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ZAX and Economy
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This discussion was created from comments split from: Salvage and Dungeon Chests.
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Drider is the typical exemple to bring on the table for someone that think raising the cap for ZAX is a good idea: it's not.
A good lockbox jackpot sells for ~12million. Call it 12M exactly, and that's 120 days of daily max refining. 4 straight months of AD farming, in an instant. Other lockbox prizes are worth less, but are still often profitable for your key. Coal Wards sell for more AD than the Zen they cost to buy, and people are able to profit while undercutting the AD->Zen->CWard price by buying tons of CWards during Zen store sales, then selling them off-sale, then turning the AD back into Zen at "each Ward is most of a week of AD" prices.
The problem is the cycle of being able to get truly massive amounts of AD *without* spending Zen for it, turning it into Zen, then turning that Zen back into AD at a serious profit WITHOUT ever spending Zen to buy AD.
The fundamental issue that breaks the Neverwinter AD economy is the Auction House running on AD. As long as you don't spend Zen to buy AD directly, you can turn AD to Zen and Zen->Items->AD and make a profit every step of the way, and that means that there's ZERO incentive for a rich player to turn Zen into AD directly. The reason STO's Zen/"AD" economy works is that there is NO WAY to make "AD" other than refining it yourself or spending Zen for it. Anything you buy with Zen or get from a lockbox in STO is sellable on their Auction House for *Gold*, not AD.
- Overflow of AD will be absorbed by the Zen market.
- It will resolve the conflict with few countrys where lockboxs are considerated as illegal.
Eleonore - CW Mof Renegade 17.5k
Harlgard le Vieux - OP Prot 18.3k
Valrik - DC AC 18.2k
Furiela - SW Temp 18.1k
It really isn't that simple. When you turn AD to ZEN, another player is turning Zen to AD. The exchange is 100% player currencies and Cryptic doesn't add Zen into that exchange.
That means the only way that it is profitable to turn AD to Zen, and then Zen to Items, and then Items to AD and repeat is if other players are in fact turning Zen into AD. As PC players point out, the general rule of thumb for them is that a million Zen is converted into AD roughly every day. That Zen is all from players.
The auction house doesn't generate AD, and in fact removes some due to the percent cut it takes on a successful sale.
You do not seem to take into consideration the fees for using the Auction House. If you used zen to purchase 10 p wards at list price then sold them on the auction house, you would be around break even. Maybe make an insignificant amount or maybe lose a little. It is not the HUGE profits you make it to be.
I think you need to pull back a little. =p Your three steps for making profit every step of the way is silly. The only step that has potential to make you profit is the last step, selling the item for AD on the market. The AD to Zen conversion makes you nothing. The purchase off the zen store makes you no profit. And if you bought the item from the zen store at full price, you are likely losing AD on the process. For most items, you only make money by purchasing off the Zen Store either with a coupon or other significant discount. There are a few exceptions. =p
The fundamental issue with the monetary system is that the developers are using limited tools to manipulate the market. The zen to AD exchange cap, coupons, sales, etc, do not manipulate the market enough. The glut in the Zen exchange is only getting worse, not better. Usually during their Zen sales every 6 months the PC Zen exchange would go below 500 to 1. This past summer, it did not. I think the closest it came was about 5MM zen still in the Q. Now it is back around 25MM.
Just for the record, I slept in a Holiday Inn Express last night. =p
If you are smart you do this..wait until there is a sale for a highly sought after item. C. Wards are a great example.
If you get a C. Ward at 40% off you are only paying 600 zen. The player than turns those wards around into AD and than buy zen again waiting for another sale or a good coupon to rinse and repeat the process. That player is making AD every time and there is no need for them to invest into zen directly. Instead they continue to earn AD by simply buy items on sale and selling them for AD.
The original post talking about a 12M item, I think he was making a point that if you get this item and play your AD to Zen and buying items on sale you can make a huge profit over time with patience. No need to invest any further into the game as you will generated enough AD that anything additional from salvage earned is just a bonus.
I get the point and the big thing to remember is you have to have patience and be willing to hold onto things and wait it out. Over time you will get those AD pay days.
If the devs wanted to make NWO better they need to make gold more valuable and reduce the value of AD. Modify how the AH works for some items. That would impact players ability to earn millions in AD without every really playing the game or buying Zen to sell for the in game currency.
Which is why there's a backlog, and the backlog continually grows: You can get WAY MORE AD by turning your Zen into things that aren't AD, then even more Zen by turning that AD back into Zen. Trading Zen for AD directly is, economically, a mistake.
(I have no idea why there's a million Zen being turned into AD a day. How can *that many* players not understand how the Zen/AH/ZAX works?) The AH doesn't generate AD, but it *does* concentrate it marvelously.
In STO if I need 80,000 Dilithium for something, I either need to max out my refining for 10 days, or trade ~250 Zen.
In Neverwinter if I need 1,000,000 AD for something, I either need to max out my refining for 10 days, or trade 2000 Zen, or sell ~1200 Zen worth of items on the AH.
Only that *you're getting it* without generating it yourself, and without buying it using Zen.
The incentive is for people who have spare AD to put it into the market, because if you put AD into zen, you can make a return, whereas if you leave it at 0, you're earning a 0% rate of interest. Now, when the wondrous bazaar goes on sale, you can theoretically make a return from that, but because there's a cap on Zen, you're never locked in; you can always instantly convert it to AD if you really need to. So you're always incentivized to put your AD into Zen.
As long as there's a cap, there's going to be forces that push the exchange rate to be equal to that cap. If you remove the cap, then you no longer have the absolute certainty that your AD wealth is going to be pegged to 500 per zen, so that adds uncertainty (but, on the other hand, you then get speculators involved).
