Guild Wars 2

I’m pretty sure it’s supply and demand driven. Some weeks ago I bought up to 1800 gems bit by bit for around 30-40 silver/100 gems. Yesterday I sold my gems at a rate of about 80 silver/100 gems. So I made about 12 gold from about 6 gold. Since I checked prices for several items in the BLTC, I frequently checked for the change rate gold<—>gems. And within about 15 minutes the rate fluctuated from 60 silver/100 gems and 70 silver/100 gems. Yes, ANet did implement an algorithm to set change rates. But in the end it is driven by supply and demand. I think when halloween’s over and no limited specials are available in the BLTC, the prices will drop a little.

They could easily keep the 30% and still have it completely market based. As in- having buy and sell orders just like everything else. Simply up the transaction fee to 30% (no need for a listing fee, gems don’t take bag space, so you couldn’t abuse the TP for free bag space).

The ONLY reason for keeping the details hidden is to allow them to “fiddle” with the exchange rate.

Tallenn.9218:

They could easily keep the 30% and still have it completely market based. As in- having buy and sell orders just like everything else. Simply up the transaction fee to 30% (no need for a listing fee, gems don’t take bag space, so you couldn’t abuse the TP for free bag space).

The ONLY reason for keeping the details hidden is to allow them to “fiddle” with the exchange rate.

Where do you apply the 30%? The seller of gems or the buyer? If the buyer, do they pay in gems or in gold?

I haven’t done the math, but I suspect there is a single “base rate” with a 15% fee on each side. That is, gem → gold rate = base rate x 85% and gold → gem rate = base rate x 115%.

While I can see the advantages of having the currency exchange operate using buy and sell orders, I think the potential for short term market manipulation of such a system is a risk that ANet didn’t want to take for an item that (initially) cost someone RL money to buy.

Colonel Kernel

The number usually cited is 30%, and the reason is quite simple. It’s to prevent short term speculation and manipulation of the market.

There’s another way to do just that and not punish the people who actually paid money to buy the gems. Prevent people from selling the gems they bought with gold for X days. Problem solved and the ratings can be equal all of a sudden.

But the way things are now, people who actually spend money on the game are punished for 30%. Yeah, that’s very nice of Anet…NOT!

I don’t like the current gem exchange system. I prefer free market. That way buying and selling would create an economic equilibrium. Impose a tax if you will but that is better than just taxing the gem seller.

A free market would lead us to more speculation and even more attention from hackers and gold sellers. Right now it doesn’t seem attractive to buy gems or gold via the currency exchange because we’re in a troubled part of the game life. Some people got rich really fast while most of us barely have 10 golds. With some time the economy will stabilize (I guess) and the gem demand should lower too (Halloween has a big part to play in the gem’s exchange rate).

As for a free market, most people playing GW2 are casual. Why am I so confident about it? No subscription fee. So what that people are casual? Well I’m pretty sure someone who only has max 1 hour per day to play the game doesn’t have time to check out the TP and try to make sense on how to buy gems and gold. Free market = gimmicks. The currency exchange controlled by ANet = fair.

ThiBash.5634:

But the way things are now, people who actually spend money on the game are punished for 30%.

How do you figure? It seems pretty symmetrical to me:
Gems → gold gives you 30% less gold than you would need to buy that many gems.
Gold → gems gives you 30% fewer gems than you would need to buy that much gold.

MilkInBags.5136:

A free market would lead us to more speculation…

I disagree. Make it a free market where people can place buy and sell orders, add the 15% fee to each side of the transaction to prevent short term speculating, and it should be golden.

At least there wouldn’t be any more question about how the prices are set. They’d be set by the market itself, not some mystery algorithm that may or may not be working as its creators intend.

