NcSoft earnings 1Q 14

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Posted by: Inculpatus cedo.9234

Inculpatus cedo.9234

I’m not sure you can assert that the cash shop causes more people to leave the game, than would without one. You conveniently leave out the fact that with this model, one can earn gold to exchange for gems and purchase anything in the Gem store. How do you know that very fact does not entice more people to stay than waiting yearly for an expansion-type model that would not offer that incentive?

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Posted by: Devata.6589

Devata.6589

I do say I think that is better explaining why. Some say they don’t think it’s better. Thats just as much of an assertion.

No, it isnt just as much of an assertion. A statement of fact is a more forceful assertion than a statement of opinion.

Anyway this is a great way to try is destroy a discussion. Asking for data you know is almost impossible to get and then state you don’t have to provide any yourself.

If I am not making an assertion there is nothing to support with facts.

And if you then really want data then somebody just listed a nice chart. That is the best data we have so far (if it’s valid) and seems to proof my point as much as possible. So there is your data.

https://dviw3bl0enbyw.cloudfront.net/uploads/forum_attachment/file/151443/1q14_NCSoft.jpg

Now if you want to continue the discussion give your idea’s and logic. Then you would really add useful information to the thread.

According to that chart the game relying on a cash shop rather than paid expansions makes more money.

What if we had expansions AND a cash shop?

Depends. A cash-shop as we have now? Then the game would still be influenced by it likely resulting in more people leaving. Expansion-sales would still mean some speaks (first likely higher then second) but it would likely not be able to stay at a level as when you had no cash-shop focus.

Now if you had a cash-shop that would not influence the game.. name-changers, sex-changers and that sort of stuff then I don’t think it’s a problem for the game and so I would expect higher expansions-sales but of course less cash-shop sales.

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Posted by: Devata.6589

Devata.6589

I’m not sure you can assert that the cash shop causes more people to leave the game, than would without one. You conveniently leave out the fact that with this model, one can earn gold to exchange for gems and purchase anything in the Gem store. How do you know that very fact does not entice more people to stay than waiting yearly for an expansion-type model that would not offer that incentive?

Turning everything in a gold-grind is a positive thing? Sorry but I do not think so. And yes I did take that fact into consideration as I did mention the gold-grind before.

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Posted by: Inculpatus cedo.9234

Inculpatus cedo.9234

Lol. Tunnel-vision can be hazardous to your health. You’ve said the same thing over and over and over and over.

Personally, I don’t feel the cash shop ‘hurts’ the game. Nor do I ever ‘gold-grind’. I’ve have purchased everything I’ve wanted from the Gem store with nary a bit of grind. And those with much more information than I have seem to feel the same about the cash shop. I prefer GW2’s model over GW1’s model. Seven years of play with 4 major updates. That’s a lot of waiting. Pretty sure I would not want to go back to that, but that’s just me. A Guild Wars (1 & 2) player.

(edited by Inculpatus cedo.9234)

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Posted by: Ashen.2907

Ashen.2907

The people with access to player data have chosen cash shop over paid expansion (for now at least).

+

The sales chart shows that the version of the GW franchise relying on cash shop makes more money than the game that relied on expansions

=

Cash shops are not as good for the game financially as paid expansions ?

I loved GW1. I loved the financial model. There is very little in GW2’s cash shop that I consider worth buying. I prefer content specific to unique skins and the like for my own pursuit of in game rewards over GW2’s grind gold – > buy on TP approach. I do think that cosmetic options in the gem shop is fine, in theory, and would be even better if there were more added in game. But that is all personal preference. Opinion. It doesn’t change the facts that are available:

1) The people with access to player data have experience with both cash shop and paid expansion financial models, have years of experience actually running successful online games, and have chosen the cash shop model (for now).

2) The financial data, per the chart in this thread, shows that the version of the GW franchise relying on a cash shop makes more money than the version that relied on paid expansions.

Pretty much everything else is supposition, personal bias, opinion, etc.

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Posted by: Devata.6589

Devata.6589

Lol. Tunnel-vision can be hazardous to your health. You’ve said the same thing over and over and over and over.

