Guild Wars 2

pdavis.8031:

So I was thinking about the introduction of precurser crafting. I know that John Smith cannot answer specificially concerning such things, but my main concern would be a price shock if/when an annoucnement is made. I would think that even an announcement of such a thing would cause MANY people to rush out and buy up as much T6, Lodestones and whatever else may be thought to be used in such a venture.

My question is would the economy be able to handle such a thing? Would prices climb dramatically for a short period and then stablize? or just spiral upwards out of control? Are these things even considered when discussing the possibily of precurser crafting?

I understand that some of these may not even be able to be discussed in depth, but I am just curious as to how the economy would react to something like this. Thanks!

I’m here to protect the game from major problems like this. Any major feature that would affect the economy of the game I’m brought in to help with.

Mckeone.9804:

(a) Does anyone read the “what we would like in the gemstore thread” and take the suggestions into account?

(b) Has anyone ever given you an award for good communication, ie, giving straight answers or, if you don’t have a straight answer, admitting it and explaining why?

A. Yes, people are constantly reading that thread.
B. No and while I’m here answering questions often, tact clearly isn’t my strongest skillset, so I’ll need to continue developing that before any awards are in order.

Astraea.6075:

Another question for John:

What do you see as the main challenges/risks faced by MMO economies, and how well do you think GW2’s economy has fared against these?

The standard challenge is always hyper-inflation. I would argue that GW2 has tackled this challenge very, very successfully.

Second, a major risk is cartels controlling your economy(ies) and I would argue that we’ve done an excellent job there as well.

MFoy.3284:

I’ve always wondered what drives the Gold to Gems conversion rate? I remember someone (you?) stating it started with a large pool of Gems and no Gold. Now, almost two years later it would seem to have changed to the other way around.

I would expect when we spend our converted Gems at the gem store they go to Bit Heaven and now are out of circulation. So, where do new Gems come from that affect the conversion rate? If players convert Gem into Gold that adds back into the pool right?

Not complaining at all. In fact, the Gold to Gem exchange has always seemed more than fair as a concept regardless of the exchange rate or other white noise in the system. As a player I commend both you and Anet for supporting the Exchange. But I am curious under what conditions does the Gem Pool expand?

Thanks John, you do a stellar job keeping the economy humming along and show your commitment to fair play with posting in threads like this. Much applause.

-M

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.

Wanze.8410:

Question:

I dont know how involved you have been with the chinese version of the client but in terms of game economics/mechanics (for example crafting or forge recipes), was there something that was implemented differently than in the US/NA client?
I know that you cant comment on future changes, so i dont want to know which changes might be coming over to us but maybe there is something that you handled differently over there because the market and economy was starting from scratch and when implementing it over here, it would cause too much upset to price equilibriums.

China is largely the same game. We felt like we did a good job with the original GW2 and so we carried that over. What China did get was all the adjustments we made over the last year+ to fix mistakes in the west, so they started on a better foot over there.

Rauderi.8706:

John Smith.4610:

We have a big data solution to help me manage the obscene quantity of data involved. I have a mix of third party and proprietary tools, but one never fully escapes excel. I’m oldschool and have an unhealthy love for excel, though it has many limitations, so if I need to do more advanced statistics I need to use more serious software.

Excel <3

Anyway, so so glad to see engagement with the red-posts. Why’s this popular? Because FEEDBACK.
So, thanks for all the time you take on this, JS, and even going so far as to explain when policy limits your responses.

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?

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.

Astraea.6075:

John Smith.4610:

There is almost no data that I cannot link together for analysis.

This week I created a table composed of multiple in game interactions that was larger than 800 billion rows.

I think I might be suffering from data envy… we complain when our users start creating queries that contain a few million rows.

I’ve been there, not fun times.

Essence Snow.3194:

John Smith.4610:

AngelsShadow.7360:

As someone who is very much interested in a career in economics, how did you get involved in MMO economies? Also, what would you consider your basic day-to-day routine?

Step 1 is definitely play MMOs. Play them a lot, play many different types, be the best at them. Learn to understand them from every perspective, not just your own.

These are all of course suggestions that come from (and essentially describe) my personal opinions on the matter. You could, arguably, get a job without accomplishing these, but you’ll be much better at that job if you do.

Does that include understanding mmo socioeconomics, reward psychology, and how the two relate?

That’s going to be really hard to learn without a mentor or a lot of experience. There is some good information, but I wouldn’t call it complete. It also changes drastically between cultures which is another hurdle.

