Guild Wars 2

Gems are created when someone buys them with $, and gems are destroyed when someone uses them to buy an item off the gem store (including bank and bag slots) or transfer servers. I saw mention of this a few months back it will take me a while to find the original quote.

Here is 1 of 2 quotes:

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.

This says to me that gems are finite within the exchange, meaning there is a limited supply. They may in fact be destroyed on store purchases, but it looks like the echange plays out differently.

John Smith.4610:

John Smith.4610:

As a quick aside. Gems in the currency exchange are finite. You may buy gems with real money to your hearts content, but if you don’t put any of them gems into the currency exchange the currency exchange’s stock of gems never changes.

John Smith.4610:

Think of it this way. The government can print as much money as they want, that doesn’t mean your bank account has access to that money. The currency exchange does not have access to gem creation. It has a limited stock that players add and subtract from.

You found the other quote for me.

But yes, gems are created with $, destroyed with purchases via gem store/transfers.

The currency exchange neither creates or destroys gems and has a finite supply.

If gems had a fixed price then either
1) the currency exchange will need to create gems
or
2) deny any gem purchase when supply runs out.

Curiously, if gems are destroyed (which i still doubt happens), what happens when a person buys gems with gold and spends those gems in the store, removing the supply from the exchange?

There’s actually a few questions specific to debating over regulation.

munkiman.3068:

Curiously, if gems are destroyed (which i still doubt happens), what happens when a person buys gems with gold and spends those gems in the store, removing the supply from the exchange?

There’s actually a few questions specific to debating over regulation.

Then there are less gems in the exchange and the exchange rate rises. Yes that means at some point the exchange could run out of gems but before then the Gems->gold rate will rise to a point where players will buy gems just to convert it into gold thus restocking the exchange and lowering the rate. The exchange also has it’s own pool of gold so it’s not creating that either. We’ve simply haven’t reached a point of equilibrium yet.

The only thing that isn’t clear (ok maybe not the only thing) is the question of what happens to the gold caused by the difference in exchange rates? When you buy gems does that 38.4% markup from the gold->gem rate acts as a sink or just added to the pool causing a “natural” rise in the exchange rate over time since the gold pool is increasing during equivalent exchanges of gems?

munkiman.3068:

Curiously, if gems are destroyed (which i still doubt happens), what happens when a person buys gems with gold and spends those gems in the store, removing the supply from the exchange?

There’s actually a few questions specific to debating over regulation.

Those gems are destroyed upon buying a good from a gem store. But that is completely irrelevant in relation to the exchange. The exchange itself does not create or destroy gems. What players do with the gems after they buy them is up to the player and has no effect on the exchange itself.

The gem/gold conversion factor is determined artificially, obviously, either manually by an employee, or using a formula which can be tweaked at will. The only way an exchange rate can be market controlled is to have buyers directly talking to/negotiating with the sellers, which is not the case here. Or at least have a TP offering to buy and sell gems like any other game item, where you can see individual prices and quantities offered for sale or purchase by players. Seeing the exchanged volume move up or down (even though you may trust those figures), by itself, does not determine a price, only a direction.

So, yes, gem prices are indeed already regulated, and the price increases are intended by ArenaNet, for obvious reasons.

Of course it’s a formula because the exchange is autonomous or do you think there is someone is sitting in a room changing it minute by minute. And you actually think someone is going “hey, lets tweak the equation after a vending machine run to tick off all those cheap skates that won’t part with the money”? Simply putting something popular on sale can do that all by it’s lonesome.

I know you don’t want to take JS at his word but I believed he’s said that the method the exchange uses to set the rates had NOT been touched since launch just as the initial supply of gems and gold the exchange has hadn’t been adjusted by ANet either. It’s only changes based on player actions with the exchange.

The exchange rate is regulated by an algorithm (MATHS) that adjusts the prices based on supply stockpiles.

Basically, the more we buy and the less we sell the more costly it will be to buy, and the more profitable to sell. by that way the price will keep close to the price we players are willing to pay for gems.

So, thinking out loud here. As players buy gems with gold and spend them on the gemstore, thus removing the supply from the exchange and raising the cost. You’re saying the only way to replenish that supply is by buying gems with cash and trading it for gold? What about people that bought gems with gold and no longer play, but have 5000 gems just sitting there? What’s in place to supplement the gem stock when people don’t make the conversions (gems->gold)?

I was under the impression that when you bought a store item it went back into the pool of available gems and that there was only ever a total finite amount of gems in the entire system.

Which brings me to the thought that the market will continue to climb if people don’t spend gems to get gold. That’s actually more troublesome than i originally thought. Where is the ceiling? 1g for 1gem? Starting to sound like the d3 economy.

Edit: To further iterate my concern, players basically have a license to print money… Seems pretty dangerous.

There probably isn’t a ceiling to the algorithm. Its real ceiling is what people would be willing to pay vs what people are willing to sell for.

the 5000 gems sitting in an inactive account isn’t part of the exchange and has no effect on the exchange. Only the act of buying or selling on the exchange causes the price to fluctuate. If there is more buying than selling the price will go up, if more selling than buying, price goes down.

As far as I understand there isn’t a limited number of gems in the game, only a finite number in the exchange supply pool. Meaning if someone dumped 1 million dollars into the game they would get 1 million dollars worth of gems created (and if they tried to convert that all to gold all at once via the exchange, crash the exchange rate and make gems really cheap again).

Think of it this way: Anet wants to sell you gems, so they really cant ‘run out of stock’ on gems otherwise their system shuts down and they don’t get money. But also for every item in the gem store they sell they want an equivalent amount of money for that item.