I agree with Colonel Kernerl, market forces must determine the price or individuals will be extremely incentivized to go elsewhere to buy game currency. Using the in-game exchange, players are spending 400% more to obtain the same amount of currency than that of the second equilibrium price observed in black market exchanges. This is due not only to the algorithm being used to control prices fluctuations, but it is also due to the large size of the tax on the one-way exchange. According to research done by John McLaren (published in The Economic Journal) on optimal evadable taxation, individuals will weigh the potential legal costs of participating in the black market with respect to the size of the evaded tax. They will then reach an optimality condition based upon these results. If the tax is large enough, or in this case when one firm is granted a legal monopoly on trade, a second equilibrium price will arise. Because the barriers to entry are legal barriers, firms can be expected to bring the market back to full competition if the legal barriers are removed. In this case, the black market is very accessible, which makes me lean to believe that the enforcement cost taken by the developer is minimal.

I believe that the exchange should be a normal exchange of buyers and sellers where both buyers and sellers agree on a price that was mutually agreed upon. Not only this but the price of Gem/USD is currently forced to be constant. If anything, this will force the price of Gem/gold to be within a distribution range. If gems suddenly become too expensive in terms of gold to buy, players who are still buying will have larger incentives to pay USD for gems. This is also dependent on the rate of inflation and the real value of the Gold Coin.

I honestly believe that buyers and sellers should have a way of buying gold coins with USD at whatever the equilibrium price is, after a small tax is applied for developer revenues (much like government revenues). Those who would say that it is unfair to players who cannot afford to buy “game” money should realize that it is already unfair. In the case of micro-transactions, only players who can afford the in-game rate of exchange can buy currency legitimately. By allowing players to trade with each other, they will reach a price in which both buyers and sellers are satisfied, without the developer generating funds.

Leno,

I agree with everything you said except “…but it is also due to the large size of the tax on the one-way exchange.”

I am assuming that you are talking about over 30% “service fee” that is charged in any Gem<>Gold conversion?

If ANet were to get rid of that “service fee” they would have to find another way to prevent short term speculation (aka arbitrage or flipping) from allowing market manipulation by the players.

Please note that I don’t disagree with that fee being a factor, as you stated. But that fee, or some other method, must be used to prevent players from playing the Gem market.

Isn’t the current service fee an arbitrary buy and sell order gap? If Tyrian gold were traded by players, the buy and sell orders would ideally be very close, limiting speculation well within the range an algorithm could provide. The BLTP would still be entitled to a service fee and a service fee would indeed help limit speculation. The important thing to note about speculation is that the algorithm doesn’t eliminate it.

Poor Leno.3582:

I agree with Colonel Kernerl, market forces must determine the price or individuals will be extremely incentivized to go elsewhere to buy game currency. Using the in-game exchange, players are spending 400% more to obtain the same amount of currency than that of the second equilibrium price observed in black market exchanges. This is due not only to the algorithm being used to control prices fluctuations, but it is also due to the large size of the tax on the one-way exchange.

While I agree with your premise that market forces must determine the price, I disagree with the causal factors you listed for the difference in rates between the BLTC exchange and the black market exchanges.

In my view, the main factor for this discrepancy is the fact that the BLTC rate is driven by the supply of and demand for gems. On the other hand, the black market rate is being driven purely by supply of and demand for gold. The gem → gold rate will change as the desirability of gems changes, whereas the black market rates will vary based on other factors (supply, competition, demand). The two markets are not equivalent.

The two markets are linked, though. If Anet were to double the price of buying gems with USD, more people would buy gems with gold coins instead, which would increase the price of gems. Having gems, to me, seems to be irrelevant in the entire system. Why not just have a USD/euro/Bpound value to all items purchasable by gems? In this way, Anet would not be generating currency through players buying gems for gold coins and the DWL associated with the enforced difference between buy/sell prices of gems would be avoided entirely.

Poor Leno.3582:

The two markets are linked, though. If Anet were to double the price of buying gems with USD, more people would buy gems with gold coins instead, which would increase the price of gems. Having gems, to me, seems to be irrelevant in the entire system. Why not just have a USD/euro/Bpound value to all items purchasable by gems? In this way, Anet would not be generating currency through players buying gems for gold coins and the DWL associated with the enforced difference between buy/sell prices of gems would be avoided entirely.

Yep, the two markets are linked, but the main point is that (in the current system) the desirability of gems (whether purchased with gold or real money) is on of the drivers of the exchange rate.

