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How Slicing and "Inflation" Help the SWTOR Economy

STAR WARS: The Old Republic > English > Crew Skills
How Slicing and "Inflation" Help the SWTOR Economy

Gerica's Avatar


Gerica
12.20.2011 , 10:56 AM | #21
Inflation would be a problem if there was a limited amount of some resource that wasn't available to just about anyone who picks up the right skill. Now the high prices will be countered by oversupply. I would say no inflation because the supply will be equal or close to demand (a bit over or bit under, but close to balance) and the prices will adjust over time on their own to correlate the challenge required to get the item first place.

Freeborne's Avatar


Freeborne
12.20.2011 , 11:06 AM | #22
Quote: Originally Posted by VenomByte View Post
"But Freeborne" I might say "You're just arguing that the rampant inflation caused by slicing is good because it renders credit sinks in game insignificant, thereby making things cheaper for everyone"

Which is true. But is it really good for the economy? If it is, why not just have no slicing and no training/mount/repair costs either?

Currency stability is of paramount importance to any economy. Just ask Zimbabwe. The problem with an unstable currency is that it becomes desirable to hold asserts instead of cash. In SWTOR terms, this means you're going to be better off hoarding high level mats instead of credits, since the credits will lose value over time much faster than the mats will. When people don't want to hold currency, they are less liquid. Less liquidity reduces trade and slows the economy.

In the real world, if the problem is severe enough (such as the aforementioned Zimbabwe) the principal means of exchange eventually becomes supplanted, by US dollars, gold, etc. In SWTOR, credits are an enforced currency and HAVE to be used in the galactic trade network regardless of stability. Therefore it is in the interest of the economy to have as stable a currency as possible.

SOME inflation can be absorbed, but there is a limit to this. Less is better, and none at all would probably be preferable.
I really dislike real world analogies because all the real world factors don't apply here.

But let's run with this one:

Let's say players go all "zimbabwe" on us, and start hoarding high level UT materials in an attempt to corner the market.

One of two results will happen from this:

UT Materials price skyrockets high on the market. Players who are not hoarding these metals see continued profits from this because they don't stop selling. Pricing reaches it's high point, eventually, and the hoarders flood the market. Sellers attempt to undercut one another, and pricing goes down. People who didn't hoard still make a profit, and hoarders increased profit is dependent purely on the numbers.

But these UT Materials have top level cap on the GTN. For each individual buyer it becomes cost prohibitive to purchase them, because at X cost you're better off making a level 15 alt, and paying to level your own UT missions instead.


The flaw in the Zimbabwe analogy is that the raw goods users might attempt to "hoard" come from a renewable resource everyone has access to. You can't hold exclusive rights to a material everyone can farm at a click of a button. You do not even need to farm/camp nodes. Prices will have an upper limit defined by a players ability to just get it themselves.
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Freeborne's Avatar


Freeborne
12.20.2011 , 11:07 AM | #23
Quote: Originally Posted by Disquiet View Post
I believe it is better to let the economy balance itself than to tamper with it artificially.
This is an MMO Economy. Every facet of it is artificial, and controlled.
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Freeborne's Avatar


Freeborne
12.20.2011 , 11:09 AM | #24
Quote: Originally Posted by Ex_Everest View Post
I don't think SW TOR needs slicing. You can kill mobs, elite bosses, finish repeatable quests, all of which provide renewable sources of income. Furthermore, since people will likely always be either leveling mains or alts, it is unlikely that there will ever exist a state when all of the game's characters have completed all of the non-renewable quests they can, which means that this also will be a source of renewable income, as these quests are 'renewable', albeit on different characters.
Then you're arguing that slicing is bad because it provides more income that renewable quests?

That is incorrect. It provides less money that renewable quests, and less money than most materials other Crew Skills will give you to sell on the AH. (Assuming you have an economy that allows for Slicing, so you have disposable income. : P )
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Shadowclaimer's Avatar


Shadowclaimer
12.20.2011 , 11:10 AM | #25
Quote: Originally Posted by Freeborne View Post
I really dislike real world analogies because all the real world factors don't apply here.

