An Economist Looks at Tyria: GW2 Prices and Deflation

I'm a full-time economist and writer (thrilling, I know - like meeting a taxidermist, or an actuary). That doesn't make me an expert in anything, but it does mean I spend a lot of time on the real-world equivalents of questions people are asking about GW2:

• Are prices falling mostly from an increase in materials or a decrease in sources of gold?
• Is deflation bad for the game?
• Would inflation be good for players?

There's a lot of misunderstanding about the first question, even though it has a specific answer. The last two suggest opinions, depending on what you mean by "bad" and "good" here. I'll write what most economists would say (because, really, who doesn't want to hear from economists?), and then put my own thoughts.

What Moves GW2 Prices=======A lot of prices have clearly fallen. I've been playing only a couple months, but it's easy to see older posts with higher pricing for ectoplasms, silk, thick leather, powerful bloods, and more.

Is it Istan? Is it the nerf to dungeon gold? An increased interest in items sold for gems, prompting conversion of gold?

Does Less Gold Mean Deflation?People usually state this the other way: more gold means inflation (so deflation must mean lack of gold). That's not quite true, but it's a common view, as in this summary of GW2 Deflation from MMOsite :

• 'There’s a town of 10 people... each with $10 and a single item they can trade. At this point, the items are worth $10 each.Now we... add another $900 to the economy, leaving each person with $100. If the items were $10 each, one person’s money could buy everything there is. Instead, the monetary value inflates, such that now it takes $100 to buy an item.'

What's missing in that example is the question of demand. If people want only one of the item, more money need not push up the price. No player needs to buy multiple identical helmets, for instance. But if multiple copies of the item matter - say, a +stats bonus - then the price moves with the increased gold.

So to have higher prices, we do need available gold: people can't pay more when they have nothing more in their pockets. That accounts for the rise in prices in GW2's early days (data from GW2 Inflation Research:

Where Gold Comes From

Storks.

No, really: gold enters the GW2 economy through adventuring.

'Adventuring' means anything with a gold reward: dailies, fractals (formerly more from dungeons), killing mobs, quest rewards. It can also come from gold bought with real-world money.

Gold does not enter the economy through flipping items, selling on the Trading Post, or gathering materials. Those may be good ways for you, personally, to earn gold, but it does not increase gold in the economy overall. Players can move gold among themselves, but only Anet can create it (or take it away).

But while reducing a supply of gold (like dungeons) or increasing costs (for anything sold from a vendor - not another player - or TP listings) affects the relative flow of gold, it does not, by itself, move prices. Players already sit on a fair amount of gold, and we still need to consider...

...Prices at the Trading PostSaying prices are 'set by supply and demand' is like answering the question 'what makes a car go?' by saying, 'the engine.' It's correct, but short on essential details.

In GW2, TP prices work differently from most other MMOs, with a rare bid method (a 'reverse discriminatory price auction') that dampens price movement.

In WoW, as in many games, the seller sets an initial minimum, with bids automatically increasing the actual sale price. In GW2, a seller never gets more than the offer price.

And sellers can't reduce their offer prices without incurring another listing fee: relist your 10g item for 1c less, twice, and you've already spent a gold before anyone has even bought it. So frequently traded items - say, copper ore or linen scrap - see a small difference between ask and offer prices, as new listings fill the gap. But items that trade less often take much longer to adjust.

Prices can still rise when demand outpaces supply. Several older guides, like

So there's the answer. Any falling prices in GW2 aren't because of a lack of money - if so, we'd see a relative drop in players' gold - but because demand has dropped (in favor of something else) or supply has risen (like for ectoplasms), or both. Although former-GW2-economist John Smith (no relation to Adam) notes there has been a conscious effort to reduce certain supplies of gold, such changes have a smaller impact on prices than recent changes to supply.

http://forbiddenplanet.blog/wp-content/uploads/2011/10/Calvin-and-Hobbes-Bill-Watterson2.jpg

(thanks, Bill Watterson!)

Are Falling Prices Bad?

Homer Simpson: Are you better than me?Darryl Strawberry: Well, I haven't seen you play, but... yes.

Falling (or rising) prices are bad if they move so fast that they cause anxiety, disappointment, or riots. Although GW2 seems not to have a (publicly declared) chief economist any longer (see the cartoon below), they should recognize that when prices shift rapidly in one direction, players will get upset. Players will get upset anyway, but that's a different topic.