What would players be exchanging their gold for if there was a system in place that did not use gems? Real money? Or some kind of ANet Dollars that can only be spent in the ANet store? Real money could throw up some legal/tax implications for ArenaNet, but these are perhaps solvable. ANet Dollars would, in practice, be no different from gems and wouldn’t really do much for changing how the rate works.

MilkInBags.5136:

A free market would lead us to more speculation and even more attention from hackers and gold sellers. Right now it doesn’t seem attractive to buy gems or gold via the currency exchange because we’re in a troubled part of the game life. Some people got rich really fast while most of us barely have 10 golds. With some time the economy will stabilize (I guess) and the gem demand should lower too (Halloween has a big part to play in the gem’s exchange rate).

As for a free market, most people playing GW2 are casual. Why am I so confident about it? No subscription fee. So what that people are casual? Well I’m pretty sure someone who only has max 1 hour per day to play the game doesn’t have time to check out the TP and try to make sense on how to buy gems and gold. Free market = gimmicks. The currency exchange controlled by ANet = fair.

Why would anyone think that the economy will be able to stabilize? People will make more and more gold, and inflation will happen no matter what until years from now when people move on from this game—then and only then will the price starts to drop again.

From the way I see it, there is no way that ANet is legit about their “supply and demand setting the price”. The price trend shows that price of gems rises every single day of the week. It is impossible for price to rise when there is no one to buy them. Unless of course the price is set based on the amount of gem being sold, in which case the ridiculous spread makes sure that no one can sell their gems anyway.

Xocolatl.6890:

From the way I see it, there is no way that ANet is legit about their “supply and demand setting the price”. The price trend shows that price of gems rises every single day of the week. It is impossible for price to rise when there is no one to buy them. Unless of course the price is set based on the amount of gem being sold, in which case the ridiculous spread makes sure that no one can sell their gems anyway.

ArenaNet makes their money from the sale of gems, so if they were controlling the rate of the gem -> gold exchange, it would be in their favour to keep the rate as low as possible in order to increase the number of gems required to get the desired amount of gold. Therefore, the rising price trend of gems → gold shows that ArenaNet are not controlling the exchange rate (or at least, not for their own benefit).

the dollar/gem is what is controlled. 1.25USD/100gems. The revenues from people buying the services offered by the gem store should be based upon the number of sales of services, not gems. just get rid of gems. its pointless. if something costs 200 gems on the store, it will always cost $2.5o. There’s no cost to Anet of proving these services, so the price is only based upon demand. Therefore, there is no reason to change the price other than shifts in demand, any case, it is up to Anet on what price it is.

Poor Leno.3582:

the dollar/gem is what is controlled. 1.25USD/100gems. The revenues from people buying the services offered by the gem store should be based upon the number of sales of services, not gems. just get rid of gems. its pointless. if something costs 200 gems on the store, it will always cost $2.5o. There’s no cost to Anet of proving these services, so the price is only based upon demand. Therefore, there is no reason to change the price other than shifts in demand, any case, it is up to Anet on what price it is.

Just to clarify, are you proposing that these services/goods can only bought with real money?

no, but i believe that the price of these goods/services should be a constant set price in terms of both dollars and gold coins. adding gems into the equation seems to only create inefficiencies.
I’m with the same belief as scree.2061 in his earlier post on this page. Although, I would go as far to say that there should be a P2P exchange in-game for USD/gold coins using a form of paypal. Arenanet could impose a small tax on all transactions, but it is important that the market sets the price, and not an algorithm designed to control the rate at which the exchange changes

Poor Leno.3582:

no, but i believe that the price of these goods/services should be a constant set price in terms of both dollars and gold coins. adding gems into the equation seems to only create inefficiencies.
I’m with the same belief as scree.2061 in his earlier post on this page. Although, I would go as far to say that there should be a P2P exchange in-game for USD/gold coins using a form of paypal. Arenanet could impose a small tax on all transactions, but it is important that the market sets the price, and not an algorithm designed to control the rate at which the exchange changes

I can see your point about inefficiencies, but I think that the gem → gold system mostly requires ArenaNet to make the offerings in the gem store as attractive as possible without going down the “pay-to-win” route. I’m not personally in favour of an exchange where players can obtain real money from earning in-game gold, but I do like being able to trade gold for items that would otherwise cost me real money.

