State of the Economy and Price of Housing

This isn't a thread complaining about the housing prices, but rather to analyze the effects of the massive gil sink of housing. Currently, I believe the flow of gil into and out of the economy is in a good state. Repairs and taxes from the market boards are the primary ways of getting money out of the economy, and dungeon runs and leves are the primary ways of getting consistent money into the economy.

Now when you look at the price of housing, tens and hundreds of millions of gil, there is really no way for that large of an amount of gil to be inserted back into the economy. When you look at the long term effects that these massive gil sinks will cause, it doesn't look good at all for the future of the economy.

Just as a reference, the state of the Balmung (Legacy Server) economy is in a very bad downward spiral, things cost 40-50% less than they did 2 months ago, which makes earning millions of gil very very difficult due to the fact that there is no demand at all for anything.

All of this on top of the fact that there is no way for a Free Company to earn gil outside donations or titan runs, this is not a way for a Free Company to earn gil. Taxes and Free Company level assets which generate income are a much better system to earn gil for the Free Company rather than "Hey guys give one guy gil so he can buy a house for us!"

So how do you really earn 625 million gil? The answer is, you don't. In order to make money, there needs to be a demand for something, currently there is little demand for anything. Crafters make money by selling things to other crafters, so they can craft more things to sell to other crafters....

All the new crafting items they are adding won't help at all either. Lol-PVP gear, and housing furnishings are the only new things being added really. Housing furnishings, for houses which no one can buy because they are so expensive no one can afford them....

SE Really has no idea how an economy works. Seriously, take something from EVE Online and hire an Economist to analyze your game economy. Then they might finally realize how terrible of a state the economy is currently.

Dude, please don't view these forums for at least a few days. It would be even better if you never came back to view this thread, seriously.

Why? The responses from people that, no matter how much you explain it to them in single-syllable words, will never understand the difference between personally making gil and gil generation in the economy.

If you're lucky you'll only lose faith in humanity. If you not, you might have a stroke brought on by impotent rage.

I'm honestly only thinking of your well being, please stay away for a while.

Hehe we had this problem a while back before the repairs cost came and square enix noticed the problem and reduced repair costs + doing dungeons gained money.

Still the huge ammount of money being removed from the economy will be staggering especially since money generation is very small/limited.

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Originally Posted by ReviiLagoon

SE Really has no idea how an economy works. Seriously, take something from EVE Online and hire an Economist to analyze your game economy. Then they might finally realize how terrible of a state the economy is currently.

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Eh... This has its potential downfalls as well... ANet hired an economist for GW2 and he just seemed to enjoy twirling his moustache and laughing at some of the bollocks the richest players pulled, looking on as if it was an amusing game.
:-(

The Market of Balmung is crashing as we speak. Raw material prices are halfing every 6-12 hours since the announcement of the housing prices. Crystal prices are ridiculously low, so much so that people are stock-piling them with teehee giggles because they won't need crystals again for probably a year or more. Materia prices are a 10th of what they are on newer servers. The whole server has gone insane with no end in sight...and 98% of the server STILL can't afford the price of a FC house.

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Originally Posted by ReviiLagoon

This isn't a thread complaining about the housing prices, but rather to analyze the effects of the massive gil sink of housing.

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Yay, discussions!

I can see why players on legacy servers are upset. It's not that the cost is high, it's that the cost is harder to make up. On that, we can agree. The amount of gil going into the economy on Balmung isn't 6.25x greater there than it is on Coeurl, so the means which generate flat amounts of gil (WP farming, leves, treasure) are vastly less impactful. For many players, that's how they get the gil -- the players sitting on 100 million gil aren't handing it out willy-nilly. It sets up a pretty unpleasant dichotomy between haves and have-nots. At the same time, I think the ongoing problem is that as long as the problem isn't addressed, the dichotomy will persist. A legacy player in another thread suggested excess on legacy servers in the hundreds of billions of gil post-re-denomination.

The economy, by my estimation, is not in a good spot pre-2.1. The amount of gil being generated far outstrips that being removed. 10 weekly WP runs just fills my coffers with excess gil, and the problem will only get worse when I start exchanging these seals for repairs and further reduce the few remaining sinks. I have also collected over 800k from leves. Items which used to be very rare are common, but their value has been propped up by the excess of gil floating around. This has been the case for some time. I'm sure SE has a good view of the gil accumulation, and can certainly plan out any future gil fountains. Now, let's look at prices around the middle, where my server is. I would estimate that if 5,000 players are farming WP every week for myth tomes, they're generating enough new gil (gil added to the economy out of the aether) to buy a new top plot of land every week. Better still, prices for these plots of land fall with time while gil generation does not. The development team used these amounts of gil because they do know the aggregate amount of gil on the servers and how quickly it is being generated. All told, there's plenty of gil showing up to support that kind of price range.

The question to me, really, is how to deal with the legacy server issue in general. The prices there are exorbitant because there is a huge excess of gil in the economy. If anyone pays, the economy falls in line with other server economies and the prices can be gradually lowered. If you don't deal with the excess of gil in this way with FC housing, you'll have to do the same thing later with a different commodity.

The markets are in a spiral because there's NOTHING worth buying!! All equipment can be quested, bought from NPC, or gotten from drops. The only thing the market was good for was selling to other crafters. And that was a pyramid scheme which is slowly collapsing.

Let me also add that the reason for the difference between housing prices on Legacy and non-Legacy isn't because gil is easier or not easier to make - or prices or higher or lower. It is SOLELY due to needing a bigger gil sink in one economy vs. another. That's it. Pathetic.

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Originally Posted by Quesse

Let me also add that the reason for the difference between housing prices on Legacy and non-Legacy isn't because gil is easier or not easier to make - or prices or higher or lower. It is SOLELY due to needing a bigger gil sink in one economy vs. another. That's it. Pathetic.

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And all the people that had friends that played 1.0 and joined a legacy server to play with them: bend over and stay that way. SE's efforts to drain all the legacy gil will continue, they don't care about all the new players on those servers that didn't carry over a ton of gil.

I believe money has been generated at a faster rate than you believe. Groups running WC speed runs for example, these groups pull in over 10K per run after factoring for repairs. With the amount of time that dungeons have generated a reasonable amount of money and the number of players running the content weekly for Myth cap or for extra Philo tomes for new classes I think a lot of new money has entered the economy in the last month.

If the daily quests provide a respectable amount of gil what I expect to see is that high ticket items on the market boards (mostly crafted gear) will decline in price as no one will be willing to sink that much money into a purchase because everything optional (crafted gear is optional as it's a tome alternative,) has become a complimentary good due to housing implementation. I expect to see smaller items, shards and such actually increase in value as people saving for housing will be less inclined to accept lower prices for their wares.

Yeah because the last time the armchair economists all started freaking out about deflation it turned out to be accurate... LOL.

Actually it was mostly just people whining about repair costs. Then SE removed a hideous amount of RMT gil from the economy, proving all the doomsayers wrong instantly.

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Originally Posted by Quesse

The markets are in a spiral because there's NOTHING worth buying!! All equipment can be quested, bought from NPC, or gotten from drops.

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To be fair, there are a few items which are worth buying as they are outclassed only by myth gear, which is time-limited.

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Originally Posted by Quesse

It is SOLELY due to needing a bigger gil sink in one economy vs. another. That's it. Pathetic.

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What, then, is the solution to the problem? Few new players are willing start on a legacy server at this time, and many legacy players are also clamoring for the opportunity to bail. Market prices are quite a bit higher there despite diminished demand compared to non-legacy servers. You can't just take the gil from them.