A Doomed Economy?

[Brennon]

There are also plenty of things that you *can't* desynth also.

[imstimpy]

So what we have here is an approximation of a real world economy. Rather than this approximation trying to replicate a functional economy, they have made compensations to try and retain both the non-crafting, consuming players and the crafters themselves. This has left a large number of opportunites open to the regular player, allowing them to continually enjoy the game rather than being forced from it do to an unfriendly market. This has also left crafters with a more difficult time and, perhaps, lower yields than would have been conceived otherwise.

If the above is true, then many MUDs are going to share this approach. Those that do not, unless ingeniously implemented, will force out their user-base and be left to die. There will be differences in implementation, of course, but it sounds like this problem will persist throughout most of these games.

[sekaran]

Maybe a durability would help, but I for sure wouldn't want some of the items I own to just become bad.

On a side note, Amemet skins on Garuda were 300k last I checked.. and mantles selling for 90k, +1 for 900k.. It really doesn't make sense on how a high level leathercrafter is making money with 200k+ losses on the regular version. I have enough trouble making HQ arrowwood lumber with my skill 40+ levels over the requirement..

[Xephoid]

HQ baby!

On a side note, Amemet skins on Garuda were 300k last I checked.. and mantles selling for 90k, +1 for 900k.. It really doesn't make sense on how a high level leathercrafter is making money with 200k+ losses on the regular version. I have enough trouble making HQ arrowwood lumber with my skill 40+ levels over the requirement..

Amemet mantle is a Lv 60 leather craft syn.

At Lv 30 over cap, HQ probability range from 15% - 50% (depending on the day and moon phase). I'm a level 83 smith, and HQ is just insane on thing that are Lv 50 and under, I average 1 HQ out of 3 syn just by getting the day right, not even bothering with moon phase.

So apply that to a lv 90+ leather crafter. You buy 12 skin for 300K = 3.6 million.

You average 1 HQ for every 3 syn like I do:

4 HQ + 8 normal Syn = 4 x (900K) + 8 x (90K) = 4.32 million.

4.32 million - 3.6 million cost = 720K profit.

Not bad for 30 minutes of work heh? :D

Of course there are days when you will be unlucky, and end up with 2 HQ out of 12, and then there are days when you'll get 6 out of 12. So having a large pool of working capital is important. But when you are that high in a craft, having 5 million or more in cash is common place. I'm only 83, and I have 5 million working capital, so yeah.

High level crafting is pretty much the same. Main money comes from (a) HQ of things that are 30+ trivial. (b) HQ results from De-syn.

Trust me, high level crafters are not losing their shirt... when they are not trying to level their craft that is. :D

[Cuer]

It really frustrates me when people make request an item from me and I reply "just go buy it at the AH, it is cheaper than what I can make it for". Is this how all MMORPG economies are or is it just a flaw in Square-Enix's implementation?

This is a very interesting topic, and it's good to see some thoughtful discussion on it.

First up, it has to be said that FFXI has the best MMOG economy to date, bar none. Most other MMOG end up dealing with rampant inflation, because so much money flows into the economy without flowing back out, that the in-game currency becomes practically worthless. (Or they act like Everquest, and introduce a new expansion with "bigger, better gear!" every 8 months which devalues all the items before it.)

As far as the overall economy goes, some points:

The price of a specific item doesn't really matter -- As was mentioned earlier, having some prices artificially low is only good for new players, since it means they can get better gear at cheaper price than they'd be able to otherwise; it's essentially a cost of living improvement for them. Unless prices fall so much that they skew the economy overall, which would require a huge amount of them being very low, the price of a specific item really has next to no impact on the overall economy. The main reason that prices are falling on many items is because many players now have expendable income that they're investing in crafting. Just because an item is on the AH for cheaper than you can craft it doesn't inherently mean that the economy is flawed, although it's easy to feel that way when you're getting undercut left and right. Crafting in FFXI is set up to be a huge money sink to level up, and then for the small percentage of people who get to the highest levels, to be a way to make money. This is done with the HQ rewards, whether they're a +1 version, or just multiples of the same item. The same can be seen in simple items like beeswax from Alchemy; the guy leveling up by making it will never be able to make it as cost-effectively as the person who can do a HQ2 and HQ3 regularly. So in short, crafting is a money sink for all but the highest levels (and then it's a huge crafting sink just to raise it a miniscule amount). Players will gladly lose money on some items in order to either a) raise their skill, or b) have a chance at getting a HQ item. That isn't a bad economy, it's just one where people value different things.