A P2P gem exchange that operates similarly to the TP would be more transparent, but again, the market would still be dependent on the overall desirability of gems, so I wouldn’t necessarily expect the exchange rate to start matching the rate offered by gold sellers.

I agree with you than the price of gems is dependent on desirability, but would you not also say that the desirability is dependent on the marginal buying power of gems? Buying gems with gold becomes far too undesirable with the current transaction fees. I would argue that if the fees were minimal, yes speculation would occur, but because the price of gems is pegged to be 1.25USD/100gems, the price of gems/gold coins will maintain a certain distribution range. If it becomes too expensive, players will be more inclined to buy gems with dollars. I do not know the elasticity of demand with regards to gem/gold, but I am assuming that it is normal. Then again, I could be wrong.

On an unrelated note, I think it would be really interesting to see actual booms and busts with gem prices, but the algorithm seems to prevent this from happening.

Well I’ve bought gems with gold, and will probably do so again soon. I’m also not averse to spending real money on gems, but that’s more likely to be on permanent things like extra character slots or storage space.

A lot may also depend on how much gold players can generate as the game matures, if gold becomes more easily obtainable, then rises in the equivalent gold value of gem store offerings may not deter players from trading gold for gems.

There was a surge in gem demand with the release of the Halloween offerings, but no real corresponding bust (more of a slow decline). I’m no economist, but I think busts could really only happen if gems were commodities in and of themselves. Because gems are destroyed when they are spent in the store, and because the margin between the two rates discourages speculation, it may be harder for the market to become too unbalanced.

Colonel Kernel.7506:

marnick.4305:

Basically the system is the same as in GW1 for traders. In GW1 it took some time but in the end prices stabilized. Some events seriously shaked the economy and could influence prices but on average ecto was extremely stable in the long run.

That’s not the way I understand the GW1 economy. From what I understand (didn’t play long enough to know personally) Glittering Dust (or maybe it was another commodity) became the de facto currency of GW1

The de facto currency was ecto, just the way I said…. the value of ecto was based on extremely stable trader prices.

marnick.4305:

Colonel Kernel.7506:

marnick.4305:

Basically the system is the same as in GW1 for traders. In GW1 it took some time but in the end prices stabilized. Some events seriously shaked the economy and could influence prices but on average ecto was extremely stable in the long run.

That’s not the way I understand the GW1 economy. From what I understand (didn’t play long enough to know personally) Glittering Dust (or maybe it was another commodity) became the de facto currency of GW1

The de facto currency was ecto, just the way I said…. the value of ecto was based on extremely stable trader prices.

The price of ectos in GW1 was stable because the NPC trader and the P2P economy functioned hand-in-hand, each working as a relief valve for the other. That model is extremely stable. We would have never chosen ectos as our currency if we had not been able to freely trade them amongst ourselves.

I saw the change in prices as soon ANet released this
https://dviw3bl0enbyw.cloudfront.net/uploads/forum_attachment/file/5064/guild-wars-2-gem-card-2000-gems-.jpg

Astraea.6075:

Xocolatl.6890:

From the way I see it, there is no way that ANet is legit about their “supply and demand setting the price”. The price trend shows that price of gems rises every single day of the week. It is impossible for price to rise when there is no one to buy them. Unless of course the price is set based on the amount of gem being sold, in which case the ridiculous spread makes sure that no one can sell their gems anyway.

ArenaNet makes their money from the sale of gems, so if they were controlling the rate of the gem -> gold exchange, it would be in their favour to keep the rate as low as possible in order to increase the number of gems required to get the desired amount of gold. Therefore, the rising price trend of gems -> gold shows that ArenaNet are not controlling the exchange rate (or at least, not for their own benefit).

