[GW2] Black Lion Boiler Room

The Guild Wars 2 Black Lion Trading Company is an amazing feat in MMOs. Every time I play I am amazed at how intuitive and powerful it is. There is room for improvement for sure, with the biggest improvement simply being the ability not to get crushed by hundreds of thousands of players. Yet, this is possibly my favorite trading place in an MMO yet.

Magnitudes and Multitudes

I wish I could be John “The Merovingian” Smith for one day. The amount of data that hundreds of thousands of players are providing within the gem exchange and trading post has got to be wonderfully suffocating. Money is finally moving in Guild Wars 2 with the trading post being up more than not, and the ability to see all the streams has got to give Mr. Smith something of a god complex.

First, the trading post and gem exchange are there across all servers. There is no way that the velocity of money would be anywhere near where it is in a server-based economy. Yes, with so many players there will be more available ultra-rare minis or runes or dyes, but there will be just as much demand. There is more seller competition, but there is just as much more buyer competition. This improves market efficiency well over a single server-based economy.

A little bit ago someone on Reddit started to crack the Mystic Forge and found that Mystic Coins are very valuable for creating “end game” exotics through the Mystic Forge. The Mystic Coins went from 0.5 silver to about 3 silver in an instant. I am kicking myself too. I had wondered why the Mystic Coins were undervalued in the beginning. A couple dozen copper seemed way too low for something players can get once per day, but I didn’t pounce on the idea that it would eventually hit a better value. The market pounced as soon as the Mystic Coins were revalued. I am betting that this will not be the last opportunity to find undervalued goods.

Stroke of Genie

I’ve seen plenty of complaints about the gold sinks in game, mostly with regard to armor repair costs, waypoint travel costs, and the hefty 15% trading post cost. These gold sinks seem to be keeping the economy in pretty decent check so far. As a level 45, I can afford most things on the trading post once in a while even ultra-rare dyes and exotic minis. Still I have to be careful, since leveling is flat and I am not slowing down with my need for upgraded gear.

Where was I? Gold sinks, yes. The best gold sink in the game is the Mystic Forge with Zommoros, an ancient genie trapped inside. Take four things that are somewhat related, and gamble to get a better thing. Four exotic bows might results in a very rare exotic bow skin. Four random rare pieces of armor might result in a less useful piece of rare armor, or it could result in a piece of exotic armor. There are also specific recipes just starting to be found.

Why is this genius? Because people want to buy absolute crap from the trading post and throw it in the genie’s pot. There is a market for that healing sword of krait slaying beyond sword users… uhh fighting only krait. People want that puce huckleberry rare dye! Creating a market where there is none was just a fantastic move by ArenaNet. I think that the amount of items sacrificed to Zommoros is only going to increase as people settle in to Tyria.

The other night I decided to have a little (stupid) fun after selling my Midnight Fire dye for 1.5 gold. I decided to snipe for rare dyes and then sacrifice them to the Mystic Forge to magic four rare dyes in to one new rare dye, which can possibly go for 1+ gold. I basically lost 80 silver just messing around with the trading post rare dye market and the Mystic Forge. It was a gamble, but a fun one. Of course I would probably be a gold richer if I had also just walked away from the one-armed bandit. Still, where’s the fun in that.

Gem Up

The most surprising commodity market for me has been the gem exchange. The gem exchange is a player-based market where players buy and sell gems for in-game gold. Gems are bought for real money with the lowest entry point being $10 for 800 gems, or 1.25 cents per gem. The gem store then sells quality-of-life and exclusive items for gems. For instance a character slot costs 800 gems, adding another bag slot per character is 400 gems, a sack of three minipets is 300 gems, or a key to open everyone’s favorite Black Lion chests cost 125 gems.

ArenaNet started launch with a price of 30 silver per 100 gems. I looked at that and scoffed. 30 silver is something a low level player can easily achieve. I made nearly 30 silver in 15 minutes just playing the bag market in a beta weekend. Why would anybody spend $10 to get only 2.4 gold? Compared to the PLEX market over in EVE where $15 gets players millions, it just seemed off. I know there are already very rich players in Guild Wars 2 having dozens of gold. What are they doing?

And yet, even two weeks after launch when plenty of power gamers are at max level, the gem market exchange has not inflated. In fact I have seen it dip down to the teens, and then bounce up to around 40 silver. Yet 30 silver so far seems like a good gravitational point. Less supply or more in-game demand will drive up that exchange rate. The opposite of what I imagined is happening.

First, players are indeed buying gems to sell for gold. If players stopped adding freshly-minted gems into the gem exchange, the exchange price would increase because supply would diminish as gems are consumables. I would love to hear from people that have bought gems and turned them in to gold.  It just doesn’t seem worthwhile to me. Second, it means that the demand for gems is not ultra-high. The gem store doesn’t have any absolute-must-haves-or-my-game-experience-is-destroyed. It has constant demand because there are some nice things in the gem store. Finally, going back to market efficiency since ArenaNet allows for the exchange of as small as one gem from in-game gold, the best market price is much more accurate than requiring some bulk exchange. I am so grateful that they designed it that way.

I have bought 1600 gems so far and exchanged about 1200 more. From that I’ve bought another character slot and a few packs of miniatures. I have a level 45 character, and I’ve exchanged 1200 gems (over $10 worth). I have consumed likely over $20 worth myself. This blows my mind. It seems that almost everything in the gem store is easily affordable (with a little work) from just playing the game. Another bag slot costs about 1.5 gold, a pack of miniatures costs about a gold, etc.

I still think that the gem market has to rise, but there are so many gold sinks in game that perhaps I am wrong. ArenaNet has carefully crafted the economy so that gold will have worth. A good month or two should give a better idea. I also think that if content ever gets added to the gem store, which has been hinted at, a must-have like that will shift the exchange rate north.

