19 comments on “How packs broke the Gold rates… but are not the only factor

  1. Got to disagree with you on a few points
    1) Part of why packs are always around, is because if god forbid, tokens of luck hit around 15k, the amount of QQ on the forums is 10 times worse then all the QQ of gold prices combined ( see around jan.feb 2011… 1 week of packs in 10+ ) and people were literally saying that the price of crab was so high they could not play anymore. As much as people complain about packs, they complain as much, if not more, when packs are gone for more then a month
    2) I dont believe merchants are to blame. I believe you can pinpoint one particular reason why packs cause massive coin inflation, and while the demand for gold does play a part, there is 1 item reward that causes the main problem.

    And that would be the tokens of best luck.

    Lets do a little math.
    With tiger packs, there is a 1.72% chance to get a Token of Best Luck
    With few exceptions, people will trade 2 of these in to get a 10 Mill Big Note.
    This essentially injects 10 million coin into the economy.

    This means that for every 100 packs opened, 1.72 ToBL are recieved
    1.72 x 5 mill = 8,600,000 Coins injected into the economy for every 100 packs
    Now it would be impossible to really conjecture on how many packs are opened during a typical sale, but lets say about 100,000 packs ( which i feel is low, but lets use it as an example )

    At 100,000 Packs, pwi is essentially injection 8.6 BILLION coins into the economy.
    and there is nothing at all in pwi that can soak up that amount of coin in such a short time.

    And while a person may use that coin to buy something else, eventually, all that coin end up in the same place, and that is the Auction House gold market.

    And while some people will buy gold during the pack sales, strictly because they know that prices will go up, and they get more bang for their buck, its not nearly enough to keep up with the demand.

    There is why pack sales wreck the economy

  2. i agree with imcelestoned. packs — much as i’d like to see them gone — would be much more tolerable if one little detail was changed; the exchange of two best luck tokens for 10mil should be removed. best lucks could still be kept in the packs, even, so long as they’re not directly exchangeable for coin at that exchange rate.

    remember when duke still shouted for best lucks? remember how often you saw a best luck red spam shout back then? every single shout, five million brand new coins in the economy. think about that massive coin influx. don’t think it’s lessened just because duke was silenced, either.

    merchants, i think, make no effective difference to the economy. type-5 merchants might even marginally stabilize the economy, by making their profits through essentially countercyclical actions. everything a cash shop merchant sells could just as well have been bought straight from the boutique, after all — the only thing type-3, 4, and 5 merchants (and up?) really provide is convenience, the ability to buy the goods right away without having to buy the gold first.

    (to some degree, cash shop merchants are coin sinks — provided they use the auction house to buy gold. look at a typical catshop, try to estimate how much gold — then coin — they paid for their packs or whatever. two percent of that coin, boom, deleted from the server, every time they turn over their inventory. yet it still can’t keep up with the new coins created…)

  3. However, if they changed it so that you could not exchange Tokens of Best Luck for coin, what would happen is a lot less people would buy packs. Because really, Tokens of Best Luck make up a good ~10-30% of the value of any given pack. With Best Lucks being worth 5m each, no one really uses any of the other exchanges.

    Also, for every Best Luck Token, you’ll have roughly 854 Tokens of Luck. Those tokens, in turn, have a fixed NPC value of 9,999 coins each. Which means that for every Token of Best Luck out there, Tokens of Luck in turn are giving out ~8,539,146 coins, which is a pretty stunning 70.8% more than the Token of Best Luck.

    So really, it’s not just the Tokens of Best Luck, it’s also the regular tokens. And if you think no one NPCs tokens, you’re wrong. I’ve personally NPC’d maybe 20,000 Tokens for a profit of 1% each.

    Change these two things and you’d observe that the value of packs has gone down a lot. Though, I doubt that this would directly lead to Gold prices going down and the economy healing. Since PWI’s playerbase is extremely greedy, as is observable from the whole APS craze, you’d probably just see the amount of packs used plummet as you’d only have people who open them for giggles left.