So instead of selling a character slot for 10$ directly they give you 800 gems for 10$ and you can either buy the character slot (which destroys the 800 gems) or sell the gems on the exchange and someone else can use those 800 gems to buy a character slot. From anets perspective that 800 gem was bought and used to buy a character slot, the exchange was just an intermediate step before the final transaction. The exchange didn’t create those gems, the 10$ purchase did, and it didn’t destroy those gems, the character slot purchase did.

Also considering the ‘inactive’ account isn’t disabled the real player could come back at any moment and use those gems.

While i understand the system, it seems to me, you could foresee a total pool of gems. If anet took the total amount of players they could technically handle and “gave” them (allocated) 50,000 gems i would think that total pool of gems would be more than enough to cover things (even if they expanded what they could handle). Giving players the ability to “crash” the exchange (regardless how minimal that risk is), seems really troubling. The government controls how much money is in the system, i was assuming this was the same deal with the gem system.

Pulling gems out of the exchange and not putting them back in (in the case of the inactive player with 5000 gems), means someone else has to put that back in at some point or the prices stay higher. Obviously 5000 gems isn’t much in the scope of it.

I think the gems are removed from the pool for the purposes of calculating the conversion rate at the moment that someone purchases them for gold, not afterward when they are spent. Gem store purchases are completely separate from the gold/gem conversion. That is, when I bought gems with cash to buy my molten pick, that had absolutely no impact on the conversion rate. Likewise, the folks that already had a balance of gems and bought the pick had no effect on the conversion rate.

I think John said a while back that the initial pool of gems and gold for the conversion was large enough that it was extremely improbable that either would run out (or get close enough to running out to be a problem), but I can’t find the quote.

Well i know this is getting off topic and i’m definitely not suggesting this, but it seems to me if you had enough money you could turn the gem exchange into an infinite gold making machine. I guess it’s possible with both scenarios, but it seems like it would take a lot more with a limited supply. But i guess you could do that with the TP as well.

There are two pools of gems. One in the exchange and one that represents all the gems sitting in player accounts and the 2nd pool has no affect in regards to the exchange rate.

JS did state that the exchange pool was created with so many initial gems that practical market manipulation by a player or group of players is impossible due to the massive difference between what a player would have Vs the pool in the exchange as well as the 38.4% markup over the Gem→Gold rate. So any arbitrage at the gem exchange is really just long term investing and not arbitrage at all (even though their may be cyclical trends in the exchange rate due to various times populations come on to play).

Behellagh.1468:

There are two pools of gems. One in the exchange and one that represents all the gems sitting in player accounts and the 2nd pool has no affect in regards to the exchange rate.

JS did state that the exchange pool was created with so many initial gems that practical market manipulation by a player or group of players is impossible due to the massive difference between what a player would have Vs the pool in the exchange as well as the 38.4% markup over the Gem->Gold rate. So any arbitrage at the gem exchange is really just long term investing and not arbitrage at all (even though their may be cyclical trends in the exchange rate due to various times populations come on to play).

How did it get to 38.4? It’s 27.7…

Gold->Gems / Gems->Gold is roughly a 38.4% markup.

The 19:25 EDT prices (according to GW2Spidy) are

Gold->Gems of 2g95s45c
Gems->Gold of 2g13s46c

Divide the two and the first exchange rate is 38.41% higher than the second.

Of course if you do it the other way, the loss of converting one way and back again then the loss is 27.75%.

So I say that gems cost 38.41% more than what you can sell them back for instead of saying the exchange will only pay 72.25% of what you paid for them. Same difference, just a different way of looking at things.

Ahh i’d assume going the other way. I see though thanks.

Ensign.2189:

Rouven.7409:

Well, just a thought here, instead of explaining maybe it’s time to change people’s perception.

Inflation is rarely discussed as an economic or policy topic; it is usually a political topic. There is a very strong, entrenched political establishment working very hard to make sure that people do not understand inflation.

When you deal with economics and not politics, it’s exhausting to continually encounter people whose notions of inflation are deeply embedded in their politics.

I can totally sympathize with JS simply beating his head against the wall when people drone on about generalized unhappiness with the economy and call it inflation. There is only so much effort you can put into educating people who have put in no effort themselves.

At the risk of dragging on this semi-off topic line, I’d like to add this:

Economics suffers greatly from the fact that those who are ignorant of Economics generally believe they have significant knowledge and expertise. These people will argue until they’re blue in the face that their impressions about how economics actually work are the accurate ones. More often then not (as you note) these ideas are pure falsehoods created to establish or reaffirm some political belief. Frustrated economists frequently reach that level of condescension, and treat these people like ignorant children simply because they are. These people are genuinely misinformed and lacking knowledge about a topic that they honestly believe themselves to be experts in. The fact is, nothing these people believe about economics (for example, “strong dollar = always good” or “inflation = bad” are common misconceptions) is accurate.

Behellagh.1468:

Gold->Gems / Gems->Gold is roughly a 38.4% markup.

The 19:25 EDT prices (according to GW2Spidy) are

Gold->Gems of 2g95s45c
Gems->Gold of 2g13s46c

Divide the two and the first exchange rate is 38.41% higher than the second.

Of course if you do it the other way, the loss of converting one way and back again then the loss is 27.75%.

So I say that gems cost 38.41% more than what you can sell them back for instead of saying the exchange will only pay 72.25% of what you paid for them. Same difference, just a different way of looking at things.

