Guild Wars 2

just a quick fact: 1 year ago you needed like 10 gold for 100 gems now you need 20 gold for 100 gems, economy is on a high way to hell. Peace!

Just another fact: 1 year ago it was much harder to get 10 golds than it is now.

besides the passive aggressive stance you could go out buy gems with real money and help all the people in game by dropping the price of gold to gems.

moomoo.3456:

just a quick fact: 1 year ago you needed like 10 gold for 100 gems now you need 20 gold for 100 gems, economy is on a high way to hell. Peace!

Just a quick fact: The gem exchange is not indicative of inflation. The gem exchange is based on player exchanging gold for gems and gems for gold. The more people use gold to buy gems the price increases, the more people buy gold with gems, the price goes down.

The more you know!!

One year ago the amount of gold in the economy was that much less. Every day more gold flows in than leaves through gold sinks. Since the level of gold is rising you can expect gold to gem prices to rise since people have more gold to spend on buying gems with gold.

The only way to avoid it is to add aggressive gold sinks to remove gold as fast as it comes in. Now if you think that’s a good idea OP, make your argument for it.

Just a flesh wound.3589:

One year ago the amount of gold in the economy was that much less. Every day more gold flows in than leaves through gold sinks. Since the level of gold is rising you can expect gold to gem prices to rise since people have more gold to spend on buying gems with gold.

The only way to avoid it is to add aggressive gold sinks to remove gold as fast as it comes in. Now if you think that’s a good idea OP, make your argument for it.

That’s not entirely accurate. Even if you had the sinks to remove gold as fast as it was made, if people are buying gems with gold the price will go up.

The ONLY way to influence or reduce prices for gems is to buy gems and convert to gold.
The gem exchange operates independently from the general economy.

pdavis.8031:

moomoo.3456:

just a quick fact: 1 year ago you needed like 10 gold for 100 gems now you need 20 gold for 100 gems, economy is on a high way to hell. Peace!

Just a quick fact: The gem exchange is not indicative of inflation. The gem exchange is based on player exchanging gold for gems and gems for gold. The more people use gold to buy gems the price increases, the more people buy gold with gems, the price goes down.

The more you know!!

Just a flesh wound.3589:

One year ago the amount of gold in the economy was that much less. Every day more gold flows in than leaves through gold sinks. Since the level of gold is rising you can expect gold to gem prices to rise since people have more gold to spend on buying gems with gold.

The only way to avoid it is to add aggressive gold sinks to remove gold as fast as it comes in. Now if you think that’s a good idea OP, make your argument for it.

These both.

It’s funny actually since you occasionally get the topic were people ask for gold influx to be increased (more gold loot form kills etc) clearly not knowing how this economy works.

Only way to decrease gold → gem conversion:

- make more people buy gems with $$$ and sell them on the market (actually all it takes is for people to sell gems, but since gems are finite unless bought with $$$ I put that in there)

- introduce more gold sinks so gold gets drained from the economy or reduces the inflation (more gold sinks = harder to save gold = more value per gold = lowers the bar at which people are willing to spend $$$ = more gems → gold)

- add more players to the game who convert gems → gold

pdavis.8031:

Just a flesh wound.3589:

One year ago the amount of gold in the economy was that much less. Every day more gold flows in than leaves through gold sinks. Since the level of gold is rising you can expect gold to gem prices to rise since people have more gold to spend on buying gems with gold.

The only way to avoid it is to add aggressive gold sinks to remove gold as fast as it comes in. Now if you think that’s a good idea OP, make your argument for it.

That’s not entirely accurate. Even if you had the sinks to remove gold as fast as it was made, if people are buying gems with gold the price will go up.

The ONLY way to influence or reduce prices for gems is to buy gems and convert to gold.
The gem exchange operates independently from the general economy.

Reducing the gold flowing in would decrease the amount of gold that people have available to buy gems. If inflowing gold was aggressively throttled then your gold income is stagnate. If you have only 50 gold and it’s hard to get more, you’re going to spend less on gold to gems than someone who has a few thousand gold and gets more every day.

pdavis.8031:

That’s not entirely accurate. Even if you had the sinks to remove gold as fast as it was made, if people are buying gems with gold the price will go up.

The ONLY way to influence or reduce prices for gems is to buy gems and convert to gold.
The gem exchange operates independently from the general economy.