Psientist.6437:

‘, Thank you in advance for any answer and inclination to answer
I am an economist onlyif economists accept currency as the anative function of reality
please be generous with your answer breadth
would I know what I am not asking

1, Hello?
2, Do you have a character avatar?
3, Do you consider yourself Tyrian?
4, Would you consider anative RMT algorithm a system rational Tyrian?
5, 4 and why?
6, What is 6 afraid of?
7, as phi’1,pi’1,phi as
8, How would ‘4 as yes, be named?
9, I xp synesthesia with words on paper, am I typical,atypical?

edit for lovinglilyliveredlovelilies

What I can answer:
1. Hello to you sir.
2. I have an two accounts that are play accounts neither is this account (if that’s what you mean)
6. Me
7. 0.61803
9. No, as atypical means unrepresented by a group, you would be represented as a group of people who experience synesthesia. (For those that don’t know, synesthesia is when someone experience words with multiple senses, think of it as tasting the words your write.)

Zaxares.5419:

Question: Just how old are you, John?

“The secret of genius is to carry the spirit of the child into old age, which mean never losing your enthusiasm.” – Aldous Huxley

:)

Mckeone.9804:

What kind of tools do you use to manage the economy? Did you develop them in house, get them from a third party, or is it just excel gone wild?

We have a big data solution to help me manage the obscene quantity of data involved. I have a mix of third party and proprietary tools, but one never fully escapes excel. I’m oldschool and have an unhealthy love for excel, though it has many limitations, so if I need to do more advanced statistics I need to use more serious software.

Mbelch.9028:

John, I just have to say thanks for taking the time and effort to answer some of our meager questions. As someone who does tend to flip items when I can make educated guesses on what to flip, I take great interest and often read this sub forum .

I’m also a person who has had a monopoly on an item for a time. It’s quite profitable, but I’m curious (and yes, this is my question) as to if you/your team does anything if it notices a monopoly; I.E. one or two people working in tandem to control a price.

My followup is: has this been an issue insofar that you’ve noticed it and had to take action?

Thanks for your time again, and here’s two notes—
-As a journalist by profession, my follow-up might seem redundant but it is necessary.
-As a reader of this forum, I appreciate your sometimes snarky responses to those who earn them. I’ll never likely earn one, but if I did, I’d add it to my signature.

Monopolistic or cartel control isn’t really an issue in guild wars 2. Most of the markets won’t bare it for long enough for us to even get around to fixing it, and 99% of the time people trying lose huge quantities of money. I wouldn’t say that we’ve never had to do anything about it, but the details I’m not currently allowed to speak on.

Mckeone.9804:

John – (1) how do you view your role in economic management . . . although a micro person, how much, if at all, do you incorporate macro modeling into your work, (2) do you have any real life role models that you follow, and (3) what papers/blogs do you read?

1. The majority of my work ends up being on the macro side, mostly due to limited time.
2/3. Does Urijah Faber count?
I enjoy reading about Nate Silver’s work and I am a big fan of Paul Krugman. I’m not sure I would call them role models because our work is so vastly different, but I would reference their traits of success and excellent work as something to look up to.

John Smith.4610:

Conncept.7638:

but there is no way you have the numbers to claim that the players think so, from a psychological perspective.

You’re adorable.

Economists have ways to measure how much your parents love you and the scariest part of all… it works.

I’ve gotten a lot of mixed feedback about this comment and I wanted to agree that it’s unnecessary. It’s an overly caustic response to an accusation (which isn’t the worst thing in the world), but it’s been pointed out that this isn’t a two way street which changes the situation entirely (and makes it really bad). My community team are saints and allow me the time and medium to interact with the players, I’ll be focusing more on providing positive responses as much as I’m able.

Cheers all, questions welcome.

phys.7689:

John Smith.4610:

Psientist.6437:

John Smith.4610:

Ayrilana.1396:

He’s referring to the conversion rates of gem and gold within the gem store most likely.

Ah, I see.
As a note, while RMT is accurate, it is generally used to refer to third party traders, hence my confusion.

This is not a returned volley:

Thank you John Smith for asking for clarification, thank you Ayrilana for providing clarification, pardon me not clarifying myself in a timely manner.

The RMT label is accurately applied to Arenanet et al. ‘You’ have collapsed the traditional third party responsibilities of RMT into the responsibilities of Arenanet et al.

Question

Have you as a game theory economist ever considered partnering with other game theory economists to create the backbone for a third party neutral RMT company that would provide RMT services to participating game worlds?

I have thought of it, I think it would be very interesting to have new worlds to work inside constantly and honestly more games need to start using economists. I also have extremely negative feelings about third party RMT because I watch them steal and destroy what players have created and it sickens me. Competing them out of business would be worth it alone.

how could you compete them out of business without having similar effects, and employing similar tactics?
Essentially how can you compete with people who operate above the laws, in a completely self interested fashion?