If we’re looking at the so called “tax rate” in this regard, it would be the 27.75% (the remaining amount of gold after those transactions is only 72.25% so 72.25% = 100% – tax rate). I’m not coming up with a real argument as to why someone would look at it in the other direction (not to say there isn’t a possible reason, I just have not come up with one).

I look at it as if I bought Gems with cash and convert it to gold, I will need to spend 39% more gold to get back to the same about of Gems.

As for think of it as a tax, I think of sales tax. Item costs $10 and the sales tax is 5% then I pay $10.50. I don’t think of it as 1-(10/10.5) or 4.76%. It’s 5% on top of the cost not 4.76% of what I finally pay.

But I freely admit I think oddly at times.

Maybe it’s a VAT vs sales tax POV.

Behellagh.1468:

I look at it as if I bought Gems with cash and convert it to gold, I will need to spend 39% more gold to get back to the same about of Gems.

As for think of it as a tax, I think of sales tax. Item costs $10 and the sales tax is 5% then I pay $10.50. I don’t think of it as 1-(10/10.5) or 4.76%. It’s 5% on top of the cost not 4.76% of what I finally pay.

But I freely admit I think oddly at times.

Maybe it’s a VAT vs sales tax POV.

That seems like a reasonable scenario for looking from the other direction, although I might question how common of a scenario it is compared to the other. As for your real life comparison, I’d say it’s better to compare it to your income (as this is a transaction tax and not a sales tax) or some other exchange fee. If I make $10,000 and after tax receive $7,500 that’s a 25% tax (1-7500/10000) not a 33% tax [(10000-7500)/7500]. Since this is a currency exchange (and they use the same mentality) I’d argue that’s really the “right” way to look at it here.

Funny thing is even when prices go down on something, then just go back to what they were before…people call it inflation.

John Smith.4610:

In this thread we should discuss whether gem prices should be regulated.

Very nice done, very nice. It’s a known debate trick: force an assumption upon someone. Here, the assumption is that ANet is not regulating the price of gems.

Which is blatantly false.

ANet defined the price mechanism for gems. It is odd to state that something is ‘not regulated’ when the price mechanic is decided by one party.

Also, ANet never made the price mechanic public. That raises suspicions. Especially because the price of gems goes up the longer the game exists. That points to a price mechanism that is specifically designed to make prices go up.

(which is in ANet’s intrest because the more gold gems are worth, the harder it is to get them without using dollars)

If you really want an unregulated gem price, then use the same mechanism as the rest of the TP where players set the price.

But don’t use an unknown price-mechanism that in rality makes prices always go up and call it ‘unregulated’ because that is just not honest.

Draygo.9473:

Gems are created when someone buys them with $, and gems are destroyed when someone uses them

1. What we do not know is whether ‘golden’ gems (gems that are created when they are bought with gold) also determine the price.

ANet never said that they did. Nor did they say that they didn’t.

.

2. If only dollar gems change the gold price of gem, ANet must track down where someone gems come from: are they bought with dollars or with gold.

ANet never said that they did this. Nor did they say that they didn’t.

.

3. The gold value of gems goes up and up and up. According to the theory that was mentioned int hat post, this means that either the supply goes down or the demand goes up or both.

ANet never said which one it is (are you noticing a theme here?)

.

3a. If supply is defined as ‘gems players bought’, then it is impossible that supply is lower now than atthe start of the game. Players had bough zero gems when the game started. Or did ANet had some sort of ‘starting pool’ for gems? Or do they add a number of gems to the pool for every new player?

ANet never said anything like that.

.

3b. If supply is not down and prices rise, than demand must be up, right?

But, it is hard to believe that demand would be higher each and every monthexcept once: prices (taken from http://www.gw2spidy.com/gem atthe start of every month)went from…
37s in oct
88s in nov
1g67 in dec
1g64 in jan
1g84 in feb
2g05 in march
2g38 in april
3g05 now

Saying that demand is up in each and every month, compared to the month before is very, very, very unbelievable.

.

I know that it is unlikely that ANet will ever give correct information about this topic, but it is clear that there is more to it than ‘prices go up when people buy gems with gold and prices go down when people sell gems for gold’.

John Smith.4610:

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.

And yet, here we are, with gems prices raising month after month after month after month. Odd, isn’t it?

Tallis.5607:

And yet, here we are, with gems prices raising month after month after month after month. Odd, isn’t it?

Nope not at all. People are buying Gems with gold and spending them on the Gem store. There just aren’t as many willing to spend cash to change it into gold which replenishes the supply. It seems the people that do spend cash on gems are also, just spending it on items in the store.

nachtnebel.9168:

Which clearly means that people are still willing to pay that price. The system works. Yes, now it takes longer to get gems (I bought my first couple thousand gems for less than 50s per 100 gems) but on the other hand you don’t need your gold for anything else in this game.
In addition, GW2 has no monthly fee but ArenaNet still needs to earn money to keep this game running. So, if you really want some gems just spend cash and buy them.

Explain gw1 if they still need money to keep the game running.

Tallis.5607:

And yet, here we are, with gems prices raising month after month after month after month. Odd, isn’t it?

Sorry I wanted to include more of your post but the message limit kicked in. You really not grasping it are you.

The exchange doesn’t care how much gold or gems are sitting in player accounts. All it cares about are its two internal pools. One seeded with a billion gems (number made up, all that JS said was large enough to prevent player manipulation) and one seeded with gold to pay out to players selling gems.

