Overflowing stupidity

[Alzelia]

Hello everyone debating about FFXIV's economy! The servers are down for yet another maintenance so instead of playing the markets tonight, I'm gonna educate you guys on how the economy really works, and what the real problem is with the economy (I read this entire thread and not one person mentioned the TRUE problem with FFXIVs economy).

First of all, let me tell every one my background in ffxiv. I have been playing ffxiv since about 4 or 5 months after 1.0's launch. I had almost all 50 crafting classes BEFORE 2.0. (my cul was only 46) The economy of ffxiv has always fascinated me until lately. I played through 1.0 with the intent of becomming as rich as possible for 2.0. Now I'm sitting on millions of gil, I have all DOH and DOL with BIS gear at 50. The economy towards the end of 1.0 was vastly healthier than the current economy in 2.1. But before we get to that, I'm gonna cover many of the topics that you guys have brought up.

First of all, I will cover the OP's issue of blind bidding. If blind bidding was actually a superior form of economics compared to a market system, then surely at least one country on Earth would use this are their economic system. Of course none do. In a free market, transparency is a good thing. It allows people to make smarter decisions since they know more facts. Blind bidding also makes it take possibly a lot more time to make a purchase. Do you think Yoshi, a man who has gone out of his way to try to streamline ffxiv's gameplay, would want that? Blind bidding is not gonna happen

Next topic. Why is "Overflowing stupidity" a problem? I would figure that an intelligent person would welcome stupidity and use their vast intellect to figure out how to take advantage and gain from the stupidity of others.

Undercutting. I will admit, I do find it frustrating to put something up for sale and come back an hour later to see 10 people selling the same thing for 1 gil less. First of all, they could have just sold it for the same price as my item. The most recent item up for sale apprears lower on the list on the wards if they are the same price. I have a question for those who are complaining about undercutting? Do you wish to ban undercutting and make it so that someone can only sell items at a higher price, and watch the prices go up and up and up towards infinity? Undercutting is how the free market works. Undercutting is a very good thing. Yes it sucks when someone undercuts the stuff you have up for sale, but that's how the economy works. Asking people to stop undercutting is like asking them to just give you their money. It's not going to happen.

2 star synths: trying to make gil on 2 star synths was purely gambling. First of all, you had the risk of being unable to HQ the synth. And second of all, you were gambling that you would be able to sell the gear for more than the cost of the mats. On top of that, people didn't really buy much HQ 2 star gear. It only took about a week into 2.0 for there to be enough crafters geared for 2 star synths to be able to meet the demand for the 2 star gear. I personally made 3 mil that first week selling HQ gryphonskin tunics, but I had them left over from 1.0. If you want to make gil (or money) its a diversity helps protect you from bad luck with investments, but the up front costs of 2 star gear was so high that it prevented diversification of investments.

Next I wish to cover the "I farmed all the mats, when I sold whatever item it was pure profit." While this is technically true, it ignores a concept in economics called an opportunity cost. Yes a person who did this made gil, but they also lost the gil they could have made. For example, and I'm just making up these numbers, but lets say it takes 5 minutes to farm the shards for a single synth, and 5 minutes to farm a different material, lets say fleece, for a single synth. If fleece sells for 500 gil and shards sell for 50, it makes more sense to farm the fleece for 10 minutes and buy the shards off the market. You would net 450 gil from that.

Well, now that I coverd those issues, let me tell you guys what the REAL problem with the economy is, and why 1.0 had a much healthier economy that 2.0. I will give you a hint, its not gil sellers, housing prices, botters, undercutters, or stupidity of the people who play ffxiv. The problem is the lack of gear and/or item sinks. The biggest gear sink in ffxiv right now is materia. Materia as it is now is nothing like the gear/material sink it was in 1.0. To those who didn't play 1.0, back then, if you failed a meld, you lost EVERYTHING, you lost the gear, the materia, and the catalyst. In order to get all 5 slots melded, you HAD to succeed on your first try EACH time. I blew up 50 HQ gryophonskin tunics in 1.0 just to have 1 of them left at the end with a triple meld.

In 1.0 it was worth it to spend so much effort on melding because melded gear was BIS, and being able to buy BIS gear definetely helped the economy stay active. However I DO NOT want crafted gear to be BIS NOR do I wish to return to 1.0's materia system. What I want is a damn good gear sink like materia was back in 1.0. I think PVP might have some potions and food sinks.