Their tactics must be combated inside the game as well.

Ask Dons Mop.3601:

Hey John! I have a question about limited time items, or items with no current way of acquisition other than the trading post. Alot of these items will continue to go up in price on the TP, the Halloween 1 skins for example, but there are also a few with no real demand for but are still unobtainable by other means. The current LS1 items are on the laurel vendor now(Which I personally thought was a very good way to deal with them). Are there any plans on re-implementing this idea on the other items that are unobtainable? Or would the re-introduction be too volitile?

I’m sorry, I can’t comment on future content.

Edit: I didn’t see that response above.

Psientist.6437:

John Smith.4610:

Ayrilana.1396:

He’s referring to the conversion rates of gem and gold within the gem store most likely.

Ah, I see.
As a note, while RMT is accurate, it is generally used to refer to third party traders, hence my confusion.

This is not a returned volley:

Thank you John Smith for asking for clarification, thank you Ayrilana for providing clarification, pardon me not clarifying myself in a timely manner.

The RMT label is accurately applied to Arenanet et al. ‘You’ have collapsed the traditional third party responsibilities of RMT into the responsibilities of Arenanet et al.

Question

Have you as a game theory economist ever considered partnering with other game theory economists to create the backbone for a third party neutral RMT company that would provide RMT services to participating game worlds?

I have thought of it, I think it would be very interesting to have new worlds to work inside constantly and honestly more games need to start using economists. I also have extremely negative feelings about third party RMT because I watch them steal and destroy what players have created and it sickens me. Competing them out of business would be worth it alone.

Lodius.5392:

As part of economy and growth is there any “Guest Pass” or “Free Weekends” so that I can tell my friends about it.

This would help increase the rate of new players coming into the game.

How about offering incentives to recruiting people?

I am interested in the economy because I enjoy the game and do not want to see it ever die.

This is a bit beyond my scope, sorry. Also it falls into my future things coming out clause, so I can’t answer twice, but I’m sorry twice as well and I hope that makes up for it.

Ayrilana.1396:

HHR LostProphet.4801:

For clarification:
John, is the fact that profit from the traiding post is shifted value, unlike the reward from other activities, which is newly created value, the justification for traiding post flippers to have, in theory, unlimited profit?

Followup:
What is the justification for traiding post flippers having an exponential maximum-reward-curve, unlike any other activities which all have just a steady, constant maximum-reward-curve?

Followup:
If skill is the justification, do you want to express that the traiding post is the most skillful activity in this game? Based on the formula that the most challenging activity should be rewarded the most? Does that mean that traiding post flipping is considered as “endgame content”? So is any other activity in this game worth less and at its core only exsiting because it fuels the traiding post? Doesn’t this mindset lacks the true meaning of a MMO, playing together to achieve more?

You’ll likely find your answer here but I’m sure he’ll elaborate when he has time.

https://forum-en.gw2archive.eu/forum/game/bltc/Why-manipulate-that/page/2#post3175493

I have already answered my opinions and the facts on flippers, but I would point out that flippers do not have an exponential gain curve. I am definitely not making a comment that the TP is the most skill portion of the game. I have previously implied that since the amount of profit is very finite and split between those participating, the fact that anyone makes a decent amount of profit indicates a barrier to entry that could be skill based.

VincentDW.9376:

Ongoing thanks, John! Also, another one for you:

As part of your in-game economist duties, do you have any input into more “meta-economic” decisions, or things that will have ramifications for the in-game economy but aren’t always though of as being directly a part of it? For example, are you consulted on things such as when to offer a sale on the box price of the game (since an influx of new players surely shifts the supply and demand curves of the in-game economy), or is this solely the purview of other departments like marketing? In the same vein, are there other areas of the game that you consult on as an economist that you think would be non-obvious or surprising to the average player?

I very often act as a statistician for all kinds of projects inside the company, providing data analysis on everything from art to audio to business. Though something as far away as box sales is more something that I would be informed of.

Nefara.2186:

Nefara.2186:

Since you’ve mentioned that “silk wasn’t an accident”, I’d love to know some of the reasoning behind that. When you say you want to add volatility, I’m very curious as to what the benefits are to putting an immense amount of demand stress on to a specific commodity. Doing so effected the price of all cloth (except jute), since Damask is so profitable to craft. However, it is more than triple the price of other ascended materials and all cloth is at least twice as expensive as its counterparts. it’s been terrible for newbs who want to level up their armor related crafting. I don’t understand the need for the imbalance so I’d love some illumination.