Personally, I don’t feel the cash shop ‘hurts’ the game. Nor do I ever ‘gold-grind’. I’ve have purchased everything I’ve wanted from the Gem store with nary a bit of grind. And those with much more information than I have seem to feel the same about the cash shop. I prefer GW2’s model over GW1’s model. Seven years of play with 4 major updates. That’s a lot of waiting. Pretty sure I would not want to go back to that, but that’s just me. A Guild Wars (1 & 2) player.

Me saying the same thing over and over again is not tunnel-vision is reaction on people who keep saying the same thing over and over again.

“Seven years of play with 4 major updates.” am I going to tell you why this line is nonsense? No i’m not. Everybody can judge for themselves.

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Posted by: Ashen.2907

Ashen.2907

GW1’s model. Seven years of play with 4 major updates. That’s a lot of waiting.

Prophecies launched in April of ’05.
Factions in April of ’06.
Nightfall in October of ’06.
Eye of the North in August of ’07.

As it was announced that they were not going forward with GW1 I am not sure that it is fair to count time spent “waiting” after Nightfall or EotN. The reality is that GW1 added full sized, massive IMO, content additions, at a rate of approximately one every nine months.

Now a new continent, with new classes, new weapons, new armors, new game play mechanics, new end game zones, new PvP modes, etc every nine months or so might not be sufficient for some people. I completely understand that some will prefer smaller updates more frequently.

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Posted by: Devata.6589

Devata.6589

The people with access to player data have chosen cash shop over paid expansion (for now at least).

+

The sales chart shows that the version of the GW franchise relying on cash shop makes more money than the game that relied on expansions

=

Cash shops are not as good for the game financially as paid expansions ?

I loved GW1. I loved the financial model. There is very little in GW2’s cash shop that I consider worth buying. I prefer content specific to unique skins and the like for my own pursuit of in game rewards over GW2’s grind gold – > buy on TP approach. I do think that cosmetic options in the gem shop is fine, in theory, and would be even better if there were more added in game. But that is all personal preference. Opinion. It doesn’t change the facts that are available:

1) The people with access to player data have experience with both cash shop and paid expansion financial models, have years of experience actually running successful online games, and have chosen the cash shop model (for now).

2) The financial data, per the chart in this thread, shows that the version of the GW franchise relying on a cash shop makes more money than the version that relied on paid expansions.

Pretty much everything else is supposition, personal bias, opinion, etc.

“The sales chart shows that the version of the GW franchise relying on cash shop makes more money than the game that relied on expansions”

You really want to hold that argument? Looking at the absolute numbers. Ok let me explain it to you.

GW2 has a much bigger audience and is a bigger game. The franchise became big because of GW1. So in fact much of the first sales you see are thanks to GW1. That to the side however.

To get an idea how GW2 might have worked with expansions we can take a look at GW1.
After initial sales it dropped a lot (not strange as it did then not have a cash-shop) however after a year at the release of the first expansion it did get a spike to almost the sale level as it did at initial release sales. Then half a year after that when selling the second expansion it even managed to go over the original sales.

So lets set the original sales at 100% then a year after initial sales it was about 95% and half a year later it was at about 110%.
Lets for the sake of argument say that in-between it was 0%. Doing this is negative for my story.

Now lets look at GW2 is the same period.
initial sales (when the game was released as B2P!) is 100% (in absolute number much higher then GW1 yeah). A quarter later it’s at 31% of that (of that there will be still many copy sales but lets say thats all cash-shop.. thats positive for your story). another quarter later we are at 24% another quarter later 21%, quarter later 29% and then back to 21%. So after it’s initial release it made about 126%.

GW1 made after it’s initial sale about 205%. (over the same period)

Yeah in absolute numbers it’s different but then you also forget that the game released as B2P but then turned out to be heavenly cash-shop focused.

Thats the best you can get out of these numbers.

(And thats much better for the expansion-based model then I personally expected. I did expected cash-shop sales to be higher but going down while expansion-sales would be more steady and overtaking the total profit after maybe a year of 3. On the other hand I expect an expansion once a year / year and a half, GW1 released much faster)

(edited by Devata.6589)

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Posted by: Ashen.2907

Ashen.2907

Pretty much everything else is supposition

To get an idea how GW2 might have work with expansions

Exactly so. Thank you for demonstrating my point for me.