[Nova_Dresden]

A blind market stops a market board with 100 items all 1 Gil lower than the next until the real value of an item is double the going rate. I don't feel we should have huge margins but in reality there maybe 10 items worth anything since all gear is replaced instantly.

This shouldn't have been a topic about the market as much as I should have said why are crafters so greedy they undercut until they lose money.

A blind market encourages unfair or unethical selling/buying in order to artificially inflate the price of an item. An item is only worth what someone else is willing to pay for it and what someone else is willing to sell it for. If someone else is willing to sell a crafted item for 5% over cost of production then you have no right to complain you can't sell it for triple the cost of production.

[Bape_Escape]

Snip

EXCELLENT breakdown, especially on the gear sinks. Identifying a market churn - commodities with lots of activity around them - is pretty much the "golden ticket" to making money. Market price isn't the only factor to making money - you also have to consider the opportunity cost (as you rightfully point out!) and time to market (in our case meaning the time from listing to sale). You would make more money in the long-term on selling highly active items at 500 a pop if you could sell 10 a day, compared to listing one item for 50k that didn't sell for 2 weeks.

Surely there are new markets heating up now that this content is out. Treasure Map items, specifically minions, seem to be SUPER valuable right now.

[Wazabi]

I think the only overflowing stupidity here are people who didn't do sufficient profit analysis, supply/demand analysis on an item that they want to sell, went on and craft the item anyway, fail to sell it at the price that they want, and then blame it to undercutters.

[Wulfies]

Simple solution is simple:

Charge listing fees.

No, seriously. Most MMOs require that you pay a listing fee (usually some small percentage of the item's list price) in order to place it up on the market. Do this whenever an item is listed and whenever the item's price is changed and you'll see the rampant undercutting grind to a rapid halt. The markets will stabilize very quickly and people might actually be able to make a decent profit from gathering and crafting.

They already have a tax system. See my quote regarding changing taxes on how SE is slowly shrinking the amount of gil to prevent market inflation (this is from a thread regarding changing taxes which i am not for):

SE has already implemented some seriously, imho crappy, ways to significantly destroy gil.

1) if you came over form 1.0 you lost 90% of the gil stored (my tens of millions of gil went to just millions of gil)
2) selling drops from a lvl 50 mob/gathering spot will only get you 10-12 gil at the max. Same with the high end crafting gear (i have yet to see anything crafter made that sells for over 100 gil)
3) Repair costs (till they "fixed/reduced" the rates) were just a way to suck money out of the economy.
4) Teleports! good god the amount of gil it takes to go rom Uldah to Gridana or Uldah to Limsa let alone anywhere to Mor Dhona or Coerthas.
5) Foreth-coming Housing - thankfully its not a buy the house (millions of gil just for the house w/o furniture) and have to pay a monthly rent cause that would be crazy talk.
6) tax on selling 5% is fine as is. With the Market Boards, there is no money being created in game, all we have is just money changing hands, less the fees of course.

To top that off look at how you make gil:

1) side quests (which to my knowledge can only be completed once) and even then, I finished a lvl 45 side quest and walked away with less than 700 gil.
2) leve quests, (now i have only experience from a few crafting and mostly gathering) give small rewards as well (eg. lvl 35 gathering/crafting leves give from 300-600). For crafters that barely would cover the costs of the materials.


Based on this, I think they are set on destroying money quickly.

@Alzelia - Very Well said. People do expect obscene profits when selling their crap stuff on the MB and when they have to lower their price to compete they get worked up with "rage" and say the market system is broken. People feel that they are entitled to sell their gear for max profits but will only buy at the lowest price. This will never work

Next I wish to cover the "I farmed all the mats, when I sold whatever item it was pure profit." While this is technically true, it ignores a concept in economics called an opportunity cost. Yes a person who did this made gil, but they also lost the gil they could have made. For example, and I'm just making up these numbers, but lets say it takes 5 minutes to farm the shards for a single synth, and 5 minutes to farm a different material, lets say fleece, for a single synth. If fleece sells for 500 gil and shards sell for 50, it makes more sense to farm the fleece for 10 minutes and buy the shards off the market. You would net 450 gil from that.

I've been trying to say this in most of my posts, there is more to selling than just at what price your object is selling for currently on the market. Some people do not seem to understand this.

It is the crafter's responsibility to find markets which are or are not profitable. When I decide on a market to sell stuff I look not only at the going prices for the product(s) I will be making but also at the history to see how fast said product is moving.