If you've been stockpiling iron to sell, you'll take a hit when prices fall. And if you're working up to craft a legendary, you'll take a hit when prices rise on items you still need to buy. You'll complain on the forum. And on Reddit. And YouTube. And in cartoons.

So is a bit of deflation bad? Will we, the players, have less even as we play more?

The standard economic answer is that deflation discourages trade, draining life from an economy. If an item will cost less in a month or six months, some potential buyers will wait to purchase. Debt payments also become harder to finance with falling incomes, but there are no direct loans in GW2.

Alternative economic theories suggest a bit of deflation can be good in the right circumstances. Switzerland recently saw a fall in wages accompanied by an even bigger fall in prices, thus increasing purchasing power. Unemployment dropped and its economy grew. Supportive economists point to a difference between bad deflation, when demand falls, and good deflation, when supply rises due to increased productivity.

My take? In GW2, the biggest factor is psychological. People feel wealthier when the thing they own go up in value, even if other things go up in cost.

This doesn't make logical sense, but people aren't creatures of pure logic. Homeowners tend to feel good when home values rise, even if the relative cost of moving goes up further still. When home prices fall, the cost of upgrading also drops (assuming stable income), but it's a rare homeowner excited about plunging prices.

Players in GW2 want their time to count. One measure of that is the value of the 'stuff' they've accumulated.

Would inflation be good for players?

As above, rapid prices changes are bad if they cause distress. And gradual price increases can be good if they provide a psychological boost increasing with the length of time of played.

My personal take: content matters more than gold. Players love new stories, new ways to advance, and, in GW2, new ways to look good. Players may not mind falling material prices if they now can access other things they desire. Increasing gold rewards may briefly boost participation in a given activity, but if the activity isn't fun, it won't sustain the game.

And when searching for the secret of fun, economics can take you only so far.

(Thanks, XKCD!)

Just wanted to say, I really enjoyed your analysis :) I did have a question with one point you made:

It can also come from gold bought with real-world money (or gems bought with real-world money).

From my understanding the gems-to-gold conversion process is due to players trading their gold through the market for purchased gems from another player. So, a wealth transfer from player to player. This process doesn't generate new gold, but instead re-allocates it. Did I get this wrong? I'm not an economist at all-- barely passed Econ 101-- so beyond broad concepts, I'm sort of floundering in the dark.

I'd love to see your analysis of game economies in a couple of other MMOs I'm playing at the moment. Secret World Legends in particular baffles me with its high MoF (gold) to aurum (gems) exchange rate and limited ability to generate gold. The tiny, dedicated population doesn't seem to want for much so prices for basic items have dropped a lot, while the exchange rate to "gems" has gone really high. It's a decent setup for a new player, but for those who bob in and out of the game-- like a lot of players in GW2-- it's discouraging. You can't sell your excess at non-insulting prices so a lot of higher reach items stay that way.

I see some parallels with GW2, except that it's a lot easier to make gold in GW2 even with the economy in its current state. Also, the population is extremely healthy, so necessary items like endgame exotic armor stay in supply and more or less affordable. The biggest issue I've found with this game is relatively similar, though. I used to be able to afford to exchange gold to gems fairly easily, but since the recent BLC changes, I can't anymore. The exchange rate is permanently out of reach for me; super annoying since I'm a giant fan of unlocks and convenience items. I have to go straight to credit card or do without. It also has a few pluses-- I've been able to unlock a lot of exotic dyes I'd have never been able to afford during my last stint a couple of years ago. I can instantly endgame gear any toon at level 80 now, instead of scrimping for weeks to upgrade a single Orr-grade rare piece to exotic.

I guess like anything, the economy will always have its pluses and minuses. I really like your lens into the whys of it.

great write-up! I hope people take the time to read it.

Interesting read.Thank you for taking your time for writing this.

I'm no expert to even ask a decent question about this, but your write up is very instructive and really fun to read. Congrats, and please, keep doing it!

Are prices falling mostly from an increase in materials or a decrease in sources of gold?

Probably both to some degree - at least on an individual basis. Silverwastes farming is considered profitable not because of the raw gold a player earns but in salvaging and selling mats. LS3 let people buy (at the time) relatively cheap bags of crafting mats for gold + unbound magic & the leather farm on Doric. PoF introduced not only a lot of mats (I fill up on mithril much faster now than I used to), but lower level mats (through the trading caches) as well, lessening (but definitely not abating, I don't think) the need to go back to core maps/SW & Istan to farm or the TP to buy. LS4 did the same as LS3 with gold + volatile magic.