Ansered by:

Just a flesh wound.3589:

Reducing the gold flowing in would decrease the amount of gold that people have available to buy gems. If inflowing gold was aggressively throttled then your gold income is stagnate. If you have only 50 gold and it’s hard to get more, you’re going to spend less on gold to gems than someone who has a few thousand gold and gets more every day.

Going to have to go with Jafw on this one.

True, only the amount of gold -> gem purchases directly affect the gem market.

Untrue, the amount of gold available does not indirectly affect the gem market.

If I have 500 gold, I’m am way more willing to buy gems for gold and even at a higher price then if I had 250 gold. My capactity to buy gems is also reduced at lower gold reserves.

So yes, reducing gold inlux into the game economy (or vice versa increasing drains) would affect gem prices.

The fact is that gems are far too expensive to buy wih real money compared to what we can byu with them imo. Who’s ready to pay 10€ for a virtual outfit ? I’m not. I don’t know if I would even buy them if it was half that price.

Honestly, I’d buy an outfit for about 3-4€, same for weapon skins.

Not sure if much more people would make purchase with real money if prices were that low, nor if it would be more profitable for Anet.

This way however, gems to gold rate would probably decrease (more people buying gems with money to then convert into gold).

Cyninja.2954:

pdavis.8031:

That’s not entirely accurate. Even if you had the sinks to remove gold as fast as it was made, if people are buying gems with gold the price will go up.

The ONLY way to influence or reduce prices for gems is to buy gems and convert to gold.
The gem exchange operates independently from the general economy.

Ansered by:

Just a flesh wound.3589:

Reducing the gold flowing in would decrease the amount of gold that people have available to buy gems. If inflowing gold was aggressively throttled then your gold income is stagnate. If you have only 50 gold and it’s hard to get more, you’re going to spend less on gold to gems than someone who has a few thousand gold and gets more every day.

Going to have to go with Jafw on this one.

True, only the amount of gold -> gem purchases directly affect the gem market.

Untrue, the amount of gold available does not indirectly affect the gem market.

If I have 500 gold, I’m am way more willing to buy gems for gold and even at a higher price then if I had 250 gold. My capactity to buy gems is also reduced at lower gold reserves.

So yes, reducing gold inlux into the game economy (or vice versa increasing drains) would affect gem prices.

But not directly. Someone could have 5000 gold and still only buy gems with cash (because they are a nice guy). What we have is a nasty self-fulling cycle here of players who only buy gems with gold who grind for gold to do so, which raises the price of the next batch of gold bought gems so they feel the need to grind more, which ticks them off. They never have a large pile of gold for long because as soon as something good appears in the gem shop they convert it all to buy gems. Just listen to the howls if two good items come out in consecutive weeks.

Behellagh.1468:

Cyninja.2954:

pdavis.8031:

That’s not entirely accurate. Even if you had the sinks to remove gold as fast as it was made, if people are buying gems with gold the price will go up.

The ONLY way to influence or reduce prices for gems is to buy gems and convert to gold.
The gem exchange operates independently from the general economy.

Ansered by:

Just a flesh wound.3589:

Reducing the gold flowing in would decrease the amount of gold that people have available to buy gems. If inflowing gold was aggressively throttled then your gold income is stagnate. If you have only 50 gold and it’s hard to get more, you’re going to spend less on gold to gems than someone who has a few thousand gold and gets more every day.

Going to have to go with Jafw on this one.

True, only the amount of gold -> gem purchases directly affect the gem market.

Untrue, the amount of gold available does not indirectly affect the gem market.

If I have 500 gold, I’m am way more willing to buy gems for gold and even at a higher price then if I had 250 gold. My capactity to buy gems is also reduced at lower gold reserves.

So yes, reducing gold inlux into the game economy (or vice versa increasing drains) would affect gem prices.

But not directly. Someone could have 5000 gold and still only buy gems with cash (because they are a nice guy). What we have is a nasty self-fulling cycle here of players who only buy gems with gold who grind for gold to do so, which raises the price of the next batch of gold bought gems so they feel the need to grind more, which ticks them off. They never have a large pile of gold for long because as soon as something good appears in the gem shop they convert it all to buy gems. Just listen to the howls if two good items come out in consecutive weeks.

That’s why I said directly and indirectly. Merely pointing out that the indirect effect is quite big.