When you buy gems with gold, gems are removed from the exchange’s gem pool and given to you while your gold goes into the exchange’s gold pool. And when you sell it gems, whether it’s gems you bought from the exchange or with actual money, the opposite happens, gems go into the exchange’s gem pool while the gold you receive comes out of the exchange’s gold pool. These transactions affect the ratio of gems to gold at the exchange and this ratio is used to set the price.

Let’s use smaller numbers here to illustrate and outline a method on how the rates could be determined. GmP is the amount of gems in the gem pool, GdP is the amount of gold in the gold pool.

The exchange rate, cost of a single gem, when buying gems is GdP/GmP * 1.15.

The exchange rate when selling gems is GdP/GmP * 0.85.

The 1.15 and 0.85 adjustments is to simulate the gap between the two exchange rates. I could have just used one value on only one of the equations but I like the symmetry. And in my example I’m not destroying any gold that comes into the exchange.

So let us begin. For this I’m seeding the exchange with one million gems and three thousand gold (the actual numbers are likely many orders of magnitude higher). This sets the rate at 34.5s for buying 100 gems and 25.5s for selling 100 gems. Please remember the actual rates are exact I’m simply rounding to two decimal places (copper) for display purposes.

So first player buys 5g worth of gems (honestly I would love the exchange to let my buy based on the number of gems I want rather than play binary search to determine the price of say 250 gems but that’s a QoL/UI discussion). So he buys, rounding up, 1,449 gems for 5g. Now the gem pool has 998,551 gems and the gold pool has 3,005 gold. The new exchange rate is now 34.61s for buying and 25.58s for selling 100 gems.

Next player buys 5g worth and they get 1,445 gems. Gem pool is now 997,106 and the gold pool is 3010. Rates are now 34.72s and 25.66s.

Now a player comes along and bought one of those 2000 gems for $25 cards (yes I know they weren’t released when the game was) and decides to sell 1000 gems for some quick gold. He gets 2g56s59c for his 1000 gems. Gem pool is now 998,106 and the gold pool is 3007.4341g. Rates are now 34.65s and 25.61s.

Now lastly let me buy some gems and then turn around and sell them back. Again buying 5g worth will now net me 1,443 and the pools are now 996,663 gems and 3012.4341g. Rates are now 34.76s and 25.69s.

So immediately sell those 1,443 gems back and get only 3.7073g. The gem pool returns to 998,106 but the gold pool is now 3008.7268g, which is 1.2927g higher than before. So yes in this method you see systematic “inflation” of the exchange rate for equivilent exchange of gems, which is now 34.67s and 25.62s.

Now iterate through hundreds of thousands of these transactions. Gem pool decreases, gold pool increases, exchange rates go up. As long as more players buy more gems through the exchange than sell to the exchange, the rate will continue to go up and up and up. Even if the number of gems bought and sold are equivalent, the rate will drift higher with this method I outline.

Hopefully this gives you an example that illustrates how

1) The rates are solely affected by the players.
2) How the rates keep going up.
3) How an equation and initial pool sizes once isn’t “regulating”, a word that to me means active external interference.
4) How after initialization, no gold or gems are being created by the pool and certainly none are being destroyed.

Of course I’m talking completely out of my hat here, I’m basing this method solely what John Smith hinted at when describing the exchange’s gold and gem pools and how I would approach this if the coding assignment landed at my desk.

Lastly I’m attaching a chart where I simply made 1,000, 5g transactions starting with the initial conditions of 3,000g and one million gems. At the end the gold pool had 8,000 gold and the gem pool had 425,826 gems with the gold to gem exchange rate at 2g16s05c and the gem to gold rate at 1g59s69c. The last 5g purchase resulted in only 232 gems, the next if made, 231.

Tallis.5607:

Draygo.9473:

Gems are created when someone buys them with $, and gems are destroyed when someone uses them

1. What we do not know is whether ‘golden’ gems (gems that are created when they are bought with gold) also determine the price.

ANet never said that they did. Nor did they say that they didn’t.

.

2. If only dollar gems change the gold price of gem, ANet must track down where someone gems come from: are they bought with dollars or with gold.

ANet never said that they did this. Nor did they say that they didn’t.

.

3. The gold value of gems goes up and up and up. According to the theory that was mentioned int hat post, this means that either the supply goes down or the demand goes up or both.

ANet never said which one it is (are you noticing a theme here?)

.

3a. If supply is defined as ‘gems players bought’, then it is impossible that supply is lower now than atthe start of the game. Players had bough zero gems when the game started. Or did ANet had some sort of ‘starting pool’ for gems? Or do they add a number of gems to the pool for every new player?

ANet never said anything like that.

.

3b. If supply is not down and prices rise, than demand must be up, right?

But, it is hard to believe that demand would be higher each and every monthexcept once: prices (taken from http://www.gw2spidy.com/gem atthe start of every month)went from…
37s in oct
88s in nov
1g67 in dec
1g64 in jan
1g84 in feb
2g05 in march
2g38 in april
3g05 now

Saying that demand is up in each and every month, compared to the month before is very, very, very unbelievable.

.

I know that it is unlikely that ANet will ever give correct information about this topic, but it is clear that there is more to it than ‘prices go up when people buy gems with gold and prices go down when people sell gems for gold’.

John Smith.4610:

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.

And yet, here we are, with gems prices raising month after month after month after month. Odd, isn’t it?

1) Gems are NOT created with the exchange – this has been said many times. you do NOT create gems with in game gold
2) Dollars do not affect the gold conversion price. buying 800 gems with money then buying a character slot does not change gem price on the exchange
3) Supply is NOT the total pool of gems in the game in players accounts, only the supply of gems currently sold to the exchange
3b) Did you ever consider outside factors like more DEMAND for gems because anet has been adding things people want to the gem store. Matter of fact gem prices on the exchange jump when players want to use gems to buy an item anet just added to the gem store. Often this coincides with anet adding something to the gem store.

