income. The more a Precursor is demanded, the faster the price will rise. Why? Because if someone wants it bad enough, they’ll pay what the sellers are asking.

But hark, we’re off topic. This thread is supposed to be about how awesome John Smith is. Please don’t deviate from it.

I have no problem believing that a certain percentage of players simply enjoy making money. Is it really harder to believe than a certain percentage of players spending hours just farming the same mobs, the same events, for loot and drops? Whoever above said the money is just a means is dead on. Just because you don’t personally think what those players are doing can’t be considered fun doesn’t mean it’s not. I occasionally get a thrill myself when I make a large profit on the TP.

Ursan.7846:

I’m going to refer you to my previous post. You should really read it more closely, because I don’t think you understood it.

You’re looking at increases in prices for a few luxury goods, and concluding that inflation is occuring. That is not the case. The rise in price of a few luxury goods is not indicative of inflation. Please look at the prices of other non-luxury goods (less desired exotics, less desired runes, etc.). You’ll see that most of the prices in these commodities have remained remarkably steady since november or so.

Also, as I stated in my previous post, the mere act of trading these high priced items is a GOLD SINK in an MMO, and hence cannot cause inflation in the economy.

Hence, inflation is not happening. If prices of EVERYTHING was steadily increasing, yes, that is inflation. But that is not what is happening.

I do understand what you’re saying. Our disagreement is whether the definition of inflation can be applied to select markets or whether all markets must be affected in order for inflation to apply.

I believe inflation can and is happening to certain markets. And I agree inflation isn’t happening to everything. If all of us were gaining wealth as rapidly as the 15% then you would see inflation everywhere, but we’re not. The 85% are suffering from the gold sinks that restrict our accumulation of wealth and the 15% aren’t. They’re making wealth faster than the gold sinks can leach it away. So the markets they control are inflating and will continue to.

The high volume of trade of certain items protect them from manipulation. But there is no form of protection from manipulation and inflation on the rarer items markets that the 15% choose to control, they’ve become exclusive. The few have been allowed unrestricted control of the rarities markets and have closed out everyone else.

John Smith.4610:

Actually about 15% of the population finds making money very fun, irrelevant of the uses of that money. Ever gotten unnecessarily rich in a single player RPG like Skyrim?

Before I begin my rebuttal of this statement I need some clarification:

1) ‘Population’ as in this games population or real world population?

2) What do you mean by making money is fun?

3) That percentage value is based on your work alone or by collating other work as well?

Also just because certain items are rising in price, it doesn’t mean inflation is happening.

Does it really matter if what meets the official. economics definition of “inflation” is happening? I think that the only thing that matters is “can people afford the things they want, having put forth a reasonable amount of effort to achieve them.” If the only people who can afford high end goods are those who play the markets, get very lucky on a few RNGs, or farm relentlessly, then something is wrong with the supply of high end goods, or with the success rate of those money-earning tactics verses basic gameplay.

I’m not an economist. If the economists in the audience say that the problem that players are having does not equal the proper use of the word “inflation,” then fine, I fully accept that point of semantics. But the problem itself still exists, regardless of what officially codified economics term one uses to describe it.

I’m one of the power trader in GW2 and every MMO I had played
Making money and become rich is very FUN for ME

I Don’t control the market or even sell any precursor/legendary
I’m doing other investments and I have like 8k+ gold(cash) and 1 legendary for now
I’m not the richest in game I sure

Anyway, Firstly,
Do you think how many gold is required to control the market for one type of item??

How can you sell the extremely storage after you bought them ?

Do you think how many sellers, farmer in this market ? and how many items is going to list for sales every second ?

What if you bring you T6 Blood price to 35s and you cannot sell half of your storage after the price down to 22s again ???

Second, the main reason for Inflation is farmer
farmer not mean bot
farmer mean every players farming in Orr, fotm or any dungeon
for example of My guild, the most common topic they chatting on guild channel is
Fotm LFM, COF LFM, TA LFM, AC LFM …. etc LFM
Don’t get wrong. My guild is ACTIVE WVW Guild

They brings massive gold into the game and buy the items listing by power traders

Yes, power traders listing higher price at TP
But who buying them? you know the answer

If the price is too high and no buyer going to buy it, the price will fall
If the items was sold even listing at high price, the price is reasonable, at least for some buyer(farmer)
If the price continue raising, you shall blame the buyer

That’s why Anet make DR on farming

What happened if power trader continue stacking their storage and no buyer going to buy theirs ?
power trader will be bankrupt

Coldness.9628:

I’m one of the power trader in GW2 and every MMO I had played
Making money and become rich is very FUN for ME

I Don’t control the market or even sell any precursor/legendary
I’m doing other investments and I have like 8k+ gold(cash) and 1 legendary for now
I’m not the richest in game I sure

Anyway, Firstly,
Do you think how many gold is required to control the market for one type of item??