What you are describing is true, but does not count for every member of the market. I’d even dare say it accounts for a minority of the markets members (people refusing to buy gems with real $$$ because it’s a game. having spare $$$, etc.). And even for that situation you can find a forumla at what point someone decides to break from habit.

The individuals gold reserves are of no consequence (or to be exact only of consequence at extremes). One extreme would be if a big part of the gold were held by a small amount of players, and would favor lower gem prices since there is a point at which someone will not buy more gems with gold due to having a big enough stash.

The only thing of consequence is the total amount of gold in the economy and the rate at which it increases and/or decreases. That is the only thing of significant magnitude to drive conversion prices with this big of a player base.

So yes, gold availability and drains will have an effect on the price of gems.

Cyninja:

I disagree. Gold availability and drains don’t really effect gem prices. The players who are buying gems arent spending their gold on other things in game, so the sinks arent being utilized.

So even if gold availability is made super easy, and there are very aggressive sinks (higher TP tax, higher WP fee, etc.) Gem prices will always go up if people use gold to buy gems.

Ironically though, those complaining about the gems prices are the very ones who are causing the prices to rise.

@pdavis – but selling your item drops on the TP still sinks 15% of the gold you receive so saying that the sinks aren’t being used is wrong. The vast majority of gold players receive is from selling their drops to other players and not gold as a direct reward or selling to NPCs.

pdavis.8031:

Cyninja:

I disagree. Gold availability and drains don’t really effect gem prices. The players who are buying gems arent spending their gold on other things in game, so the sinks arent being utilized.

So even if gold availability is made super easy, and there are very aggressive sinks (higher TP tax, higher WP fee, etc.) Gem prices will always go up if people use gold to buy gems.

Ironically though, those complaining about the gems prices are the very ones who are causing the prices to rise.

Agree to disagree. You are completely ignoring oportunity costs and assuming gold just magically appears in someone wallet to get spent.

Gold sinks do not have to be tied to the trading post for once (or any purchase for that matter).

Let’s consider this extreme:

- repair costs get reintroduced to 1 gold per item damaged
-> result, massiv gold deflux (and lots of whining etc. not of significance here).
-> 2nd result, players will have to keep gear repaired first befor spending that gold on gems.
-> 3rd effect, players might even have to buy gems with $$$ and convert to gold to be able to keep playing (though this is an extreme, it is a viable assumption)
What you are not considering is that for each player there is a point where he will decide between:

A.) use gold to buy gems, knowing well that it took him 5 hours to aquire this gold
b.) buy gems with $$$ since it might have taken him 20-30 minutes of his monthly salary

Not every one is a poor student playing this game.

Behellagh.1468:

@pdavis – but selling your item drops on the TP still sinks 15% of the gold you receive so saying that the sinks aren’t being used is wrong. The vast majority of gold players receive is from selling their drops to other players and not gold as a direct reward or selling to NPCs.

True many players make their money from the TP. But where is the money the buyers are using coming from?

Dungeons are the leading method in which gold is obtained. If i sell the 100g drop, that 100g had to be earned from somewhere.

But the point i was making is that if people are buying gems with gold, then they arent using that gold to buy something off the TP. The TP does sink 15% of gold. But if i am not using the TP then that gold isnt being removed. Its being put into the gem exchange.
Again a gold sink only works if people use it.

If I never used a way point and ran everywhere, then the WP gold sink isnt being used.

Cyninja.2954:

pdavis.8031:

Cyninja:

I disagree. Gold availability and drains don’t really effect gem prices. The players who are buying gems arent spending their gold on other things in game, so the sinks arent being utilized.

So even if gold availability is made super easy, and there are very aggressive sinks (higher TP tax, higher WP fee, etc.) Gem prices will always go up if people use gold to buy gems.

Ironically though, those complaining about the gems prices are the very ones who are causing the prices to rise.

Agree to disagree. You are completely ignoring oportunity costs and assuming gold just magically appears in someone wallet to get spent.

Gold sinks do not have to be tied to the trading post for once (or any purchase for that matter).

Let’s consider this extreme:

- repair costs get reintroduced to 1 gold per item damaged
-> result, massiv gold deflux (and lots of whining etc. not of significance here).
-> 2nd result, players will have to keep gear repaired first befor spending that gold on gems.
-> 3rd effect, players might even have to buy gems with $$$ and convert to gold to be able to keep playing (though this is an extreme, it is a viable assumption)
What you are not considering is that for each player there is a point where he will decide between:

A.) use gold to buy gems, knowing well that it took him 5 hours to aquire this gold
b.) buy gems with $$$ since it might have taken him 20-30 minutes of his monthly salary

Not every one is a poor student playing this game.