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Posted by: Devata.6589

Devata.6589

Pretty much everything else is supposition

To get an idea how GW2 might have work with expansions

Exactly so. Thank you for demonstrating my point for me.

That is just as much your point as the point I was making. You can always say you don’t have the data because it’s always an “what if scenario”.

This is the best the numbers show but as we live in this world and not in the world where they did go for expansion-based approach you will never (and nobody will) have the exact numbers for the possible other outcome.

So it’s indeed always a “might have worked”. Never an absolute. Even with the best data we can get.

So thats why it’s an easy argument that does not add anything usefull to the discussion. Nor does it disproof or proof anything. All it really says is “you can never be a 100% sure”. No I can’t.

(edited by Devata.6589)

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Posted by: phys.7689

phys.7689

Pretty much everything else is supposition

To get an idea how GW2 might have work with expansions

Exactly so. Thank you for demonstrating my point for me.

If are not going to apply logic/reason/analysis to facts, they are pretty useless.

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Posted by: Shockwave.1230

Shockwave.1230

Looking at that chart again, and it’s interesting how when you give people a cash shop they spend more money overall than they do on purely expansion games.

I guess that shows the more opportunities you provide for people to spend money, the more opportunities that are taken.

Even more interesting to me though, is how Guild Wars 2 revenue has never been less than Guild Wars revenue, even without having ever provided an expansion in the 21ish months it’s been released. It looks like it’s normally bringing in more than 2x the revenue that Guild Wars ever brought in at its peak, which is pretty astounding.

It’s interesting how the business model is more successful from a revenue perspective. I just really want to see the world expand and build upon itself, while allowing us to go back and experience everything we’ve experienced before so we can find these little nuggest/connections that we might have glossed over initially.

Sylvari Elementalist – Mystree Duskbloom (Lv 80)
Norn Guardian – Aurora Lustyr (Lv 80)
Mia A Shadows Glow – Human Thief (Lv 80)

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Posted by: phys.7689

phys.7689

Looking at that chart again, and it’s interesting how when you give people a cash shop they spend more money overall than they do on purely expansion games.

I guess that shows the more opportunities you provide for people to spend money, the more opportunities that are taken.

Even more interesting to me though, is how Guild Wars 2 revenue has never been less than Guild Wars revenue, even without having ever provided an expansion in the 21ish months it’s been released. It looks like it’s normally bringing in more than 2x the revenue that Guild Wars ever brought in at its peak, which is pretty astounding.

It’s interesting how the business model is more successful from a revenue perspective. I just really want to see the world expand and build upon itself, while allowing us to go back and experience everything we’ve experienced before so we can find these little nuggest/connections that we might have glossed over initially.

Its not really accurate to say that its a better model, GW2 is starting with a much larger base who were essentially told the cash shop would be somewhat minimal.

i would hazard to guess that even to this day, the vast amount of sales for gw2 is from the game itself. Not to say they havent made money from the cash shop.

if they basically could make the same for each expanison, they would in fact make more money than they have with the cash shop.

However its not really that cash shops arent profitable, it entirely depends on your audience, your product etc. if you have a product that a lot of people want to spend a box price on, the box is hard to beat.

The main trick to monetization, is coming up with a way that benefits the product and the company the most.
I believe the idea with gw2 going in could work, but if they dont add some new interesting and engaging content soon, they wont be getting any cash shop money from me, because i wont be engaged enough to want to spend for side goodies.

perfect example, i got salavage a tron, and oil pick, at the time i wanted the lumber and harvesting tool, but by the time it came back around, i wasnt too excited about the current game/direction, so i just passed on it.

Basically imo they waited a little too long before introducing meaty real content, and have no announcements to keep people interested in the interim.

right now i have no idea if they have any intention of adding anything i would be interested in, so im getting less and less engaged as time goes by.

And unfortunately, based on LS1, just not that hyped for ls2.

But hey im just one dude, they got many more in china now.

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Posted by: IndigoSundown.5419

IndigoSundown.5419

if they basically could make the same for each expansion, they would in fact make more money than they have with the cash shop.

