This just a fluff opinion piece, no real significance other than I happened to be thinking about it.

Disclaimer: I do not even remotely consider myself an economic expert.

Having spent a lot of time crafting over the last couple of years, and having dabbled in playing the market (e.g. buying and relisting), crafting lowbie gear, crafting endgame gear, etc. I've had a certain amount of experience making and losing credits. I've also seen (and participated in) debates on these forums about how the economy is affected by the Cartel Market, by crafters cornering commodities, inflation, etc.

I have a theory.

I believe that the market is driven by how many credits per hour someone can make doing dailies at level 55.

The only way to "create" credits is to loot a chest, loot a mob, turn in a quest or sell equipment to a vendor. Buying and selling on the GTN only move money around, it doesn't get created.

If someone sells an expensive item (e.g. Revan's mask), it is purchased by someone who amassed credits. This player obtained those credits either by running dailies, or by selling things to people who did.

Lowbie purple gear can sell for 150,000 credits, which is an extraordinary price, when you consider that crafted Basic gear (rating 156) sells for much less. The only reason it sells for that much is because people are willing to pay for it. And the only people willing to pay for it, are players that already have level 55s, who have a much higher ability to generate revenue.

Anyway. That's my theory. What do y'all think?

Yes thats basically what drives the market. Players that are max level run dailies and craft etc.. and make alot of credits. They then unload these credits into the market to generate the pricing increases on items. (twinking) low level characters keeps price high for certain items while high end gear drops because how many pieces drop. Items that are the strongest (orange, Purple) are high value.

The only way to combat this would be to create what is know as a Credit Sink in the game. This would be something that would entice players to spend their credits to do or get something. For instance change the cost to change appearance/race to credits instead of CC and you would create a sink. Or allow players to trade in so many credits for Comms or for a casino that drops rare items like maybe Cartel items. This would benefit the game in removing the credits that exist and deflate the prices of items and gear.

Its something along those lines.

At first credits have to be generated. However, a lot of earnings for wealthy players is exchange of previously earned credits.

Say you've got 100,000 credits from running dailies, and you buy an item off the GTN. Well 6% is shaved off. So transactions ad nauseam, or a simple formula(100,000/.06), approximately 1.66 million credits worth of transactions are made with the initial 100,000 credits before its effect disappears.

Now this assumes the credits aren't simply held, but are spent, but the main point is to illustrate how earnings through GTN transactions result in high prices.

You are focusing on liquidity and wealth as the economic drivers inside the game.

While that is indeed the "fuel" for the GTN....... it completely ignores all other factors that have +/- impacts on the fluidity of the economy.

There must be things worth spending credits on. And these items exist on a ebb and flow of market supply/demand forces.

There must be multiple ways to convert time into credits (new credits to the server, I'm not referring to simple movement of credits via GTN/player-2-player trades).

There must be sufficient players with sufficient goods to sell and wealth to buy/sell in the economy.

And Bioware must continuously inject new items into the economy to keep people interested in new things to acquire and trade.

Credits dropping from Mobs, and from selling junk is but a small part of the total economy. True, it's more significant in volume for level 55s, and this does trickle down to use for what appear to be wealthy alts. But really, credits are just the lubricant for the economy and the fuel for the GTN. If there were no credits.. then we would be operating in a true barter system, which would be both boring and heavily loathed by today's twitter generation.

<snip for brevity>

I think he's got something there actually. Ultimately, we measure our goods in credits, which in turn is measured against effort expended to acquire them. In a sense, all prices on the GTN are derived from the rate at which credits are generated(assuming generated credits are spent on the GTN), and dailies, having a disproportionately high credit generation rate to other content, are probably a source of a good bit of it. Clearly credits in of themselves are not the economy nor generally an end unto themselves, but they, and the effort involved to acquire them, are how we measure value in game.

I appreciate some of the insights on this.

Perhaps "drives" was a poor choice of word. Not sure. I was trying to put a finger on what it is that determines how much people are willing to pay for the NON-ultra-rare commodities.

The reason I lean in the direction of dailies, is that I think that most of the liquid assets in this game, across all players, comes from dailies. Even the extremely wealths player are likely to have built up their assets through sales to others that obtained their credits with dailies.

It's been a while since I ran dailies and counted credits. Would it be fair to say that a player could typically make 100k per hour?