If gold sinks are that aggressive, sure people might reconsider buying gems with gold, Or buy smaller increments over time. If the are doing the latter, then gem prices will continue to go up. Just at a smaller rate.

pdavis.8031:

Cyninja.2954:

pdavis.8031:

Cyninja:

I disagree. Gold availability and drains don’t really effect gem prices. The players who are buying gems arent spending their gold on other things in game, so the sinks arent being utilized.

So even if gold availability is made super easy, and there are very aggressive sinks (higher TP tax, higher WP fee, etc.) Gem prices will always go up if people use gold to buy gems.

Ironically though, those complaining about the gems prices are the very ones who are causing the prices to rise.

Agree to disagree. You are completely ignoring oportunity costs and assuming gold just magically appears in someone wallet to get spent.

Gold sinks do not have to be tied to the trading post for once (or any purchase for that matter).

Let’s consider this extreme:

- repair costs get reintroduced to 1 gold per item damaged
-> result, massiv gold deflux (and lots of whining etc. not of significance here).
-> 2nd result, players will have to keep gear repaired first befor spending that gold on gems.
-> 3rd effect, players might even have to buy gems with $$$ and convert to gold to be able to keep playing (though this is an extreme, it is a viable assumption)
What you are not considering is that for each player there is a point where he will decide between:

A.) use gold to buy gems, knowing well that it took him 5 hours to aquire this gold
b.) buy gems with $$$ since it might have taken him 20-30 minutes of his monthly salary

Not every one is a poor student playing this game.

If gold sinks are that aggressive, sure people might reconsider buying gems with gold, Or buy smaller increments over time. If the are doing the latter, then gem prices will continue to go up. Just at a smaller rate.

Again leaving out the people who change their opinion and instead buy gems with $$$ now.

But even with only a smaller amount of gold -> gems conversion the prices would stagnate or fall depending on how strong the effect is if we assume the amount of gems bought with real $$$ stays the same.

If in the same amount of time less gold gets converted to gems while the amount of gems bought for real cash and traded for gold stays the same, we will see one of the following:

A.) a slower increase of gems prices for gold (since we now drain less gems from the pool but keep introducing them at the same rate)
B.) equalibrium since gems introduced is the same as gems bought with gold (price stays unchanged)
C.) a decline in gem for gold price (if the amount withdrawn falls below the amount of gems added to the market)

That is not even considering the increase in gems bought via real $$$.

You can argue all you want. This is very basic economics of supply and demand and currency exchange.

I think we are saying the same thing.

People use gold, prices go up. People use cash and convert to gold prices go down.

But I dont agree that ability to make gold, or the gold in the economy, influences or effects gem prices. If gold wss diificult to come by, youd still have people using it to buy gems. It just might take a bit longer to get the amount they want, but they’d still do it. You say that not everyone is a student, true. But also not everyone has a bunch of extra money they can spend on video games either. But the system helps those without disposable incomes. Those who can buy gems, do and convert to gold, which helps those who cannot afford to buy gems very often, by keeping prices lower.

You know that Gold → Gems is a kind of gold sink for the wider economy right? xD

In February, you could get 100 gems for 14 gold (I even got some at close to 12g). Does that mean the ‘economy’ was better then?

As a game ages, people will have more wealth and be willing to pay more, so there’s a natural upward pressure on the gold:gem ratio. What’s impressive isn’t the 20g:100 gem ratio that we’ve seen sometimes this last month, it’s that the price isn’t far higher.

pdavis.8031:

I think we are saying the same thing.

People use gold, prices go up. People use cash and convert to gold prices go down.

But I dont agree that ability to make gold, or the gold in the economy, influences or effects gem prices. If gold wss diificult to come by, youd still have people using it to buy gems. It just might take a bit longer to get the amount they want, but they’d still do it. You say that not everyone is a student, true. But also not everyone has a bunch of extra money they can spend on video games either. But the system helps those without disposable incomes. Those who can buy gems, do and convert to gold, which helps those who cannot afford to buy gems very often, by keeping prices lower.

