Guild Wars 2

Look at the EVE system. CCP sells all the pilot licenses and people buy them for real cash and then sell them in game for Isk to other players. CCP sets the cost of RM to PL but once in game, the players decide how much to sell them for to other buyers who in turn decide how much they are willing to spend on them.

We all know this already, Elfa. It’s been mentioned no less than 3 other times in this thread.

What we are griping about is that the GW2 Gold for Gem exchange doesn’t work that way.

Hence the title of this thread, “Who sets Gem prices?”, ‘cause we all know it isn’t the players.

What, exactly, is the “problem” that people are suggesting is present?

To me, it seems like the current system is working just fine already.

Well, what the current system does in my opinion is penalize people with certain playstyles. Basically what you have to do in order to stay on top of this is to maximize your gold income with your highest level character. If you play 5 or more characters you are already at a disadvantage. Seeing how the price jumped just now.

Of course this is not a problem per se, but discouraging nevertheless.

A couple of weeks ago there was a sweetspot in my opinion. For 40 silver you could trade 100 gems. This is a price that everyone will be able to afford some after a playing session even with mid level characters. That encourages me to buy some with real money for the larger ticket items, and slowly I will be able to buy “fun” things on the side.

Well, there is my input. In essence, contrary to the real economy out there I can chose not to participate – this is something to be considered, no need to be an economist.

For the time being I will likely continue to buy $20 per month and probably an extra $20 right now for the holidays. That is because I really like the game and I have no quarrels supporting it. If it get’s too expensive and I find myself to think too much about the conversion rate and how many hours I might have to spend to afford another 100 gems … then a huge “fun-factor” will be gone.

John Smith.4610:

Out of curiosity, how many feel that a 100% free market would be a good idea?

If by “free market” you refer to players’ ability to trade gems directly with each other (like Mike O’Brien suggested we’d be able to do before launch), then count me in (and count in anyone else who understands currency trading and the basic principles of a transparent and trustworthy economy).

It would cause the gem value to correctly reflect supply and demand (the current system can’t really be based on supply and demand since you don’t let players set their prices – it can only be based on transaction volume, which is something else), and would make every player into a competitor for the gold farmers / gold sellers, which would drive most of them out of business (or make their margins so small that they’d move on to more lucrative games).

This is what Eve Online did (getting rid of 90% of the gold sellers in the process) and I think everyone who has played it (or studied it from an economic point of view) agrees that it has the most advanced and realistic economy of any MMO.

Here is a quote from Mike O’Brien:

MMO veterans will note the similarities of our system to EVE Online’s PLEX system. As in that case, our system takes gold trading out of the hands of real-money trading (RMT) companies and puts it directly in the hands of players.

Except that’s not what we got. What we got was a system with one “official” gold seller (Arena Net) that sets the price through a black box exchange and where players can’t place buy orders, can’t set the sale price for their gems, and can’t trade directly with each other. All we can do is accept the rate set by Arena Net (based on an unknown formula and an unknown number of transactions) or not.

Naturally, this made the game a goldmine for 3rd party sellers, as several people warned during beta (after we saw the system that you were actually implementing, instead of the system Mike O’Brien had promised us).

Coupled with the lack of monitoring by GMs and the long times between bot “ban waves”, this ensures the gold sellers are never going away. In fact, some are not even bothering to steal accounts anymore; you give them enough time before bans to make money to buy a new account if and when they do get banned (maybe that’s the plan; keep it marginally profitable for them so they keep buying new accounts?).

Even banning bots faster won’t drive them away; they’ll simply hire cheap labour (human farmers) and keep doing it. The only way you can get rid of the gold sellers / spammers is to put gem-gold trading directly in the hands of players, like EVE does with PLEX, and like we were told before launch that GW2 would do with gems.

Of course, this would put pressure on Arena Net to make its gem store money by selling actual interesting items (ex., implement a better town clothes system, add things like barbers, etc.) rather than simply by selling gold-disguised-as-gems, and while I think the developers would live up to that challenge, it looks like management doesn’t feel very confident about that.

Here’s my contribution to this discussion

Q: Why doesn’t ArenaNet disclose the algorithm they use to determine GEM to Coin conversion? A: Because it isn’t static algorithm, it’s more like a dial they can turn up and down to bring in revenue.

GW2 is not a free to play model, it is a micro-transaction model. Never forget something has to pay the bills at ArenaNet HQ. Box sales with any game begin to slow a few months after release. For a micro transaction based MMO it’s important to keep revenue coming in through micro-transactions. ArenaNet has to find a way to make micro-transactions appealing. Holiday exclusive items are one way to do that. Turning up the dial to increase the value of gems to coin exchange is another.