With no real way to get "rid" of credits in game... The problem will just keep getting worse and worse. That is what destroys most MMO style game economy.

Are you describing something theoretical? Or are you trying to say that problem exists right now?

There are plenty of credit sinks in TOR. Just visit the numerous posts complaining about mod-ripping fees as an example.

I think that probably drives the market for normal gear and consumables. I don't think credits-per-hour grinding has anything to do with the prices on high end, rare stuff like hover chairs and whatnot.

Sort of how the day-to-day grind puts the average price of a car in the USA at around $22,000... but the price of a Bugatti Veryon has nothing to do with what wage slaves make.

Also, scarcity does push prices up. The scarcity can be when things first come out - like the first weeks of a new crafting tier. Or it can be things like items from embargoed cartel packs.

With no real way to get "rid" of credits in game... The problem will just keep getting worse and worse. That is what destroys most MMO style game economy.

What problem are you talking about?

The problem crafters have with more and more competition and no quality differentiation driving prices of the stuff we make ever downward?

I don't think credit drains help with that problem.

There are multiple credit sinks in the current game, but I believe they need to be relocated.

-Ship Travel

-Ability Trainer

-NPC Vendors

-Mod ripping

-repair costs

All are common credit sinks, but I believe that some are WAY out of proportion for certain areas. For example, once you hit your mid 30's (in terms of levels) new abilities can cost upwards of 35k per upgrade. While this might not seem like a lot, when you have 3 or 4 upgrades over a period of two levels, it can drain you very quickly. All this does is drain credits from leveling players who might not have as much credits to blow.

Instead, I believe that a credit sink should be applied to priority transport abilities. For a certain amount of credits (Scales with levels) you can reduce the amount of time a certain priority transport has left on its cooldown. For example, for 50k you can reset your fleet pass (at level 55).

TL;DR More credit sinks endgame, not during leveling. Especially not with abilities.

With no real way to get "rid" of credits in game... The problem will just keep getting worse and worse. That is what destroys most MMO style game economy.

SWTOR actually gets beaten up regularly in the forum here about the "credit sinks" in the game, so.. I'm afraid I have to disagree with you.

As far as I can see, the economy appears pretty well balanced for a 2 year old MMO. There is little real inflation in the game. Sure, there are always some items that command premium prices (that would be supply/demand at work).

A good metric IMO is the market prices for low/mid level materials. Why? Because they represent a sweet spot in the economy where there is lots of supply and demand due to a continual influx of new players (offsetting those that leave or take a break) into the game. If anything, there is modest deflation over time on the low and mid end of the market for materials.

SWTOR actually gets beaten up regularly in the forum here about the "credit sinks" in the game, so.. I'm afraid I have to disagree with you.

 

As far as I can see, the economy appears pretty well balanced for a 2 year old MMO. There is little real inflation in the game. Sure, there are always some items that command premium prices (that would be supply/demand at work).

 

A good metric IMO is the market prices for low/mid level materials. Why? Because they represent a sweet spot in the economy where there is lots of supply and demand due to a continual influx of new players (offsetting those that leave or take a break) into the game. If anything, there is modest deflation over time on the low and mid end of the market for materials.

I agree, the economy is actually fairly well balanced, especially when it comes to the majority of Cartel items. I don't believe the placement of some of the credit sinks are appropriate (read above post), but regardless there are plenty of credit sinks that help regulate the constant influx of credits.

Whats nice, is the fact that many credit sinks are optional and don't force you to use them in order to progress into the game (for the most part).

I think he's got something there actually. Ultimately, we measure our goods in credits, which in turn is measured against effort expended to acquire them. In a sense, all prices on the GTN are derived from the rate at which credits are generated(assuming generated credits are spent on the GTN), and dailies, having a disproportionately high credit generation rate to other content, are probably a source of a good bit of it. Clearly credits in of themselves are not the economy nor generally an end unto themselves, but they, and the effort involved to acquire them, are how we measure value in game.

As a player who earns 95% of their game wealth by working the GTN... I disagree. Price for items on the GTN do not always track on an inflationary curve. Some do... but these are rare examples in this MMOs player economy on most servers. The players desire for items is much more of a consumer driver in the game economy then just pure character wealth. AND..... I have seen them fluctuate wildly in the GTN for many items such that there is no clear persistent price point. Which makes for some interesting analysis on supply/demand price points in the market as they move around an average selling price for an item. I make millions by being aware of the moving average prices for items and watching for the opportunity to snap up items under priced and relist them.