How can the ability to make gold not influence the price of gold to gems? If gold is hard to come by then people buy less or they are not able to afford high gem prices. Either way puts a downward pressure in gold.

As a thought exercise, let’s imagine a game world where doing one event gave 5 gold instead of 2 silver. If one person in that game can do 4 events and have 20 gold and a one person in this game does 4 events and has 8 silver, which of these 2 people can more easily afford to put down 20 gold for gems? It’s the person in the 5 gold/event game. More gold flowing in increases the ability to buy gems more frequently. It puts upward pressure on the gem prices.

If the person in game world one can afford to buy 100 gold worth of gems daily and the person in game world 2 can only buy 100 gold worth of gems once a month then there is more pressure on gem prices in game world one where gold is easier to make and prices will be higher.

pdavis.8031:

Just a flesh wound.3589:

One year ago the amount of gold in the economy was that much less. Every day more gold flows in than leaves through gold sinks. Since the level of gold is rising you can expect gold to gem prices to rise since people have more gold to spend on buying gems with gold.

The only way to avoid it is to add aggressive gold sinks to remove gold as fast as it comes in. Now if you think that’s a good idea OP, make your argument for it.

That’s not entirely accurate. Even if you had the sinks to remove gold as fast as it was made, if people are buying gems with gold the price will go up.

The ONLY way to influence or reduce prices for gems is to buy gems and convert to gold.
The gem exchange operates independently from the general economy.

It is not as simple as that I don’t think.

I mean… what happens when players buy gems with real life money?

The total amount of gems in the gem pool should be increasing along with the amount of gold in the game.

You cant tell me the gems aren’t added to the gem pool because the players who are converting their gold into gems are spending those gems the exact same way as the person who bought them with cash.

…and if the gems are destroyed after a purchase is made with them (gem sink)….
Then the entire gem supply would have been depleted long ago.

Unless gems are created when they are bought with cash and converted to gold.

Gems in the exchange pool only increases of the player buying gems with cash sells them for gold. If they are used to buy gem shop items or held they don’t affect the rate at all. Just as players hording gold doesn’t. It’s only when the exchange is used that the ratio of gold to gems are affected as the pools reside internally to the exchange.

And yes, other than the initial supply of gems at launch (a ginormous supply according to JS and a minuscule amount of gold in that pool). Other than Gem rewards from AP chests, yes gems are only created by cash purchases and are destroyed when used in the gem shop for items. The gold/gem exchange simply holds onto any sold to it until someone is willing to buy them.

pdavis.8031:

But I dont agree that ability to make gold, or the gold in the economy, influences or effects gem prices.

There is no direct mechanism linking the two. But you’re ignoring the fact that if people have a lot of gold in game and they want to buy something off the gem store would they be more likely to exchange gold or use real money? Particularly in a context where there a few gold sinks and thus gold has little use overall.

Behellagh.1468:

Gems in the exchange pool only increases of the player buying gems with cash sells them for gold. If they are used to buy gem shop items or held they don’t affect the rate at all. Just as players hording gold doesn’t. It’s only when the exchange is used that the ratio of gold to gems are affected as the pools reside internally to the exchange.

Yes but it seems fully logical that if people have large pools of gold that is going unused they’d rather use that to get gems than real world money.

All I’m saying is the amount of gold and gems players are hoarding on their accounts have no direct impact as to what the current exchange rate is. Only the pools internal to the exchange matter for calculating the rate.

If the money supply craters tomorrow and nobody has any gold what so ever. The exchange rate is unaffected, it still requires players to sell gems for the rate to go down.

Behellagh.1468:

All I’m saying is the amount of gold and gems players are hoarding on their accounts have no direct impact as to what the current exchange rate is.

But you can’t possibly ignore the fact that people are involved. You’re ignoring the human element. If people have lots of gold and items are released in the gem store that they want, is it more likely that they will buy gems with real money or buy gems with the large pools of gold they’re hoarding which would otherwise go unused?

Behellagh.1468:

All I’m saying is the amount of gold and gems players are hoarding on their accounts have no direct impact as to what the current exchange rate is. Only the pools internal to the exchange matter for calculating the rate.

If the money supply craters tomorrow and nobody has any gold what so ever. The exchange rate is unaffected, it still requires players to sell gems for the rate to go down.

No, it does not have a direct impact. It has an indirect impact. But that was never part of the argument or disscussion. Yes, the gem market gold price is defined by the amount of gem currently in supply, every one knows that.

