Double the precursor drop rate

#1 - July 16, 2013, 2:33 a.m.

Like the title says, ANET needs to double the precursor drop rate. Now I can see a few people that spent a fortune with real currency to obtain these, but they are minuscule to the total revenue that ANET could receive if the “base was widened”. Also many of the people that own legendaries did not spend a dime ever in the gemstore. Call them the lucky ones that got a precursor drop early, flipped it, and repurchased when it was lower. Same goes with other market hawks.

So how exactly can ANET make more money and make more players happy?
It’s simple supply and demand really. If precursors would double what would happen? The price for precursors would drop a little less than half. This would in turn put precursors in the viability range for a lot of players to purchase…….well almost. It would spark huge demand for gems to cover the extra 100-200 gold needed to buy the precursors. It would also greatly increase the demand for the other mats needed in creating the actually legendary. The increased demand for those other mats would compensate a bit for doubling the drop rate. It would also force demand on none-legendary materials.

Overall we would see the price come down, but would give a huge perception that legendaries are actually attainable.

John Smith

#40 - July 18, 2013, 2:19 p.m.

Rebort.6295:
Increasing supply to lower the price ignores half of the supply/demand equation. What happens when the increased supply creates more demand?

This is very astute. All evidence we have shows that doubling the precursor drop rate would actually increase the price, not decrease it. The shape of the curve looks something like this (obviously ignoring any actual numbers on the graph).
http://www.wolframalpha.com/input/?i=%28x+%2B+2x%5E2+%2B+x%5E3%2Bx%5E4+%2B+x%5E5%29+*-1

John Smith

#48 - July 18, 2013, 3:33 p.m.

Hell Avenger.7021:
lol… people does not study economics… Increase supply does not necessary affect demand, unless you talking about less prestige (that would actually lower demand)

Increase supply has an effect on price, lower prices. However, lower prices meet higher level demand due to affordability. You will not see people trying to outbid each other for more available products.

Anyway… this thread is just…. LOL

Btw John, this is a supply curve shock, and not a price shock. It is a movement of the whole supply curve and not movement on the curve. That graphs don’t apply.

1. It would be a shift, not a shock.

2. Shifts in supply always affect demand, just the degree with the change is relative to the individual market and the current state of the market. This is even more emphasized in a virtual economy.

3. The graph applies perfectly, though I do apologize for the confusing appearance, I just wanted to get up an idea of the shape quick and dirty.

4. “You will not see people trying to outbid each other for more available products.” this statement in not true at this point in the market, which is the point I was trying to make.

John Smith

#58 - July 19, 2013, 1:54 p.m.

Hell Avenger.7021:
1. A shock to the supply curve is a shift in the supply curve. (Making the same point here) Movement along the supply curve, is when you decrease the price of the product.

2) You trying to touch upon “Demand Curve Elasticity.” Using graphing terminology, it depends on the slope of the demand curve.

3) That Sine graph is interesting, but it lacks a demand curve. Also, dues to axis labelling, it is very confusing to read.

4) The statement is true. People trying to outbid is because price is going down, and it unlocks people from going to totally unaffordable to reasonably affordable. Think it this way, I lower Ferrari price to 40k and increase production, you will see a lot more demand. The reason is the price elasticity of the demand.

One more time:
1. “In economics, a shock is an unexpected or unpredictable event that affects an economy” This would be neither. Just because two terms are similar doesn’t mean they can be used interchangeably.

2. I’m not trying to touch on anything in particular, I’m informing you about how life works.

3. It’s not a sine curve, nor is it a supply curve, nor is it lacking a demand curve. It’s a representation of the shape of changing price over time or quantity.

4. You have a good grasp of elasticity, but I’m referring to a more complicated concept here, one that’s specifically visible in virtual economies, but present in other economies as well, depending on the state of the market.

Ensign – this is to your question as well.

We’ve seen before that at certain points in certain markets, changes to the supply side of the equation has resulted in an effect that is opposite of what was expected. We noticed that shifting the supply side equation caused the demand side of the market to shift even further. As people see the changes in the game many of them decide to enter the market. The changes to the in game content, cause a change in individual preferences. The phenomena falls off pretty quickly as you push harder on the supply side, but small changes so far have resulted in increased demand due to changing preferences. That’s why if we were to increase the input by 10 prices would drop, but if we were to increase it only slightly, prices would most likely go up.

John Smith

#92 - Aug. 2, 2013, 2:47 p.m.

arabeth.2361:
Unrelated:
At least part of the reason threads like this spawn and are so volatile is that many people seem to only want to prove they know a lot of jargon and very few things are explained at a level that someone who isn’t a graduate in economics could understand. Certainly this isn’t John Smith’s job – although he does seem to enjoy taking time out to belittle people in threads who counter his theories – but I’ve yet to see many people explain things this complex at a level that is accessible. And of course this isn’t going to stop everyone from countering or believing their own views, but it might help. (Of course, I’m assuming that anyone cares or wishes to help, which may itself be unrealistic.)

When I originally wrote the explanation of what has happened before, I had intended it to be accessible (and at the time thought I accomplished that), but after re-reading it and your post I agree that I did not succeed.