Sources of raw gold (killing monsters, events rewards, etc) have remained relatively stable.

But as you point out in your post, the real question here is player satisfaction.

1.) Traders - some people love playing the TP. They have fun with the pricing and analysis. So, introducing a bunch of new ways for things to be obtained (it's not just mats, but also dyes, skins, etc) has left some of the hardcore TPers unhappy.

2.) New players - the decrease in mat prices and availability of low level mats on new maps allows them to stay up where most of the vet players are, and they can level up their crafting a bit easier

3.) Players working on legendaries - this depends on their mystic coin stash. If they've got enough MCs to finish a project, then life is good. Mats are cheaper, less farming to do, and more incentive to buy some from the TP . If they don't have enough MCs, it's probably a little better anyway because at least you'll theoretically have more money to buy them at some point.

4.) Other group - here's where the dissatisfaction might really kick in. If you don't craft/have nothing currently that you want to craft and were selling of mats as a second source of income, then these dropping mat prices are annoying.

Other potential problems:1.) Back to Silverwastes for a minute. The original legendaries all require 1000 bandit crests . If the SW farm slides to 'not very profitable' then this could bottle neck players. because there aren't too many events in SW that most people will be able to solo. Dry Top already has this problem. Yes, people still run Dry Top maps and when it's a daily, then you can make good progress, but finding active Dry Top maps when they're not a daily is much less likely than SW. (During my usual play times I probably see 1 DT map per 10 SW maps.)

2.) More loot becoming 'worthless' - we already have the minor/major sigil and rune problem with the majority of them being vendor trash. Some of the low tier mats aren't in a much better position - barbed thorns and fossils from HoT maps, ley line sand and eyes of kormir from PoF have little value. If a player feels like an hour's worth of play time gets them next to nothing, I think that could affect play especially if certain components of long term goals (like MCs) stay high by comparison. This is especially true if Inventory Wars stays the same or gets worse.

@"juhani.5361" said:From my understanding the gems-to-gold conversion process is due to players trading their gold through the market for purchased gems from another player. So, a wealth transfer from player to player. This process doesn't generate new gold, but instead re-allocates it. Did I get this wrong?

Good point, and I've edited my OP to clarify. You're exactly right about the exchange you mention: any exchange between players does not add gold to the economy.

Secret World Legends in particular baffles me with its high MoF (gold) to aurum (gems) exchange rate and limited ability to generate gold. The tiny, dedicated population doesn't seem to want for much so prices for basic items have dropped a lot, while the exchange rate to "gems" has gone really high. It's a decent setup for a new player, but for those who bob in and out of the game-- like a lot of players in GW2-- it's discouraging. You can't sell your excess at non-insulting prices so a lot of higher reach items stay that way.

Ah, I've wanted to try Secret World. As a writer, I'm always interested in storytelling, and I hear it's good in SW. But I've become attached to GW2.

Your analysis of price trends there makes sense. While in GW2, it does seem that increased supply drives the price reduction in the commonly cited items - ectoplasms, T6 mats, etc - I've heard a few things have seen falling demand, like Zhed's gear (though I haven't been playing long enough to see that personally). Basic items do drop in price as the population moves past them.

A typical pattern in a new WoW server is that prices of a wool - roughly a T2 material - start really low, because no one has any money, then rises sharply. That's a case when increased gold supply props up prices. It then drops back down as players move on from the things you can craft with wool, and then there's almost always a second rise as players make alts who go through the cycle again.

MMO economies are great terrariums for economists. I don't know why more don't look at them. Maybe economists don't like to have fun.

I used to be able to afford to exchange gold to gems fairly easily, but since the recent BLC changes, I can't anymore.

That generally happens in a more mature economy, too, especially with a transaction fee as high as 15%. The exception comes if waves of players return for awhile; gold-for-subscription tokens in WoW are four times the cost of what they were at the release of the last expansion, for instance.

Interestingly, Mystic coins are inflating again after the Path of Fire bubble burst. Sell price was down to 88 silver, but now back to 1 gold 20 silver and rising.