It is in ANet’s interest to keep the amount of Gold required to purchase Gems as high as possible, not the other way around. If it is more favorable for the player to exchange Gold for Gems they will do so. ANet gets nothing from that transaction. If it is less profitable for the player to exchange Gold for Gems than cash for Gems then the player will pay cash. This is the only way ANet profits.

Players buying (in RL money) Gems to exchange for Gold doesn’t bring more gold into the in game economy, it takes it out of the hands of other players. IOW it has a minimal impact (the service fee) on how much Gold is in the game.

Unless ANet is “printing” Gold when a player exchanges Gems for it and then removing an equivalent amount when a different player exchanges their Gold for Gems. Which is what I suspect is happening on both ends of any trade.

Colonel Kernel.7506:

Astraea.6075:

ArenaNet makes their money from the sale of gems, so if they were controlling the rate of the gem -> gold exchange, it would be in their favour to keep the rate as low as possible in order to increase the number of gems required to get the desired amount of gold. Therefore, the rising price trend of gems -> gold shows that ArenaNet are not controlling the exchange rate (or at least, not for their own benefit).

It is in ANet’s interest to keep the amount of Gold required to purchase Gems as high as possible, not the other way around. If it is more favorable for the player to exchange Gold for Gems they will do so. ANet gets nothing from that transaction. If it is less profitable for the player to exchange Gold for Gems than cash for Gems then the player will pay cash. This is the only way ANet profits.

Players buying (in RL money) Gems to exchange for Gold doesn’t bring more gold into the in game economy, it takes it out of the hands of other players. IOW it has a minimal impact (the service fee) on how much Gold is in the game.

Unless ANet is “printing” Gold when a player exchanges Gems for it and then removing an equivalent amount when a different player exchanges their Gold for Gems. Which is what I suspect is happening on both ends of any trade.

Oops, a bit of a brainfart on my part… assuming gold is not being created out of thin air when someone exchanges gems for gold (and similarly when gold is exchanged for gems), then ArenaNet benefits from as high a rate as possible. This is because a high gem → gold rate should increase the demand for gems for real money from those who want to trade them for gold.

In that case, the gem price should reach some kind of equilibrium near the price where the number of gems being exchanged for gold is roughly equal to the number of gems demanded by people willing to trade gold at that price point. This equilibrium will shift as ArenaNet makes changes to the gem store, and this will be an upwards shift if those changes make gems more attractive to players who want to trade gems for gold.

From the way I see it, there is no way that ANet is legit about their “supply and demand setting the price”. The price trend shows that price of gems rises every single day of the week. It is impossible for price to rise when there is no one to buy them. Unless of course the price is set based on the amount of gem being sold, in which case the ridiculous spread makes sure that no one can sell their gems anyway.

A better answer to this poster than what I said originally is to point to http://www.gw2spidy.com/gem and note that gem prices have in fact stopped rising, and have been pretty stable for the past week.

to be quite honest…

short of nuking the entire gold pool on the game right now, the only way to EVENTUALLY fix this , is to start by removing the ability to buy gems with gold

yes its a fine convenience and a way to get gem only stuff without using my credit card, but id rather have a a higher value for my doller when i do buy gems using cash if it means gold sellers/buyers no longer control the gem/gold exchange ratio….and the only way to do this is to stop people from buying gold and turning into gems thus screwing the value of the exchange for everyone else

leave gems > gold in , its a fine convenience and Anet should retain the abilty to sell gold legit, but kill the gold buyers ability to buy gems with gold , wich also happens to mean better revenues for your cash shop something wich i think its crucial in the long run..

you have a good setup and the currency exchange would be a perfect idea and tool if the internet didnt have farmers and gold sellers , unfortunatley it does and Anet has to roll with the punches and adapt

TLDR: the only way to keep the currency exchange values constant and fair is to remove gold to gem exchange because gold from gold sellers is being used and thus ruining the value and market for both conversions and taking revenue away from Anet

