Economy -- Dropping Prices

[ekarat.1085]

I wanted to start a thread about the economy and dropping prices.

 

What do you think is going on?

 

I do think the new maps have caused there to be more raw resources available (especially orichalcum, which has dropped the most). That makes it cheaper to craft things, so the prices of crafted items drop too.

 

I also think the griffon has caused a lot of gold to exit the economy, which also causes prices to drop.

 

The lack of a new legendary means we aren't seeing a new sink for resources -- the griffon requires gold, not crafting materials.

 

Finally, an influx of players for the expansion could do something, but I'm not clear what.

 

Any other opinions?

 

[Illconceived Was Na.9781]

There have been a number of posts about this. First, the "economy" is a lot bigger than just the selection of popular items that are much lower now than they have been recently (but they aren't at record lows). Second, there is never any one single cause to a change like this **and** (third) history suggests it's unlikely to last that long.

 

The most likely reasons:

* Tons of people returning to the game need gold, so they are dumping whatever resources they have to afford the griffon (as well as other shinies). This especially affects mystic coins (there are lots of people reporting they sold nearly all they had sitting around, because — to them — it seemed like free money).

* People are purchasing the Ultimate edition and dumping gems for gold.

* More players are doing content that results in greens and blues (identified or not) and salvaging, which results in tons of common materials.

* There aren't all that many sinks, so supply is rising without a commensurate rise in demand.

 

None of the above are "opinions" — we just don't know how heavily each is influencing the market(s) nor whether there are other important factors.

 

Historically, markets have always been tumultuous after huge content changes. They rise or fall dramatically within the first days/weeks and then they slowly return to the old equilibrium (or nearly so). This one will probably take longer because Halloween arrives shortly, which itself tends to drive certain prices down.

 

Thus I expect rares, exotics, and some T6 mats to remain low for a long time, perhaps until Jan/Feb. Other markets will start to rise well before then, too. And LS4.1 is going to change it all again.

[logan.5846]

Prices on things like mystic coins and t6 mats are mostly consistent with where they were 3 months ago. In the two months before PoF we had::

 

Shining Blade, the first legendary to use the new crafting system that people actually wanted, sending elder wood and mithril to the moon

Legendary trinket

PVP legendary armor

WVW legendary armor & backpiece

New elite specs to gear up

 

All filling up a massive demand bubble, once PoF came out with no legendaries, no raids, no fractals, no rare shinies, no.. anything really other than a handful of vanilla zones, much of that demand dissipated. People who speculated on stuff like ectos and mystic coins dumped stock to cut their losses, plus the rewards in the new zones are so poor players aren't making much gold, driving prices down.

[Blood Red Arachnid.2493]

What happened here is what happens with gas prices. The anticipation of rising prices in the summer causes a lot of people to load up early, thus causing the prices to rise before the summer. When summer hits, the price doesn't increase much.

 

Something similar happened with PoF. When the new specializations were announced, prices skyrocketed because everybody was out preparing for the pack. I personally bought over a dozen ascended weapons and several full ascended armor sets. Several thousand gold worth. But now that the pack has been launched, I have had no lofty monetary goals, so I have been selling all of my loot at low prices. Everyone else is probably doing the same.

[TexZero.7910]

Prices go up and down.

 

Don't worry, in 2 Weeks time Blood Prices/Linseed Oil and Drinks/Food will go through the roof for achievement sake. Then ~6 week after that Blood and Linseed Oil will spike again because Wintersday stuffs.

[Just a flesh wound.3589]

As above, prices went down because people dumped inventory to get gold. However prices should rise with the next announcement of new Legendary weapon(s), probably with the next Living Story patch.

[Daddicus.6128]

Prices always go down before and during events. Both PoF and Halloween are affecting things currently. So, in addition to the normal changes due to new offerings, people want money to spend on goodies. The way they get it is selling stuff, which drives down prices.

[ekarat.1085]

So, we don't need to completely guess at some of these -- we have data.

Mystic coin supply is *not* increased -- it's gone slightly down. So, people haven't been dumping more mystic coins than people use. Debunked.

On the other hand, orichalcum ore supply has gone up quite a bit -- by roughly 1/3, though some of that was before the release of PoF.

Volume moved may have decreased as well, but it's hard to tell because the data is so noisy.

That does suggest that materials are accumulating because there is nothing new to do with them.

It also suggests that people dumping goods on the market were not statistically significant.

I'm not sure about the decrease in skin values. Perhaps investors switched strategies and stopped favoring skins as a holder of value?

(I swear that skins are to the gw2 economy what gold is to the world economy.)