Thanks for the thoughtful, rational take on GW2's economy. I gained a lot of benefit from falling prices, so I definitely can't complain, especially since the 2-gold for doing dailies goes farther. And now that a lot of super-high value items have better release mechanics (ie, RNG rewards from Black Lion chests now distributed through Statuettes), those prices have come down. While not "easy" to get, they're more attainable, which is a good thing for the game as a whole.

I'm a little concerned about some prices skittering below 1s, especially high volume items, but I've been thinking we need better sinks anyway. Not just huge one-time sinks like legendaries or guild halls (absurd quantities destroyed by a wealthy/driven few) but small, daily sinks with unique, consumable rewards, with bonus points for an automated schedule that reads price data and chooses low points as the turn-in item(s) of the day.

@"Ringlin.1863" said:When home prices fall, the cost of upgrading also drops (assuming stable income), but it's a rare homeowner excited about plunging prices.(Not So) Pro tip: Contest your city's assessment of your property by having a real estate agent run comps lower than your home's value. With proof, the city should change your home value, thereby lowering your taxes. Seems minor, but I'm saving roughly $230/year. When you're ready to sell, having a real estate agent compile comps that are higher/competitive with your home can adjust the city's assessment, meaning the bank and appraisers will likely value your home higher, earning you more cash for the sale.

Maybe economists don't like to have fun.We, uh, did kind of blame J. Smith for that. A lot.

@Ringlin.1863 said:

@juhani.5361 said:From my understanding the gems-to-gold conversion process is due to players trading their gold through the market for purchased gems from another player. So, a wealth transfer from player to player. This process doesn't generate new gold, but instead re-allocates it. Did I get this wrong?

And of course it's more complicated than that... the rate of gem to gold/gold to gem conversion is not a constant and does fluctuate based on how many people are exchanging one way or another, but it is not a direct exchange with other players, but rather an algorithm that changes the price based on what is happening. Furthermore there is a set minimum and maximum exchange rate, and there is never a scenario where the system will refuse to give you gold for your gems because no one is actually buying them. Any time more people are exchanging gems for gold than there are people exchanging gold for gems, this system still creates gold and puts it in to the economy (and the exchange rate changes accordingly).

Nice analysis of GW2's economy. There is just one thing I want to mention. Maybe it's kinda included in the terms of in-/deflation. It's the value of gold. Note: value is used here as an arbitrary measurement of demand/supply.

You can see gold as a currency, but at the same time you can see gold as a material or an item. If we look at the gold-price of ectoplasm we have to consider both the value of gold and the value of ectoplasm at that time. This is why we can't say if 50 silver for a glob of ectoplasm is cheap or expensive without knowing the value of either the silver or the ectoplasm.

I believe ANet has done an amazing job at keeping a good balance between the value of gold and the value of other items. The gold-price of most items has been rather stable (compared to other MMOs). However people still feel uncomfortable with the current economy. That is because both, the value of gold AND the value of items has been in free fall. This is difficult to see since there is no big spike in GW2Efficiency's graphs. You can't even see the change clearly in the gold-gem conversion ratio as the value of gems is constantly fluctuating and depends on many factors. However the buying-/crafting power of each player has been constantly rising. The one currency I believe to be of constant value is time. So looking at the time you have to spend to gain a certain amount of gold is probably the best way to measure the value of gold. And it's dropping fast. It's because the time required to farm for a legendary / full ascended set / etc is just a fraction today of what it used to be a few years ago, that everyone feels like their stuff is loosing value even if the gold-price doesn't change.

Anyone ever noticed that in most MMOs which have an economy, gold is always worth much more than the resource gold which you dig out of the ground and make ingots out of.eg you can currently buy gold ingots on the TP for 1s 31c.This doesnt happen in any other type of economy.Maybe MMOs need a gold standard.And even more sillyness is that copper ingots are worth 7 times more than silver ingots, and are very close to gold ingots.Mithril ingots are almost worthless, which is surprising because in most MMOs that have mithril, its normally one of the rarest and most difficult to find metals.

@mauried.5608 said:Anyone ever noticed that in most MMOs which have an economy, gold is always worth much more than the resource gold which you dig out of the ground and make ingots out of.eg you can currently buy gold ingots on the TP for 1s 31c.This doesnt happen in any other type of economy.Maybe MMOs need a gold standard.And even more sillyness is that copper ingots are worth 7 times more than silver ingots, and are very close to gold ingots.Mithril ingots are almost worthless, which is surprising because in most MMOs that have mithril, its normally one of the rarest and most difficult to find metals.