The argument is about if inflation on the gold side of the market at equal real life gems introdution into the market on the other side(gems get bought with $$$ and sold for gold) has an influence on gem prices. To which the anser is: yes.

Cyninja.2954:

Behellagh.1468:

All I’m saying is the amount of gold and gems players are hoarding on their accounts have no direct impact as to what the current exchange rate is. Only the pools internal to the exchange matter for calculating the rate.

If the money supply craters tomorrow and nobody has any gold what so ever. The exchange rate is unaffected, it still requires players to sell gems for the rate to go down.

No, it does not have a direct impact. It has an indirect impact. But that was never part of the argument or disscussion. Yes, the gem market gold price is defined by the amount of gem currently in supply, every one knows that.

The argument is about if inflation on the gold side of the market at equal real life gems introdution into the market on the other side(gems get bought with $$$ and sold for gold) has an influence on gem prices. To which the anser is: yes.

Taken from: https://forum-en.gw2archive.eu/forum/game/gw2/I-have-a-question-about-the-economy/page/20#post5082609

Rauderi.8706:
As for a question, would you be at liberty to discuss the growing gulf between gem-to-gold and gold-to-gem rates? There’s definitely a bit of perception-rancor that I wouldn’t be getting value for my gems relative to those using gold to purchase gems. It’s stopped me in the past from making that conversion.

Was it intended to be an additional gold sink or it is just a proportional effect to gold inflation? Does that gap lower the volatility of gem prices?

John Smith.4610:
I’m not sure what you mean by growing gulf between the rates, the gulf has always been the same.

The gold/gem rates have very little to do with gold inflation inside the game.

Wanze.8410:
How, in your opinion, would the game economy have evolved differently, if the gold/gem exchange wasnt implemented?

John Smith.4610:
I think it would be pretty much the same.

Wanze.8410:
Lame.

John Smith.4610:
The CE is really a reflection of gem value and isn’t as strongly tied to the economy as many think it is.

John Smith.4610:
“The CE is really a reflection of gem value and isn’t as strongly tied to the economy as many think it is.”

Which means that the CE has at least a weak tie to the economy. If it had no tie, he would have said that.

Just a flesh wound.3589:

John Smith.4610:
“The CE is really a reflection of gem value and isn’t as strongly tied to the economy as many think it is.”

Which means that the CE has at least a weak tie to the economy. If it had no tie, he would have said that.

Yes, there is a weak tie to the economy. How could there not be?
But the point I was trying to get across was that it’s not as stong as is implied in this thread.

Sure making money can influence peoples decision to buy gems with gold. However, I don’t believe that it has such a great influence as to cause the gem prices to be where they are today.

pdavis.8031:

I disagree. Gold availability and drains don’t really effect gem prices. The players who are buying gems arent spending their gold on other things in game, so the sinks arent being utilized.

pdavis.8031:

That’s not entirely accurate. Even if you had the sinks to remove gold as fast as it was made, if people are buying gems with gold the price will go up.

The ONLY way to influence or reduce prices for gems is to buy gems and convert to gold.
The gem exchange operates independently from the general economy.

pdavis.8031:

But I dont agree that ability to make gold, or the gold in the economy, influences or effects gem prices. If gold wss diificult to come by, youd still have people using it to buy gems. It just might take a bit longer to get the amount they want, but they’d still do it. You say that not everyone is a student, true. But also not everyone has a bunch of extra money they can spend on video games either. But the system helps those without disposable incomes. Those who can buy gems, do and convert to gold, which helps those who cannot afford to buy gems very often, by keeping prices lower.

And now we are at:

pdavis.8031:

Yes, there is a weak tie to the economy. How could there not be?
But the point I was trying to get across was that it’s not as stong as is implied in this thread.

Sure making money can influence peoples decision to buy gems with gold. However, I don’t believe that it has such a great influence as to cause the gem prices to be where they are today.

But if you are linking and quoting John, you might as well keep reading:

John Smith.4610:

The gem pool expands when players trade in gems for gold. If you assume two stockpiles of currency, it works pretty much exactly like you would expect.

What does this tell us? That the growth of ones side supply is a factor. Is it the biggest factor visable in data? Certainly not since it has multiple indirect effects. Is it a factor. Still yes.