Any item that falls too far in price will be corrected -- The use of desynth and the Guild Point system has both been mentioned in this regard. I think the GP system is generally under-recognized in just how much it does to take gil and items out of the economy. It's not just the fact that all those specific items are being turned in for Guild Points, thereby raising the value of the other copies of that item that are left, and it's ingredients -- anytime you have a mass scale of synthesis going in, there will be some loss (about 5% minimum, regardless of skill), which means that a lot of items are destroyed just in the attempt to get Guild Points. As for the rewards being "too easy" to get; if that becomes true, it would be quite simple for S-E to add higher level Guild Point items (rewards that take 300k, 1mil Guild Points, etc.) You can be sure that if those are added, people will start blowing gil left and right to obtain them, too.

Deflation will only really be a problem when players leave en masse -- When I was leveling up my first job, the value of all the items I bought inflated from when I bought them to when I sold them. There were so many people coming into the game, and so few crafters to create the basic goods, that everything was skyrocketing in price. The big worry then (which was partially legitimate given the history of MMOG) was about inflation, not deflation. Now it's the reverse, apparently, or at least until the Europeans swarm the servers and start buying up all the newbie gear again. For the reasons mentioned above, true across the board deflation will only be a problem when you have a lot of players leaving the game at once, and putting their items back into the marketplace.

The biggest potential problem is inflation, not deflation -- The hardest thing to keep a handle on in the economy of a MMOG that functions in a supply and demand environment at all, is not allowing inflation to eat away at it. S-E has taken a hard-line approach to this, basically divorcing any experience gains from monetary gains -- it's extremely difficult to get both experience and gil or items of value on a character at the same time. They've also introduced systems that pull value out of the economy overall, in order to try to keep things stable; Guild Points are one, Dynamis is another. Dynamis is a huge sink: time, experience, gil -- it all gets pulled away by anyone who tries to get the goodies from there. (As an example, it takes in excess of 50 million gil to upgrade a single relic weapon completely, plus an array of extraordinarily difficult drops.)

There are bumps within the overall FFXI economy at times, but imo, it seems as though it is functioning quite well overall, for the time being. Whether it will stay that way remains to be seen...

[iglak]

the economy...

Supply and demand is a two way street. Gil is just as much a commodity as everything else. When selling a crafted item, the crafter supplies the item and the buyers demand it, while at the same time the crafter demands Gil and the buyers supply it. This is it's own way of keeping prices balanced.

Many non-consumables become consumables, not only in the ways of desynthesis and guildpoints, but simply selling to NPCs. When the price of an item gets so low that the seller gets almost as much gil just by selling it to the NPCs, many people will do that instead of taking up valuable AH space. Any items of low demand or high supply are also sold to NPCs for quick cash, since it becomes very hard to sell them at the AH. There are also many times when people have too many items they want to sell to fit it all on the AH, the least expensive ones are sold to NPCs.

It is true that normal synthesis items sell for very little. And as was said before, this is because people trying to craft HQs are willing to take a fall before the jump. There is a limit where no one will craft the item because it will never be worth it, then supply will go down, and cost will rise.

And demand is steadily increasing. With non-consumables being used as consumables, demand for the consumed items will always be increasing. Not only that, but newbies come in every day(week?), and old players also start new jobs and create new characters.

Really the only thing that could ruin the economy is Gil-selling companies that hire employees to do nothing but farm (they increase supply by a lot without changing demand), and even that will take quite a lot to ruin the economy. Everything in-game has checks and balances.

Sure, limits will be reached, and in many cases breached, but they will always return to below the limit lines. And if someone somehow hacks into everyone's files, or the server database, and gets rid of everyone's gil, then the market will start back up at low prices in proportion to before. And THFs will have a good time with their Gilfinder ability. High level players, even without Gilfinder, can farm beastmen for about 10kG/hr, and there are quite a lot of beastmen that nobody likes to touch normally. The market would be back to normal in a very short time.

[JP_Ikari]

I think everyone gets hurt with the pinch of how some people would just totally mess up the prices on certain items (let it be consumables or not). Again, it will always go towards how in-demand that said item is. To that previous thread, if you guys look at that DmXlord (I think that's how you spell his name) he pretty much summed it up and just stick with your guns and don't drop your prices regardless on what the price history says. If another individual wants to buy that item, damn it he has to cough it up, regardless if that price history is all screwy. I myself don't like how the price history is in Garuda on certain items, but I can't do nothing about it, but stick with my guns and stay with the price that I "think" it should be. If it gets sold, good for me, if it doesn't, try it again (even if it's in Jeuno and me coughing up 650 for a stack, or 250 *i'm trying to remember hehe* on a single item). That's how I do it. So now instead of everyone trying to follow the flow of the price history, stick with your price, it will sell regardless. That's my 2gil on it.

Ikari

[leii]

as more and more people reach higher levels the higher level equipment will cost more. like sniper rings.

[imstimpy]

Thank you for the mature responses to my inquisition. It really helps to see how things are organized. In the end, it is a really fascinating topic of discussion.

[Roldarin]

Its interesting how the idea of desynths is a way to make money. Because the results of the desynth is sold to lower level people trying to get high level, who will use desynths to make money.