 

[tigirius.9014]

Literally laughed out loud when Illconceived Was Na.9781 stated: "There aren't all that many sinks, so supply is rising without a commensurate rise in demand."

[MMAI.5892]

> @ekarat.1085 said:

> So, we don't need to completely guess at some of these -- we have data.

> Mystic coin supply is *not* increased -- it's gone slightly down. So, people haven't been dumping more mystic coins than people use. Debunked.

 

No it hasn't relative to launch. On 9/22 Sell price was 1g 58s with a supply of 16,758 coins. Buy price was 1g 40s with a demand of 120,867 The big drop came on 9/25 with sell price dipping down to 99s and 32, 971 in supply -- nearly double what was available on 9/22 -- buy price was 94s with a demand of 113,100 -- ~7K drop in demand. So yes, people were offloading coins and supply has increased. It's now at about ~37K in supply and 111,265 in demand -- a rise in supply and a drop in demand.

 

For me, the real question is, who's buying them? I remember a comment a while ago by Anet that the MC market was predominately flippers. Either way, I expect the prices to rise as people willing to offload their stores of mystic coins finish doing so and those coins are either hoarded for later flipping or consumed -- effectively taking them out of the market for a time. If they're primarily being bought by flippers and we get new sinks, then prices could rise sharply in the future.

 

 

> On the other hand, orichalcum ore supply has gone up quite a bit -- by roughly 1/3, though some of that was before the release of PoF.

> Volume moved may have decreased as well, but it's hard to tell because the data is so noisy.

> That does suggest that materials are accumulating because there is nothing new to do with them.

 

In my experience so far, most mats are dropping like candy in PoF. Be it harvesting or salvaging, I'm hitting the upper limits of my bank stores far more often than I did before even with additional crafting (new exotic stat gear, etc). This is with the exception of things like lodestones that still seem to be quite rare. It's entirely possible that even crafters are selling because they're finding themselves flooded with metal, cloth, and leather, but don't have enough of the rarer components. I'm also holding out for grievers stats, but that's a mild point.

 

> It also suggests that people dumping goods on the market were not statistically significant.

 

Dumping as in people selling out mats to convert to gold for things like griffon? I think it's probably too hard to tell until we take a particular mat and analyze it day by day with some rough idea of how much of, say Ori, people are generating in a day on average.

 

> I'm not sure about the decrease in skin values. Perhaps investors switched strategies and stopped favoring skins as a holder of value?

> (I swear that skins are to the gw2 economy what gold is to the world economy.)

 

Skins, I think, will stay volatile for a bit as new/returning players decide whether or not to play Fashion Wars. Unless you meant a particular set?

 

 

[ekarat.1085]

> @MMAI.5892 said:

> > @ekarat.1085 said:

> > So, we don't need to completely guess at some of these -- we have data.

> > Mystic coin supply is *not* increased -- it's gone slightly down. So, people haven't been dumping more mystic coins than people use. Debunked.

>

> No it hasn't relative to launch. On 9/22 Sell price was 1g 58s with a supply of 16,758 coins. Buy price was 1g 40s with a demand of 120,867 The big drop came on 9/25 with sell price dipping down to 99s and 32, 971 in supply -- nearly double what was available on 9/22 -- buy price was 94s with a demand of 113,100 -- ~7K drop in demand. So yes, people were offloading coins and supply has increased. It's now at about ~37K in supply and 111,265 in demand -- a rise in supply and a drop in demand.

>

> For me, the real question is, who's buying them? I remember a comment a while ago by Anet that the MC market was predominately flippers. Either way, I expect the prices to rise as people willing to offload their stores of mystic coins finish doing so and those coins are either hoarded for later flipping or consumed -- effectively taking them out of the market for a time. If they're primarily being bought by flippers and we get new sinks, then prices could rise sharply in the future.

>

 

Fair points. Allow me to amend/clarify. It looks like mystic coin supply dropped sharply in the months leading up to the release. Some of this may be people making things. Some of this may be speculators. Almost definitely a mix of both. However, when the expansion didn't create a new sink for mystic coins, the speculators sold back the coins that they had been scooping up in the months prior. So, while the supply is up from PoF launch, prices and supply have merely returned to the longer-term trend line over the months before launch. It looks like a short-term bubble grew and popped, but returned to where it was a couple of months ago.

 

(Yes, a lot of analysis depends on what your point of comparison is -- launch day or a couple of months before that, since speculation did mess with the market leading up to launch, so prices at launch might not be the best comparison.)

 

Raw materials (especially orichalcum) seem to have a different pattern of significantly growing supply in the market and dropping prices, suggesting that the expansion and/or flood of players returning for the expansion is making a greater supply of raw materials available.