Unfortunately, I believe that going forward what we’ll see is not either/or but both/and. Box plus store. Box plus sub plus store. Box plus expansions plus store. Even box plus expansion plus sub plus store.

Why? Just look at the GW2 forums. Over the last month we’ve seen posts suggesting the players pay extra for content, dueling or even bug fixes. One might argue that all of these game additions were once considered part of the initial purchase, part of the sub, or part of an expansion box fee. However, people want what they want, they get impatient and want to throw money at the company to get what they want fast. As long as consumers are willing to pay extra for what was once part of the product or service, companies will be more than happy to let them — or even entice them. I believe it’s only a matter of time.

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Posted by: Ashen.2907

Ashen.2907

Pretty much everything else is supposition

To get an idea how GW2 might have work with expansions

Exactly so. Thank you for demonstrating my point for me.

If are not going to apply logic/reason/analysis to facts, they are pretty useless.

If one is going to invent scenarios to fit one’s personal bias regardless of what the facts actually are they are essentially useless as well.

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Posted by: Aidan Savage.2078

Aidan Savage.2078

So is there anything worth reading in this thread (thus it can be left unlocked) or is there just the bickering that’s been going back and forth for the last 2.5 pages?

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Posted by: Behellagh.1468

Behellagh.1468

Well how about the fact that everything is a gold-grind. The fact that getting an mini or many skins are not behind specific content but in the cash-shop or / and require gold-grind? how about temporary stuff?

All stuff that might not bother you personally. The watchwork pick is not something that effected me personally. It all depends on what game-play you personally prefer the best.

It’s only a gold grind if you want to by Gem Shop items with gold. Gem Shop is a cash shop and they “finance” their RMT Gems to Gold with Gold to Gems.

If this was a subscription game players would have dumped some $240 (at the $12/month yearly discount) to $300 to play. Of course you all will counter that nobody would be still subscribing based on your dislike of LS content, TP meta game, etc.

We are heroes. This is what we do!

RIP City of Heroes

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Posted by: Behellagh.1468

Behellagh.1468

This chart is very interesting. It shows that Aion has performed better than GW2, over a 6 quarter period so far. I’m not sure if the chart even takes inflation into account, so it could be performing even better than what is appearing. One thing that I’m noticing is up until 2012 Aion had been releasing expansions every year or so, then when the new round of AAA MMOs hit, it tapers off, even though they did an expansion in 2013, which seems to have given them a boost.

With how much revenue GW2’s gemshop/box sales has been bringing in since launch, it might make sense for ANet to hold off on expansions, so that they’re wider intervals. If they can get some major overhauls and additions into their expansions (like the next directx?, new contenents?), maybe it’ll be like a release of an entirely new game with huge revenue spikes similar to launch. That’s all speculation, of course, but it’d be interesting to see if it could turn out that way nonetheless.

You overlook that the 1st 4 quarters of AION, it was a Korean/China/Japan game only. It’s peak in 4Q09 was when it went international and it was downhill from then. And it followed the traditional P2P box plus subscription model until it went F2P in the west during 1Q12. 2Q12 shows a huge fall in earnings. The expansions were free and the first one was already folded in when the game had it’s western release. But the expansions let them re-release a box edition here. This last quarter 78.8% of AION’s direct income is from Korea, compared with 94.1% for Lineage, 46.6% for Lineage II and 100% for Blade & Soul (China’s income comes in as royalties, as always).

Non-Asia sales always pale in comparison with Asia sales for NCSOFT’s games that were first released in the Asia. The reverse is also true with non-Asia released games doing poorly in Asia. There is obviously some cultural differences that prove difficult to cross. Which is why it will be interesting to see how GW2 does in Asia. The original GW did have a following in Asia leading to at least one International PvP competition (held in Taiwan I think).

We are heroes. This is what we do!

RIP City of Heroes

(edited by Behellagh.1468)

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Posted by: Devata.6589

Devata.6589

if they basically could make the same for each expansion, they would in fact make more money than they have with the cash shop.

Unfortunately, I believe that going forward what we’ll see is not either/or but both/and. Box plus store. Box plus sub plus store. Box plus expansions plus store. Even box plus expansion plus sub plus store.