Maybe copper is more rare than gold on Tyria, who knows.But generally I agree. There are too many worthless things in this game.

@mauried.5608Mithril ingots are almost worthless, which is surprising because in most MMOs that have mithril, its normally one of the rarest and most difficult to find metals.

Oddly enough, there are more materials coming into the market through drops /salvage than from gathering, and they're level-bound. Low level stuff are quite rare because of that.

You will get inflation and deflation from changes in the rate of gold generation - quantity / neutrality of money holds, with the equilibrium point determined by some combination of...budget constraints and liquidity preference, I suppose. It's not just about the goods markets.

However the impact of changes in gold generation on price levels is very slow. Only a small fraction of a player's income is in the form of cash, and unlike goods, which tend to be consumed, gold changes hands many times before being consumed by trading post fees. Add in the large stock of cash (liquidity preferences!) and it takes a while for prices to adjust to even pretty large changes in gold generation. Changes on the goods side on the other hand are reflected quickly, as the bulk of income is goods and they only pass through the TP once in principle.

So price level changes driven by the money side are slow and grinding as liquidity builds or dries up; changes from the goods side move quickly, accelerated further by speculators, causing the big swings we are used to seeing.

@Sojourner.4621 said:[...] and there is never a scenario where the system will refuse to give you gold for your gems because no one is actually buying them. Any time more people are exchanging gems for gold than there are people exchanging gold for gems, this system still creates gold and puts it in to the economy (and the exchange rate changes accordingly).

Do you have a source on that? Because everything I've read says that there was an initial seed of gems and gold in the exchange at launch, but the exchange generates neither gold nor gems. The algorithm sets exchange rates in such a way as to be practically impossible to empty out the pool of either.

@"mauried.5608" said:Anyone ever noticed that in most MMOs which have an economy, gold is always worth much more than the resource gold which you dig out of the ground and make ingots out of.eg you can currently buy gold ingots on the TP for 1s 31c.This doesnt happen in any other type of economy.Maybe MMOs need a gold standard.And even more sillyness is that copper ingots are worth 7 times more than silver ingots, and are very close to gold ingots.Mithril ingots are almost worthless, which is surprising because in most MMOs that have mithril, its normally one of the rarest and most difficult to find metals.

This is primarily because most games involve both a crafting that "requires" precious metals such as silver and gold as materials, and sticking to the trope currency of copper/silver/gold coins, with no relation between them. In that way, GW1 was more "realistic" in that gold and platinum wasn't available as materials, their only function was currency. A system of "royal coin" or some other step away from the copper/silver/gold trope would be refreshing, but in a world like Tyria it would kind of require a separate currency for each race, wich would be hell for actual practical play.

Re Mithril: I love the trope inversion with cheap mithril!

@"mauried.5608" said:Anyone ever noticed that in most MMOs which have an economy, gold is always worth much more than the resource gold which you dig out of the ground and make ingots out of.eg you can currently buy gold ingots on the TP for 1s 31c.This doesnt happen in any other type of economy.Maybe MMOs need a gold standard.And even more sillyness is that copper ingots are worth 7 times more than silver ingots, and are very close to gold ingots.Mithril ingots are almost worthless, which is surprising because in most MMOs that have mithril, its normally one of the rarest and most difficult to find metals.

The same thing happens in real life, but it's usually the other way around. The UKs currency is still called Pounds Sterling because at one time they were linked (hundreds of years ago, I think it was actually the Saxons who introduced that system), but these days a pound of sterling silver will cost you several hundred pounds to buy because there's no longer a direct link between the two.

If gold coins in GW2 were items I assume they would look a lot like modern coins, and like modern coins the value would come from the design printed on them identifying them as 1 gold piece rather than from the material they were made from (which, given the lower price of gold ingots could be actual gold, in real life gold was typically more expensive so currencies were made from cheaper materials).

Also it's not unheard of for stereotypically low value metals to actually be worth a lot. My favourite example is that by the time physicists figured out a way to turn lead into gold (yes it can be done) the cost of lead was so high that it wasn't worth doing, especially when you added on the cost of the process. (It involves a nuclear reactor.)