Crafted item prices are dropping, but lagging the drop in raw material prices, as crafters are making a profit off the cheap materials.

 

[MMAI.5892]

> @ekarat.1085 said:

> > @MMAI.5892 said:

> > > @ekarat.1085 said:

> > > So, we don't need to completely guess at some of these -- we have data.

> > > Mystic coin supply is *not* increased -- it's gone slightly down. So, people haven't been dumping more mystic coins than people use. Debunked.

> >

> > No it hasn't relative to launch. On 9/22 Sell price was 1g 58s with a supply of 16,758 coins. Buy price was 1g 40s with a demand of 120,867 The big drop came on 9/25 with sell price dipping down to 99s and 32, 971 in supply -- nearly double what was available on 9/22 -- buy price was 94s with a demand of 113,100 -- ~7K drop in demand. So yes, people were offloading coins and supply has increased. It's now at about ~37K in supply and 111,265 in demand -- a rise in supply and a drop in demand.

> >

> > For me, the real question is, who's buying them? I remember a comment a while ago by Anet that the MC market was predominately flippers. Either way, I expect the prices to rise as people willing to offload their stores of mystic coins finish doing so and those coins are either hoarded for later flipping or consumed -- effectively taking them out of the market for a time. If they're primarily being bought by flippers and we get new sinks, then prices could rise sharply in the future.

> >

>

> Fair points. Allow me to amend/clarify. It looks like mystic coin supply dropped sharply in the months leading up to the release. Some of this may be people making things. Some of this may be speculators. Almost definitely a mix of both. However, when the expansion didn't create a new sink for mystic coins, the speculators sold back the coins that they had been scooping up in the months prior. So, while the supply is up from PoF launch, prices and supply have merely returned to the longer-term trend line over the months before launch. It looks like a short-term bubble grew and popped, but returned to where it was a couple of months ago.

>

> (Yes, a lot of analysis depends on what your point of comparison is -- launch day or a couple of months before that, since speculation did mess with the market leading up to launch, so prices at launch might not be the best comparison.)

>

> Raw materials (especially orichalcum) seem to have a different pattern of significantly growing supply in the market and dropping prices, suggesting that the expansion and/or flood of players returning for the expansion is making a greater supply of raw materials available.

> Crafted item prices are dropping, but lagging the drop in raw material prices, as crafters are making a profit off the cheap materials.

>

 

Ahhh okay. I gotcha. About when are you looking at the supply numbers then? now I'm curious. If I speculated in the MC market, personally, I wouldn't offload them now just because we're likely to get new sinks for them, but if the speculators over estimated demand and sinks with the expansion, it's possible they could have stretched their resources too thin. Still, I do think it's likely that we're seeing some influx from players that's aren't speculators. If you're fairly casual but have played the game off and on for years, then it's entirely possible that ppl have a large enough stash to liquidate for the purposes of buying mounts, etc.

 

I'm not terribly surprised on the crafting end - materials may be flooding the market due to a larger volume of mats, but we may not be getting a flood of crafters. I could see players that are really just here for the expansion story content and maybe a bit after being willing to sell of mats and buy what they might need instead of bothering to craft it themselves.

[Ellisande.5218]

"Oh no, the minority of middle men aren't making as much money anymore. Please harm everyone else so that the useless middle men start making more money again."

[Neural.1824]

Path of Fire hasn't even been out for a month, and it has been very successful in terms of player interaction and bringing people back to the game. Price fluctuation is going to happen and will eventually stabilize (either at a new level, or back towards what it was before, but it will stabilize).

It's going to go through more turmoil in about 3 days when Halloween hits, and then again at Wintersday, but eventually things will settle down.

Arenanet does not need to change anything overall at this point. A couple items could use some change, but they are not affected by Path of Fire.

No one, *NO ONE* that played the speculation game has any right at all to complain that their speculations failed. Whether it was purchases made just before PoF launched, or long term investments. No player has any right to a reliable investment either.

I speculated on 3 or 4 items before Path of Fire came out. I've lost at least 50% value on each of them, but that's simply how it works. Instead of asking Arenanet to change the economy for me for my own advantage, I'm taking advantage of the lower prices on other things to finish achievements, craft legendaries, etc.

[Menadena.7482]

> @ekarat.1085 said:

> I wanted to start a thread about the economy and dropping prices.

>

> What do you think is going on?

 

The economy always does strange things after an expansion. New maps, new nodes, new mats, new abilities.

 

Stay calm and carry on.

 

 

[nekretaal.6485]

My total net worth is down several throusand gold, because of falling Material prices.