There are probably quotas to meet each month on micro-transactions (again, keep in mind these pay a portion of the bills). They know some people purchase gems exclusively to convert to coin and will buy when the price is right so they turn the dial when more funds need to come in.

You say but that makes no sense, the holiday events is going on and should be bringing more money into the gem store. Actually it does, they need to decrease the value of coin during the event so customers with a lot of coin can’t easily obtain the gems in gem to coin conversion.

If you think about this design it’s brilliant for ArenaNet because it allows them to make the Gem store appealing at the time of holiday events for those who would use Gems to buy festive items and also for those who want to convert gems to coin. It’s a win-win for them.

I would not be surprised to see 2-3x the number of holiday events in GW2 over GW1

it is already more expensive to make mystic salvange kits than to buy master salvage kits cause of the gold to gem rate. I have stopped buying gems and using my gold to buy several masters instead (and holding onto salvagable material till I have a large stack of it if need be).

Hippocampus.8470:

Which kind of makes the title pointless, no? It’s not the players, therefore it must be ANet. Why then have there been more than 4 pages of ensuing discussion?

There are 5 pages, prior to your post.

To answer your question, read the post by Account.9832.

Obviously ANet sets the prices, or at least they think they do.

The problem with the lack of transparency is that no one, including ANet, knows if something goes wrong with their price setting algorithm. That’s one of the problems anyway.

Another problem, as pointed by Account.9832, is gold sellers. If they had to compete with the players as well as ANet they’d go out of business quickly.

Having played both I actually prefer CCP’s method of letting players set the price of PLEX versus ANet’s Gold/Gem dictatorship.

Colonel Kernel.7506:

There are 5 pages, prior to your post.

My post is on the 5th page, meaning there are about 4.5 pages prior to it.

It was a rhetorical question, anyway, just like the title of the thread has apparently become.

I’ve seen lots of people comment about gold being devalued, has anyone considered that gems would be similarly devalued if there was a fixed rate conversion?

The variable conversion protects the value of gems in the face of massive gold inflation (which is inevitable in a game with infinite supply). There is no monthly sub; Anet relies on the cash shop for profitability. If gem value crashes, Anet’s real-life profit crashes and the game would likely follow.

Rouven.7409:

Of course this is not a problem per se, but discouraging nevertheless.

A couple of weeks ago there was a sweetspot in my opinion. For 40 silver you could trade 100 gems. This is a price that everyone will be able to afford some after a playing session even with mid level characters. That encourages me to buy some with real money for the larger ticket items, and slowly I will be able to buy “fun” things on the side.

I suspect in a year or so we’ll all look fondly back on the days when 100 gems only cost 89 s (last night’s price).

It seems inevitable that the larger availability of gold in the market overall will continue to push the cost to buy gems higher and higher. And for continuing players this won’t be a tremendous burden.

But it does likely hit new players fairly hard. Buying a new bag slot currently would cost about 3.6g, a bank slot 5.4g (I wrote ‘sloth’ on the first go – who wouldn’t pay for a bank sloth?).

In some other MMOs new players could always make some quick cash by learning how to sell raw mats. But, barring some major change in the market, I don’t see how that happens here. At current prices you’d have to sell roughly 4,000 copper ore to earn that much (versus, say, some WoW servers where you can sell 20 copper ore for that price).

New players would either have to make do with the moderate storage available or pay with real $$. That could be a significant turn-off for people just wanting to try the game out. Anecdotally, I’ve stopped trying to talk two of my friends into coming back to the game for this reason. They leveled to 14 or so and stopped with only a few silver to their name.

While I am thinking about my own approach to the game, I’m curious how ANet can implement a system that acknowledges that continuing players have plenty of gold, but also that new players typically have just a few copper in hand.

voyager.4982:

Rouven.7409:

Of course this is not a problem per se, but discouraging nevertheless.

A couple of weeks ago there was a sweetspot in my opinion. For 40 silver you could trade 100 gems. This is a price that everyone will be able to afford some after a playing session even with mid level characters. That encourages me to buy some with real money for the larger ticket items, and slowly I will be able to buy “fun” things on the side.

I suspect in a year or so we’ll all look fondly back on the days when 100 gems only cost 89 s (last night’s price).

It seems inevitable that the larger availability of gold in the market overall will continue to push the cost to buy gems higher and higher. And for continuing players this won’t be a tremendous burden.

But it does likely hit new players fairly hard. Buying a new bag slot currently would cost about 3.6g, a bank slot 5.4g (I wrote ‘sloth’ on the first go – who wouldn’t pay for a bank sloth?).