How can you sell the extremely storage after you bought them ?

Do you think how many sellers, farmer in this market ? and how many items is going to list for sales every second ?

What if you bring you T6 Blood price to 35s and you cannot sell half of your storage after the price down to 22s again ???

Second, the main reason for Inflation is farmer
farmer not mean bot
farmer mean every players farming in Orr, fotm or any dungeon
for example of My guild, the most common topic they chatting on guild channel is
Fotm LFM, COF LFM, TA LFM, AC LFM …. etc LFM
Don’t get wrong. My guild is ACTIVE WVW Guild

They brings massive gold into the game and buy the items listing by power traders

Yes, power traders listing higher price at TP
But who buying them? you know the answer

If the price is too high and no buyer going to buy it, the price will fall
If the items was sold even listing at high price, the price is reasonable, at least for some buyer(farmer)
If the price continue raising, you shall blame the buyer

That’s why Anet make DR on farming

What happened if power trader continue stacking their storage and no buyer going to buy theirs ?
power trader will be bankrupt

Farmers do not create inflation.

More supply to fulfill demand never creates inflation.

Do they create new money? Yes. But only John Smith could tell us how new money is created and how much money is eaten up by the TP taxes.

What would create inflation is demand exceeding supply.

xxxzavulonxxx.8413:

Farmers do not create inflation.

More supply to fulfill demand never creates inflation.

Actually, that’s not right; farmers generate gold and excess gold in the economy is the big thing that will result in general across the board price level increases over time. An excess of money supply devalues the currency, and by devaluing the currency, you end up with increasing price levels. Farming is like printing money in a real economy.

Edit: though, yes, if GW2 does a good job of soaking up extra money in the system, then that increase of currency maybe doesn’t cause anything at all to happen. If the sinks are well balanced with the faucets, you won’t see inflation from farming. That’s typically never happened in an MMO before to my knowledge, so if GW2 manages to get that right and we see stable prices for years, that’ll be amazing.

Eolirin.1830:

xxxzavulonxxx.8413:

Farmers do not create inflation.

More supply to fulfill demand never creates inflation.

Actually, that’s not right; farmers generate gold and excess gold in the economy is the big thing that will result in general across the board price level increases over time. An excess of money supply devalues the currency, and by devaluing the currency, you end up with increasing price levels. Farming is like printing money in a real economy.

No it isn’t. “Printing cash” does not mean physically printing money. The analogy is bad. I could also point out reserve requirements impact inflation. And a bigger money supply can lead to higher output of production which can drive down prices as well, if that capital is implemented that way.

You fail to account for the fact that only items vendored creates coins, and omnomberry bars and other coin boosters with coin drops.

The majority of wealth players bring to their accounts from farming is crafting materials, ectos from salvaging, selling rares and exotics on the TP all are taxed. Which all would have a downward drive on prices, as more supply at higher prices would create surplus.

You have to measure how much new wealth they create vs. the wealth they deplete. And how many times they make transactions with other players. V(elocity) is an important part of the equation as well.

If the price is too high and no buyer going to buy it, the price will fall
If the items was sold even listing at high price, the price is reasonable, at least for some buyer(farmer)
If the price continue raising, you shall blame the buyer

The fair price is the rate people will pay when the supply is not being artificially managed. If ANet puts 50K of a given resource into the game, and roughly that many are on the TP (minus the number of people putting those resources to their intended use), then that is the only fair market value for that item. If instead the TP supply is half that or less because some people are hoarding the existing supply and releasing them at inflated prices, then that is NOT the fair price, whether people are willing to pay it or not.

xxxzavulonxxx.8413:

Coldness.9628:

I’m one of the power trader in GW2 and every MMO I had played
Making money and become rich is very FUN for ME

I Don’t control the market or even sell any precursor/legendary
I’m doing other investments and I have like 8k+ gold(cash) and 1 legendary for now
I’m not the richest in game I sure

Anyway, Firstly,
Do you think how many gold is required to control the market for one type of item??

How can you sell the extremely storage after you bought them ?

Do you think how many sellers, farmer in this market ? and how many items is going to list for sales every second ?

What if you bring you T6 Blood price to 35s and you cannot sell half of your storage after the price down to 22s again ???

