Feedback:User/Indexer/Being Proactive With Inflation
Being Proactive With Inflation | |
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Due to the way Guild Wars 2's Gem-to-Gold and Gold-to-Gem system functions it makes the economy very susceptible to inflation. This suggestion touches on the reasons why this is true as well as ways to resolve the issue.
Guild Wars 2 has an open economy, meaning that external sources can influence it. When a player makes use of the Gem-to-Gold feature the gold is introduced into the economy. This contrasts with a closed economy where the player would have to trade the gems with another player who had acquired the gold from a different currency faucet in the game. Closed economies are highly preferable in MMOs, as they are significantly easier to maintain without external influences.
The first goal of this suggestion would be to create a closed economy. This could easily be accomplished by treating gems as items and letting users trade them on the Trading Post. At the same time Gem-to-Gold and Gold-to-Gem features would need to be removed. The end result would be that the only external influence would be a creation of gems. All gold transactions must be earned by the player and therefore during the process no gold is created from an external source.
To view the consequences of this we need to look at what Gem-to-Gold and Gold-to-Gem features were at a meta level. Respectively, they were recurring currency faucets and currency sinks, where faucets introduce currency to the economy and sinks remove currency. Because inflation is a very long-term occurrence only recurring faucets and sinks make a big difference, and therefore one-time faucets and sinks can safely be ignored.
Guild Wars 2's current recurring gold faucets are:
- Gem-to-Gold
- Looting
- Completing events/hearts
- Vendors
Guild Wars 2's current recurring gold sinks are:
- Gold-to-Gem
- Waypoints
- Repairing
- Purchasing items from vendors
ArenaNet can easily regulate all sinks and faucets except for the Gold-to-Gem and Gem-to-Gold features. As an example, if Guild Wars 2 has hit its 3 million playerbase that was expected and on average every player purchased $10 USD of gems, it introduces 2.4 billion gems. Using the Gem-to-Gold feature at an abysmal rate (10 silver, the lowest it has ever gotten is 18 silver per 100 gems) that is 24 million gold introduced into the economy from external sources. Of course the instance where $30 million USD is invested in gems is highly unlikely, but over the course of Guild Wars 2's lifespan $30 million USD will be marginal.
By removing the Gem-to-Gold currency faucet players would have to sell their gems for gold that was created from much more regulated faucets. At the same time the currency sink of Gold-to-Gem still exists but is simply moved into being the Black Lion Trading Company. ArenaNet have done a very good job of making that currency sink very appealing. Removing such a large currency faucet would remove a significant amount of gold generation and would help combat inflation.
The result of this action is that there are significantly less gems in circulation, as gems are only created when a player purchases them. This benefits ArenaNet greatly in that through simple supply and demand (few gems, massive demand), we can determine that the price of gems will rise significantly until it regulates itself at a price that players are willing to purchase. Players unwilling to purchase gems for the increased price will look towards buying gems themselves. Because of this we can conclude that the Gold-to-Gem and Gem-to-Gold systems are causing ArenaNet to lose gem sales.
Replacing the Gem-to-Gold and Gold-to-Gem features with trade-able gems will help combat inflation by forcing all currency faucets to be easily regulated, and will aid ArenaNet with increased gem sales.