When there is more demand for gems, more gold is converted to gems, jumping the exchange rate price.

4) Buying any item in shop is destroying these gems used to acquire item (then the total amount of gem is reduced and their price per gem in gold currency increase.)
The total amount of gems available at starts is unknown. This total amount of gem has a starting equivalent in gold currency value.
As buying any item in shop destroy the used gems then the total amount of gem is lower with overal value in gold that keeps raising as long as people are adding gold to the “gold pool” to acquire gems. Then less gems for an overal gold value that keeps increasing in quantity makes each gem price per unit in gold value more expensive to acquire.
The only way to add some gems on the “total gem pool’” is whenever someone buy these gems and convert them into gold (this process remove gold from the overal gold pool and add some gems).

READ CAREFULLY THESE ARE THE KEYS TO UNDERSTAND HOW WORKS GEM/GOLD MARKET :

GAME START====> GEM POOL <———————————————>GOLD POOL

We don’t know what was the set up of gold and gem amount at game start implemented by Anet but we know that the gem-gold ratio was very low and can only be increasing over time considering how the system works.
Here is explain how the gem gold ratio are affected by various options:

>Option 1<
Buying gems for gold ==> -x Gem in pool <-———————————-> +x Gold in pool
Effect => Increasing the price of gems per gold // Decreasing the price of gold per gem
The balance is changing less gems for an overall higher gold pool value.

>Option 2<
Buying gold for gems==> +x Gem in pool <——————————-> -x Gold in pool
Effect=> Decreasing the price of gems per gold // Increasing the price of gold per gem
The balance is changing more Gems for a lower overal gold gool value.

>Option 3<
Buying items for gems==> No change on Gem pool <———>No change on gold pool
Effect=> The amount of gems on your account is reduced, these gems are detroyed // You acquire an item
The balance is not affected as you are using your account gems to acquire an item – Gems used to acquire item are DESTROYED (the only way to destroy gems)

>Option 4<
Buying gems for real money==> No change on gems pool <—> No change on gold pool
Effect: Increasing Anet incomes // GEMS ARE CREATED (only way to create gems) and directly added to your account not affecting the pool// no effect on the gold or gem value —- Then 1) if you buy gold with these gems it will add gems in the pool and the price of gem in gold will decrease (see >Option 2<). —- 2) if you buy item in shop with these gems, they will be destroy and wont change anything on the gem/gold ratio nor pools (see >Option 3<).

There is an exponential effect over time: more gem increase in gold value per unit more you need to acquire the same amount of gems then you need more and more gold to get the same amount of gems. Adding more and more gold and in the same time withdrawing gems from gem pool has an exponential effect on the gem gold ratio over time. It means in the next month price of gem in gold will increase much more than it did for the few first months.

Conclusion the best investment to make gold on long term which is 100% sure investment is to buy gem for gold as much as you can now and sell back in 2 or 3 month as price will be probably twice more (much more gold for each gems in few month). Gems can beconsider like shares on the gold pool, everytime someone will buy shop item for gem your gem overal value will increase and as Anet incomes are from selling gem for real money to acquire hot shop items and that they are most likely add more and more wanted stuffs for gems then the gems you are stocking will be worth more and more gold per unit. Over time this pool can only grow so it means anyone investing gold to acquire gems will get rich much faster than any TP flip in the next months. Owning gems is like being shareholder of the gold pool. Invest now and get 10X more in few month, that s my advice.

One must praise Ursan for his amazing ability to produce lovely counterarguments. +1 to all his arguments is in place.

On the other hand, to provide a good counterargument, one could say that Ursan is only one point of view. I agree with this argument, and further with the fact that Ursan is a forum groper.

To actually make this post relevant, I will stop trolling Ursan and now attack Kaiza. Prepare yourself for artillery, K-boy.

On the one hand, gem regulation will allow for more players to have gems, as the price will not be able to continuously rise, as it is now. However, on the other hand, you are preventing the price from reaching equilibrium. Effectively, with regulation, you will be implementing a price ceiling, which would be below the equilibrium price and quantity. Thus, there will more gems sold at a lower price. This effectively makes the gem worth less, and thus makes the idea of gems—>gold less viable. Thus, this will reduce the amount of gems —> gold and thus reduce A net’s profits.

YOU MUST NOT STOP ANET FROM EARNING MONEY. IT NEEDS MONEY TO SURVIVE.

LEAVE IT THE WAY IT IS. THE PRICE WILL GO UP, PEOPLE WILL BUY GEMS WITH REAL LIFE MONEY, AND ANET will survive. And I get to keep playing for only having paid $60

Merry christmas to all, and to all a good fight!
-MK

The Guild Wars 2 doesn’t have a monthly fee argument is a bit moot. Guild Wars 1 was also free to play, and over there we didn’t have a gem store. It’s just a source of extra income which I highly doubt is needed to keep the game free to play.

I would be up for a fixed price, at least that way you’d know what’s up. That way discounts on certain items would actually mean something, I mean 25% discount on something, and the price going up by 25% because of the increased sales isn’t really worth it.

Not saying to get rid of it altogether, though a bit fairer wouldn’t hurt.

Control Core.1079:

The Guild Wars 2 doesn’t have a monthly fee argument is a bit moot. Guild Wars 1 was also free to play, and over there we didn’t have a gem store. It’s just a source of extra income which I highly doubt is needed to keep the game free to play.