What Luigio is suggesting is that GW2 become a pay to win game, like all the others that have failed.
All I have to say is, if Gems are changed to real money only.. I will quit so fast it will make your head spin.
So will most of the community.
We left games with that model to come here. If you like that model, go back to those games. Don’t ruin this one.
I’m pretty sure GW2 developers knew this going in, and have no intention of making their awesome game fail, by listening to people with no clue about how to KEEP a player base for many many years.
Gold buyers is a third party issue, which they handle on a separate basis. This will always happen in all games, but there are ways to slow it down.
Bots are the first part. Hacked accounts are another.
Anyone who has played games like this for years should know buying gold means allowing access to your account.. ie resulting in hacking.
It is a monumental task for the devs to deal with.
As for a free market. Can’t have a real free market in a game. Players always mess it up.
But it can be adjusted to account for abuses by those who wish to take advantage of others.
I think this is what Mr. Smith is getting at.

How does allowing players to turn gold into gems “inflate the exchange ratio” in a negative way, though? People buying gems with gold causes gems to be worth more gold, not less.

lackofcheese.5617:

How does allowing players to turn gold into gems “inflate the exchange ratio” in a negative way, though? People buying gems with gold causes gems to be worth more gold, not less.

in short, gold sellers

gems COST more gold, because people have ZERO qualms about buying them with gold because of the ridiculously good deal on gold they get from botters, so …it costs more gold for everyone else that is not buying gold, wich means they have to farm MORE for the same amount of gems

until such time when the gold seller/buyers/botters are no longer a hampering problem for the economy and the amount of gold circulating around ,they should take the abilty to buy gems with gold away , period.

i’m with luigio. because those gold sellers can influence the the gem to gold rates too. people buying from gold sellers can buy gems from the bltc, kittening up the conversion rate and making it kittened up for the people who want to get gold by buying gems from a.net with real cash.

if real money is involved guys, everything is serious. it’s not just a matter of “why would a real money investor gets advantage?”. (well, these real money investors should technically get advantage, if i was a ruthless capitalist).

alcopaul.2156:

i’m with luigio. because those gold sellers can influence the the gem to gold rates too. people buying from gold sellers can buy gems from the bltc, kittening up the conversion rate and making it kittened up for the people who want to get gold by buying gems from a.net with real cash.

If people buying gold from gold sellers are using that gold to buy gems, then that would push both the gold → gem and gem → gold exchange rates up. This would mean that people “who want to get gold by buying gems from a.net with real cash” would actually get more gold for their gems, not less.

John Smith.4610:

There seems to be some confusion:
The currency exchange has a supply of Gems and Gold.

If players are converting Gold to Gems, then the Amount of Gold player will receive for their gems goes up.
If players are converting Gems to Gold, then the amount of Gems players receive for Gold goes up.

The exchange rate changes based on the scarcity of each supply. You cannot inflate it, it’s an exchange rate. As players purchase in one direction, it entices purchases in the other direction.

John, thank you for confirming (at least in part) how the currency exchange works.

Another issue that is often debated is to what extent (if any) the initial exchange rates (and possibly initial supply of gold and gems) when the game launched have on the current rates. Are you able to provide any insight on this?

John Smith.4610:

The currency exchange has a supply of Gems and Gold.

If players are converting Gold to Gems, then the Amount of Gold player will receive for their gems goes up.
If players are converting Gems to Gold, then the amount of Gems players receive for Gold goes up.

thank you John for this.

but does this tell me that buying gold from bltc will actually entice me to buy from gold sellers since the gem->gold rates becomes undesirable when more people buy from the bltc?

and does this tell me to support gold sellers to make it worth to invest to the bltc again?

so it see saws between the gold sellers and the bltc? and to attain the balance, the rate should be a compromise between the gold sellers and the bltc?

so how about competing with the gold sellers rate? is this an option that you’re looking at?

regards,

John Smith.4610:

Astraea.6075:

John, thank you for confirming (at least in part) how the currency exchange works.

Another issue that is often debated is to what extent (if any) the initial exchange rates (and possibly initial supply of gold and gems) when the game launched have on the current rates. Are you able to provide any insight on this?

Virtually none at this point.