In some other MMOs new players could always make some quick cash by learning how to sell raw mats. But, barring some major change in the market, I don’t see how that happens here. At current prices you’d have to sell roughly 4,000 copper ore to earn that much (versus, say, some WoW servers where you can sell 20 copper ore for that price).

I agree about the continuing increase in Gem prices. What you’re missing is that mat prices will not stay the same. As inflation occurs, continuing players will have more money to spend on low level mats and those prices will go up.

Will it be enough for increased bank inventory? No way to know yet, but it won’t be as bad as the numbers above look. And there’s always the cash shop; a one time investment of $10 or less will double your bank space. Most people with the leisure time for MMOs can afford that much.

GreyWraith.8394:

I’ve seen lots of people comment about gold being devalued,

Gold being “devalued” ? In relation to what?

GreyWraith.8394:

has anyone considered that gems would be similarly devalued if there was a fixed rate conversion?

The variable conversion protects the value of gems in the face of massive gold inflation (which is inevitable in a game with infinite supply). There is no monthly sub; Anet relies on the cash shop for profitability. If gem value crashes, Anet’s real-life profit crashes and the game would likely follow.

That doesn’t make any sense. Gems have a (real money) value set by Arena Net. $10 for 800 gems (some variation depending on region, but let’s ignore that for now). Letting players trade gems with each other would not change that.

As long as the only way to create gems is by buying them with real money (as happens with Eve PLEX, and as Arena Net claims happens with GW2 gems – but no one can actually verify), then it makes no difference to Arena Net what the gem-gold exchange rate is.

Every gem spent at the store will have been bought by someone (same as with PLEX). Whether the person spending it is the person who originally bought it or whether it changed hands 15 times in the meantime is irrelevant. The (real-money) value of the gem would always be preserved.

The only reason Arena Net can have to want control over the exchange rate is if they are, in fact, “printing” gold to satisfy players who buy gems to “convert” into gold through the black-box exchange.

And that is what actually messes up the economy and leads to items being priced at values that no “normal” player could have earned since launch. And instead of fixing the economy (by replacing this black-box exchange with a transparent player-driven market, like the one in Eve Online – which we were promised before launch), Arena Net are now talking about “adjusting the drop rates” (of legendary precursors, etc.) to try to bring the prices down.

Which isn’t going to work, of course, and can only be seen as a good idea by someone with very little understanding of how economies (and currency exchanges in particular) work.

Account.9832:

GreyWraith.8394:

has anyone considered that gems would be similarly devalued if there was a fixed rate conversion?

The variable conversion protects the value of gems in the face of massive gold inflation (which is inevitable in a game with infinite supply). There is no monthly sub; Anet relies on the cash shop for profitability. If gem value crashes, Anet’s real-life profit crashes and the game would likely follow.

That doesn’t make any sense. Gems have a (real money) value set by Arena Net. $10 for 800 gems (some variation depending on region, but let’s ignore that for now). Letting players trade gems with each other would not change that.

As long as the only way to create gems is by buying them with real money (as happens with Eve PLEX, and as Arena Net claims happens with GW2 gems – but no one can actually verify), then it makes no difference to Arena Net what the gem-gold exchange rate is.

Every gem spent at the store will have been bought by someone (same as with PLEX). Whether the person spending it is the person who originally bought it or whether it changed hands 15 times in the meantime is irrelevant. The (real-money) value of the gem would always be preserved.

The only reason Arena Net can have to want control over the exchange rate is if they are, in fact, “printing” gold to satisfy players who buy gems to “convert” into gold through the black-box exchange.

And that is what actually messes up the economy and leads to items being priced at values that no “normal” player could have earned since launch. And instead of fixing the economy (by replacing this black-box exchange with a transparent player-driven market, like the one in Eve Online – which we were promised before launch), Arena Net are now talking about “adjusting the drop rates” (of legendary precursors, etc.) to try to bring the prices down.

Which isn’t going to work, of course, and can only be seen as a good idea by someone with very little understanding of how economies (and currency exchanges in particular) work.

1. I’ve made no comment on players trading gems with each other, and that has no bearing on my posts here.

2. Gems can be ‘created’ by playing the game to earn gold and converting to gems. Real money purchases are not required.

3. Gold is ‘printed’ by just playing the game. Supply is potentially infinite and available amounts will increase as time passes and players accumulate more by playing. Inflation will inevitably occur.

