I wrote this in the Player-supported area of the Guild Wars 2 forums, so for those of you who don’t follow it, I will repost it.
Follow my complete message history on their support forum through this link:
and now, the message I wrote…
I’ll start this out with my primary concern:
The post-transaction tax is undocumented, in-game.
As the majority of traders realize that they are losing their earnings to a hidden tax, the number of sale listings will dry up. The listing fee is enough of a hit already to scare people out of trading (see the above statement about the problem of continuous front running). This may drive up prices, and mop up any “excess” gold generated within the game. At the same time, I find it quite shifty to clearly state the smaller tax, then make no reference to the larger one. This has the potential to really blow up in ArenaNET’s face, because…
Gems can be purchased with real dollars, then exchanged for gold.
The ability to use real dollars to create gold is the biggest inflationary driver for the game. We’re not in a closed economic system. There is an “invisible magic hand” that generates wealth out of thin Tyrian air, in much the same way the Federal Reserve does.
Since there is no ability to cash-out gems back to real dollars, increasing vendor costs, severe taxation and a continuously dropping exchange rate are the methods that can be used to slow inflation.
I would be very surprised if ArenaNET was not aware of this right from the start. Listing and post-transaction taxes result in real balance sheet earnings for the company, because of the gems-to-gold exchange system.
As the taxation drives sellers out of the system and increases prices, late joining players will be more likely to make gem purchases with real dollars to help them catch up with those of us who were here right from the start, which wasn’t possible with Guild Wars 1.
Decreasing exchange rates (demand) and increasing item costs due to sell side risk mean increased real dollar value for each in-game copper piece, which I am estimating is meant to balance out real dollar purchase inflation.
The real problem, though, is that ArenaNET is, without clear documentation, taking away gold (copper, whatever) that has been purchased with real dollars. It’s one thing for the customer to be a bad trader, but it’s another thing to secretly siphon profits out of their trades.
Users get banned for finding and using exploits within the game (which is great, I am with this). How does it work when a real (not in game) vendor is, and I say HOPEFULLY unintentionally, exploiting its customers misunderstanding of the trading system to take an undocumented profit?
SLIDING EXCHANGE RATES
From the beta events, I prepared by doing my gems-to-gold exchange at the first few minutes of pre-launch, predicting that the rate would only go down. At 9pm PDT on August 24th, the exchange rate opened at 30 silver per gem. Each time the trading post went up, the rate went down. We see it settling now at around 18-19. Predictions for the future?
ONE MORE THING:
This market opens the opportunity for a wealthy (or well stocked) player to short sell. As a previous poster mentioned, there are many times when you will see a sell order posted at significantly less than the market rate. In a slow moving commodity, this extreme front running can have that cascading effect on decreasing the price and drive it down quite quickly. Far from this being a “stupid trader” trying to get their deal through fast, the seller may use this technique to hammer down the price of a product, then purchase a large allotment at the now significantly reduced price. As long as the short seller can eat up all of the low prices quickly, they can then drive the market back up and sell at the “normal” price, once they have scared sellers out of the commodity.
I see the tax as an unfair burden on the novice trader and a potential windfall for the astute one, who understands market dynamics through real world experience.
BTW, I also somewhat agree with the poster who stated that the lack of a stable trading post for the first few weeks of this game has the potential to crash the game’s economy.. BUT, since it is a game, ArenaNET does have the ability (and has done so in BWE’s) to manipulate it however they see fit to correct it. How good a job they do, well that’s up to John Smith now, isn’t it? Hopefully he realizes, by now, how incorrect his BWE economy infographic was.