Why? Just look at the GW2 forums. Over the last month we’ve seen posts suggesting the players pay extra for content, dueling or even bug fixes. One might argue that all of these game additions were once considered part of the initial purchase, part of the sub, or part of an expansion box fee. However, people want what they want, they get impatient and want to throw money at the company to get what they want fast. As long as consumers are willing to pay extra for what was once part of the product or service, companies will be more than happy to let them — or even entice them. I believe it’s only a matter of time.

As phys stated (and I did before) your explanation about how it’s more successful because of it’s model is inaccurate.

In this last statement you forget that because of the fact that they use the cash-shop te generate income they end up with another product. So even when they do an expansion it’s not garanteed to make as much sales as if they would not do so.

Of course it’s once again a what if because there is no GW2 expansion yet. After GW2 would have released to expansion the best you could do it set it against GW1 expansion sales.

I do believe that because of the way the cash-shop influences the game it will result in less expansions sales… IF they don’t make a change. Now if Anet was to say “ok with the introduction of the new expansion we are going fully B2P throwing everything in the game” I do think that would be a big difference. However like said before there will be people who left GW2 because they disliked the game but don’t know it’s indirectly because of a cash-shop focus. They might not come back anyway.

There is no arguing that is influences the game (having stuff in the cash-shop that would else be in the game simply is a influence). One could only debate how much and in what way it would influence it.

The numbers show that with GW1 after 1,5 year 110% of the number of initial buyers was willing to buy an expansion. For now we don’t know how many would buy a GW2 expansion.

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Posted by: Devata.6589

Devata.6589

Pretty much everything else is supposition

To get an idea how GW2 might have work with expansions

Exactly so. Thank you for demonstrating my point for me.

If are not going to apply logic/reason/analysis to facts, they are pretty useless.

If one is going to invent scenarios to fit one’s personal bias regardless of what the facts actually are they are essentially useless as well.

You are talking about me.
I did not invent anything. I did give my idea’s based on logic. It was then somebody else who provided a chart that did seem to confirm what I was saying. Well in fact it topped it.

That you name my logic of “putting mini’s in the cash-shop hurts my game-play and so also other’s (not everybody’s) game-play and as I don’t see how it will benefit a lot of players game-play I have to call that a negative influence” biast because I do not have all data to proof that that is indeed accurate that is up to you. It makes sense and without data thats the best we can do. Data we later got seem to proof my overall statement. But you apparently still don´t want to see that pointing towards absolute numbers.

And then somebody accused me of tunnel vision.. lol.

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Posted by: Devata.6589

Devata.6589

Well how about the fact that everything is a gold-grind. The fact that getting an mini or many skins are not behind specific content but in the cash-shop or / and require gold-grind? how about temporary stuff?

All stuff that might not bother you personally. The watchwork pick is not something that effected me personally. It all depends on what game-play you personally prefer the best.

It’s only a gold grind if you want to by Gem Shop items with gold. Gem Shop is a cash shop and they “finance” their RMT Gems to Gold with Gold to Gems.

If this was a subscription game players would have dumped some $240 (at the $12/month yearly discount) to $300 to play. Of course you all will counter that nobody would be still subscribing based on your dislike of LS content, TP meta game, etc.

`It’s only a gold grind if you want to by Gem Shop items with gold. Gem Shop is a cash shop and they “finance” their RMT Gems to Gold with Gold to Gems.`
If that was true it would be a gold-grind for the many people interested in those items, and if the those items where behind specific content it was not a gold-grind. So by putting it there is effectively influences the game at least for those people. That was indeed the point I was making.

However you forget one thing. Gems can be converted to gold so ArenaNet has a benefit of having a gold-grind. In the game it’s extremely hard to farm / work towards specific items or mats. Thats mainly because most stuff is in general world or map drops but not behind a specific content meaning you can’t directly work towards it. This mean that with most elements in the game grinding gold is still the best option. Want to get crafting to lvl 500 then grinding gold, buying the mats and leveling up is more efficient then in fact going into the game to collect everything you need directly.

Of course we can never proof it but is it really so strange to think this mechanic is so that gold gets so important as to increase gem-sales from people who convert it to gold? It’s all just marketing and answering the question “how do we get people to buy gems”.