4. Suppose the following theoretical example with a fixed exchange rate of 1 silver = 1 gem.

Today:
1 ItemX costs 1 silver on the market
$10 = 800 gems = 800 silver = 800 ItemX

Three months from today:
1 ItemX costs 2 silver due to inflation
$10 = 800 gems = 800 silver = 400 ItemX
Buying power is halved. Very few people buy gems with cash for converting to gold because rising prices make it a waste of money.

tl;dr: Cash shop sales drop = Anet profit drops = game endangered. A variable gem-to-gold exchange rate is required to protect the cash shop from the effects of inevitable infinite-supply-gold-inflation-with-time.

I don’t think most people have been arguing for a fixed rate – that would definitely be a mistake. Account definitely wasn’t arguing for a fixed rate.

An actual gem market would, like the current system, not be threatened by gold inflation. However, I don’t really see why there’s a problem with the current system.

It seems like the easiest solution to the gold for gems issue would be to make it function like the TP or like any real world equity market/exchange where buyers and sellers can each post the price they are willing to pay/receive for a fixed quantity of gems (say 100gems). To make this work however players need to be able to specify their own prices as well as view the bid/ask spread as well as quantities and several extra prices (the TP already does this for items listed).
AFAIK With the current system ANet essentially “creates” the purchased currency and “destroys” the paid with currency on demand. However its critical for price discovery that for someone to buy gems at a certain price there is another person willing to sell them at that price. By allowing players to set their own price, they can decide how much their real life work time or in game farming time is worth to them. There is nothing wrong with a transaction tax and as a gold sink its probably needed but it should be clearly listed. All of the “sophisticated” traders will figure it out in 5 seconds anyway its just the “casual” gold/gem trader that will get burned by it not being listed.
To address a couple concerns about “free markets” earlier in the thread:
Yes there will be speculation and arbitrage(flipping) with this system and that’s not a problem.
Speculation and arbitrage both contribute to liquidity (tl;dr your offer gets taken more quickly unless you want 100gold/1gem or vice versa) also arbitrage will help funnel more gold out of the system.
This would contribute to more rapidly fixing the gold seller issue although gem prices will likely jump since again someone actually has to buy the gems now from ANet with RMT to sell them to you for gold instead of ANet just deleting your gold. Over time legit prices will more or less fall in line with the gold sellers prices with some risk premium for buying from gold sellers based on how likely it is that ANet bothers to ban accounts/wipe gold from accounts caught buying from gold sellers.

Summary:
-Make all player gems/gold trades have a player counterparty.
-Visibility of offers (price and quantity)
-We already have free markets on everything else in game (that isn’t soul/accountbound) why not gold/gems

Possible issues: If players turning gold into gems through ANet is intended as the main gold sink (since there are no mounts and what not) then this is a moot point.

lackofcheese.5617:

I don’t think most people have been arguing for a fixed rate – that would definitely be a mistake. Account definitely wasn’t arguing for a fixed rate.

An actual gem market would, like the current system, not be threatened by gold inflation. However, I don’t really see why there’s a problem with the current system.

Yes. I was commenting on why a feature is necessary given the context of the current system. Account was talking about completely changing the system. It’s apples/oranges; I don’t know why he responded to me in the first place unless it was just a misunderstanding.

Slean.6139:

<snip>
Summary:
-Make all player gems/gold trades have a player counterparty.
-Visibility of offers (price and quantity)
-We already have free markets on everything else in game (that isn’t soul/accountbound) why not gold/gems

Possible issues: If players turning gold into gems through ANet is intended as the main gold sink (since there are no mounts and what not) then this is a moot point.

My only real concern about this would be demand. For it to work there has to be a high & ongoing demand for gems (for something other than gold). I’m not sure what product Anet could market in the gem store that would work.

Example: Tera has ChronoScrolls to fill this need. They grant the user’s account a month of gameplay time and are RMT purchasable for the same price as a month’s subscription. People who want gold fast will sell them on the market and people who don’t want to pay real money subscriptions farm gold to buy them and continue to play for ‘free’. Since everyone has to subscribe, there is a continual high demand and players will pay quite a bit of gold for them.

Obviously GW2 is subscription free, so that’s out. Most of the useful purchases in the gem store are one-time things like bank storage and character slots, so no continual demand. The repeat/consumable items available are… not that desirable. Except maybe tickets for sPvPers? But that only applies to a fraction of the playerbase and they can be obtained for free by playing sPvP anyway…

Why would players pay gold for gems on an ongoing basis? Enough to keep Anet afloat financially, I mean.

Back when I played Runes of Magic, I bought diamonds (their cash shop currency) and traded them for gold on their auction house. Their market is player regulated without a ridiculous exchange rate as both the buyer and the seller had to agree to the price set. It allowed market forces because for someone to buy diamonds with gold, there had to be someone selling diamonds for gold and vice-versa. There doesn’t appear to be any such thing in GW2 which is a fatal flaw.