Well, now that I coverd those issues, let me tell you guys what the REAL problem with the economy is, and why 1.0 had a much healthier economy that 2.0. I will give you a hint, its not gil sellers, housing prices, botters, undercutters, or stupidity of the people who play ffxiv. The problem is the lack of gear and/or item sinks. The biggest gear sink in ffxiv right now is materia. Materia as it is now is nothing like the gear/material sink it was in 1.0. To those who didn't play 1.0, back then, if you failed a meld, you lost EVERYTHING, you lost the gear, the materia, and the catalyst. In order to get all 5 slots melded, you HAD to succeed on your first try EACH time. I blew up 50 HQ gryophonskin tunics in 1.0 just to have 1 of them left at the end with a triple meld.

Oh the amount of Raptorskin Satchel Purses I had to burn through to get myself a tri-meld plus all those materia. Also you forgot that there were certain materia that could only fit into certain spots and certain catalysts worked on certain materia. That was fun trying to match up and kept people buying loads of gear.

[Zourin]

Lets take steel. Prices on my server had stabilized pre 2.1 to a gentle fluctuation between 200-250 a bar. Surprisingly enough, the Amal'ja have a price point of 258, so either floor or ceiling, you would think that the price would generally centralize around this number to maximize profits.. High qualities sold well in modest quantities, being significantly more time consuming to craft, assuming you didn't quicksynth thousands of ingots.

Only instead the price crashed to 100-110. Apparently, everyone clamoring for gil over the housing fiasco did exactly that. Thousands of metal ingots flooding the market. Thousands of ores flooding the market. HQ cobalt and mythril ores going for 30 gil. bomb ash for 40gil. 20's of thousands of shards driving some flavors below the 10gil waterline. Darksteel Ore plummeting to 200 apeice. Gold ore doing the same. Other goldsmithing ingredients that were 'trash' to begin with saw an influx of oversupply.

The only person making money I know of right now is the guy with 16 retainers all selling 20 different ingredient/component/etc at a time in stacks of 1, and almost never leaves town.

Ores down, ingots down, plates & rivets. Equipment always was pretty terrible. Given these are my primary markets, I've had little choice but to abandon the boards entirely and go straight to the gil faucet for the scant few drops I can coax from the stone walls of the dungeon finder. I would make more gil running a dungeon than synthing over such small profit margins and losing most of it to repairs.

[HEC]

... synthing over such small profit margins and losing most of it to repairs.

In regards of repairs:

- if you craft lower recepies - use alternative gear sets without materia in and then convert it after binding
- don't use a full set if it's not needed to finish the craft
- do repairs yourself and only when it's at 0% - it will drop the cost of repairs to 1/3 - 1/4 if you'll purchase dark matter from NPC or you can even use extra GC seals to purchas dark matter (now a little better since 2.1 when they've dropped the "cost" of the dark matter in seals)

[Asteldian]

I am more bothered by the fact you can see what the item has previously been selling for. I have no issue with competing with current sales - smart players don't bother undercutting because they know their item will still sell (particularly for popular items). I have seen material selling from 40k down to 15k and still selling again regularly at 35k (by selling I mean ACTUALLY being bought) so the undercutters ultimately missed out on a lot of money trying to deflate the market costs. If someone undercuts too much I buy it and resell it.

[Fiosha_Maureiba]

I am more bothered by the fact you can see what the item has previously been selling for. I have no issue with competing with current sales - smart players don't bother undercutting because they know their item will still sell (particularly for popular items). I have seen material selling from 40k down to 15k and still selling again regularly at 35k (by selling I mean ACTUALLY being bought) so the undercutters ultimately missed out on a lot of money trying to deflate the market costs. If someone undercuts too much I buy it and resell it.

For finished products, I would have to disagree. Two star accessories that used to sell dropped from 1+ million to 100k. Other two star gear similiar in the 700k range. I watched over a 1.5 month as people undercut me on those specific items until the patch came and now it's unrealistic to keep the items up there.

It's smarter to cut your losses as the markets change. Maybe if I had eight retainers, I may leave items up, but my inventory space / retainer included, is crying in the meantime.

[Asteldian]

2* recipes are an exception. Their cost was always going to drop significantly as time went on because less and less people need the tomes so just blow them on ingredients. Add in 2.1 giving more tomes more easily plus treasure hunts and the ingredient costs drop and therefore so does the gear