Yes.. we use credits as a common medium to establish supply/demand price points that players apply, but that's a convenience of standard consumerism in the modern era of humanity.

The single biggest variable that drives player prices in the economy appears to be much more population density based with some additional shift due to different player dynamics (for example: it's not uncommon to hear about GTN prices on PvP servers being quite a bit higher then on PvE servers).

TL;DR: the player economy is complex and evolves slowly over time. No single parameter quantifies the economy, and that includes credit float within the server.

As a player who earns 95% of their game wealth by working the GTN... I disagree. Price for items on the GTN do not always track on an inflationary curve. Some do... but these are rare examples in this MMOs player economy on most servers. The players desire for items is much more of a consumer driver in the game economy then just pure character wealth. AND..... I have seen them fluctuate wildly in the GTN for many items such that there is no clear persistent price point. Which makes for some interesting analysis on supply/demand price points in the market as they move around an average selling price for an item. I make millions by being aware of the moving average prices for items and watching for the opportunity to snap up items under priced and relist them.

 

Yes.. we use credits as a common medium to establish supply/demand price points that players apply, but that's a convenience of standard consumerism in the modern era of humanity.

 

The single biggest variable that drives player prices in the economy appears to be much more population density based with some additional shift due to different player dynamics (for example: it's not uncommon to hear about GTN prices on PvP servers being quite a bit higher then on PvE servers).

 

TL;DR: the player economy is complex and evolves slowly over time. No single parameter quantifies the economy, and that includes credit float within the server.

While cartel items are rather volatile, most of the stuff acquired in-game moves in somewhat predictable trends, excepting when someone decides to buy out the market and sell at a higher price. In addition, most acquirable in-game items do reflect things such as time, labor, and skill required(or alternatively exclusivity of access) when priced.

While yes, no single thing will determine the way the entire market behaves, I believe that the rate at which new credits are generated, particularly the highest rate at which credits can be generated, have the largest long-run impact on price. If the rate at which credits could be created were increased dramatically, we'd likewise see a dramatic increase in price over time.

That doesn't mean the system will be inflationary over time however(excepting an increase in the rate of credit generation), because the GTN curbs credit growth naturally. As I mentioned earlier, 100k credits will be entirely gone by the time 1.66 million credits worth of transactions have transpired. 100k credits probably takes about 15 minutes of dailies to create, and that effort is entirely consumed in the process of say, buying a speeder for 1.66 million. So every time such a purchase is made, in order to allow purchases to continue transpiring, someone somewhere must be creating new credits in the game.

TL;DR: the player economy is complex and evolves slowly over time. No single parameter quantifies the economy, and that includes credit float within the server.

I don't disagree with you, and I'm not trying to oversimplify something that is unarguable more complex.

But I do think that it is important to note that the GTN affects the liquidity of the economy in two ways:

a) It moves credits around.

b) It destroys credits (GTN fee)

When you buy low and sell high, the person on the other end is either buying it for use, or is also buying it to resell again. At some point, you will have an end user that is buying it for use.

The end user who bought that item for use made credits either by running dailies, or by selling things to other players that ran dailies. I'm not aware of any activity in the game that is capable of creating credits at even close to the same rate.

Perhaps "foundation" is a better word than "drive"?

While yes, no single thing will determine the way the entire market behaves, I believe that the rate at which new credits are generated, particularly the highest rate at which credits can be generated, have the largest long-run impact on price. If the rate at which credits could be created were increased dramatically, we'd likewise see a dramatic increase in price over time.

See, while I acknowledge that credit liquidity (at the economy level) does indeed factor in, IMO it remains player desire driven more then any other factor.

That doesn't mean the system will be inflationary over time however(excepting an increase in the rate of credit generation), because the GTN curbs credit growth naturally. As I mentioned earlier, 100k credits will be entirely gone by the time 1.66 million credits worth of transactions have transpired. 100k credits probably takes about 15 minutes of dailies to create, and that effort is entirely consumed in the process of say, buying a speeder for 1.66 million. So every time such a purchase is made, in order to allow purchases to continue transpiring, someone somewhere must be creating new credits in the game.

/Agree.