Spoiler Alert, I’m not an economist.

Not to go off on a random tangent or de-rail the current conversation, but I’d like to put in my thoughts on what could/should be done on the conversion situation.

First of all the fundamental aspects of these trades need to be understood:

1) Anet needs to make money off of the gem store
2) Players need to feel that they directly and substantially benefit from the gem store
3) Gems should be able to be exchanged for gold at prices that players agree on both ways
4) Anet needs to funnel currency out of the system in order to prevent hyperinflation

So, the current system exists such that players may purchase gems directly from Anet. Players also (against the rules of course) have means to purchase gold without going through the GS. Anet put into place a system where a player may be able to purchase gems with gold so that players need not feel obligated to pay real world money for in game content (i.e. what WoW and RS do). Anet also made sure that their game is not pay-to-win (via the GS at least). Some things are currently out of Anet’s complete control (gold farming) but that isn’t to say that there is not an ongoing effort to control that issue.

With the release of the Halloween update we have seen a massive increase in the purchase of gems for gold as many players excitedly rushed for Halloween goodies and Black Lion Chest Keys. This could easily have been anticipated by every player who would have taken the time to consider the situation. (Also, notice how some other prices of valuable items have gone down I expect to make a pretty penny after H’Ween is over) Once the event is over we can most probably expect to see the Gem market settle down a bit more and maybe even become somewhat stable again. (Maybe)

So, it has been brought up that Anet should allow us as players to offer our own prices for Gems to one another. Basically turn Gems into another itemized currency that sits in one’s inventory. Sure that sounds all fine and dandy, but Anet still wants their slice. In the current state on each transaction Anet takes a ‘cut’, if you will, of the transaction. This is not a faulty transaction rate, but rather a way for them to siphon currency out of the system for what they expected to be a high volume market.

The issue that remains for this suggestion where players purchase the Gems from one another is where do the Gems start to come from? Do you all really think that we should only buy Gems from other players? Don’t you see the fatal flaw in that market? There will become a point where anyone who is willing to spend x dollars will have guaranteed gold as base offers. Obviously that sounds pretty attractive if you are the seller, but if you are the buyer then it begins to spark desperation. (Yes, I realize that I am extrapolating an extreme case, but play along nicely, will you?) Once such a system where players may trade one another for gems and purchase from Anet via real world currency we introduce much more exclusivity to those who have gold/real world money and are willing to spend a lot of it on the GS or getting gold from players who wish to use the GS.

There is still much that is desired to be said by my above statements, but I’d rather just move on for now. I may come back and post later. A conclusion to my ramble would be nice…

EDIT: Just realized, I never got to the could/should be done portion… oh well… next post

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.

GreyWraith.8394:

2. Gems can be ‘created’ by playing the game to earn gold and converting to gems.

According to Arena Net, they can’t. They have claimed several times that the gem exchange doesn’t create any gems or gold, it merely stores gems that players traded in for gold, and gold that players traded in for gems, without creating either of the currencies (apart from an initial “priming” that had to be done to enable the first transactions).

I think they’re lying, but that is their official position.

GreyWraith.8394:

Gold is ‘printed’ by just playing the game.

Nobody said it wasn’t. That is the case with every MMO, including Eve Online, where players can generate ISK (gold) simply by playing. But PLEX / Aurum (gems) is only added to the game economy when someone buys it with real money (and removed when someone uses it to buy items or play time at the cash shop).

Imitation.5736:

It removes all of the ability to speculate on the gem/gold conversion market.

Considering Arena Net prints both currencies and sets the exchange rate, anyone thinking they can speculate on (or even predict the behaviour of) the gem-gold exchange clearly flunked economy 101.

Account.9832:

Imitation.5736:

It removes all of the ability to speculate on the gem/gold conversion market.

Considering Arena Net prints both currencies and sets the exchange rate, anyone thinking they can speculate on (or even predict the behaviour of) the gem-gold exchange clearly flunked economy 101.

Even so, if the tax wasn’t exorbitantly high, I would have been able to speculate pretty hardcore on the price of gems going up during the start of the halloween holiday.

Until then, there’s always halloween crafting materials.

Haha!

im kinda amazed gems arent worth more than 1g per 100, but thats just me.
Another thing it makes me wonder if Anet does put gems in the TP of their own accord i imagine they shouldnt/wouldnt but since theres always so many gems in it, and it doesnt ever run out (people have bills eventually the gems gotta run out… maybe) or the prices of gems never increase drastically makes me believe theres a huge supplier, supplying the thousands of thousands of players playing and buying the semi cheap gems. then again thats just me.
gems/gold go hand in hand with gold buyers/bots but thats an issue for another topic, just thought id throw my thoughts in here for the sake of being seen

How much gold you can make is all a matter of being creative (or I hate to say smart about it). There are all sorts of ways to earn gold. Farm nodes and sell on TP being the easiest of them. I’m sure there are other ways being/have been discussed on the forums. It seems to me just by doing the regular content you can net 1+ gold per hour played.

