Guild Wars 2

I’ve been seeing a lot of threads made by people complaining about gem prices lately, and even more posts by people saying it’s simply supply and demand. Here are some facts.

First data point on GW2Spidy for gem prices on September 10, 2012 has 100 gems costing 2747 copper and 100 gems selling for 1965 copper, this comes to a (2747-1965)/2747 = 28.47% loss due to transaction fees of converting gold to gems and back to gold. You can back into the transaction fee by solving x+x(1-x) = Loss % to get a 15.42% transaction fee.

The most recent data point I see on GW2Spidy today May 24, 2015 has 100 gems costing 205354 copper and 100 gems selling for 110821 copper, this comes to a (205354-110821)/205354 = 46.03% loss due to transaction fees. You can solve the same equation and see that the transaction fee is currently 26.54%

Since transaction fees have absolutely nothing to do with supply and demand, part of the reason that gem prices are increasing so much, especially recently, is due to Anet making them more expensive to buy with in game gold (obviously you can always dual wield those credit cards for the same rate). The 15% transaction fee (which is the official one listed in the wiki here http://wiki.guildwars2.com/wiki/Currency_exchange) was unchanged from release to August 2014, in September 2014 it started to increase and has been increasing ever since.

Spidy gem exchange data is borked since last august.
Use values from the gem exchange in game and you will have the exact 15% taxes both directions.

Waffler.1257:

Since transaction fees have absolutely nothing to do with supply and demand, part of the reason that gem prices are increasing so much, especially recently, is due to Anet making them more expensive to buy with in game gold (obviously you can always dual wield those credit cards for the same rate). The 15% transaction fee (which is the official one listed in the wiki here http://wiki.guildwars2.com/wiki/Currency_exchange) was unchanged from release to August 2014, in September 2014 it started to increase and has been increasing ever since.

correction: Players have caused the increase of the cost of gems. Anet has said they havent and wont touch the gem exchange.
People buy gems for gold, the price increases. People sell gems for gold, the price decreases.

Waynze is correct. The spidy exchange info is wrong. Its always been 15% and always will be 15%.

www.reddit.com/r/Guildwars2/comments/2xtjc7/psa_how_gems_work/cp3gd2a

John smith explains it here.

Could somebody please explain the supply and demand thing to me regarding gems please as i many be wrong but if gem prices are based on supply and demand then the cost would surely be the same.

Also supply and demand would surely only truly happen if players sold and bought with other players no?

I may be wrong but when gems are sold are they not sold back to anet? Because if not then there must be players buying gems at the “sell” rate no?

So I must be right by assuming anet buy them cheap and sell them high.

I admit I don’t fully understand the anet system on gems, but my points are economically valid I feel.

HenleyLegoMan.4987:

Could somebody please explain the supply and demand thing to me regarding gems please as i many be wrong but if gem prices are based on supply and demand then the cost would surely be the same.

Also supply and demand would surely only truly happen if players sold and bought with other players no?

I may be wrong but when gems are sold are they not sold back to anet? Because if not then there must be players buying gems at the “sell” rate no?

So I must be right by assuming anet buy them cheap and sell them high.

I admit I don’t fully understand the anet system on gems, but my points are economically valid I feel.

Imagine each time a players buys Gems with in game Gold the price of “1 Gem” goes up by 1 copper and each time someone sell their Gems for Gold the price of “1 Gem” drops by 1 copper (it’ll be more complicated than this).

This describes the relationship :

Lots of players using their Gold to buy Gems = increased demend for Gems = increased price.
Lots of players selling their Gems for Gold = increased supply of Gems = price goes down.

As expected people are more likely to use in game gold to buy gems and hence its gone up over time. Remember “Gems” are just an imaginary thing designed to look like there is a market (ANet aren’t actually mining for them).

HenleyLegoMan.4987:

Could somebody please explain the supply and demand thing to me regarding gems please as i many be wrong but if gem prices are based on supply and demand then the cost would surely be the same.