But let's run with this one:

Let's say players go all "zimbabwe" on us, and start hoarding high level UT materials in an attempt to corner the market.

One of two results will happen from this:

UT Materials price skyrockets high on the market. Players who are not hoarding these metals see continued profits from this because they don't stop selling. Pricing reaches it's high point, eventually, and the hoarders flood the market. Sellers attempt to undercut one another, and pricing goes down. People who didn't hoard still make a profit, and hoarders increased profit is dependent purely on the numbers.

But these UT Materials have top level cap on the GTN. For each individual buyer it becomes cost prohibitive to purchase them, because at X cost you're better off making a level 15 alt, and paying to level your own UT missions instead.


The flaw in the Zimbabwe analogy is that the raw goods users might attempt to "hoard" come from a renewable resource everyone has access to. You can't hold exclusive rights to a material everyone can farm at a click of a button. You do not even need to farm/camp nodes. Prices will have an upper limit defined by a players ability to just get it themselves.
I am professing my love for you.

MMO economies run artificially because the old rules of supply and demand are hard to rectify here, there is limitless supply of everything. Everyone can effectively obtain everything. The only really defining things an MMO economy needs are goldsinks to counter inflation. The "perfect" MMO economy has more gold going out in goldsinks than is coming in from other sources, however that leaves little spending room for player-player trade. So the goal is to find a balance where the economy will slowly inflate, but only so much that it never snowballs (IE: Slicing is the artificial part here, it'll inflate the economy purposefully to the point where people abandon Slicing and the inflation relatively "stops" or drastically slows) then Bioware can introduce content that consumes more currency and slows or reverses the inflation. Then it'll hit the buffer zone where Slicing is valuable again and the process repeats back and forth (ping-pong economy inflation).
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Freeborne's Avatar


Freeborne
12.20.2011 , 11:16 AM | #26
Quote: Originally Posted by Asurai View Post
this is wrong; while im not one of these people who say slicing is OP, it does create an inflation problem.Slicing creates money that wouldn't exist otherwise(same as killing monster does) which create inflation and increase the price of everything that will be sold.Since item sell at a price determined by the market, inflation will rise the price of seller to include this inflation.

In real life; when inflation is present, usually the seller increase their price to match the inflation because the seller price to make the good as increased.In this case however, the price to make item is fixed and independent of inflation but the selling price will have to include the inflation created by slicing because everything else sold will.Of course since every profession has a fixed price to get good and since all money sink in this game are fix this render this argument abit wrong; however that is the behavor that will be experienced.

a simple example would be: if you can make a good for 20$ and sell it for 50$ and the Bank give 100,000 to everyone in the country; would you still sell the bicycle at 50$?

Again, I do not like real world examples, because MMO economies do not properly reflect the real world.

However, the general gist of your post is "Inflation on Mats means that Finished Goods Cost More."

And I would respond to that with thoughts.

1. The first is, that in any MMO I have ever played, and against all "common sense" raw goods are ALWAYS worth more than Crafted Goods.

Why? Because everyone always wants to skill up their own crafts. This always seems to be the driving force on pricing for raw goods. I only need 1 piece of iron to make a chest piece that a player will only need 1 off. However, I'll need 50 pieces of iron to skill up my craft well enough to be able to work with silver, the next tier of raw goods. Which part of the market buys more raw goods, do you think?

2. If against all experience, Manufactured goods ARE worth more than Raw goods. (Med Pacs, Stims, etc). Well, that means the provider of raw goods, and the provider of the manufactured goods are both making a profit. GOOD!
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Shadowclaimer's Avatar


Shadowclaimer
12.20.2011 , 11:19 AM | #27
Quote: Originally Posted by Freeborne View Post
Again, I do not like real world examples, because MMO economies do not properly reflect the real world.

However, the general gist of your post is "Inflation on Mats means that Finished Goods Cost More."

And I would respond to that with thoughts.