The gem exchange doesn’t work exactly like the traders in GW1. Though the idea behind them is the same. It seems to me this system is not regulated like the traders were. The purpose behind the traders was to artificially lower the prices of the items they handled. They were put in as a response to the massive complaints about cost and ease of buying the items from others. There was huge complaints from sellers at first about how it devalued the items they were selling at big prices an even not so big prices. Every single item except a few items hit the floor price much like how the TP is now with almost everything listed on it. However the gem exchange rate inflates as the amount of average wealth increase and rises and falls with demand within that. The traders in GW1 did not increase in price as the average wealth increased.

John Smith.4610:

Out of curiosity, how many feel that a 100% free market would be a good idea?

I liked it on Eve online. But it was crazy frustrating because everyone degrades into findging ways to get over on other players. I think a little management from Big Brother isn’t bad. The hard core veteran players and corporations definately called the shots but that was sort of the point.

But it was immersive to think the economy was wide open and only set by user behavior.

“I agree about the continuing increase in Gem prices. What you’re missing is that mat prices will not stay the same. As inflation occurs, continuing players will have more money to spend on low level mats and those prices will go up.”

Of course mat prices won’t stay the same. The question is whether they will increase in proportion to (or in excess relative to) the rise in gem prices.

I tend to doubt that will be the case.

There are a couple structural reasons for my opinion: 1) more incentive in GW2 (versus other MMOs) for high level toons to hang out in lowbie zones; 2) relative abundance of common mats; 3) seeming perception that crafting skills have limited utility.

At least at this point there doesn’t seem to be much demand for power-leveling crafting. It’s not like people are taking Jewelcrafting for min/max for raiding. Plus copper nodes are all over, you don’t have to compete for them, and you can easily farm a few stacks casually between DEs.

You could certainly be right and there could be market demand from wealthy 80s who don’t want to farm and will spend big for common mats to powerlevel crafting, but to me that’s far from the most likely scenario. There’s a reason bots are farming rare mats and not common ones.

I think the rise in gem prices will outpace the price of basic mats. I also think bag/bank slots are over-priced in real dollar terms, but that’s another debate.

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.

arcaneclarity.5283:

Back when I played Runes of Magic, I bought diamonds (their cash shop currency) and traded them for gold on their auction house. Their market is player regulated without a ridiculous exchange rate as both the buyer and the seller had to agree to the price set. It allowed market forces because for someone to buy diamonds with gold, there had to be someone selling diamonds for gold and vice-versa. There doesn’t appear to be any such thing in GW2 which is a fatal flaw.

If I recall correctly they removed this ability and you can no longer exchange diamonds for gold or vice versa through the auction house, unless they re-introduced it recently.

People always say the economy is the same as in real world.
But the truth is, it is a digital world. Arenanet does not have production costs of gems. They can sell as many as they want, there isn’t some big stash of gems and after a year they are all sold. Demand can always be fulfiled becuase it is digital.
They are regulating prices.

Well Ferum, yes and no.

Technically if no player has Gems that they are offering, then no Gems should be for sale.

Ferum Flamebender.5910:

People always say the economy is the same as in real world.
But the truth is, it is a digital world. Arenanet does not have production costs of gems. They can sell as many as they want, there isn’t some big stash of gems and after a year they are all sold. Demand can always be fulfiled becuase it is digital.
They are regulating prices.

I’m not sure what production has to do with any of this.

And club goods and public goods exist in the ‘real world’ economies.

All I want to know is, what has caused the gems prices to have sky rocketed.
For more than a week after launch it was 1g=+-300 gems, but a around a month after launch it began to plummet and now 1g sits around 100 gems. That’s an insane price, as I paid for gems while its was around 220 for a gold, but haven’t bought any since.

Now I wonder what was responsible for this radical price increase. Was it because:
a ) The game is two months old and people now have a lot more in game cash available than before, or
b ) Far too many people would much rather pay the in game currency than real money, causing a sort of cascading effect.

Can’t it be both of those? I mean, (a) and (b) don’t even really look that different, to me. If there’s enough in-game gold to make it relatively easy to get more to spend on gems, people would of course rather acquire them that way than with real money.

John Smith.4610:

Out of curiosity, how many feel that a 100% free market would be a good idea?