On a related note, is there an economic reason why superior runes and sigils are not able to be put into the mystic forge? Adding a mystic forge recipe would help equalize the prices of all of the superior runes, adding value to the, well, crappy ones and adding supply to whichever ones are currently en vogue. Was this inequality something else that was planned and if so, why?

If you get the chance I’d still love a response about the benefits of cost imbalance, it’s something I genuinely would like to understand better!

I’m not confident I can adequately explain the concepts you’re asking about in this forum without a significant time investment. Remind me of this question at a later date and I’ll put some thought into it.

TooBz.3065:

Hi John,

How does wealth / material distribution affect how you think about sinks?

For example, I imagine that gaining wealth for the sake of gaining wealth could be, under some circumstances, be very similar to a sink – as wealth and materials are held outside the market. The problem being that at anytime those materials and gold could flood back in. Or is this a self-correcting problem that you don’t need to worry about?

Correct me if I’m wrong, but I believe you’re asking if the sink is likely to sink from the rich/poor/middle/everyone, is that a factor of the design?

Where the sinks hit are a major factor of the process. Imagine the difference between HoHo Tron allowing people to donate to kick off the event faster and requiring anyone who wants to participate to donate.
It’s good to think about sinks and faucets in terms of wealth and potential wealth, both must remain balanced or you lose sleep over the possibilities.

wwwes.1398:

It’s hard to think of more questions, you’ve done such a thorough job.

Can you talk more about your role within the development process? You’ve alluded a few times to what seems like very specific periods of input to the process, do you have daily discussions on a project like Dry Top as it’s being developed or is it just an advisory role at the beginning and end?

On a different note, how involved do you get on a day to day basis? Do you operate like a stock trader with 3 monitors of different markets or just look at a daily snapshot of activity? Is part of your job identifying major anomalies or abuses in the system as they happen and flagging them for developers to take care of?

Again, this is fascinating to math/programming nerds like myself that frequent these boards, so thank you! I wish we had more threads like this with developers/writers, it makes the game more enjoyable to hear about how much care goes into it.

How much input I put into a project is dependent on the project and it’s possible economic interactions, it can go from a talk at the start middle and end to meetings every day. We have great designers too, so they are checking for economic interactions as well.

I’m hesitant to say that finding anomalies is part of my job, but being a person who recognizes patterns and anomalies is a must in this position.

I’m glad people are enjoying this mini Q&A, it’s great to see people interested!

Lodius.5392:

@John Smith

It appears you are responding to these questions in this post… So my quick question in regards to the economy is this.

The economy centers around wealth of the players. This could be graphed on a bell curve (but that is outside the spirit of this post).

To craft a legendary weapon people are required to earn around 2000 – 3000 gold. Which, when not considering drops, would require a person to run around 1,000 dungeons.

My questions are centered around gold making:
1) Dungeons. Are there talks / will there ever be an increased incentive to run dungeons? You cannot run more than the same path once per day now to get rewards. The 1.25 – 1.5g takes a while to amass any amount of wealth.

2) T6 material. There are no place to farm for T6 mats. The drop rate on these is extremely low, even in the Level 80 areas. Is there any talks to increase the drop rate or make these more “farmable” to lower the price on the TP? I mean… up to 55 silver a piece for some of these mats is getting very expensive.

3) Laurels. Tons of things require Laurels… from Ascended Accessories, to Ascended Armor/weapon recipes, Heavy Crafting Bags for people working on Legendaries, etc etc. Is there any thoughts to increase the amount of laurels that a person receives?

I can’t answer questions about our future plans. I’m more here to answer questions about our/my process in the economy, how the economy works, the past and other interesting ideas that don’t require me to violate an NDA.

Ayrilana.1396:

He’s referring to the conversion rates of gem and gold within the gem store most likely.

Ah, I see.
As a note, while RMT is accurate, it is generally used to refer to third party traders, hence my confusion.

Psientist.6437:

John Smith.4610:

Conncept.7638:

but there is no way you have the numbers to claim that the players think so, from a psychological perspective.

You’re adorable.

Economists have ways to measure how much your parents love you and the scariest part of all… it works.

The EULU allows Arenanet et al to data-mine chat logs.

John Smith, there are so many ways to shape information for thermodynamic effect. Your response to this player is almost caustic.

Questions!

1. The RMT algorithm, does it process every gold and gem bit as individual bits (ie do gem and gold bits queue in a single line), process bits as batches, or both?