1. The first is, that in any MMO I have ever played, and against all "common sense" raw goods are ALWAYS worth more than Crafted Goods.

Why? Because everyone always wants to skill up their own crafts. This always seems to be the driving force on pricing for raw goods. I only need 1 piece of iron to make a chest piece that a player will only need 1 off. However, I'll need 50 pieces of iron to skill up my craft well enough to be able to work with silver, the next tier of raw goods. Which part of the market buys more raw goods, do you think?

2. If against all experience, Manufactured goods ARE worth more than Raw goods. (Med Pacs, Stims, etc). Well, that means the provider of raw goods, and the provider of the manufactured goods are both making a profit. GOOD!
I think people are misunderstanding Inflation, there is a common misconception that inflation is bad when in actuality its a glass half-full glass half-empty thing.

Inflation results in you paying more for goods
Inflation results in your goods being worth more

If you are a supplier IRL you will make more money from inflation, and if you're a consumer you'll pay more. You can consider this bad by IRL example. In an MMO economy however we are all suppliers and consumers therefor the old rules of economics and inflation do not work instead Inflation becomes a boon for everyone across the board. You do not want inflation to snowball out of control exactly, but a little inflation is a good thing for everyone.
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Freeborne's Avatar


Freeborne
12.20.2011 , 11:23 AM | #28
Quote: Originally Posted by Shadowclaimer View Post
I think people are misunderstanding Inflation, there is a common misconception that inflation is bad when in actuality its a glass half-full glass half-empty thing.

Inflation results in you paying more for goods
Inflation results in your goods being worth more

If you are a supplier IRL you will make more money from inflation, and if you're a consumer you'll pay more. You can consider this bad by IRL example. In an MMO economy however we are all suppliers and consumers therefor the old rules of economics and inflation do not work instead Inflation becomes a boon for everyone across the board. You do not want inflation to snowball out of control exactly, but a little inflation is a good thing for everyone.
Exactly.

In the real world inflation hurts those who have a low fixed income.

No one in TOR has a low fixed income, because we all have access to the same resources to produce raw goods or credits for selling/buying.
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SableShadow's Avatar


SableShadow
12.20.2011 , 11:27 AM | #29
Quote: Originally Posted by Shadowclaimer View Post
there is limitless supply of everything. Everyone can effectively obtain everything.
Time.

Quote: Originally Posted by Shadowclaimer View Post
but only so much that it never snowballs
Yes. I've played in MMOs where this was entirely out of wack, to the point that any high end trades were done strictly by barter. Money had no real value, it was not truly a currency. Which was inconvenient.

Quote: Originally Posted by Shadowclaimer View Post
(IE: Slicing is the artificial part here, it'll inflate the economy purposefully to the point where people abandon Slicing and the inflation relatively "stops" or drastically slows) then Bioware can introduce content that consumes more currency and slows or reverses the inflation. Then it'll hit the buffer zone where Slicing is valuable again and the process repeats back and forth (ping-pong economy inflation).
At the moment, it seems like slicing is the way to go to make money.

Having one, best skill choice seems out of whack; games are in many ways about decision making, and having only one, best, clear choice to make is a failure of game design. That said, the game has just started and there's not really a player economy out there; we'll see how it plays out.

At some point, I should expect slicing-as-best to shift with enough people at all levels of the game that going into some other skill to gain mats desired by high level players will become more lucrative.

Shadowclaimer's Avatar


Shadowclaimer
12.20.2011 , 11:27 AM | #30
Quote: Originally Posted by Freeborne View Post
Exactly.

In the real world inflation hurts those who have a low fixed income.

No one in TOR has a low fixed income, because we all have access to the same resources to produce raw goods or credits for selling/buying.
Actually after going over the math and charts with my brother, I highly think Slicing was an ingenious way to handle ping pong inflation, if it was intended as such. Basically inflation will rise to a point, then fall off as people dump slicing for other professions, when they do that supply will increase and prices will drop again, making slicing valuable again, rinse and repeat forever.

I'm baffled, this is well thought out if they did this on purpose.
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