Expansions were GW1 source of content funding, since expansions here will most likely be free, the gems store is the only source of funding aside from box sales/downloads.

Control Core.1079:

The Guild Wars 2 doesn’t have a monthly fee argument is a bit moot. Guild Wars 1 was also free to play, and over there we didn’t have a gem store. It’s just a source of extra income which I highly doubt is needed to keep the game free to play.

I would be up for a fixed price, at least that way you’d know what’s up. That way discounts on certain items would actually mean something, I mean 25% discount on something, and the price going up by 25% because of the increased sales isn’t really worth it.

Not saying to get rid of it altogether, though a bit fairer wouldn’t hurt.

First, sorry they need income from somewhere. It’s not free to keep an MMO running.

Second, Guild Wars did have a straight up cash shop where you could buy things.

http://wiki.guildwars.com/wiki/Guild_Wars_In-Game_Store

However this is a problem for someone who doesn’t have a credit or debt card. This is why just about every MMO and game system now uses a proxy currency to run their cash shop. You can still buy the proxy currency online but now you can sell those little FastCard cards in stores for those who prefer or have no other choice than using cash. Sure ANet (Gems), Nintendo (NPoints), Perfect World (Zen), XBox (XBL Points), NCSOFT (NCoin), etc will never get the full cash value from that card but it’s income they wouldn’t otherwise get. Plus you can give them as gifts in a birthday card. Also they get the money when you buy the proxy currency , not when you spend it.

Control Core.1079:

I would be up for a fixed price, at least that way you’d know what’s up.

Earlier in the thread I theorized that the initial rate that ANet would have to set would be highly unattractive to most players for various reasons. Just think about what the rate would have to be in order to prevent players from purchasing gem store items that can be sold on the TP for more gold then the gems it took to acquire the item. Aslo, as disccussed else where, setting too favorable a rate would cut into cash sales.

Control Core.1079:

That way discounts on certain items would actually mean something, I mean 25% discount on something, and the price going up by 25% because of the increased sales isn’t really worth it.

This was also discussed in another thread. A 25% discount on price does not equate, nor is intended to be, a 25% haricut in the exchage rate. John Smith even proposed a discussion on how a haricut can actually be offered on the floating exchange rate. I think thre were two, maybe three posts in that thread. Regardless, from a cash perspective, which is the intended market, the sale discount is fully realized.

Wow, you just gotta love how they drop some bullkitten answer on you and that’s that. Simply put, my apparently dimwit hero keeps helping people around Tyria for rates which vary from insulting copper to a couple silver coins. Now, even as he sees the gem rates rise like +300% he keeps on receiving 99copper for his deeds; that’s just awesome!! Long live the kitten heroes of Tyria. Why would a hero want gems anyway you might say; well, apparently when he’s not being a grinding machine he likes to enjoy the pleasures of life and the leisures that the gems provide. So, tired of being kittened by society he abandons his heroic path to exploit the market until further notice. (This is another different topic but I’m really insulted by the fact that I made more gold on 10H of flipping than on +600H of gameplay). JMTC.

LeMiranda.9026:

Wow, you just gotta love how they drop some bullkitten answer on you and that’s that. Simply put, my apparently dimwit hero keeps helping people around Tyria for rates which vary from insulting copper to a couple silver coins. Now, even as he sees the gem rates rise like +300% he keeps on receiving 99copper for his deeds; that’s just awesome!! Long live the kitten heroes of Tyria. Why would a hero want gems anyway you might say; well, apparently when he’s not being a grinding machine he likes to enjoy the pleasures of life and the leisures that the gems provide. So, tired of being kittened by society he abandons his heroic path to exploit the market until further notice. (This is another different topic but I’m really insulted by the fact that I made more gold on 10H of flipping than on +600H of gameplay). JMTC.

I’m getting the sense you’re bitter.

So everything would be alright with the world if the Gold to Gem option didn’t exist and Gems were only purchasable with cash? If so then your problem is not with the exchange but with players who can take advantage of it more they you can. Do you get this upset over being beaten in PvP or ganked in WvW? Do you get upset when someone posts they got some nifty elite weapon, even a precursor, from a chest while you got some 19s set of gloves? How about those who can level a new character to 80 in days and not weeks? Upset at them as well?

You do realize it’s in the game solely as a consideration for those who do make large amounts of gold, siphoning it out of the immediate economy. It’s rewarding people who, IMO, make the game their second (maybe first) job.

John Smith.4610:

I see no current issues with the exchange, it’s functioning very well. Remember for every opinion on which way should be “favored” there is at least one opinion for the opposite.

PS please stop calling everything inflation, it’s driving me mad.

I fully agree with you John. The exchange is working perfectly fine now and imposing regulations on it would probably do more harm than good. Let the free market decide on its prices. Hopefully, the value of gold & globs of ectoplasms goes down even further and gem prices increase. That way, newer players will have an easier time getting into the game and getting their BIS gear. This also adds incentives for gemmers to convert their hard-earned gems into in-game gold.

What people forget here is the time factor. Both gold and gems are generally “hard-earned” (please note that this excludes extremely lucky players who make a ton of gold easily or those born with so much money, they don’t need it anymore). You either work hard for it in game or in real life. Either way, there is time and effort involved and regulating one over the other is not exactly fair. In fact, gold is by far easier to get and you generally get it by having fun and playing a great game.

I think part of the problem is that there’s no real need for people to convert gems to gold to keep the exchange rate low. If I had the disposable income RL I would have more gold than I’d know what to do with because, at least for me, most desireables come straight from the gem store with very few exceptions. I buy virtually nothing off the TP compared to the amount of gold I put toward gem purchases.