So it go’s a little further then just directly those items in the cash-shop however still that is a part of it indeed.

Then there are examples as having no barber in the game. Something that will effect many RP / PvE players, or the picks with added stats that will hurt the farmers and so on.

I do not know if people would still be subscripted if they had expansions. I do think the content would have been different so you can’t compare that with the LS we have seen. However I do think that initial sales would be way lower and looking as other mmo’s there indeed has not been a single MMO after WoW (ten years ago) that has been successful (so lets say maintained it with success for more then 2 years) with a subscription. All mmo’s still successfully using subscriptions are WoW and pre-WoW. Of course I do not count the recent ones as they still have to proof being successful. So one could indeed think that there would not be that many subscribers left. However I was not comparing a cash-shop to a sub-model but I was comparing a cash-shop model to a true B2P model.

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Posted by: Devata.6589

Devata.6589

So is there anything worth reading in this thread (thus it can be left unlocked) or is there just the bickering that’s been going back and forth for the last 2.5 pages?

Yeah the chart is worth reading.

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Posted by: Inculpatus cedo.9234

Inculpatus cedo.9234

If the model so influences the game to encourage more people to exchange Gems for Gold, then I wonder why the exchange rate keeps rising. I would think it would drop, as there would be so many more Gems exchanged than Gold. Ah well, I’m sure there is some fact that will surface.

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Posted by: Devata.6589

Devata.6589

If the model so influences the game to encourage more people to exchange Gems for Gold, then I wonder why the exchange rate keeps rising. I would think it would drop, as there would be so many more Gems exchanged than Gold. Ah well, I’m sure there is some fact that will surface.

If it’s to low I think less people would be billing to buy gems for gold, especially with prices for items rising. If it’s to high there would be less need to buy it. So it’s an matter of finding the correct balance to get best sales. Thats what I would think at least.

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Posted by: Astral Projections.7320

Astral Projections.7320

If the model so influences the game to encourage more people to exchange Gems for Gold, then I wonder why the exchange rate keeps rising. I would think it would drop, as there would be so many more Gems exchanged than Gold. Ah well, I’m sure there is some fact that will surface.

If it’s to low I think less people would be billing to buy gems for gold, especially with prices for items rising. If it’s to high there would be less need to buy it. So it’s an matter of finding the correct balance to get best sales. Thats what I would think at least.

It sounds like you are saying ANet is actively involved in the gems/gold prices. However John Smith says it is simply the ratio of gems versus gold in the currency exchange.

from this thread here
John Smith
“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.”

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Posted by: laokoko.7403

laokoko.7403

If the model so influences the game to encourage more people to exchange Gems for Gold, then I wonder why the exchange rate keeps rising. I would think it would drop, as there would be so many more Gems exchanged than Gold. Ah well, I’m sure there is some fact that will surface.

If it’s to low I think less people would be billing to buy gems for gold, especially with prices for items rising. If it’s to high there would be less need to buy it. So it’s an matter of finding the correct balance to get best sales. Thats what I would think at least.

It sounds like you are saying ANet is actively involved in the gems/gold prices. However John Smith says it is simply the ratio of gems versus gold in the currency exchange.

from this thread here
John Smith
“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.”

No where does that says number of gems bought with gold = number of gems converted from real cash.

I’m wondering if Anet kept that equal. Some other people mind wonder the same question.

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Posted by: Devata.6589

Devata.6589

If the model so influences the game to encourage more people to exchange Gems for Gold, then I wonder why the exchange rate keeps rising. I would think it would drop, as there would be so many more Gems exchanged than Gold. Ah well, I’m sure there is some fact that will surface.

If it’s to low I think less people would be billing to buy gems for gold, especially with prices for items rising. If it’s to high there would be less need to buy it. So it’s an matter of finding the correct balance to get best sales. Thats what I would think at least.

It sounds like you are saying ANet is actively involved in the gems/gold prices. However John Smith says it is simply the ratio of gems versus gold in the currency exchange.

from this thread here
John Smith
“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.”

What I am mainly saying is that I do think that they benefit of a gold-grind as that would improve gem-sales. The way ‘John Smith’ describes it is also how I always hearth it. And it indeed might be a good way to get it balanced out nicely.