Hello there, I wanted to take a moment to write down my thoughts on the current gold inflation trend happening on all the AGS Lost Ark regions (some more than others). I wanted to discuss my thoughts on why it is happening, how inflation could be mitigated, and what might happen if nothing is done.
Firstly, as a short introduction, my main character is the sorceress Verthandi (big surprise) and I play on the NA East - Azena server. I have grown to love this game a lot and have done almost all there is to do in the game (up to our current patch). I have spent over 2500 hours and around $1500 total (probably 2/3rds of which on cosmetics/stronghold stuff). I am not free-to-play but I can very much sympathize with both whales and free-to-play players.
Next, I am not an economist but I have taken a bit of time to carefully think (as best as I can) about the various causes of the current economic trends and what several potential solutions could do (both good and bad).
So I will now begin with what I think are the primary causes of gold inflation, what can be done to mitigate its effects, and what might happen if nothing is done.
1. What is causing inflation?
In a nutshell, the main cause of the gold inflation is that more gold is being created than destroyed! This should be fairly straight forward but let’s look into the different sources and sinks for gold. Note, gold obtained from other players does not count as a gold source! I am only considering global gold sources/sinks.
Gold sources:
Weekly abyss/legion raids (up to ~60k per roster)
Gold sinks:
Honing costs (depends on number of characters being honed)
In theory, as the economy grows, the 5% tax rate from player-to-player transactions becomes more relevant and keeps the inflation in check… provided players keep actively buying and selling goods which scales with the size of the economy. Additionally, the honing system, quality upgrade system, and stronghold activities act as a flat-fee cost system that drain gold out of the economy… provided players keep honing, upgrading quality, and using their strongholds!
Note those caveats! I said provided players keep trading and honing, in particular. However, as we have seen (and as I will go into in a bit), pheons tend to have the opposite effect on trading in the economy!
Also, it is important to note that the gold inflation adjusts the prices of goods relative to their supply changes. A quick example are Guardian Stone Crystals (whose supply is also increasing faster than demand, so its gold price remains somewhat fixed). However, certain low-supply goods, like legendary class engraving books, will grow in price with gold inflation.
What about third-party RMT?
By third-party RMT, I specifically mean bots and methods to greatly increase the influx of gold into the economy. It should be a no-brainer that such behavior is detrimental to the economy as a whole and action should be taken to ban both the generators of such gold (the bots) and the purchasers of that gold (RMT buyers).
Inflation causes summary:
In short, more gold is entering the economy than is being removed by it. Thus, over time, units of gold are worth less and less to a player for a specific good unless that specific good is also inflating as fast as gold in supply.
2. What can be done about inflation?
Fortunately, there are a number of things that could be done to combat inflation in some form to promote player behavior which would push the economy in a direction more players are happy with. I will not go into an exhaustive list of option but just highlight a few ideas I’ve had or have seen proposed by others.
What if blue crystals can be bought directly with gold at some fixed price?
This is a common suggestion I’ve seen and has some merits. Firstly, one of the causes of slowing down the trading economy is pheons. These pesky little blue demons
(phemons) are however a major source of income for the devs/publishers! Thus removing pheons outright would lead the devs/publishers to seek alternative sources of income such as more pricy cosmetics, blue crystal costs for additional things (e.g. honing, upgrading, etc.), and other undesirable (for the player) changes!
Thus, care must be taken in introducing a new gold sink that provides pheons indirectly. A possible workaround would be to impose a limit on such an idea and allow players to purchase a certain amount of blue crystals at a fixed price per week before needing to resort to the exchange. At the very least, this would ease some tensions and should not significantly change the amount of profits the devs/publishers make. It would need to be closely monitored as sliding the scale too far one way or the other will either have no effect or too much effect (loss in profits for the devs/publishers).
What if pheons were removed?
For the same reason I advised against removing pheons if the blue crystals were sold at a fixed gold price, I warn that the developers could possibly turn around and impose other necessities for blue crystals that would lead to players returning to the same dilemma: that their gold purchases fewer and fewer blue crystals each day.
What if all RMT players/bots were banned?