A lot of materials, even seemingly useful ones, have an entirely arbitrary value. One, probably quite well known, example is diamonds. They're not nearly as rare as dealers would have you believe (especially now it's possible to make them synthetically) and industrial diamonds are relatively cheap and widely available (helped by the fact that no one cares what they look like). Jewellery quality diamonds are rarer but still not hard to come by, but the vast majority of the supply is controlled by a relatively small group of companies with a vested interest in keeping it as high as possible.

Even so the price of diamonds has been dropping over recent years, driven by a variety of factors like reduced consumer demand as 2nd hand jewellery becomes more fashionable, other stones and even alternatives gaining popularity (for example when I got married 7 years ago titanium engagement and wedding rings were the new big thing) and an awareness among consumers about the unethical practices often involved in diamond mining.

In GW2 we're way beyond gold and silver being the high point of fashion. Who cares about a gold necklace when you can have glowing lights all around your body? (Or in more practical terms who wants a rare or even exotic amulet when you can buy an ascended one for a few laurels?) So it's not surprising they have a very different value to real life.

@"MMAI.5892" said:

4.) Other group - here's where the dissatisfaction might really kick in. If you don't craft/have nothing currently that you want to craft and were selling of mats as a second source of income, then these dropping mat prices are annoying.

Yep, that's me ;) And a lazy second-sourcer at that. I farm with the dailies now, and if I'm leveling a new toon, will clear most nodes on a map for the XP. Other than that, I'm "buy/sell now" sort. I hate having tons of listings and having to spend hours tracking TP pricing. So killing WBs and doing a Bitterfrost ice chest run nets me about half of what it did a month ago. Luckily, I don't care about cosmetics or Fashion Wars, so my needs are relatively few. I just want enough gold to gear up any new 80s and do whatever my current long-term project is. Right now, it's raising my magic find to 200%.

Other potential problems:

2.) More loot becoming 'worthless' - we already have the minor/major sigil and rune problem with the majority of them being vendor trash. Some of the low tier mats aren't in a much better position - barbed thorns and fossils from HoT maps, ley line sand and eyes of kormir from PoF have little value. If a player feels like an hour's worth of play time gets them next to nothing, I think that could affect play especially if certain components of long term goals (like MCs) stay high by comparison. This is especially true if Inventory Wars stays the same or gets worse.

That's vexing too. Then there are the "rare" stackable/upgradable mats like the granite things, or the lillies. Bag space isn't cheap-- and it doesn't seem to be getting cheaper. I usually end up destroying the precursor mats. I've never even seen what they upgrade into. There's more and more junk, and less and less trunk, buttcapes notwithstanding.

@Sojourner.4621 said:

@Ringlin.1863 said:

@"juhani.5361" said:From my understanding the gems-to-gold conversion process is due to players trading their gold through the market for purchased gems from another player. So, a wealth transfer from player to player. This process doesn't generate new gold, but instead re-allocates it. Did I get this wrong?

This is fascinating! I'm used to simpler exchanges like SWL's, which are pure player to player transactions. There might be some "temporary" currency generation as things shift through the system-- you can remove your "trade" earnings instantly-- but only as many gem units are available as players are willing to list at a certain gold price. I've only done a couple of gold-to-gems conversions, so I wasn't aware GW2's system was more complicated.

This thread's excellent! I'm learning so much :)

@Ringlin.1863 said:

@"juhani.5361" said:From my understanding the gems-to-gold conversion process is due to players trading their gold through the market for purchased gems from another player. So, a wealth transfer from player to player. This process doesn't generate new gold, but instead re-allocates it. Did I get this wrong?

Secret World Legends in particular baffles me with its high MoF (gold) to aurum (gems) exchange rate and limited ability to generate gold. The tiny, dedicated population doesn't seem to want for much so prices for basic items have dropped a

lot

, while the exchange rate to "gems" has gone really high. It's a decent setup for a new player, but for those who bob in and out of the game-- like a lot of players in GW2-- it's discouraging. You can't sell your excess at non-insulting prices so a lot of higher reach items stay that way.

I recommend it for at least one run-through. If you're a decent player, you won't face much of a grind. If you suck like yours truly, you're probably going to be spending tons of time and gold to get your gear up to par. The game's F2P, and easy to pop in and out of. Most quests are open world and have several tiers, so you can take your time doing them. Instanced quests are usually pretty short until you hit Tokyo. You really don't have to invest much time if you don't want to-- it's not a game to stick with long-term unless you're into grinding the same (six? seven?) dungeons and single raid into oblivion-- or Elite 10. Most players come to enjoy the new installments of the story then leave until the next segment gets released.