Sounds like a pyramid scheme to me. As long as you have new entrants at the bottom buying the products of high end crafters with the promise of being rich, the system sustains itself.

I realize that desynthing isn't the only way to make money for some crafts, but it just struck me as funny that money making through desynths seems so similar to a typical pyramid scheme.

The more I read about it, the more I come to realize that to make back the money you spent raising your skill you'd need to get really high level and craft for a long time. Or am I missing something?

[Cuer]

Its interesting how the idea of desynths is a way to make money. Because the results of the desynth is sold to lower level people trying to get high level, who will use desynths to make money.

This is by and large incorrect. Most crafters desynth in order to obtain raw materials for a cheaper price than they buy them otherwise. It's a way of making sure that crafted items still have value in the marketplace, even if there isn't enough of a demand for the item to use it. If a crafted item gets cheaper than the price of the raw materials it contains + the price of a lightning crystal, smart crafters will buy it up and desynth the raw materials out of it.

The more I read about it, the more I come to realize that to make back the money you spent raising your skill you'd need to get really high level and craft for a long time. Or am I missing something?

This is absolutely correct. Crafting is primarily a gil sink, if you want to take a skill to the highest levels. Over time, a high skill crafter can make that money back and more. Since S-E is getting paid by the month from all of us, it's a pretty smart system from their point of view.

[CarbonFibre]

I just wish they would do something about people camping things like the carpenter's guild for arrowwood lumber only to resell on AH for a much higher price. I haven't checked in a long time, but I doubt this has changed much. Hell, I wouldn't be surprised if people had guild bots that could execute commands far faster than any normal human navigating the menus so that they get all of X item before anyone else.

At least there is a minimum price of things. Items (most of the time) cannot go far below the price that they would sell to an NPC. By this time, most people know what items go for what or figure it out, so if something is below NPC buying price you're damn right I'm going to buy as many as I can possibly get my hands on. Oh, and remind me to check the prices on the scrolls of Bind and Blind next time I'm in San d'Oria.

[kuu]

Durability is a horrible idea

Economically it is unstable as people have layed out, but FFxi is not as ridget as it seems.

People "die" and people are "born"

World shifting happens periodically

It doesn't solve the problem, of course not, but you forget that SE is "God" in a sense. They can change any rule at any time and has.

Introducing new recipes, change old, flood, or constrict can shape crafters ability to make or lose money(in the sense of monopolies. 12/9 anyone?)

All this is underlying the fact that ffxi is not ment to live on forever. Eventually, and not quite that long in terms of life span, will die and goto FFXX or something. Simply for technological reasons even.

But this is going away from why durability is a bad idea in general.

It's partily a mental issue in which, this is a game, and not ment to reflect reality, only try to reflect the best parts of it.

Acquiring weath, status, power etc are all things reflected in our wants. Durability by its nature is the opposite of that.

The phyical issue is cost. You are trying to do as much as possible with as little as possible. A Durability system is costly to say the least. Less effective tools, for a limited lifespan= more money for SE in the end.

[aegina]

Re: A Doomed Economy?

Sorry for bumping an old thread, but I found this interesting, and wanted to add some more of my own thoughts to it.

There are many things that hurt the ffxi economy.

For one, is the manner in which hq items are made. High level players mass produce nq items trying to hq. this floods the market as high level and low level players compete to sell the same item, the higher level crafter being able to sell at a loss if he wants to, giving him a distinct advantage and pushing low level crafters out of the market. if the manner in which hq’d items were produced were changed, so that attempting to create an hq could not result in an nq, it would help to, at the very least, slow the degradation of this artificial economy. It would place high level and low level crafters in separate markets, and make making money easier for lower level crafters.

For another, npc’s hurt the economy. You spend 4k on raw materials to create an item you must sell for 2k, because the npc standing next to the ah sells that same item for 2k. the prices of npc-sold items are not based on the current economy, and do not adjust properly to inflation. selling items to npc’s hurts the economy as well. Soppose there’s an item you normally sell for 4k. one day you try to sell it for 3k, but there’s an npc who will buy it for 3500. someone will buy yours and anyone who tries to undercut you just to sell them to the npc. Normal customers will then have to buy from the players who sold theirs for more than you did. The price then cannot drop below 3500, so the price can only go up. This also adds more gil to the economy, adding to inflated prices further.

As mentioned before, reselling equipment hurts the economy. People creating new characters/switching to new jobs serves to hide this and prolong the inevitable, but armor and weapons are not consumables. Making gear consumable would help the crafters by creating more of a need for all gear. This could be done through durability, or it could be done through making all gear bind-on-equip. Making gear bind-on-equip would make the gear consumable because you would eventually have to throw it away once you reached a higher level. Either way would work, though I doubt either method could be properly implemented into this game at this point without losing customers.

At this point, I think it’s only a matter of time before the economy fails completely…