Nope. I’m a hardcore supporter of capitalism, it does the greatest good for the greatest amount of people possible, even if not for each equally. But even I know that there has to be restrictions in place, there will always be those who will not look out for the greater good unless forced.

Colonel Kernel.7506:

Azjenco.9425:

All I want to know is, what has caused the gems prices to have sky rocketed.
For more than a week after launch it was 1g=+-300 gems, but a around a month after launch it began to plummet and now 1g sits around 100 gems. That’s an insane price, as I paid for gems while its was around 220 for a gold, but haven’t bought any since.

Now I wonder what was responsible for this radical price increase. Was it because:
a ) The game is two months old and people now have a lot more in game cash available than before, or
b ) Far too many people would much rather pay the in game currency than real money, causing a sort of cascading effect.

More than likely the spike in Gem prices is caused by the Halloween event. It may go down a bit after, but will spike again for the Winter event. It may even fall again in January, but that’s anybody’s guess…

Indeed. Now that we have an idea of how players react to holiday events, you can actually profit if your timing is right. Even with the premium in the Gold to Gems over Gems to Gold, a 50% or 60% swing in conversion rates has the potential to make a lot of rich players even richer.

Just leveling a warrior and reaching 20, I decided to upgrade. Checking just Masterwork gear, I find I cannot afford it now. Plenty of supply there but the price keeps going up. Stagnant.

Just a guess, It appears people have bought out the items and are re-selling it a a higher price. For what purpose? Don’t ya want people to buy? lol! Could be totally wrong but the more inflation, the less sold and less players. Seems more of a deterrent than anything else.

If you think those prices are too high to reliably sell, place a buy order for a lower price. If any sellers agree, you’ll get it for that much.

Hippocampus.8470:

If you think those prices are too high to reliably sell, place a buy order for a lower price. If any sellers agree, you’ll get it for that much.

I think part of the complaint is that you can’t set a lower offer.

Slean.6139:

Hippocampus.8470:

If you think those prices are too high to reliably sell, place a buy order for a lower price. If any sellers agree, you’ll get it for that much.

I think part of the complaint is that you can’t set a lower offer.

What are you talking about? Buyers have the ability to ask for items at whatever price they want. Keep in mind that if you set your asking price too low on a Buy Order, and someone else offers even 1 cp more, they’ll get theirs listen first.

Smooth Penguin.5294:

Slean.6139:

Hippocampus.8470:

If you think those prices are too high to reliably sell, place a buy order for a lower price. If any sellers agree, you’ll get it for that much.

I think part of the complaint is that you can’t set a lower offer.

What are you talking about? Buyers have the ability to ask for items at whatever price they want. Keep in mind that if you set your asking price too low on a Buy Order, and someone else offers even 1 cp more, they’ll get theirs listen first.

What he means is that there is no “Buy Orders” in the Gem Store. You buy at the rate they give you and that’s it. Same is true for sales, you can’t set an offer, you sell at the rate they dictate.

Except I was replying to someone complaining about the price of masterwork items.

Not gems, in other words.

Olba.5376:

Smooth Penguin.5294:

Slean.6139:

Hippocampus.8470:

If you think those prices are too high to reliably sell, place a buy order for a lower price. If any sellers agree, you’ll get it for that much.

I think part of the complaint is that you can’t set a lower offer.

What are you talking about? Buyers have the ability to ask for items at whatever price they want. Keep in mind that if you set your asking price too low on a Buy Order, and someone else offers even 1 cp more, they’ll get theirs listen first.

What he means is that there is no “Buy Orders” in the Gem Store. You buy at the rate they give you and that’s it. Same is true for sales, you can’t set an offer, you sell at the rate they dictate.

He wasn’t talking about Gems. Besides, there is no Buy Order for Gems since the price fluctuates between the demand for Gems or Gold. If you play your cards right, you can make a lot of money with this system.

My problem with the gems is not so much with the price of the gems, but the spread (which is set up by arena) – it’s extremely wide. Bid price of 85s and ask of 65s – that’s a spread of 30%! Such spread is not possible in any “free” market because the traders would arbitrage the spread away and keep it at the minimum levels. High spread can be an indication of low volume of gems trades, but in my opinion arena deliberately set the spread at such levels to discourage any speculation (despite the fact speculation is good – because it kills any imperfection in the free market).

Also it’s not clear how oftern the new price is recalculated – are there any fixed moments (once a day) or is it instant? If it’s instant why the don’t see it then?

I don’t like the way gem/gold trade is now. In my opinion the better system is one price, but comission for exchange gems/gold. Another thing we are missing here is the volume figures. If arena is really transparent about the gem trades they should publish these figures too.

