ARR Gil Cap Reduction

[Punainen]

A 90% reduction to the currency as a whole is not "taking gil away." It is a measure against overly-inflated values.

Nobody loses wealth, the way their wealth is numerically represented is changed.

Its slightly more complicated than that. As that makes it so anything that used to cost, say... 100 gil, if still listed at 100 gil, is a 90% increase in price. The problem lies in the fact that, those used to the current pricing will NOT begin charging 90% less for all their items. An item that sells in the MW for 10k, is NOT going to drop to 1k. It will remain at 10k. So beyond NPC values (which hold extremely little control over the economy), all they're really doing is making everyone poorer.

[NoctisUmbra]

Its slightly more complicated than that. As that makes it so anything that used to cost, say... 100 gil, if still listed at 100 gil, is a 90% increase in price. The problem lies in the fact that, those used to the current pricing will NOT begin charging 90% less for all their items. An item that sells in the MW for 10k, is NOT going to drop to 1k. It will remain at 10k. So beyond NPC values (which hold extremely little control over the economy), all they're really doing is making everyone poorer.

Oh, but they will. Sure prices won't change immediately but they definitely will drop, and likely drop rapidly. When everyone has 10% of what they used to then they won't be buying certain things for what they're willing to pay now.

I'm not saying there won't be some sort of transitional period... in fact expecting there not to be would be silly for many other reasons as well considering gathering and crafting are undergoing fundamental changes... but rather I'm pointing out that what they're doing isn't a Gil wipe... it's a digit drop.

[Seig345]

Oh, but they will. Sure prices won't change immediately but they definitely will drop, and likely drop rapidly. When everyone has 10% of what they used to then they won't be buying certain things for what they're willing to pay now.

I'm not saying there won't be some sort of transitional period... in fact expecting there not to be would be silly for many other reasons as well considering gathering and crafting are undergoing fundamental changes... but rather I'm pointing out that what they're doing isn't a Gil wipe... it's a digit drop.

Precisely. People will try to leave items at the same price, but especially those who only earn their gil off the land are going to see anything priced to the old standard and just laugh. Whether they consider the seller crazy, or blame SE for the gil drop putting the item out of their reach is irrelevant, as long as that item suddenly becomes out of their reach at that price.

[Punainen]

Oh, but they will. Sure prices won't change immediately but they definitely will drop, and likely drop rapidly. When everyone has 10% of what they used to then they won't be buying certain things for what they're willing to pay now.

I'm not saying there won't be some sort of transitional period... in fact expecting there not to be would be silly for many other reasons as well considering gathering and crafting are undergoing fundamental changes... but rather I'm pointing out that what they're doing isn't a Gil wipe... it's a digit drop.

Except it wont drop by 90%. An item that currently sells for 1mil will likely NEVER get down to 100k. At this point it would actually be BETTER to wipe everyone's gil, because then EVERYONE would have to deal with it being harder to earn as much gil as before, and therefore new prices will be set immediately, rather than having to gradually lower and likely never get down to what they should be.

Also, its a bad idea, as at the moment the idea of RMT is laughable by most people, as when gil is this prevalent, why would anyone feel the need to buy it? But increasing the demand for gil, increases the demand to BUY gil, which makes RMT more successful.

[NoctisUmbra]

Except it wont drop by 90%. An item that currently sells for 1mil will likely NEVER get down to 100k.

Interesting... and what exactly do you base this assertion on? I mean we can all assume what we want and pretend we're discussing, or we can look at some facts. If we don't have enough facts, we can at least study the current market and in this case the reason behind the prices placed on items.

Let's go along with your example. What sort of goods can we expect to find selling on the market for ~1 mil? Some materia? Uncommon/melded/HQ gear? New, high demand items that have just hit the market? For all of these things, how does one determine the value to sell for in game? Are they really based on cost?

On the contrary almost everything selling for 1 mil in game is selling for that price as a means of supply/demand. Supply/demand isn't primarily influenced by the good's cost when the scale tips towards higher demand and lower supply. No matter how high the demand is, nobody is going to be willing to continue to pay 1 mil for something when 1 mil becomes 10x more difficult to make. The sellers in turn are going to have no trouble drastically lowering prices until sales start flowing again and a new value is found in the market that satisfies supply/demand.

So, considering how the market works at such high values, prices dropping from values such as 1 mil to that of 100k is not impossible. It is inevitable.

