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Diminishing Inevitable Inflation

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#1 ZigKid3

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Posted 07 September 2012 - 04:02 AM

INTRODUCTION:

(if you want you can just skip down to my suggestions section instead)

As we all know, inflation becomes an inevitable problem in mmorpgs. As such I am also assuming everyone here knows the basic definition of inflation which is the prices of goods/services become increasingly higher as more money is introduced into the market and money loses its value.
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BACKGROUND INFO:

Before I delve into solutions to prevent hyperinflation for a more controlled, slow, and steady form of inflation (since it can't be truly avoided as gold is constantly being generated and introduced into the market) I want to discuss the monetary value of money for reference and background which will back the premise of some future suggestions and it will provide more insight into what I am about to implore.

What gives money (or any item) it's value? How we percieve it, and how it compares to other currencies/items as it is relative to everything else. In an mmorpg, currency is basically fiat money, this means that its value is useless and its only purpose is to put a measurement on exchange. moving on to inflation, since money is relative, the more money that is generated/printed and introduced to the market, the less it's worth which means the cost of something becomes higher in order to make up for it.

For example: say a loaf of bread costs $1, after some time and inflation as more money saturates the market, that same loaf of bread is now $2. the bread is still the same, but since the amount of money in the market has doubled, the currency's purchasing power was cut in half and thus it costs more to buy it. Take a look at Germany, a loaf of bread in 1918 costed 0.6 of a mark, in 1921 it costed 250 marks, worse, in 1923 a loaf of bread costed 201 billion marks. By that time their money was worthless due to printing too much money.
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TLDR: As more money is generated and introduced into the market, the value of it goes down, and items end up costing higher prices.

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SOLUTION:

Okay, so now that we know that if:
amount of money in market increases --> value decreases --> price increases

Then that means:
amount of money in the market decreases --> value increases --> price decreases

of course you don't want prices too low either, so you need to strike a balance, but what that equilibrium is I'm not going to delve into.

But now we know our solution: to create a gold sink. A gold sink is a way to remove gold from the market in order to combat inflation.

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WHAT ANET HAS SO FAR:

Here's where my real and actual post comes into play. some suggestions I have in order to remove gold from the game in order to ensure a steady slow inflation right instead of hyperinflation.

What made me think about posting this was when i was thinking about the gold/gem conversion rates. Of course as we all know, Anet is in charge of the changing rates and will ensure that there's a 30% loss if you try to convert back and forth, this is a way to remove gems and gold from the market (and so people don't try to play it trying to make money), but mainly gold (as well as stopping goldfarmers but that's something different from the topic).

Anet also does this by taking some money every time you post something in the Auction House. so there are already some things set in place, but i don't think they alone will be significant enough.
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SOME SUGGESTIONS FOR MORE AND FUN GOLD SINKS:

This is what my post is really about, the suggestions.

Gambling House:

Pretty simple, you use gold to play gambling minigames. The gambling house would pretty much work like a casino in which it is purposely built so that it has a certain payout percentage, and keeps the rest of the wagers. It is possible to win and make money off the gambling house obviously, but overall for the majority of the population, the payout will be less than what is wagered obviously. This can include some classical games like blackjack (using a shoe consisting of 4-8 decks) and slots, to moa races which would be like betting on a horse where the odds change depending on the changing bets, to maybe some made up minigames. There could be a betting cap per game and even a daily betting cap.

(kind of like the cow cannon thing where you can bet against that one npc where the cow will land xD)

the only problem with this is people may argue for those with gambling addictions and may spend real money on gems to convert to gold to play this. that is what the betting caps and daily caps would be for. Someone may argue legal reasons saying Anet would have to get some casino license, to which before it's said I will dispute it by saying you can buy gems with real money, but you can't convert gems back to real money, and those it would be stuck as virtual currency.

PvP Gladiator Unranked Tournaments:

This would be similar to sPvP. You'll be able to easily queue up against say 10 random people, everyone puts 10 gold on the line (100 g total). Anet will say take 30% (30 g), leaving 70 g in prize money, say 1st gets 35 g, 2nd gets 20 g, and 3rd gets 15 g, everyone else recieves 0. It would be a free for all of sorts in a timed map that will base the winner off of kill/death ratios. similarly this can even be done for maybe even duels, or team battles.

The only argument i can see against this is maybe unofficial alliances during the free for all match, which i can not defend. but keep in mind this is for gold betting and not actual ranking or anything. from the system I laid out, an alliance can only be 2-3 people if theyre all strangers which can maybe be discouraged by disabling /say and /map during the match. or 6 people if they all happened to know each other and all got the same queue for the same one and divide the 70g afterwards by 6 which i doubt would even be worth it, and would almost never happen.

In the case of team vs. team, or dueling for gold it shouldn't be a problem.

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FAR OFF IN THE FUTURE IF INFLATION BECOMES TOO GRANDIOSE:

This is not the main purpose of my thread, but figured this may be an interesting idea in a very extreme case where it may be necessary to do such an extreme thing. I'm sure some people will try to poke holes in this of course. I call this, the economic reset....

In the case that too much gold is saturating the market, making everything cost far too much in price, (hopefully it will never happen, but in such in an extreme and maybe even unpopular case) I'd propose a reset. This won't be a complete wipe, of course not don't be ridiculous, I was thinking it would have something to do with proportionally changing the amount of gold everyone had by some conversion rate. to stop people from trying to buy up items and then npcing them afterwards, any items prior to the reset would have no sell price to npcs, that's what the big major heads up warning is for, to let people know about that. this means everyone would sell off items as they would want prior to this reset.

Obviously there are a few things you could probably point out that would make some people upset, but this is an extreme fix with plenty of warning time, essentially you won't lose how much buying power you have compared to everyone else though... until you factor the flat economy of npcs and quests.