Perhaps the solution is to have a tax on zen exchanges. Yes, that makes the game less free to play, but it disincentives players like me from opportunistically trying to utilize the zen exchange to make something from nothing. A player that spends real life money for zen and wants to make money will be able to make more by selling items on the AH than one who converts AD to Zen to buy those items, because they won't have to pay the tax. Of course, in that situation, why should anyone ever sell zen for AD? Well, I don't know why people do it now: it's virtually always more efficient to just buy zen shop items and sell them on the AH.
Anyway, this is totally off-topic.
Yes, if you buy full-price Zen items and sell them immediately, you won't make much. You'll still usually beat the direct Zen-> AD market, though.
And if you *wait*, you can turn your Zen into way more AD than the Zen cost, then turn it back into Zen again. The problem is that turning Zen into AD is a mistake, because turning it into items and selling them will make you more AD than turning it into AD, often A LOT more AD. As long as you can afford to wait, and as long as there's still impatient or ignorant people who *are* turning Zen into AD.
What's the problem?
All Zen shop items are available to players for AD. And they're discounted by coupons! I know that I usually sell coal wards for around 480k AD when I get them. That's less than buying them at 500 AD per zen personally.
It seems off that the cap is there and people are profiting off of it. But, realistically, what's the harm? Is it reducing the amount of zen people buy?
You can say that the cap causes zen to be at 500 when it would actually be at 400 and therefore zen shop items are artificially more expensive, but I don't think the evidence really points to that. And I don't really see how making zen unpurchasable for AD is much of a solution, since that takes away the F2P element entirely.
I suppose you could move 90% of content from the zen shop to the Wondrous Bazaar and keep VIP Zen purchase only. A looooooot fewer people would use VIP then though, so not exactly recommending that course of action.
In fact, I'd like to reiterate just how horrible of an idea that would be-I would definitely stop playing if there was no longer an in-game method of acquiring VIP rather than having to use real life money.
Try to keep your mind open to see there are all kinds playing these games.
I'm suggesting that the AH using AD as a currency, and allowing Zen to buy AH-able items, is a mistake, because it allows people to turn Zen -> Items (AH) -> AD -> Zen, producing a loop where you can make a profit at every step as long as you're willing to wait for someone who doesn't know what you know, or is desperate for AD and willing to take a loss.
This is all similar to "coalgate", way back when, when you could buy Coal Ward for 1000 Zen or 80 Trade Bars..... and selling a Coal bought you enough Zen to buy (usually, on average) more than 80 bars worth of keys, AND you got the lockbox rewards from those keys. There's a loop in the prices, so that uncapping the ZAX will only cause it to rise infinitely and the loop to maybe slow down. No matter how many AD you get for 1 Zen, as long as you can spend AD to get Zen and Zen to get items that sell for more AD than their Zen cost, your AD->Zen ratio will cap out. And the multi-annual 40% or 50% zen sales GUARANTEE that you can buy Zen items for way less than their AD cost, even discounting short-term coupons.
Buying Zen, whether with realmoney or AD, is a totally legit thing that can give you mad in-game rewards.
Turning that Zen into AD on the Zen->AD exchange is the mistake that requires impatience or ignorance.
And: What you're describing is called "impatience".
I fully support the idea that as a fully-employed professional I should be able to spend an hour's wages and buy whatever I want. But I *also* acknowledge that, were I to wait, spend that same hour's wages at the right time, then make the right transactions, I would get 2 hours wages, or 3, or 9, worth of the same in-game result.
Impatience isn't the right wording. You and 4 of your friends could choose to go to the theater to see a new movie at a total cost of say $60 for all of your tickets. Or you could all wait and rent it at home for a total of $5. It isn't impatience to want to see it when it is brand new in the theater, but it is a choice.
Similarly you can buy the new iPhone at a premium price or wait a few months for it to drop in price. For some people, buying it while it is brand new and more exclusive is worth the money to them. It has nothing to do with being impatient, but rather how they view the product and its newness as a value.
I myself have turned Zen into AD on the ZAX multiple times (Zen I purchased with my own money, not any kind of free Zen from being at Cryptic to be very clear) because there were some upgrades I wanted to do to my character in that moment for what I wanted to play in game. I am fully aware of all of the methods of making AD and converting AD to Zen, buying things at a discount etc. but in that moment the upgrades would improve my play experience so it was worth the "premium" instead of waiting for a sale/coupon/etc. to get a bit of a better deal. It is all about circumstances.
All of that said, although it is an interesting conversation to have, it might be better served in another thread instead of extending the length of this thread which can make it harder for others to find the more pertinent information contained within.
there's no such thing as "patience" in a game. in reality, i'm wasting time by playing a game. As I make good money IRL i'm actually losing money by playing it. I lose even more by attempting to "go long" in the AD/ZEN/AH game. do you honestly think the $$$ i potentially lose, in the waiting game, the "long game", bothers me?
LOL. johnxgalt understands. i'm actually LOSING money if i play the waiting game, due to actual real world income.
think of it like this: if Warren Buffet, Bill Gates, Jeff Bezos, and Mark Zuckerberg are all walking down the street, and 3 one dollar bills go floating by, and three of them stop to chase them down while the 4th guy continues on, who made more money? i'll give you a clue: your way is one of those 3 guys chasing dollar bills. their &/hr income is so huge that just bending over to pick up a dollar wastes their time. the "long game" for me is Wall Street. this is something i do casually, to blow off steam, and pay to do so. i could care less about the nickels i'd pick up playing the zax/zen/ah game.
all that said, i do wait for sales to buy the things i want (bonus AD, bonus coals, extra-off VIP, tigers for alts, etc.) because i'm not going to toss dollar bills to the wind to have scavengers pick them up. frugal and stupid are two completely different things.