This game is actually pretty well tuned for balance in the economy, and has been for some time now. Much better then other MMOs I have played IMO. Then again... old MMOs struggle more with this then newer MMOs... so it's hard to say what it will look like in SWTOR in three more years. Players get emotional about the "credit sinks" (nothing new), but honestly they are not that bad in this game IMO.

Perhaps "foundation" is a better word than "drive"?

/Agree. Players drive the economy... but the economy is an engine and... credits ARE the fuel and the lube of the economy. Engines need lubrication and fuel.. and the player economy IS an engine of commerce. So yeah, credits ARE foundational to the economy.... yep... along with cool items with high player appeal.

But if we did not have lots of players with lots of item desire..... credits would be useless.... no matter how many or few we had.

Also, the lack of GTN Mods to the client is stabilizing in effect IMO. It prevents players from robo-ganking the GTN like the AH was by the use of clever AH mods in WoW.

SWTOR actually gets beaten up regularly in the forum here about the "credit sinks" in the game, so.. I'm afraid I have to disagree with you.

I think one of the reasons people think TOR has inflation problems is because BioWare don't break the currency down into tiers like most Fantasy MMOs do, in other words, Zeros are confusing.

In TOR we have just credits, but in many MMO's you have Copper/Silver/Gold. 100 Credits would be roughly equal to 1 Silver in many MMOs, and 10,000 Credits would be roughly equal to 1 Gold. People see fairly regular items listed for 50,000 credits and freak out a bit, because of all those Zeros, but it would only be 5g in many fantasy MMOs.

See, while I acknowledge that credit liquidity (at the economy level) does indeed factor in, IMO it remains player desire driven more then any other factor.

 

 

The only place where I've really seen that effect occur is when it comes to progression gear/mats. However, I'd argue that the price adjustment is due to obsolete content becoming easier to run over time, and that the mats[say biometric crystal alloys] associated with obsolete content(when measured by pure desirability should actually be worthless now, as the gear is so far obsolete as to be useless) seem to follow a pricing pattern, which indicates that aside from the costs paid by early adopters, the most relevant aspect in pricing is perceived level of labor/skill/time involved, which translates directly into time required to acquire credits in the game.

Even relatively undesirable cartel items will become worth significant amounts over time. This leads me to believe that the perception that something is difficult to acquire causes people to value that object more, which makes the market appear to be driven by the concept of "how difficult is this to acquire", which we measure in credits, over the long haul.

This is somewhat of a deviation from how things work in real life(though its certainly considered an element), but I'd speculate that this is because of the nature of MMOs, or rather RPGs, which are games partially centered around acquiring rarities. I think we're more significantly utilitarian in real life than MMOs.

People see fairly regular items listed for 50,000 credits and freak out a bit, because of all those Zeros, but it would only be 5g in many fantasy MMOs.

Can you imagine the number of Zeros that will be attatched to Guild flashships.

(Realizing that I'm about to derail my own thread) , I imagine that Guild ships could very well end up being the most significant credit sink in the game. Imagine 30 million * 100 guilds for the uber-everything-unlock, and 8 million * 500 guilds for the standard unlock.

My purely imaginary numbers (that I completely pulled out of my bumm) would result in 7 billion credits worth of liquid assets being removed from circulation and destroyed.

O.o

I think one of the reasons people think TOR has inflation problems is because BioWare don't break the currency down into tiers like most Fantasy MMOs do, in other words, Zeros are confusing.

 

In TOR we have just credits, but in many MMO's you have Copper/Silver/Gold. 100 Credits would be roughly equal to 1 Silver in many MMOs, and 10,000 Credits would be roughly equal to 1 Gold. People see fairly regular items listed for 50,000 credits and freak out a bit, because of all those Zeros, but it would only be 5g in many fantasy MMOs.

Inflation problems? Please elaborate. Many of the raw material markets are practically depressingly competitive, and end-game mods will usually be crafted at cost.. Augmentation kits are less than half the price they were for months after 2.0. Augments themselves have stabilized somewhere between 20-40k cheaper than they were just over half a year ago.

Inflation problems? Please elaborate.

I understood his post to say that there are people that THINK there is inflation, because they see big numbers. Not that there actually IS inflation.

I understood his post to say that there are people that THINK there is inflation, because they see big numbers. Not that there actually IS inflation.

Ah. Yeah I get what he's saying there. Most of the people who come on to the forums to complain about inflation seem to think that 1 million credits is outrageously large, and 20k is highway robbery for a piece of gear.