So, does anyone have suggestions for cool fun gold sinks to help the in game economy?

Edited by ZigKid3, 07 September 2012 - 04:28 AM.


#2 Skyencez

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Posted 07 September 2012 - 05:53 AM

The In-game economy is fine, it has enough gold sinks, you're talking about basic economics here, which I'm sure Arena net has taken into account, but if I had to choose one probably gambling, such a cool idea.

+1 for the effort in the post.

#3 ZigKid3

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Posted 07 September 2012 - 06:26 AM

View PostSkyencez, on 07 September 2012 - 05:53 AM, said:

The In-game economy is fine, it has enough gold sinks, you're talking about basic economics here, which I'm sure Arena net has taken into account, but if I had to choose one probably gambling, such a cool idea.

+1 for the effort in the post.

yes, for now it's fine.

This is just for the future, to prevent this from becoming a problem.

Edited by ZigKid3, 07 September 2012 - 06:28 AM.


#4 Virdiana Sovari

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Posted 15 March 2013 - 09:22 PM

Okay, now everyone can see that inflation is a problem.
Time for ArenaNet to do something more?

#5 Sans

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Posted 15 March 2013 - 10:33 PM

mobs need to stop dropping so much shit
(whites/blues/greens)

or, white's removed completely.

#6 ShezuTsukai

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Posted 15 March 2013 - 11:07 PM

Inflation has been produced by people playing the trading post. Essentially gaining great, nearly unbelievable wealth in the very short time the game has been out. If proportionate time was required of the TP players to receive their gold compared to typical PvE gain time the market would correct itself overnight.

I am not a TP player nor am I bitter about the TP players. In fact I get quite a chuckle looking at the prices of Legendaries and how unbelievably far they are out of my reach. I will get my legendary in time and it will all come from play in PvE, WvW, and the minimum number of dungeon runs for tokens. I am a patient player who took three years to get obsidian armor and loved every minute.

#7 draxynnic

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Posted 15 March 2013 - 11:50 PM

One thing I think needs to be pointed out whenever inflation and gold sinks come up is that the inflation in GW2 is very much not the same as inflation in the real world.

Real-world inflation is something that bites into the entire economy, affecting rich and poor alike. The GW2 economy, on the other hand, is two-level. Pretty much everything you actually need is price-controlled or otherwise stagnating - waypoint and repair fees are fixed by ArenaNet, items that do not need ectoplasm or large quantities of T6 materials generally go for close to vendor price on the TP, and even the price of ectoplasm (and, by extension, T6 items crafted using ectoplasm) seems if anything to be steadily dropping over time. The only things that are increasing in price over time are the price of gems - and let's face it, ArenaNet is never going to deliberately take actions to prevent that from going up - and the price of things that are clearly luxuries such as legendaries.

With this in mind, I'd say that the majority of players are neither driving nor being driven by inflation. It's only when people start getting rich enough to start reaching for the legendaries that they enter the inflationary market. To many of the 'boo, inflation' crowd are advocating gold sinks that'll hit everybody, but the truth is that all that ends up doing is enforcing the gap between the poor (which aren't able to reach the inflationary part of the economy and thus do not directly influence it) and the rich. In order to actually control inflation, gold sinks need to come out of the pockets of those rich enough to be part of the inflationary sector of the economy - or to put it bluntly, they need to target the rich.

And when you get down to it, gold sinks targeting the rich essentially translates into voluntary gold sinks - offer something that is worth spending money on in lieu of driving the legendary price higher, but which isn't something that poor players are going to be punished for not participating in.

On these considerations, I think the OP is thinking along the right lines. My main concern, though, is that both of these are essentially gambles where the gambler knows the odds are stacked against them (unless they're a good PvPer in the second case, and as written I expect that would die over time as the worst players realise that participating is a losing proposition and drop out, then the next worst, and so on) and intelligent investors will start avoiding them over time. A better solution would be to offer prizes that aren't monetary... or at least not directly monetary. A small reward could then be offered simply for participating (karma, points towards a title) but providing some desired item as a grand prize could serve to kill two birds with one stone - removing gold from the top end of the economy while increasing the supply of items in the TP competing for that gold.
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#8 FoxBat

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Posted 16 March 2013 - 01:26 PM

Funny. I always thought inflation was related to doing things like printing money (or gold.) Those filthy rich TP players do nothing but sink it away to the trade taxes, leeching their way through bad trades made by people that actually produce inflation, those poor enough to spend their time vendoring whites and blues.

If you want legendaries et. al to be cheap, the solution is pretty simple. Increase the supply. There's a reason that isn't happening though.

#9 draxynnic

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Posted 16 March 2013 - 02:00 PM

The thing is that the stuff purchased by the poorer players is not inflating. There's an indirect influence in that money that transfers from poor players to rich (such as through the TP) shifts into the inflationary sector of the economy, but at the bottom line it's not a problem until it gets there - so it's at that point where a gold sink becomes most effective.

Keep in mind that the usual reason why inflation in an MMO is seen as a bad thing is that it presents new players with an ever-increasing barrier to get into the market - for an established player it doesn't matter hugely if the value of gold is halved in a month when you've tripled your money in that month, but it sucks for the new player that is probably earning gold at the same rate that the veterans did on day 1 when everything was cheap.

Putting these two together, this makes gold sinks that proportionally hit poorer players harder than richer players a bit pointless. The rich players may have less currency to drive inflation with, but when that reduction in wealth is coming from a kind of trickle-up effect from gold sinks in the poorer sectors of the economy, the end result is to push those high-value items even further out of the reach of newer and poorer players - even if the price in numerical terms is lower.
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