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I'm going to pick out my favorite parts of the recent interview with John Smith. Feel free to read the entire article here. Seriously, I have a real man crush on the Guild Wars 2 economist, and here's why!
1. Intriguing Crafting Tips
"What place do you feel crafting has in the Guild Wars 2 economy?
John: Crafting is an interesting topic because it’s so much different in Guild Wars 2 than in other places. One of the primary differences isn’t actually caused by the crafting mechanics or recipes, but by the global economy. There’s opportunity for profit from crafting all the time, but the economy is so large and efficient that those opportunities tend to go away really fast. Others will pop up to replace them, but it can easily give the feeling of inability to earn a profit with crafting. We recently added some necessary recipes with cooldowns to help crafters easily sell something that’s worth more than the cost of the materials going in. Overall, crafting and the mystic forge both play a huge role in redistributing goods inside the economy as well as adding flavor and fun to the gameplay."
John has a tremendous knowledge and understanding of not just how the numbers behind our beloved guild wars 2 economy work, but also how people react to them. Opportunities in crafting appear and then are silenced once enough people compete for the same materials and consumers. Prices are constantly re-correcting to the point of making something no longer profitable, but the key take away is what John said about new opportunities replacing them.
Using tools like gold wars 2 allow you to instantly pick out which crafting recipes are profitable. Also, having a stash of materials in your bank obtained with super cheap buy orders will enable you to sell items for a profit when everyone else is posting for a loss!
Example: You buy wool cloth on buy orders for 45 copper. The next day wool is selling for 60 copper buy order, and that's because overnight the price of several items like wool insignias rose in value. Wool went up to meet the prices of the new items, making crafting with 60 copper wool way too expensive to be profitable. But you bought it yesterday at 45 copper, so now you have an advantage over anyone who is trying to buy at 60 copper.
If you're a crafter, start keeping track of when your materials are cheap and buy extra at those times. This same logic applies to the mystic forge. The more crafting and mystic forge strategies you are aware of, then the more opportunities you will be able to cash in on as they appear. Cast a wide net and diversify people!
2. Informed Perspective on Players
"How would you compare the way people make money on the trading post in Guild Wars 2 to real world markets?
John: The short answer is: I wouldn’t. I would compare the people. Markets in any major economic system can be hard to understand and predict, and I don’t think this is the medium for a long discussion of virtual and non-virtual economies. However, I think it’s much easier to compare people. While it’s glib to reduce people into individual archetypes, I’ve noticed several types of players in-game that I’ve also noticed as players in real-world financial markets. A good example is the casual investor. In “real life,” this may mean someone who researches their own investment plan or spends their free time studying a specific market for investment. They make fewer but larger trades, and if effective, earn a larger gain than someone who may have not spent the time. This same exact behavior can be seen in Guild Wars 2; the markets are slightly different, but the behavior pattern is the same. In Guild Wars 2 we see a lot of comparable play/personality types that I think have direct corollaries in the real world."
John made it a point to only focus on one type of player: the casual one. These players make up the vast majority of consumers and buyers, so it makes sense that John is so focused on them. He said that they buy/sell small quantities of expensive items. I believe this has to do with the grinding nature of most rpgs; you grind for hours to get enough gold to buy a really expensive item. This makes grinding a little more efficient or helps you reach some other goal like being more useful in fractals.
With new items on the horizon, it really makes sense to be able to sell the expensive materials that players will need for their ascended gear. If you want to get rich later then you better max your crafting disciplines asap.
3. John Understands Time = Gold
John was directly responsible for the 24 hour limit on crafting ascended items. This will be an awesome way to reduce supply and keep crafting profitable for a long time.
4. Hatred for Hackers
"What sort of market manipulation do you most commonly see?
John: The most common market failure I see is asymmetry of information leading to insider trading. This means that players gain knowledge they shouldn’t have through any of various nefarious means, and use that knowledge to gain an advantage on the standard trader. Overall it’s a negligible, but noticeable, impact that I see every couple of weeks. It’s a secret, but: we have plans, and this will soon become an even worse idea than it currently is."
What John is likely suggesting here is that ArenaNet will deliberately leak faulty insider trading information in order to hurt people who try to speculate through unethical methods. This doesn't apply to someone like myself making assumptions based on patch notes, but it does apply to anyone who datamines or hacks to get more information.
5. Disproving the Myth of Market Manipulators
"It is often claimed on the forums this or that market is being monopolized does this actually happen? How long can one player or groups of players control one market for?
John: This comes up really often, and so far there’s nobody monopolizing any major market. That is to say, in every major case of market change that we’ve investigated claims of market control, I’ve yet to find any. That doesn’t mean that there aren’t individuals or groups attempting to manipulate and control markets for personal gain – there definitely are. What it means is that any major market in Guild Wars 2 is just too big and has too much velocity for players to maintain any kind of hold on that market for long. The smaller, lower-velocity markets are more susceptible to monopolistic or oligopolistic behavior, but the profit from those ventures is also diminished. Most players with ambition or finances have better ways of earning income."
I couldn't agree more. So if you use the excuse that people are controlling your market, think again!