Second, the main reason for Inflation is farmer
farmer not mean bot
farmer mean every players farming in Orr, fotm or any dungeon
for example of My guild, the most common topic they chatting on guild channel is
Fotm LFM, COF LFM, TA LFM, AC LFM …. etc LFM
Don’t get wrong. My guild is ACTIVE WVW Guild

They brings massive gold into the game and buy the items listing by power traders

Yes, power traders listing higher price at TP
But who buying them? you know the answer

If the price is too high and no buyer going to buy it, the price will fall
If the items was sold even listing at high price, the price is reasonable, at least for some buyer(farmer)
If the price continue raising, you shall blame the buyer

That’s why Anet make DR on farming

What happened if power trader continue stacking their storage and no buyer going to buy theirs ?
power trader will be bankrupt

Farmers do not create inflation.

More supply to fulfill demand never creates inflation.

Do they create new money? Yes. But only John Smith could tell us how new money is created and how much money is eaten up by the TP taxes.

What would create inflation is demand exceeding supply.

“What would create inflation is demand exceeding supply”

Yes, you are right
demand is higher than supply
why ?
Most of the people choose to farm gold to buy them, but not farm for the item they want
As you know, there are many topics in forum discuss how to farm gold in dungeon or anywhere etc.

That’s why price raised so many after banned large number of bots
the supply is lower

TP is the best way to anti-inflation because of 15% tax

Demand exceeding supply is not inflation. It is market correction.

xxxzavulonxxx.8413:

No it isn’t. “Printing cash” does not mean physically printing money. The analogy is bad. I could also point out reserve requirements impact inflation. And a bigger money supply can lead to higher output of production which can drive down prices as well, if that capital is implemented that way.

You fail to account for the fact that only items vendored creates coins, and omnomberry bars and other coin boosters with coin drops.

The majority of wealth players bring to their accounts from farming is crafting materials, ectos from salvaging, selling rares and exotics on the TP all are taxed. Which all would have a downward drive on prices, as more supply at higher prices would create surplus.

You have to measure how much new wealth they create vs. the wealth they deplete. And how many times they make transactions with other players. V(elocity) is an important part of the equation as well.

I was not attempting to be exhaustive when I said gold generation was like printing money; I could have been more precise and said that farming generating gold is like increasing the money supply, the point should’ve been clear though. And while you can indeed situationally increase the money supply in a way that does not generate inflation in the real world, that does require specific non-normal conditions to be met. Again, I was not attempting to be exhaustive in the analogy.

I have a suspicion that you actually have a hidden assumption that I wasn’t making, and that we actually agree about this though, so let me be clearer about where I was coming from:

For an MMO economy, in general, farming is the only source of gold, this is true even in GW2. The amount of gold generated by farming (plus other stuff, but farming generates the most “stuff” regardless of what the stuff is) is the money supply for the economy as a whole. Items in aggregate cannot be traded for more than the sum total of gold harvested by players (and in the case of GW2, minus the transaction fee of trading them). If people do not farm lots of gold, prices in the aggregate, assuming we don’t move to a barter economy (which would be hard since we can’t safely trade without using the TP), cannot increase; without gold generation in excess of gold sinks, you cannot have inflation. In fact, if gold isn’t being pumped into the economy enough so that the transaction fees from multiple TP listings eats it all up, we’d be seeing rampant deflation and the entire market would be in the process of grinding to a halt.

Now there are a number of factors to GW2’s economy that mitigate the inflationary effect of gold generation. The sinks seem really well balanced, especially relative to other mmos, and the TP tax likely does a good job of soaking up excess supply. But farming has to be the primary source of gold in the game, there has to be some amount of positive growth in the gold supply, or the economy would be seeing other significant problems. Gold generation is “wages”, and you can’t have a wage-price spiral without wages going up. Even if demand massively outstripped supply, that wouldn’t matter much if players had insufficient gold to spend.

But those are considerations, in principle. They’re obviously not actually happening in game; we’re not really seeing serious signs of inflation in the economy, gold is clearly being supplied sufficiently that things aren’t being ground to a halt, and the sinks seem balanced enough that there are many goods that have had stable prices for months. So it does seem that Anet’s so far been managing the size of the gold supply very well. So in practice, it may be that farming won’t cause inflation, in GW2, because of how Anet has mitigated against it. But farming in the abstract most definitely does cause inflation.

Durian.5419:

Demand exceeding supply is not inflation. It is market correction.

I did not say it was inflation. But a causation of it.

Visiroth.5914:

EA dumped 200-300 million on launching TOR and its post-launch performance was disappointing to them. Or how about TSW that couldn’t even meet sales expectations? FF14 delayed subscription fees for over a year because of horrible reception. Getting accurate market research and following it can’t be as easy as it sounds.

Sure. Having your data and interpreting it correctly are not the same thing. And even if you do, they are no guarantee for nothing. And don’t get me started on finding the right questions to ask in your surveys in the first place, there are so many things you can do wrong.