2. The RMT algorithm, would it translate simultaneous “no demand” for gems and gold into a vector?

1. It’s more complicated than that, but as you know I cannot discuss the specifics.

2. If I’m understanding correctly then no. The exchange requires player activity for change, it does no interpret a lack of activity as value.

Michael Walker.8150:

Quoting myself, adding some questions, for every question answered I will give 1 gold to the next drunk quaggan.

Michael Walker.8150:

Hi John!

Cool idea, would love to hear some of your experiences when creating the BLTP

-Can you explain how you started designing the BLTP when approached by Anet?
-How big was/is your team, how many variants and iterations did you come up with and how different were they?
-Did you have to change some aspects that make perfect sense economically but didn’t fit lore?
-If there have been others, what were the alternative names for the BLTP?
-How many hours approximately did you spend working with sound engineers & audio artists?
-How much gold do you have in game?
-Have you ever contributed something to the lore behind the economy or helped?
-Who had the idea for the mystic forge conduit? Love mine and it worked well (?) as a material sink. Can you give that person a cookie?

Angel’s post was really interesting

//edit
@Wanze
Questions aren’t about the current economy, still fits the spirit of the thread I hope. More than one because I don’t want a specific answer.

-Can you explain how you started designing the BLTP when approached by Anet?
I did not design the BLTP, the concept of it was in place upon my arrival. There are many major aspects that went into the design including programming and design and I wouldn’t want to speak for those individuals.

-How big was/is your team, how many variants and iterations did you come up with and how different were they?
The internal structure inside arenanet is complicated (yes I’m sidestepping the question, sorry).

-Did you have to change some aspects that make perfect sense economically but didn’t fit lore?
Almost, but lore was added to merge the world and the BLTP system together.

-If there have been others, what were the alternative names for the BLTP?
I’m not free to say, sorry.

-How many hours approximately did you spend working with sound engineers & audio artists?
Me personally? None unfortunately, our sound and music guys are fantastic.

(skipping a couple)

-Who had the idea for the mystic forge conduit? Love mine and it worked well (?) as a material sink. Can you give that person a cookie?

Izzy and I brainstormed that event with the conduits together, it was a lot of fun and very successful.

tolunart.2095:

Rouven.7409:

I’m not sure if John can, but if not, is someone else perhaps able to elaborate on the implications? Thanks in advance – and thanks John for participating here, love it!

Because most activities produce in-game currency (“gold” or whatever) from nothing, the amount of money in circulation tends to go up as the game ages. Currency sinks like repair costs are a major concern to new players, but a minor annoyance to more experienced players. Inflation of player-controlled market prices is expected, simply because it takes a lot of work to have 10 gold to spare on your toon while leveling, but when you’re at max level for six months you don’t upgrade or repair equipment as often so more experienced players have more gold to spend.

The game works much differently when 5% of the players have recently achieved max level vs. when 50% of the players are at max level and gearing alts. The market reflects this as a natural consequence of players involved in the game over time. The design of the game reflects this, for example removing repair costs makes it easier for newer players to accumulate gold while experienced players barely notice the difference.

Devs have to watch the effect of currency sinks and faucets carefully, and try to balance the amount of money in circulation with the sinks designed to remove it in order to make sure that new players can afford basic equipment as they level but experienced players can still feel as though they have goals to achieve. If either side is too rich or too poor the game suffers.

To add to this. There are many different types of currency sinks, but the most common error when attempting to control for inflation is to apply a set of large static sinks. An example of a large static sink is something like a commander’s icon. You want a bunch of these in the game, but you don’t want them to be your only tool for controlling inflation.

What I call “Dynamic Sinks” are important. These are sinks that either change naturally with the state of the economy, or a sink that designers can modify to pull more or less money out of the total supply. The trading post is an example of a dynamic sink.

Combining multiple types of sinks together allow you to more effectively control the money supply as well as don’t look terrifying to a new player when he sees that there are 900,000 gold worth of stuff he needs to buy at level 80.

Psientist.6437:

Would this derivatives market have anything to do with the unique features of Tyrian lore or just be an addition to our mercenary marketplace?

I would attempt to incorporate any game feature into the world as a piece of the world.

Psientist.6437:

Color me an impressed Tyrian.
I hope the color isn’t account bound because Wanze and John Smith deserve some of that color, in shades.
I haven’t made it through the first page and I had to post at least that sentiment.

My question:

Information releases that talk about changes to in game systems impact the market. The information concerning changes to the dye mechanic came in dribbles and the market reacted as any market would to incomplete information.

If it were up to you, would you have released all of the information concerning changes to the dye system at once?

Unfortunately, releasing problem isn’t a single variable problem. There is an unbelievable amount of work required to release information in an official/public way.