Lane.3410:

I think part of the problem is that there’s no real need for people to convert gems to gold to keep the exchange rate low. If I had the disposable income RL I would have more gold than I’d know what to do with because, at least for me, most desireables come straight from the gem store with very few exceptions. I buy virtually nothing off the TP compared to the amount of gold I put toward gem purchases.

This is a solid point mate. The items in the TP that are most likely attractive to many (precursors, good looking items, and the like) are way too expensive to be bought with gems given prevailing exchange rates. For me, the only noticeable time people convert gems to gold is either when they need some quick gold or when they notice a sharp spike in the conversion rate.

I always buy my gems with real money – I’d rather just pay 10 bucks than farm CoF for hours on end to get a character slot expansion or whatever. However there have been a few occasions I’ve converted my gems to gold. I was something like 10g shy of my precursor so I just converted some of the gems I had left over from my last top-up.

However with the things I want to buy being so expensive, it is not worth it for me to pay 10 bucks for 8 charged lodestones or however many you get when I need 100 of them. The conversion rate may seem really high for you with gold to gems, but it’s totally not worth it for me to convert gems to gold unless it rises some more. I’d be happy to pour tens of thousands of gems into the market if I can get 5g per 100 gems. It’ll save me hundreds of hours of lodestone/CoF farming. But many people would probably be happy to do the same if they can get 4g per 100 gems, and that way the conversion rate will stay stable at something that both the gold and cash buyers find acceptable.

You know what? Sure, you’re all correct; “It’s functioning very well”… It must be my imagination what is making me see players on mapchat talking about how they can’t even imagine themselves affording a rare dye much less converting their “fortune” (usually less than 10-20G) to gems. I’ll just let you, economy geniuses, do your thing and meanwhile I’ll instruct the fellas on the wonders of using the many webpages and tools to flip, speculate, and exploit the hell out of this ridiculous economy. I’ll be a REAL HERO to them (true story, I’ve gotten many thanks).

On a side note, It’s adorable how you fail so miserably in driving players to low level areas and meanwhile you have LA’s TP causing an overflow (you’d actually think it’s an indication of something, right? ‘giggles’)… simply adorable!! (protip: flip in RataSum for 0 lag, better loading times and proper bank access) Anyhow, I hope you’re all enjoying Tyria, that world of wonder and social stratification.

PS Smith, do they pay you for the attitude? Geessh, keep your kitten together and handle your job like a pro (whatever you do here)… sad, so sad.

LeMiranda.9026:

You know what? Sure, you’re all correct; “It’s functioning very well”… It must be my imagination what is making me see players on mapchat talking about how they can’t even imagine themselves affording a rare dye much less converting their “fortune” (usually less than 10-20G) to gems. I’ll just let you, economy geniuses, do your thing and meanwhile I’ll instruct the fellas on the wonders of using the many webpages and tools to flip, speculate, and exploit the hell out of this ridiculous economy. I’ll be a REAL HERO to them (true story, I’ve gotten many thanks).

On a side note, It’s adorable how you fail so miserably in driving players to low level areas and meanwhile you have LA’s TP causing an overflow (you’d actually think it’s an indication of something, right? ‘giggles’)… simply adorable!! (protip: flip in RataSum for 0 lag, better loading times and proper bank access) Anyhow, I hope you’re all enjoying Tyria, that world of wonder and social stratification.

PS Smith, do they pay you for the attitude? Geessh, keep your kitten together and handle your job like a pro (whatever you do here)… sad, so sad.

You do know that you can buy and sell anywhere in game right? You only need the NPC to pick up.

You sound angry that you can’t make X amount of gold every day. My wife plays about 1-3 hours a week on a lowbie character and she makes about 10g a week just running around. People can make 1-10+g an hour in game without ever touching the BLTC other than to press the sell button.. You just sound jealous and petty attacking the devs and other players who understand economics clearly better than you. Probably the best in game trading post I’ve ever seen, and game wide trading post, amazing idea.

PS. I love the low level areas, I find many reasons to come back even if its just to help new people. Since I’m scaled down no worries on loot stealing, xp stealing, its a pretty awesome feature.

@LeMiranda.

You seem to have problem with players playing the TP (A completely legitimate aspect of the game, by the way. Just because you don’t like it does not change that fact.) (Also, I’m not sure if you’re seriously trying to convince people here, but use of anecdotal evidence makes your argument very weak.)

But it’s off-topic. Transactions on the TP is a gold sink. Speculators/flippers actively destroy gold in the economy. Do some people earn lots of money playing the TP? Most likely. However, that money is made off of someone else’s loss. Overall, the gold in the economy decreases due to TP transactions.

Which means that the Gem Exchange increases simply mean the player base as a whole still has enough expendable gold to convert into gems. The argument that those who got incredibly wealthy off the TP has a significant impact on the Gem Exchange ignores 1. the massive size of the playerbase and 2. The fact that their actions destroy gold, not create it.

LeMiranda.9026:

You know what? Sure, you’re all correct; “It’s functioning very well”… It must be my imagination what is making me see players on mapchat talking about how they can’t even imagine themselves affording a rare dye much less converting their “fortune” (usually less than 10-20G) to gems. I’ll just let you, economy geniuses, do your thing and meanwhile I’ll instruct the fellas on the wonders of using the many webpages and tools to flip, speculate, and exploit the hell out of this ridiculous economy. I’ll be a REAL HERO to them (true story, I’ve gotten many thanks).