Thanks again! I’m happy to find out that the exchange functions pretty much as I expected.

alcopaul.2156:

John Smith.4610:

The currency exchange has a supply of Gems and Gold.

If players are converting Gold to Gems, then the Amount of Gold player will receive for their gems goes up.
If players are converting Gems to Gold, then the amount of Gems players receive for Gold goes up.

thank you John for this.

but does this tell me that buying gold from bltc will actually entice me to buy from gold sellers since the gem->gold rates becomes undesirable when more people buy from the bltc?

and does this tell me to support gold sellers to make it worth to invest to the bltc again?

so it see saws between the gold sellers and the bltc? and to attain the balance, the rate should be a compromise between the gold sellers and the bltc?

so how about competing with the gold sellers rate? is this an option that you’re looking at?

regards,

i just realize the implication of the post. this could mean that the rate movements require you to support gold sellers to get the bltc going. conspiracy? lol.

So, what about the difference in the ratios for the two directions?

For example, if I had 84 silver, 28 copper and decided to convert those to gems, I could get 100 gems. However, if I then changed my mind and exchanged those 100 gems for gold, I would only get 60 silver, 89 copper. That’s a 38% loss. Where does that money go?

More specifically, why such a high loss, and who decides the relationship between the two rates that results in the loss?

RoyHarmon.5398:

So, what about the difference in the ratios for the two directions?

For example, if I had 84 silver, 28 copper and decided to convert those to gems, I could get 100 gems. However, if I then changed my mind and exchanged those 100 gems for gold, I would only get 60 silver, 89 copper. That’s a 38% loss. Where does that money go?

More specifically, why such a high loss, and who decides the relationship between the two rates that results in the loss?

I think the difference is unnecessarily high, but I imagine that one of the points is that they don’t want it to be easy for people to make money buying gems (with gold) and turning around and quickly reselling them. It keeps the price a bit more stable over the short term. (That has little to do with the increased demand for gems when new items are available to be purchased with gems, of course.)

RoyHarmon.5398:

So, what about the difference in the ratios for the two directions?

For example, if I had 84 silver, 28 copper and decided to convert those to gems, I could get 100 gems. However, if I then changed my mind and exchanged those 100 gems for gold, I would only get 60 silver, 89 copper. That’s a 38% loss. Where does that money go?

More specifically, why such a high loss, and who decides the relationship between the two rates that results in the loss?

38% seemed a bit high, so I just double checked the math, and it’s actually closer to 28%… which is consistent with a roughly 30% difference between the two rates.

Why is there such a big difference? My personal theory is that the 30% margin is there to make it harder to speculate in gems for short term profit, especially if someone was trying to use a large amount of gems/gold to “push” the rate in a desired direction with a single transaction.

Same as selling anything on the TP: there’s an associated fee. In this case, you pay in both directions: selling gems or selling gold for gems.

What happens if no one buy gems for real money in some days? The game will say there are no gems available to buy with gold?

All this talk of a market? -SERIOUSLY? You do of course know that this is a game EVERYTHING (except real life money transactions) are virtual- THEY DO NOT EXIST. The laws of supply and demand exist but as its virtual Anet could control the supply.

It seemed a good idea at the time: To offer gems for in game currency but its a BIG FAIL due to the gold sellers and bots.
TBH i think turbine hit the nail on the head You got Turbine Points for accomplishments in the game. with these points you could buy things from the store. You could also purchase TP with real life money and if you subscribed (after f2p) you got monthly Turbine points. This, of course, meant that gold sellers did not affect their revenue from the store.
Their are two systems in gw2 that offer a measure of accomplishments Achievment points (limited) and karma (unlimited). So why not make a 3rd “currency” [for want of a better name, lets call this Gems] and its formula is based on achievments and karma. With these [Gems] you could obviously buy things from the store [including the ingame currency gold].
This then gives two options to acquire gems – through real life money or through doing things in the game [achievments/events maybe even dungeons].
This would help the game:
Gold sellers would no longer have an impact on your revenue [i’m sure they would still have some impact on the player trading post tho]
Also people would do more content (including more alt playing), I understand that this would be deemed a grind, but tbh with all the “bored” people out there maybe they wouldnt be so bored if this mechanic was in play. Also with this system it makes it more equal for all levels to access things in the store.
I Do believe real life sales for gems would increase: currently the only way for me to get gems at the moment is with real life money or in game gold. I started the game with 0 gems and unless i buy gems / convert gold then i could still have 0 gems at lvl 80.
With the new system i would be “rewarded” gems for my accomplishments, “giving” people gems would give more incentive for the people to actually want more (i imagine that (due to the cost) there are lots of people that havnt even bothered with gems).
And if your revenue is that bad maybe should consider a “monthly fee PERKS package” its NOT a subscription, you pay a fee to get {insert perks here} its players choice if they do this but its NOT needed to play the game.
I aplologize for quoting another games system- but it did work (2 years in one of the biggest guilds on the most populated server taught me that)