    And if packs stopped being super profitable for PWE, you’d just see them bring more frequent reputation sales, more frequent orb sales, more frequent charm sales.

    There is no simple, magical way to fix the economy.

    • Why on earth would you NPC tokens for 1% profit, when you can turn them into token goods and catshop them for more like 10%?

      • Of course you can do that, but that takes more time. And I was just looking for something to spend time with at the point. And it was kinda funny to see that people actually sell tokens to catshops for below NPC price in rather large quantities.

  4. Pretty interesting point of view, I didn’t think about that.
    Though I disagree on your major point : the only possible way for someone to “inject” money in PW’s economy is by getting 2 ToBL. So your whole formula is wrong because for each 100 packs opened, the number of “brand new” millions is slightly lower than 8.6 mil.
    I agree it contributes to it though, but I’m not sure everyone thinks of AH Gold trades when they earn 10m in cash… At least I never heard anyone near me doing that (basically because of AH fees, they prefer to buy a valuable item and resell it than AH gold trade).

    As I said in the very title of my post, packs do have a responsability in the inflation, but they are not the only factor. If packs sales were removed, there would definitly be a crisis and an even bigger inflation of the prices of some products like crab meats (and Hypers) from wich players are now very dependants.

    In my opinion, packs now HAVE to stay in the CS and there HAS to be sales regularly so people can keep playing the way they play, because of the tokens. But by staying and being on sale, we will very rarely see Gold rates go below 1 million from now on…
    How ironic is that ? Packs are our own subprimes ! 😆

  5. Damn, is there a level restriction on these “pseudo-crabs”? I really need some for Yataghan… I have to agree with Celestoned on his point about ToBL and Olba about ToL, however there are a lot of instant cash injections, and I suspect even the ones that are indirect injections (such as Flawless shards) still have an effect on the market, if smaller.

  6. I’ve been using crabs for a while (some guy dropped a lot of them when i was like lvl50) and i use them in case of extreme emergency since then, so there may be a level restriction but it’s pretty low if i remember well… I haven’t read the description of the item in ages, so I might be wrong…

    What I do know is that crabs are for HP, and if you plan on using them for Yataghan Vortex, I bet you want MP, right ? If so, it’s not crab meat that you need, but its equivalent in MP (don’t remember the name). Look in the “gift exchange” at the PWI Agent NPC.

      • Then it wasn’t crab meat that i used to use… It has the same icon though…
        I do remember it saved my life on my own FB51 against Rankar, me tanking all alone after party wipe and I got him down thanks to those babies.

  7. Multiflavour Jiaozi, and erm…Sesame Yuanxiao?

    Req. Level 25, really useful if you can get hold of them for those levels.

    • those were event foods available once, years ago. they’ve never been available in game since, though some folks still have stacks of them. thay’re level-25 versions of the still available level-75 ones, and though i’ve never seen them, i can well believe they’re handy.

  8. to be honest, i never would have needed those at that level, regular pots worked fine
    i didnt use crab meat until i started to solo TT, in the mid 70’s

  9. “Though I disagree on your major point : the only possible way for someone to “inject” money in PW’s economy is by getting 2 ToBL. So your whole formula is wrong because for each 100 packs opened, the number of “brand new” millions is slightly lower than 8.6 mil.”

    Huh? On average, across hundreds of thousands of packs, it will be almost exactly 8.6 mil per 100 packs, assuming people only turn them in for 10 Mil Big Notes (and the only reason why someone wouldn’t is for something worth more than 5 mill per ToBL). I only say “almost” because it’s somewhat random, and there will be some fluctuations in the frequency of ToBLs.

    The fact that it requires 2 ToBL to make 10 mil is irrelevant since the “per 100 packs” is part of a much larger pool of packs. Anyone with only 1 ToBL can find someone else with 1 ToBL, and thus another 10 mil is injected into the economy.

    However, another factor has been ignored: competition among a growing player base. There are far more people playing now then there were at the end of 2008, thus there is more competition in gold trading for gold, thus people are willing to bid higher for it, which means the gold price steadily climbs. As a game grows, inflation is almost inevitable.