That said, the game writing is stellar. Funcom also has an amazing eye for tiny world-immersive details. I'm a huge Stephen King fan, so setting foot in SWL's version of New England felt just like I'd stepped into one of his novels. The fog, the sea, the architecture... it was all perfect despite the older graphics. In Transylvania, during a simple side quest, you can see the shrubbery rattle before a faun pops out of it. I've never seen anything quite so attentive to detail in any game, online or single player. The newest installment in South Africa has some brilliant writing and the overarching story has a good flow. I haven't really enjoyed any VG writing in the last year or so-- I think ME:A was the last game I actively appreciated.

If you like jumping puzzles and stealth missions, you'll feel right at home. For me, they're a huge minus ;) A lot of them remind me of that one JP in Lion's Arch with the hidden walls and traps everywhere.

Your analysis of price trends there makes sense. While in GW2, it does seem that increased supply drives the price reduction in the commonly cited items - ectoplasms, T6 mats, etc - I've heard a few things have seen falling demand, like Zhed's gear (though I haven't been playing long enough to see that personally). Basic items do drop in price as the population moves past them.

A typical pattern in a new WoW server is that prices of a wool - roughly a T2 material - start really low, because no one has any money, then rises sharply. That's a case when increased gold supply props up prices. It then drops back down as players move on from the things you can craft with wool, and then there's almost always a second rise as players make alts who go through the cycle again.

MMO economies are great terrariums for economists. I don't know why more don't look at them. Maybe economists don't like to have fun.

Heh-- my econ prof however many aeons ago didn't seem like a "fun" sort.

So it sounds, like GW2, that WoW doesn't have any low-tier material recycling mechanisms. One of the things I've found interesting in my on-and-off SWTOR jaunts, is how stable materials prices have remained over the years due to the Conquest system. The system requires players to craft components that serve no particular purpose to beat a target goal in addition to a bunch of other recycled PvP/PvE activities. Those items take ridiculous amounts of materials which drives up the price for anyone trying to level a new crafting toon. I think the only place I've ever seen real competition in the market came from T1 or T2 equivalent mats. Mats trading is usually a surefire gold generator. T3-T7 equivalents have usually sold over the years at about 500-1000 credits per unit, T9 and T10s, typically 1500 credits/unit. I have no idea what the impact of Bioware's Conquest changes have made to the market there since they've added huge quantities of T1 and T2 mats to their components. Depending on how many players unsubbed or quit participating, it could be close to nothing.

Part of me wonders if GW2 couldn't use some kind of recycling system like SWTOR's. It might stabilize prices a bit. Then again, GW2's fun factor would probably take a huge nosedive ;) It's probably a bad idea.

I used to be able to afford to exchange gold to gems fairly easily, but since the recent BLC changes, I can't anymore.

It's a shame older games are so credit card unfriendly to newer players ;) I'll give GW2 this, though-- stable gearing definitely makes it possible for newcomers to keep up with vets when it comes actually playing the game. That's a wonderful, wonderful thing.

@Sojourner.4621 said:And of course it's more complicated than that... the rate of gem to gold/gold to gem conversion is not a constant... never a scenario where the system will refuse to give you gold for your gems because no one is actually buying them. Any time more people are exchanging gems for gold than there are people exchanging gold for gems, this system still creates gold and puts it in to the economy (and the exchange rate changes accordingly).

Yes, great point. That's what I originally assumed (and still do), but since I don't have evidence of the mechanics, I removed the reference in the OP. In any case, players exchanging with other players does not change the amount of gold in the economy, unless Anet adds or subtracts gold in the process. Gold comes into the economy through rewards and leaves it primarily through transaction fees.

@BunjiKugashira.9754 said:You can see gold as a currency, but at the same time you can see gold as a material or an item.

Yes, here we're looking at it just as a currency, since you can't use the gold in your wallet for anything else. Incidentally, real-world gold has limited practical uses, since it is so soft and silver is a better conductor. About 80% of gold consumption goes toward jewelry.

@"mauried.5608" said:Anyone ever noticed that in most MMOs which have an economy, gold is always worth much more than the resource gold which you dig out of the ground and make ingots out of.

Odd, isn't it? But it happens in real life, too.