 

There is so much ore / wood / cloth / ectoplasm dropped in the new PoF maps, but there are no big new sinks for these materials. No Legendary weapons and no new expensive collections. The only Exception is the Griffon collection, but that just requires gold`. They are throwing lots of old materials at us with few new reasons to spend them.

 

It would be nice to see some sinks for excess materials. It would be nice for anet to prop up the market for ectos before precursors become super cheap with all of this super cheap ore / wood / and T5 materials.

 

Whats the point of rewarding us with rare weapons, minerals, and materials when there is nothing to spend them on that people want?

[TEKnowledgy.1760]

Definitely PoF not just the expansion itself also brought an influx of people back to the game. But as for expansion its self mats flow like gold did with auric basin meta/map instance switch. Only dif is the mats side is intended lol. I noticed even ecto dived again like when auric basin deal was going on what caused that? That also to be blamed on PoF, I'm just curious? Actually, i wouldn't be a concerned player but it's one of my primary ways to get gold as a whole so now i'm having to consider dif options way the gem to gold rates have got thats also getting whacky to. Sucks not sure what we can do about it . :(

Guess just stock pile what money you got spend sparingly till things recover. But with PoF way it forks out mats things may never become like pre-PoF.

[Ulion.5476]

Just wait until A-net introduces new HoT legendaries. I am sure A-net has come up with more gold sinks for Halloween. I am just hopefully for the new HoT legendaries.

[Svarty.8019]

> @ekarat.1085 said:

> I wanted to start a thread about the economy and dropping prices.

>

> What do you think is going on?

 

As everybody and his dog seem to have already stated, the answer to this question is always Supply and Demand.

 

When there is more supply than demand, prices drop.

 

Now might be a good time to buy cheap things.

[Daddicus.6128]

> @Svarty.8019 said:

> > @ekarat.1085 said:

> > I wanted to start a thread about the economy and dropping prices.

> >

> > What do you think is going on?

>

> As everybody and his dog seem to have already stated, the answer to this question is always Supply and Demand.

>

> When there is more supply than demand, prices drop.

>

> Now might be a good time to buy cheap things.

 

Exactly correct. But, there's more detail. The prices are obviously set by supply and demand mechanics. That will never change. BUT, the equations for supply and the equations for demand DO change. Most are unpredictable streaks The math on this is very old: it's impossible to consistently correctly time any market in the short-term. (Although, the definition of "short term" is different in artificial economies.)

 

The few things that ARE predictable are things like rule changes, additions to the economy (such as new nodes in PoF affecting the supply curve or desires for more cash coming up on Halloween for the demand curve).

 

What I don't understand is why people like the OP complain about it. The only alternative is price-fixing or rationing, and that means everything useful eventually becomes unattainable.

[Coulter.2315]

> @nekretaal.6485 said:

> My total net worth is down several throusand gold, because of falling Material prices.

>

> There is so much ore / wood / cloth / ectoplasm dropped in the new PoF maps, but there are no big new sinks for these materials. No Legendary weapons and no new expensive collections. The only Exception is the Griffon collection, but that just requires gold`. They are throwing lots of old materials at us with few new reasons to spend them.

>

> It would be nice to see some sinks for excess materials. It would be nice for anet to prop up the market for ectos before precursors become super cheap with all of this super cheap ore / wood / and T5 materials.

>

> Whats the point of rewarding us with rare weapons, minerals, and materials when there is nothing to spend them on that people want?

 

Remember your net worth on GW2 efficiency includes gemstore items and the value of gems has dropped dramatically since PoF (converting gems to gold).

[zealex.9410]

New maps going yolo on gather spots as well as returning players selling theirs.

[Mira.4906]

As things calm down in the coming months I expect prices to recover to an extent. I also expect the new expansion loot to be adjusted once they feel they have enough new players for the new zones. I mean if rewards were soo bad people would go back to Hot zones or which ever map an the new expansion would be deemed a failure from the marketing and sales perspective.

[Ensign.2189]

On top of the prices of individual materials moving around, we've (surprisingly) seen a pretty substantial amount of deflation (or a substantial increase in the purchasing power of gold).

 

Primary drivers would be demand for gold-as-commodity in the Griffon collections, and a general lack of new material sinks to go along with all the new material sources.

 

In the longer term, the former will diminish in importance, while the latter we should assume to be a permanent shift (meaning it will not change on its own - though future updates will supersede it).

[Titan.3472]

Gold is Worth more than any item/gem so I farm hours in all game mode and sell everything at any price. Gold is Life, the only commodity Worth saving in GW2 GOLD GOLD GOLD. xD You guys playing TP can't always win. It's the game : gimme your gold i give ya any mat/loot. ^^ "AHOY HOARD DA GOLD MATEY !"