NeHoMaR.9812:

What happens if no one buy gems for real money in some days? The game will say there are no gems available to buy with gold?

I assume you mean that nobody exchanges gems for gold, since that is supposedly what lowers the price. In that case, the price will keep going up, assuming that people keep buying gems with gold. Eventually they would get to the point where the gold price for them would be so high that it would be impractical for most people to buy gems that way. Of course, by that point, it would be a lot more enticing for people (who are into that sort of thing) to buy gems to exchange for money, which is obviously the idea.

Astraea.6075:

RoyHarmon.5398:

So, what about the difference in the ratios for the two directions?

For example, if I had 84 silver, 28 copper and decided to convert those to gems, I could get 100 gems. However, if I then changed my mind and exchanged those 100 gems for gold, I would only get 60 silver, 89 copper. That’s a 38% loss. Where does that money go?

More specifically, why such a high loss, and who decides the relationship between the two rates that results in the loss?

38% seemed a bit high, so I just double checked the math, and it’s actually closer to 28%… which is consistent with a roughly 30% difference between the two rates.

Why is there such a big difference? My personal theory is that the 30% margin is there to make it harder to speculate in gems for short term profit, especially if someone was trying to use a large amount of gems/gold to “push” the rate in a desired direction with a single transaction.

I did (8428-6089)/6089=0.38413… = 38%.

I guess maybe you did (8428-6089)/8028=0.2775?

Either way, it’s a bit excessive in my opinion.

RoyHarmon.5398:

I did (8428-6089)/6089=0.38413… = 38%.

I guess maybe you did (8428-6089)/8028=0.2775?

Either way, it’s a bit excessive in my opinion.

Yeah I did it the second way… it’s a 28% loss on your original funds, not a 38% loss on your remaining funds.

I think it’s a problem if you buy gems with gold and immediately regret it and wish to get your gold back, but it also means that gems don’t get targeted for speculation like other commodities.

Astraea.6075:

RoyHarmon.5398:

I did (8428-6089)/6089=0.38413… = 38%.

I guess maybe you did (8428-6089)/8028=0.2775?

Either way, it’s a bit excessive in my opinion.

Yeah I did it the second way… it’s a 28% loss on your original funds, not a 38% loss on your remaining funds.

I think it’s a problem if you buy gems with gold and immediately regret it and wish to get your gold back, but it also means that gems don’t get targeted for speculation like other commodities.

Okay, that makes sense. I guess something would be necessary to stop speculation, but it makes me think both “Wow, it would cost $10 to buy enough gold for a guild backpack,” and “Wow, it takes so much gold to buy Black Lion keys.” I suppose it probably feels more excessive than it is, and I’m far, far behind the curve when it comes to accumulating in-game wealth.

Colonel Kernel.7506:

Imitation.5736:

I don’t really like that Anet heavily taxes the gem/gold conversions. It removes all of the ability to speculate on the gem/gold conversion market.

No, it doesn’t. It just means that you are highly unlikely to profit in the short term from said speculation.

And I do like the high fee for exactly the reason you don’t. People do NOT need to be flipping Gems for profit at the expense of the casual players.

But they will anyway, flipping is PvP negotiaiting and it is clear Tyria attracts PvP economists