Also supply and demand would surely only truly happen if players sold and bought with other players no?

I may be wrong but when gems are sold are they not sold back to anet? Because if not then there must be players buying gems at the “sell” rate no?

So I must be right by assuming anet buy them cheap and sell them high.

I admit I don’t fully understand the anet system on gems, but my points are economically valid I feel.

I think it would be easier to assume for you that whenever someone buys something in the gem store, those gems are destroyed and whenever someone buys gems with cash from Anet those gems are newly created.
However, if you buy some gems with cash, those gems dont enter the gem exchange or in any way influence the gold/gem ratio, just like the gold in your acount wallet.

For simplicity lets assume there are 1000 each gold and gems in the exchange and 1 gold is worth 1 gem.

Now a player buys 500 gems with 500 gold (there is a 15% tax, so he would only get 425 gems).

Now there are 500 gems left in the exchange but 1500 gold, which would mean that the new ratio would be 1 gem/3 gold.

Good for someone, who wants to buy gold, bad for someone who wants to buy gems.

When are we going to start getting discounts on gem store items again?

(To anyone who has any snark along the lines of, “How are we suppose to know?” This is just self pondering on my part, lol)

Lambent.6375:

When are we going to start getting discounts on gem store items again?

(To anyone who has any snark along the lines of, “How are we suppose to know?” This is just self pondering on my part, lol)

its not self pondering, if you do it in a public forum.

Wanze.8410:

Lambent.6375:

When are we going to start getting discounts on gem store items again?

(To anyone who has any snark along the lines of, “How are we suppose to know?” This is just self pondering on my part, lol)

its not self pondering, if you do it in a public forum.

Let’s do this then, it was initially a self pondering that has now become public.

Is there another site that has a graph of gem prices over time besides spidy? I tried finding one on the gw2tp.com, but couldn’t locate it.

HenleyLegoMan.4987:

Could somebody please explain the supply and demand thing to me regarding gems please as i many be wrong but if gem prices are based on supply and demand then the cost would surely be the same.

You’re right, the price is the same for everyone, except that there’s a 15% transaction fee. It’s a good question, maybe this will help.

As an example, from the numbers I just pulled it costs 367.7 gold to buy 2000 gems on the exchange. If X is the real gems per gold ratio, then 367.7 * X * 0.85 = 2000, which gives a “true” rate of 6.4 gems per gold.

On the other side? It costs 1884 gems to get 250 gold on the exchange; again, there’s a 15% tax, so 1884 * 0.85 * (1/X) = 250, which gives a “true” rate of 6.4 gems per gold.

Essentially there is a single, internal true rate, but you see two different offer rates since they each reflect a 15% transaction fee.

HenleyLegoMan.4987:

Also supply and demand would surely only truly happen if players sold and bought with other players no?

In an exchange, there’s a single middleman that sets the price. If the price is set too low, the exchange will have too many buyers and its stock of goods will be depleted; if the price is too high, its stock will grow and grow as it is unable to re-sell the product fast enough. Only when the price(s) are set to equalize supply and demand will the net accumulation of goods in the exchange be zero.

The price that equalizes supply and demand in an exchange is identical to the price that equalizes supply and demand in a competitive market; they’re both at the intersection where demand (at price) equals supply (at price). Whether or not it is intermediated doesn’t matter.

The one on GW2TP is under tools. And it only samples the Gold to Gem price about every half an hour. Gem to Gold will be roughly 72.25% of the Gold to Gem value.

https://www.gw2tp.com/gems

The way I explain the exchange is the two internal pools, gold and gems are always equal in value with one another. So the price per gem is simply the amount of gold in the exchange divided by the amount of gems in the exchange.

Ensign pretty much hit the nail on the head with the how the two rates we see are simply adjustments of this internal core rate by the standard gold sink rate of 15%.

^
Thanks for the link. Every half hour is better than nothing. ^^