The post I was replying to questioned whether ANet does actually have a certain kind of statistic or whether John Smith was pulling numbers out of his kitten. (You know, forum style.) I was mere pointing out that there is reason to assume that ANet has, indeeed, lots of data at their hand.

~MRA

John Smith.4610:

I changed the title to “Why do the rich continue earning wealth”. I attempt to stay pretty informal on the forums, because when I stayed terse it upset people. Another alternative would be to stop participating on the forums, my goal overall is to create a positive environment here.

Please don’t quit, even if people disagree with you, I have still learnt a lot from your discussions and it’s certainly an interesting perspective from the game.

Plus, you post the most amusing things. I doubt many staff would rename the thread to how you had it, Mr Galt… I mean Smith.

Well I am making money because of i play WvW and I am commander in my guild. So if we can some kepp our tower i always upgrade it, and it costs money. So here is my answer why i am trying to make even more money.

Bonefield.9813:

Appeal to popular opinion (the majority believes that the economy is destroyed, so it must be true); begging the question (ArenaNet is doing nothing about the destroyed economy, so their market research should be doubted. This assumes that the economy is in fact destroyed); strawman argument (implying that the previous poster is motivated in their arguments by a desire to defend ArenaNet rather than debating in good faith); and argumentum ad hominem (fanboy accusation).

Did I get any of them?

As entertaining as I found that, I’ll mention two other entries from that site that might be relevant…

Tu quoque: You avoided having to engage with criticism by turning it back on the accuser – you answered criticism with criticism.

Appeal to authority: You said that because an authority thinks something, it must therefore be true.

The fallacies are flying fast and free today .

Oh, wait, here’s another mildly ironic type of fallacy.

The fallacy fallacy: You presumed that because a claim has been poorly argued, or a fallacy has been made, that the claim itself must be wrong.

I generally enjoy chatting in and around threads Mr. Smith has taken an interst in, but sometimes it is a shame that he really isn’t in that great of a position to expain his reasoning or observations sometimes. It makes them come out a bit more like sound bites or spin control than I think was his actual intent. Just a limitation of the media I think – so much of his job is handling what amounts to ANet’s state secrets.

John Smith.4610:

I changed the title to “Why do the rich continue earning wealth”. I attempt to stay pretty informal on the forums, because when I stayed terse it upset people. Another alternative would be to stop participating on the forums, my goal overall is to create a positive environment here.

I don’t think you changed the title to what you think you changed the title too… since there are now two threads named “Playing for the inflationary compensation”

Oops!

John Smith.4610:

I changed the title to “Why do the rich continue earning wealth”. I attempt to stay pretty informal on the forums, because when I stayed terse it upset people. Another alternative would be to stop participating on the forums, my goal overall is to create a positive environment here.

John, hopefully without sounding too corny, but your very presence on this part of the forum is what makes it so interesting and worthwhile. Knowing that one of the very engineers of this economy is watching our discussions is huge. I have personally never seen it before in any other MMO, so I have an idea how to value this. Speculation and frustration regarding the economy is very bad for any MMO; you’ve been able to kill a large part of it in immensely entertaining ways.

TL;DR Please continue exactly how you’re doing now.

Astralporing.1957:

John Smith.4610:

Actually about 15% of the population finds making money very fun, irrelevant of the uses of that money.

Problem appears when the remaining 85% finds the ways the first 15% uses that money as not fun for them.

It is not a single player game. gathering obscene amounts of money by some affects not only them, but everyone else as well.

In real life this is usually a self-regulating process – if a small number of people gets too wealthy, it can lead to a “forced redistribution of wealth” (depending on scale and method, called robbery, riots, revolution, tax increase or nationalization).
This is not possible here.

False. In real life, forced redistribution of wealth never happens. The only possible thing is destruction of wealth. CCCP tried, Belgium tried, France tried resulting in an iconic actor becoming Russian. It is almost impossible to steal wealth from rich people without destroying this wealth in the process.

You may ask rich people. Maybe, if you’re a respectable guy, they may give you a good job with a matching salary (I did). You might even get someone to simply give you a million dollars for a youtube video (happened some time ago). But you can’t steal it.

Eolirin.1830:

xxxzavulonxxx.8413:

Farmers do not create inflation.

More supply to fulfill demand never creates inflation.

Actually, that’s not right; farmers generate gold and excess gold in the economy is the big thing that will result in general across the board price level increases over time. An excess of money supply devalues the currency, and by devaluing the currency, you end up with increasing price levels. Farming is like printing money in a real economy.

You seem to adhere to the austrian school which only sees money as a source of inflation. This is obviously not true and the austrian school is largely ignored, just like communism isn’t a real economic theory but rather fantasy.

Increased money can lead to lower prices. Videogames have never been cheaper.