On a side note, It’s adorable how you fail so miserably in driving players to low level areas and meanwhile you have LA’s TP causing an overflow (you’d actually think it’s an indication of something, right? ‘giggles’)… simply adorable!! (protip: flip in RataSum for 0 lag, better loading times and proper bank access) Anyhow, I hope you’re all enjoying Tyria, that world of wonder and social stratification.

PS Smith, do they pay you for the attitude? Geessh, keep your kitten together and handle your job like a pro (whatever you do here)… sad, so sad.

I may have missed the point and I do apologize but I cannot seem to connect your side note with the topic.

Anyway, there’s practically nothing in the Gem Store that is absolutely necessary for a player to achieve success in GW2. Most of them are cosmetic changes, some are boosts, and the rest are added functionality items (Bank Slots, Character Slots, Remakes, and the like). That rare dye you speak of is purely cosmetic and you can practically buy it off the TP. It doesn’t affect gameplay whatsoever. It will not be to your detriment to not have the “rare dye”.

Geotherma.2395:

You sound angry that you can’t make X amount of gold every day. My wife plays about 1-3 hours a week on a lowbie character and she makes about 10g a week just running around. People can make 1-10+g an hour in game without ever touching the BLTC other than to press the sell button.. You just sound jealous and petty attacking the devs and other players who understand economics clearly better than you. Probably the best in game trading post I’ve ever seen, and game wide trading post, amazing idea.

PS. I love the low level areas, I find many reasons to come back even if its just to help new people. Since I’m scaled down no worries on loot stealing, xp stealing, its a pretty awesome feature.

Are you even serious?! Like, REALLY?!? Only way to make 1-10+G an hour is farming CoF with an uberparty and you don’t even hit the 10G mark so I’ll just ignore your ignorance. I’m sure the loot and xp you gain is awesome; nice job, buddy!! xDD

LeMiranda.9026:

Are you even serious?! Like, REALLY?!? Only way to make 1-10+G an hour is farming CoF with an uberparty and you don’t even hit the 10G mark so I’ll just ignore your ignorance. On my moneymaking skills… well, one example, I made 15G with two clicks flipping 1 Infinite Molten Berserker Tonic; so that’s that. I’m sure the loot and xp you gain is awesome; nice job, buddy!! xDD

Well, I laud you for having great gold making skills. Now, if you could avoid buying gems, it would really help out those who can’t make as much gold. It will ease up the demand for gems and would hopefully make it the rate more favorable to those that want to exchange for it.

LeMiranda.9026:

Geotherma.2395:

You sound angry that you can’t make X amount of gold every day. My wife plays about 1-3 hours a week on a lowbie character and she makes about 10g a week just running around. People can make 1-10+g an hour in game without ever touching the BLTC other than to press the sell button.. You just sound jealous and petty attacking the devs and other players who understand economics clearly better than you. Probably the best in game trading post I’ve ever seen, and game wide trading post, amazing idea.

PS. I love the low level areas, I find many reasons to come back even if its just to help new people. Since I’m scaled down no worries on loot stealing, xp stealing, its a pretty awesome feature.

Are you even serious?! Like, REALLY?!? Only way to make 1-10+G an hour is farming CoF with an uberparty and you don’t even hit the 10G mark so I’ll just ignore your ignorance. On my moneymaking skills… well, one example, I made 15G with two clicks flipping 1 Infinite Molten Berserker Tonic; so that’s that. I’m sure the loot and xp you gain is awesome; nice job, buddy!! xDD

Lol my ignorance? I just tossed 200 gold into influence because I was bored with having so much…

I’ve never played the TP, not once. I sell my stuff and that’s it. As far as your silly ignorance comment, I’ll let others school you on the fact that it is very possible and quite common to make 2-5g+ an hour for just about anyone. Now you just sound upset. 1-10?

I’ve already made videos on here making at minimum 5g an hour, really need to do your research better before whining on forums.

I mean heck, I even bought rares and salvaged with master kits instead of BL kits just to help the community, knowing full well I’d lose money. Some people in these forums make my brain hurt… carry on.

Geotherma.2395:

Lol my ignorance? I just tossed 200 gold into influence because I was bored with having so much…

I’ve never played the TP, not once. I sell my stuff and that’s it. As far as your silly ignorance comment, I’ll let others school you on the fact that it is very possible and quite common to make 2-5g+ an hour for just about anyone. Now you just sound upset. 1-10?

I’ve already made videos on here making at minimum 5g an hour, really need to do your research better before whining on forums.

I mean heck, I even bought rares and salvaged with master kits instead of BL kits just to help the community, knowing full well I’d lose money. Some people in these forums make my brain hurt… carry on.

I’m no way near to being a master at the art of flipping nor farming; but you did make it sound like you could make “1-10G+”H just by lollygagging; anyway… at the end of the day it’s the same old, it’s purely cosmetics etc. whatever. Im fine with that; and I wasn’t attacking anyone players nor devs… I was rather amazed by the fact that someone would say he’s going mad by talking with MMO players about inflation… like he got so far in his field ‘cough, cough’ he can’t spare us our ignorance in something we didn’t even study for!!

Lazuline.3876:

Well, I laud you for having great gold making skills. Now, if you could avoid buying gems, it would really help out those who can’t make as much gold. It will ease up the demand for gems and would hopefully make it the rate more favorable to those that want to exchange for it.

Uggh, wish I didn’t have to as I despise them overall but I think they’ve secretly nerfed the droprate of Fine Transmutations Stones and I really like those; been a long time haven’t found one in any type of content be it daily, monthly, story…