    There are only two ways for players to combat that: everyone decides to stick to some arbitrary “maximum gold price” (which will never happen in a free market) or pour tons of gold into the economy, thus decreasing its worth. The Dreamweaver server, for example, has had fairly consistently lower gold prices than the other older PWI servers due to more players on that server spending cash on the game.

    And you will notice that I said that there are only two ways for players to combat inflation. The only way PWE could combat inflation, short of a lame gold cap (which would invoke player rage for gold sellers) or adding cheap gold to the market which had not come from cash (which would badly hurt PWE’s bottom line), would be to only put items in the boutique which aren’t worth buying (which would also hurt PWE’s bottom line). Basically, there is no incentive for PWE to do any of those things.

    In short, the reason why people are willing to buy so much more gold now than in the past is because people want to buy what PWE’s selling now, and competition for the gold needed to buy it drives gold value up. It’s not exactly packs that “broke the gold rates”, it’s player demand for packs that caused the price of gold to jump. This is basically one part of your argument, but with a slightly different focus.

    PWE only makes money “thanks to merchants” indirectly as they drive up demand for gold by basically extending PWE sales at a slightly higher rate. PWE actually makes money thanks to people who spend money on the game, and many merchants don’t do that.

    Inflation is inevitable in any economy that doesn’t have artificial caps on pricing. I’d go so far as to say inflation is usually a sign of a healthy economy. So as long as PWE and most players adapt to it appropriately over time (such as PWE did by making Chests of Coins, that had become worthless due to inflation, valuable again for DQ Points) then we’ll be fine.

    Finally, it should be mentioned that due to packs, mainly through ToL exchange, many items have become more affordable than they were prior to packs. For example, it’s much cheaper and easier to get wines now. Packs shifted and changed the economy a lot, but they certainly didn’t “break” it.

    (Apologies for the wall of text, this started out much shorter. 😛 )

    • The only way PWE could combat inflation, short of a lame gold cap (which would invoke player rage for gold sellers) or adding cheap gold to the market which had not come from cash (which would badly hurt PWE’s bottom line),

      i disagree that a gold cap would combat inflation at all; there’s too many ways to circumvent the auction house and buy/sell gold for arbitrary uncapped prices. see the official forums, Warren’s commented on this (among other people).

      and i’m honestly unsure if injecting non-cash gold to the AH market would budge PWE’s income very much. do gold prices on the AH serve as a large motivator for people to charge zen or not? i don’t think the question has any obvious answer, and short of actually trying it and tracking income from zen, i don’t know of any definitive way to find out.

      if PWE’s marketing and sales departments were conscientious, that’s an experiment they probably should run at least once. maybe they have. unfortunately, i doubt they’d be telling us the outcome either way.

      part of the problem with inflation is that we have a multi-currency economy here — coins and gold — and when we speak about “inflation” we usually really mean “inflation of gold prices as measured in coin”. that’s not exactly analogous to real world economies’ notion of “inflation”, unless the prices of everything bought with coin were to inflate in synchrony, which they don’t. PWI inflation seriously disadvantages in-game farmers, because mat prices tend to be more stable than gold prices.

  10. I think one of the problems is that they put them on more % off each time. I remember gold used to be pretty low and I’d buy 50 backs for 45 gold, and then sell them, repeat. But now I buy 18 gold, for more coin than I use to pay for 45 gold. If they kept packs are 45 gold per 50, it wouldn’t be so much of a problem, but they make it so low in gold that the gold goes up to compensate for how much the packs are worth. If they make it 15 gold per 50 packs for example, gold will go up again.

    And this is a problem because now everyone has to pay more coin for everything, and the DQ price or coin you get from questing/grinding doesn’t go up. People new to the game seem to be almost forced to pay cash to keep up. and like LenieClark said, this puts all farmers at a disadvantage because the cost in coin goes way up, and the price of gold goes way up, but the cost in GOLD, the cost in MONEY, goes DOWN. so it encourages cash shoppers. which is also why pwe will never care to fix it.

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