The Stone Table

So far I am very impressed with the economy in Guild Wars 2. It is clear that time has been taken to interweave a lot of big moving parts in something on the order of the Eternal Alchemy. I hope that John Smith gets more columns on the site. I would love to have a regular Freakonomics type discussion on the happenings of Guild Wars 2. Regardless, the bottom line is that the Black Lion Trading Company appears to be a success both for players and ArenaNet. It adds another great facet to Guild Wars 2.


16 thoughts on “[GW2] Black Lion Boiler Room”

    1. I feel that post is so narrowly construed to crafting. Of course crafting mats are going to be constrained to value at the edges, just like every other MMO out there. Mid-tier crafting mats are not worth money. Starting tier always have been and last tier definitely will be with things like legendary weapons.

      The issue of crafted materials having little worth on the other hand is an interesting one that probably deserves more exploration. But, I don’t believe the economy revolves around the selling of crafted materials yet since demand on materials far far outweighs demand on crafted goods. Possibly it will never come close to equalization, but I think this is such a small part of the economy anyway…. much like it was in GW1.

      1. As can be implied by my linked post, I have come to 100% the opposite conclusion vis-a-vis the health of the economy.

        “Market efficiency” reducing crafted goods to vendor+1c is a broken economy. Much like with Diablo 3, there is every incentive to turn all of the drops you get into coin and simply purchase your upgrades from the AH. Every two Copper Ore nodes I hit is the equivalent of a level 30 upgrade. Hell, ONE Tiny Totem or Vial of Weak Blood is a level 30 upgrade.

        I have not seen the 100 gem exchange rate above 28s for the past week (it was 25s 25c yesterday), and that to me indicates a preponderance of Supply, e.g. there are thousands of dollars being pumped in for ridiculously low amounts of coin. Given the low gem prices, the money sinks in the game are actually pretty obscene. Each death is $0.02, if I bothered repairing anymore (cheaper to buy a new piece of equipment). That 100g Commander book? The equivalent of $495 USD. And that’s using the gold-for-gem side of things, not the worse gem-for-gold exchange rate!

        It is still early in the game’s life, sure, but I’m not seeing much indication that things are going to meaningfully improve given the systemic AH issues that come with a global AH structure. It is like a fully globalized world: there will ALWAYS be someone willing to work for less money than you.

        1. I’d imagine all your problems will be solved if enough demand comes in to drive gear above the vendor+1c price. The mystic forge could easily do this: Reddit gets ahold of a mystic forge recipe that lets them upconvert some of these items to something worth, potentially, more, with the results partially determined by what stats are on the ingredient items. Bam, problem solved.

  1. One feature that’s missing is a preview in the trading post, I can see some of the more attractive skins selling for a few times more than other exotics at the same level. There should be huge demand for some of the skins that some players have said they got out of the mystic forge, sacrificing many of the undesirable exotics for a chance at these skins e.g. the charrzooka and super hyperbeam alpha (don’t know if these are unique to the mystic forge or not), not to mention the base weapon for legendaries.

  2. I haven’t yet bought Gems to buy gold but I have considered it. Mrs Bhagpuss is in the high 60s and I am 57th and neither of us even has close to the 2 gold required for the Level 60 skill book. I can’t think of any MMO I have ever played in which money remained this tight at two-thirds to three-quarters of the way to the level cap.

    There is literally nothing in the Gem store I would pay real money for and most of it I wouldn’t take as a free gift. We bought two new accounts in preference to paying for character slots and increased bank space because that’s a much better deal and those two items were the sole things in the Gem store of interest. It’s more likely than not, however, that at some point we will buy Gems just to spend on Gold.

  3. I’m boggled at how cheap gems are. I can’t believe that it can possibly remain anything like that, especially when you look at high-end money sinks. e.g. the WvW Commander book costs 100 gold – at current gem exchange rate, that would set you back more than $450 if you wanted to pour real money into it!!

    So I’ve been spending all my spare gold buying gems – I picked a baseline of one gold I want to maintain, anything over that, I spend on gems at the end of each play session. I’m sure that the price will move strongly and permanently upwards eventually – and even if it doesn’t, hey, I got gems for bank slots, bag slots, character slots.

  4. “Why is this genius? Because people want to buy absolute crap from the trading post and throw it in the genie’s pot.”

    I’m not sure people are going to want to do that for gear below max level, unless they really have gold to burn (I mean you might as well buy a nice green piece for levelling and just go with it).

    It’s a common failing with MMO crafting that there is really no demand for most of the recipes, so this isn’t new. It’s a shame for crafting fans that there is a built in disincentive to craft for others, though. This sometimes happens with crafting systems that are too heavily weighted towards benefits for the crafter, which I think is what happened here.

    1. Not to mention once you have your BiS+skin, you are done and no longer throwing gold down the sink. What keeps an economy going is not people chasing something expensive, but people having to REPLACE things as they use them. You don’t have that in GW2, and hence you don’t really have an economy.

  5. Hmmm…you paint a very positive picture here, while I share a lot of Azuriel’s misgivings. it seems there are plenty of fun goldsinks in GW2 yes, however I cannot see any good ways of making money right now – so how would I even find the time to spend it on experiments?

    ‘This blows my mind’

    It blows my mind too, because how are ANet supposed to make money at all with the gemstore this way? real money?

    they don’t make real money purchases attractive to anyone – not those looking to use the store, not those looking to actually ‘buy money’ via conversion. it’s bizarre to me and comes with some fairly bad side-effects(?) (which I tried to tackle on my own blog tonight)….

    1. i dont think the ability to get more gold for your gem purchases is the answer i mean thats pay for power and it’s not fair to the guy who cant afford to do that

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