EDIT: the 2 stockpiles he refers to are the total amount of gold and total amount of gems available (not the ones sold for gold on the market). Thus incentives to trade one for the other rise and fall with the rate at the trading post.

So yes, if the gem stockpile grows faster or similarly fast as the gold stockpile (in ratio, not total) we would effectively see no change if the same amount of people remain converting (not factoring for people having everything they need/want for gems etc.).

And we are back at growth of the gold stockpile affects the gem price.

pdavis.8031:

Just a flesh wound.3589:

John Smith.4610:
“The CE is really a reflection of gem value and isn’t as strongly tied to the economy as many think it is.”

Which means that the CE has at least a weak tie to the economy. If it had no tie, he would have said that.

Yes, there is a weak tie to the economy. How could there not be?
But the point I was trying to get across was that it’s not as stong as is implied in this thread.

Sure making money can influence peoples decision to buy gems with gold. However, I don’t believe that it has such a great influence as to cause the gem prices to be where they are today.

Actually, when you look at that quote, he isn’t saying the tie isn’t strong. He is saying it’s not as strongly tied as many think. As long as the degree of tie is lesser than the degree he is specifically referring to, it can still be strong, just be below that point.

moomoo.3456:

just a quick fact: 1 year ago you needed like 10 gold for 100 gems now you need 20 gold for 100 gems, economy is on a high way to hell. Peace!

back on launch day 1g → 400gems…..

yeah… economy…..

Cyninja.2954:

Behellagh.1468:

All I’m saying is the amount of gold and gems players are hoarding on their accounts have no direct impact as to what the current exchange rate is. Only the pools internal to the exchange matter for calculating the rate.

If the money supply craters tomorrow and nobody has any gold what so ever. The exchange rate is unaffected, it still requires players to sell gems for the rate to go down.

No, it does not have a direct impact. It has an indirect impact. But that was never part of the argument or disscussion. Yes, the gem market gold price is defined by the amount of gem currently in supply, every one knows that.

The argument is about if inflation on the gold side of the market at equal real life gems introdution into the market on the other side(gems get bought with $$$ and sold for gold) has an influence on gem prices. To which the anser is: yes.

I am simply making it clear the current rate is only determined by the current size of the gold and gem pool in the exchange.

Okay, I’ve dredged up John Smith’s outline as to how the exchange works.

John Smith.4610:

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

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

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

He clearly states that only the supply gold and gems internal to the exchange is used to calculate the rate, therefore any amount outside of the exchange isn’t used to calculate the rate. Sure as those external supplies are used to buy or sell gems from/to the exchange the rate will change but until that happens the rate is unchanged by players buying gems with cash or increasing the amount of gold in their wallets.

Cyninja.2954:

Yes, the gem market gold price is defined by the amount of gem currently in supply, every one knows that.

Apparently not.

Behellagh.1468:

I don’t disagree that when players have more gold they would spend more toward “free” gems but there needs to be a reason, in most cases, to do the conversion. From late Nov 2014 through end of Feb 2015 the exchange rate trended downward. There was a couple of spikes when something desirable came out but for the most gold to gem rate declined roughly 20-25%. Was there a huge up surge in Gem sellers or a drop off of Gem buyers?

Without information from anet we can only guess/speculate. Over winter months and especially christmas many games see an increase in activity on average.

My guess would be many returning players, some of which bought gems to “catch up” and requip their left toons. Maybe some new players, but those don’t go into gem buying unless they really enjoy the game.

Less desirable items probably ment also less gems bought for gold.

Currently we are seeing people take breaks from the game or farm in DT and SW, especially SW being quite profitable in preparation of HoT. That combined with the huge amount of new skins the last 3 months (what was it, 4 weapon sets and some outfits in total or so?) combined with other gem items is probably why the trend got interupted.

The reason why you saw drops over the winter is because holidays tend to bolster out-of-game gem sales, as gifts, and people are often inclined to impulse buy whatever they can given a gift card, meaning many people just converted the gems to gold, possibly due to the demand for high-cost items like legendaries, ascended armor, etc.

The rise in gold per capita is undoubted, but the issue is more closely paralleled to fewer people buying gems in general (or at least converting them to gold) than they were in the past.

This may be attributed to a declining player-base, increase in freeloaders farming gold for gems in common hotspots (Silverwastes) paired with a spiked interest in doing such farming for beta portals, etc.