Speculation leads to manipulation. I’m ecstatic that ANet just said “No” by that 30% spread.

I would be quite happy just to have the ability to place buy and sell orders and let the market find its own level that way. As long as that 30% spread remains in place or other means are used to prevent flipping Gems.

So I posted one of the very first forum posts about just this very topic. Part of me is inheritly dubious of a cash-to-gem system in which all aspects of price are set by the company making money. I understand the need to make money as a company not making subscription revenue…fine. The comparison to EVE Online made frequently by players is another important step towards discussing this issue.

One must remember, however, that EVE Online has a built in safeguard towards over-inflation; players need to subscribe to the game. This means at any given point if the cost of the PLEX rises too high for the average gamer to realistically purchase one, CCP could merely flood the market by adding them as drops to their in-game “monsters”. More supply, lower cost, inflation now in check (in a manner of speaking). Additionally, EVE Online has very large money sinks installed …. if you die your ship goes boom. Everythings gone. That stimulates the economy via spending to replace it, manufacturing to build a replacement, and mining to make the replacement… which is something that Guild Wars 2 has no comparable systems.

So ultimately should the price be set by the free market? The claim that ANet risks losing money is completely besides the point, they did VERY well during the Halloween Event so I have no doubt in my mind they can come up with other enticing Gem sinks. The more important point is a free market system introduces the notion of “Pay-to-Win”. Why you ask? Anytime players can virtually print money unchecked by spending real money…. and in a far better conversion rate that is currently available you are basically allowing players with cash to buy their way to a legendary or whatever else it is they may want (Commander? As if we don’t have enough players running around with blue icons on their head as it is…whole other problem, I digress).

I for one do not understand player disdain for pay-to-win. If the market is going towards a free to play game model, one must understand that developers need to make money. If you like your games free, and you want to keep them that way…. you have to support the developer somehow. While a portion of an audience may chose to never spend any real life money on that game (a significant portion i’m sure), their are more players who would spend cash.

Pay-to-Win infuriates players who are stuck in the subscription model of an older era of online massively multiplayer RPGs. Its something I’ve written about numerous times and the conclusion is the same. You either support a developer with a pay-to-win model, or you pay subscription fees. Its hard to find a middle ground (what we have now) that is truly sustainable for a developer.

I vote yes, introduce the free market. I’ve loved EVE Onlines approach, I have always felt more games deserved systems as complicated and player-driven. It gives the game a truly alive feeling where everything you do can impact your fellow gamers. Guild Wars 2 needs to adopt the sandbox mechanics if it wants to thrive. I was hoping for more from WvW, but I’m not going anywhere till I see where you guys are going to take the game!

Good luck.

scree.2061:

I for one do not understand player disdain for pay-to-win. If the market is going towards a free to play game model, one must understand that developers need to make money.

Yup, which they can do by selling cosmetic and novelty items in the gem store, along with utility products like character slots and bank tabs and additional bag space.

Sure, you’ve also got people whining that the ability to trade gems for gold inherently makes this game pay to win, but I really don’t think that’s the case so long as non-paying players still have access to all the same functional items.

Pay-to-look-the-prettiest is not the same as pay-to-win, in other words.

The thing that concerns me most is the HUGE difference between the Gold→Gems and Gems→Gold rates. Yesterday, the difference was 25%. And for what reason? Unknown.

In practice, this means that whenever gems are converted, ArenaNet (or NCSoft) removes 25% of the value of the gems/gold. Thus they gain 25% more for each gem store item that is bought if at least 1 transaction precedes it. All gems are bought by a player at some point in time. With the large amount of transactions going on, it’s easy to see that this little trick forces the playerbase as a whole to pay much more for the same amount of content.

While this will certainly help them financially, I’m kinda puzzled as to the WHY. The reason for this is because the thing they’re selling is, in essence, bits and bytes (which are essentially free to copy). After a costume has been made, it won’t cost Anet anything to redistribute it anymore. Taking that into account, I fail to see why an inflation tax like this should be implemented at all, let alone such a steep one. What’s the harm in giving 25% more players acces to gemstore content? Obviously they were willing to spend their money anyways, but in this way, there’ll be 25% more happy customers and no changes in both costs and profits.

So to sum it up, the players as a whole scammed out of their cash while instead they could have 25% more happy players at no extra expenses.

ThiBash.5634:

The thing that concerns me most is the HUGE difference between the Gold->Gems and Gems->Gold rates. Yesterday, the difference was 25%. And for what reason? Unknown.

The number usually cited is 30%, and the reason is quite simple. It’s to prevent short term speculation and manipulation of the market. As I stated about 4 posts above this one.