People who want to get rid of pennies often note that a penny costs more to make than it is worth (I don't like pennies, either, but I don't use this argument). Nickels, too, cost more than their face value.

But strange as that sounds, it doesn't really matter. Coins can be used over and over again - for 30 years, on average - and the US Mint doesn't issue them to increase national wealth. That would take a lot of pennies. The coins, like all physical money, offer easier ways to exchange value than if people had to barter for every transaction. Well, most coins.

@"Danikat.8537" said:A lot of materials, even seemingly useful ones, have an entirely arbitrary value. One, probably quite well known, example is diamonds.

The 'Diamonds are Forever' marketing campaign is widely cited as the most successful branding ever. Atlantic has a great article on its extraordinary manipulation of supply and demand.

Thanks for the thoughtful summary of SWL, Juhani. I'd like to try it, if I can squeeze it in between GW2 time.

I enjoyed SWTOR, too - compelling world and good writing in some storylines (especially Imperial Agent) - and your thoughts on price stability there echo Rauderi's suggestion:

@Rauderi.8706 said:I've been thinking we need better sinks anyway. Not just huge one-time sinks like legendaries or guild halls (absurd quantities destroyed by a wealthy/driven few) but small, daily sinks with unique, consumable rewards

If Anet decides players will feel better with a little inflation, that's an interesting way to prop up prices of T6 mats. Instead of offering another big, expensive item to craft, they could encourage recycling them through a system similar to SWTOR's. That might be more appealing than reducing drop rates.

@juhani.5361 said:I'll give GW2 this, though-- stable gearing definitely makes it possible for newcomers to keep up with vets when it comes actually playing the game. That's a wonderful, wonderful thing.I'm biased here as a new player, since I've benefited from moderated prices on basic gear. It's not top-of-the-line, and I don't have the snappiest outfits (until I discovered the Dye system, I looked like an escaped clown), but it's functional and affordable.

In the end, though, we all benefit from a system accessible to everyone. A combination of newcomers and veterans keeps a good game going.

@Ringlin.1863 said:

@"Rauderi.8706" said:I've been thinking we need better sinks anyway. Not just huge one-time sinks like legendaries or guild halls (absurd quantities destroyed by a wealthy/driven few) but small, daily sinks with unique, consumable rewards

Not just T6, of course. We see T2-5 get some use, especially cloth and leather that don't drop much, wrapped up in ascended/legendary crafts. But there are plenty of other "left behind" mats (as you explained earlier) that are one or near the vendor floor. Or, heck, anything we have sitting in piles of 250 (or 500+...) which includes pink-tier items with very little use (airship oil, auric dust, etc) could be roped into a single, once-per-day trading thing, just so that ANet doesn't keep having to make eaters and other accretion tactics to keep up with them. And if the sought items (and rewards?) change every day, that encourages at least logging in and shunting a few items back into the digital ether.

Regarding the amount of gold in the system, I didn't see much mention about gold sinks. A significant one was added with PoF. Each player opting to get the griffon mount will suck 250 gold out of the system. From a check of the related achievement on gw2efficiency (https://gw2efficiency.com/account/unlock-statistics?filter.search=On%20wings%20and%20a%20prayer) over 37% of the registered players have done this, which also lines up with the high number of griffons I've seen in game. That must have some impact on the overall economy. Not only is there less gold circulating, but it's likely that some of those players were liquidating other assets, raising the supply and potentially dropping the value of those assets in the process, in order to raise the gold to get the griffon.

It would be a bit better to define what gold sinks are .To me , a gold sink is a mechanism that takes gold out of the economy, but gives you nothing in return, ie the equivalent of taxes in RL.Gold sinks which remove gold , but give the player something in return will eventually fail, because players will eventually have all they want, unless the game goes down the WOW road and introduces a gear and weapon grind, along with a never ending level cap.Theres a limit on how much players will ultimately spend on cosmetics, and after you have made 20+ legendary weapons there isnt too much left to buy that you actually need.There are ways of introducing gold sinks that last forever, but most players wont like them.eg Food for your character.If your character doesnt consume sufficient food each day, they die from malnutrition.Same goes for your mount, just needs lots more food.Item durability.Weapons and armour wear out over time , and eventually have to be replaced, as repair costs become prohibitive the older the gear is.Obviously the better the weapons and gear in the first place , the longer they last.