[NoctisUmbra]

Oh, this just came to mind so I apologize in advance for the double post, but consider the following little brain-teaser:

If you buy something for 500k on the market on November 1st before the Final Save maintenance for the current version and manage to sell this very same item for only 100k in ARR, you will have made a 50% ROI (Return on Investment).

[Punainen]

Interesting... and what exactly do you base this assertion on? I mean we can all assume what we want and pretend we're discussing, or we can look at some facts. If we don't have enough facts, we can at least study the current market and in this case the reason behind the prices placed on items.

Let's go along with your example. What sort of goods can we expect to find selling on the market for ~1 mil? Some materia? Uncommon/melded/HQ gear? New, high demand items that have just hit the market? For all of these things, how does one determine the value to sell for in game? Are they really based on cost?

On the contrary almost everything selling for 1 mil in game is selling for that price as a means of supply/demand. Supply/demand isn't primarily influenced by the good's cost when the scale tips towards higher demand and lower supply. No matter how high the demand is, nobody is going to be willing to continue to pay 1 mil for something when 1 mil becomes 10x more difficult to make. The sellers in turn are going to have no trouble drastically lowering prices until sales start flowing again and a new value is found in the market that satisfies supply/demand.

So, considering how the market works at such high values, prices dropping from values such as 1 mil to that of 100k is not impossible. It is inevitable.

I would have continued to discuss this with you, but you're beginning to get really self-righteous and condescending, so I'm done.

[NoctisUmbra]

I would have continued to discuss this with you, but you're beginning to get really self-righteous and condescending, so I'm done.

Yikes. Here I thought I was just applying logic. I can't even find a part in what I wrote that would be considered condescending, but perhaps I've misjudged your sensitivity in that regard. In that case I apologize.

[PandaTaru]

Interesting... and what exactly do you base this assertion on? I mean we can all assume what we want and pretend we're discussing, or we can look at some facts. If we don't have enough facts, we can at least study the current market and in this case the reason behind the prices placed on items.

Let's go along with your example. What sort of goods can we expect to find selling on the market for ~1 mil? Some materia? Uncommon/melded/HQ gear? New, high demand items that have just hit the market? For all of these things, how does one determine the value to sell for in game? Are they really based on cost?

[...]
It is inevitable.

Yep, very interesting- And you do yours based on what? You're basically saying, it's ok to reduce our amount of gil to then say "hey, who cares we can just sell stuff for the same price as before to get it back" which make the measure useless smarty.

The only thing this measure will do is frustrate people and drive the demand of RMT like many people pointed out. Yes it will and it's based the fact that the exact same thing happened before in FFXI. Never played FFXI? Here is what happened; gil was hard to make, RMT started to sell gil for cheap and people picked the easy way by buying gil instead of trying to make gil. The thing ended up with SE finally banning RMT after the price at the AH skyrocketed and having 1m was like having 100k a couple of months back. I really mean a few months like 3 or 4. If even one of all the economic models worked, we'd live in a paradise. Never underestimate human stupidity.

[NoctisUmbra]

Yep, very interesting- And you do yours based on what? You're basically saying, it's ok to reduce our amount of gil to then say "hey, who cares we can just sell stuff for the same price as before to get it back" which make the measure useless smarty.

You-...I-... wha? Where did you get the idea that I was suggesting people continue to sell stuff for the price from before and make their gil back or whatever. I never so much as implied such a notion.

My entire post is a sequence of cause and effect. Unfortunately, we cannot predict the future in this case with any hard evidence.

I can understand how it may be confusing to grasp, as seen by the popularity of people actually believing SE is simply gonna remove any gil we have in excess off 99,999,999 come ARR - and they support this notion with Bayohne's post that they won't be wiping any gil which I fınd very ironic.

Let me try to clarify:

1. Everyone's gil is reduced to 10% of it's previous value. All NPC sale values are reduced to 10% of their previous value. All gil rewards are reduced to 10% of their previous value. Re-denomination. 1 ARR gil = 10 1.XX gil.

2a. Buyers have significantly less gil than before when they consider the not-yet-adjusted market wards values and therefore they do not buy anything as paying 1mil for something now would amount to having paid 10m for it before.

2b. Sellers notice that nothing is selling like it used to at the old prices and repeatedly drop prices until things sell. Technically they wouldn't be losing any profit at all until they go below 10% of the previous sale price. This means they won't have any trouble dropping prices by large values at a very quick rate. Even the most stubborn of them will be forced to.

3. New supply/demand rates are met and new prices are achieved in the market - likely eventually hovering around 10% of what they used to be.