This is a valid solution but will only slow down inflation, perhaps not even significantly. As I listed in the previous section: gold inflation occurs when there are more gold sources than sinks. The RMT/bot issue just makes it worse but isn’t solely responsible for it. Of course, any solutions to combat inflation should indeed also ban RMT players/bots as well!
What if the exchange rate between royal crystals and blue crystals were changed?
This is a popular request, especially in South America where the prices are not regionalized, and thus fewer players can actually afford to buy royal crystals. This is probably the best solution for those regions as it would incentivize the real money spenders to buy gold via royal crystals to thus drop the price of blue crystals a bit. It also does not rely on any mechanisms that AGS/Smilegate cannot control (e.g. Steam wallet systems).
This solution would increase the supply of blue crystals which would in turn decrease the cost of pheons which would in turn increase the velocity of the economy to drain gold faster with the 5% tax rate. As a precaution, the devs/publishers could experiment with adjusting the royal to blue crystal rate along with the in-game tax rate (currently set at 5%) to achieve desired player behavior.
So there was a list of a few different solutions and some benefits and side-effects of each. There doesn’t seem to be a best solution that all parties would be happy with though (the devs/publishers and the players) as making it easier for the player might detriment the profit margin for the devs/publishers!
3. What will happen if nothing is done?
The short answer is that the game will slowly die until so few players remain that the devs/publishers are forced to merge servers, or if only one server remains, shut it down for good.
To see how we get there, let’s extrapolate into the future where it costs 100k gold for 95 blue crystals (of course this is extreme, but this is a thought experiment)! This means, a player would have to invest the entirety of their roster’s weekly gold for about 10 pheons (40% the amount needed to purchase a single accessory)! Of course, the player cannot hope to sell any equipment they found that week because of the 250k “pheon” tax on a single relic accessory. So their only general income is from raids/unas and a few other minor sources.
Thus the auction house is generally unused by the majority of the population, effectively removing itself as a valid gold sink. Gold is only used for non-pheon related transactions such as marketplace goods. Free-to-play players will have no way to gain blue crystals at the existing price making cosmetics and other Lost Ark Shop (F4 shop) goods unattainable.
This leads to a mass exodus of free-to-play players as they essentially are playing a non-trading game where it is impossible to find any accessories, ability stones, tripods, etc. to improve their character beyond random junk (making endgame content impossible).
The real money-spending players now are the entire population of the server. They use their money to buy crystals directly without using the exchange since gold isn’t useful anymore. But content stagnates with such a low population count and few people left to show off their new skins to! So eventually the paying players will move onto a new game.
As an aside, yes, whales and big spenders do like to spend to show off their stuff to the non-spenders. My theory is that this is a thrill for them, or helps them feel better about insecurities, or to “be ahead of the pack”. To put this another way, if everyone has the latest toy/gadget/thing, then it isn’t special and wouldn’t be fun to show off. There is no single-player game I know of that a player would have spent as much real money compared to a multiplayer game!
4. Closing thoughts
I do not know of any sure-fire way to fix inflation and there likely isn’t a perfect solution. My best suggestion is for the devs/publishers to carefully analyze their situation regarding short-term profits and long-term goals for the game. The royal crystal / blue crystal / pheon dilemma with the overabundance of gold sources in game are at the core of the issues. The RMT player/bot situation makes the situation worse but isn’t solely the cause.
I would recommend the developers consider adjusting royal crystal <-> blue crystal <-> pheon exchange rates along with the player-to-player tax rate (currently 5%). These levers should be carefully adjusted to increase player sentiment and involvement in the game at the cost of some short-term profits. As more and more players remain active in the game, more royal crystal sales will be made in the future when more content is released, thus leading to possibly more profits spread over a longer period.
I would encourage the devs/publishers to prioritize the health of the game over short term profits, although such a request is likely not possible with shareholders and other corporate executives.
Thank you for reading my long post regarding this very complicated issue! I apologize in advance if I missed some other popular solutions or if some parts were not clear. Again, I’m not an economist but this game means a lot to me and I wish to help as best as I can with providing meaningful feedback as a dedicated player.
Verthandi - Azena - NA East
