The Effect of the New Updates on the Runescape Economy

[jackg243]

The new "updates" to RuneScape have shocked many, and caused many to leave the game forever. Paradoxically, however, these updates were both necessary and absolutely intolerable for RuneScape to continue.

 

 

 

NECESSARY

 

 

 

For several years now, macroers and gold farmers have dealt heavy blows to the RuneScape economy. Their excessive production of raw materials for the purpose of attaining gold to sell for real-world money has gradually driven down prices in RuneScape to the extent that massive "macro-hunting" campaigns are being conducted by players in order for them to be able to earn honest GP. In Figure 1, the green dot indicates the "equilibrium price" for any given item, such as yew logs. Supply equals demand in this case, and everyone is happy. The red dot indicates the production level of the macroers. In a normal economy, such a result would be infeasible b/c supply would greatly outweigh demand and very high prices would result, leading to very few sales until the price reverted back to equilibrium. However, b/c macroers are willing to sell at any price in order to get the gold they need to sell quickly, they continually sell below the market price and gradually lower the average price. Thus, it becomes harder for the average Scaper to earn a GP.

 

 

 

If Jagex had ignored this problem, it would have continued until it would eventually not be worth the money to do anything anymore, because all prices are so low. Hundreds of thousands of players would leave RuneScape, the macroers would leave b/c there was no one left to sell money to anymore, and RuneScape would revert to the state it was in eight years ago.

 

 

 

If Jagex had implemented only one of these updates, that is, the abolishment of PKing/death piles and the "market value" +/- 3000 gp price fixing, macroers would have continued to use whichever method was still available to transfer funds from one account to another, which would not impact the problem at all but would have an incredibly adverse effect on the honest players.

 

 

 

Thus, Jagex's only choice was to implement both moratoria at once, and deliver the death blow to RWT, however much it may initially cost them by players cancelling their memberships. In this way they can hopefully still retain at least half of their paying players, as opposed to the above alternative in which there are no players.

 

 

 

ABSOLUTELY INTOLERABLE

 

 

 

As George Orwell so aptly stated in his novel 1984: WAR IS PEACE

 

 

 

PKing is the central hub of the RuneScape economy. People fish and cook sharks because PKers demand them in large quantities. Yew longbows are cut, fletched, and alched in order to provide a quick (albeit expensive) way for PKers to attain a desired magic level. Runecrafting functions in the same way, along with providing PKers runes with which to kill others. Herblorists produce vast quantities of potions for PKers to attain an advantange over their opponents, the herbs to do which are provided by hardcore farmers and monster-killers. People kill dragons in order to provide would-be PKers with a quick (again, expensive) way to reach their desired Prayer level. Monster-killers reach high Slayer levels in order to provide PKers the highest quality weapons and armor with which to decimate their opponents. These examples, along with others unmentioned, exemplify how PKing drives the RuneScape economy. Thus, everyone is content with their lot. War is Peace!

 

 

 

Now that PKing has been abolished, the whole of the RuneScape economy grinds to a halt. There will be no PKers left to consume the produced materials, and with no buyers, sellers will be left with a massive supply which they cannot sell at a price that earns them a profit. Thus, the producers will be forced to cut losses by dumping their goods at very low prices, which is precisely the problem that Jagex hoped to avoid by abolishing RWT!

 

 

 

To throw another wrench in the gears, Jagex instituted the 3000 gp price fluctuation cap. Will the Grand Exchange still be able to regulate market prices at +/- 5% and thus even out the market, or will no one be able to sell anything b/c producers are trying to dump super strength potions to the only people that will buy them at 200 gp each, while the Grand Exchange still insists on a minimum price of 4500 gp? If this is the case, as I doubt it is, the entire economy is stalled in idle, and will take months to begin crawling along again.

 

 

 

The likely outcome (if the folks at Jagex have an IQ at least slightly above that of a rock) is that the Grand Exchange will still be allowed to operate at a +/- 5% fluctuation, with the 3000 gp leeway-cap instituted between direct player-to-player trades. In this case, merchants will be those hit the hardest. In a hypothetical example, if a merchant has 100M GP and wants to have 110M GP, he could (again, hypothetically) buy 100 abyssal whips at 1M each, and sell them for 1.1M each, leaving him with a profit of +10M GP. However, if this merchant had purchased the 100 whips but had yet to sell them when the updates were instituted, prices would drop to (hypothetically) 500k per abyssal whip and continue dropping. In this case, the merchant would want to sell his whips @ 500k GP each and cut his losses, further fueling the decline in prices (remember the stock market crash?). This would leave him with a "profit" of -50M, that is, a loss of 50M.

 

 

 

CONCLUSION

 

 

 

The updates, as stated above, are both essential and completely ruinous. Your best bet: Liquidate (sell for cash) your valuable items, wait for prices to crash and settle out, and get ready to buy really cool stuff you could never have afforded before!

 

 

 

 

 

-Jackg243

 

 

 

APPENDIX A

 

 

 

 

 

 

 

[Baezal]

This is slightly weird as lower prices on items such as whips/str potions will only benefit, well, Pkers. :-k

 

Even when Pking is "eliminated," Pkers benefit :-k

[Skull]

Seems like you put alot of work into this, so good job to you =D> .

 

 

 

I'm sorry to say however, my attention began to drift a little way in, so I may have missed your point or some of your reasons.

 

 

 

Correct me if I'm wrong here, but I think you're trying to say that without the pkers the supply of items that were commonly used by pkers will continue at the same pace as before, but since the pkers are gone (aka demand drops) the amount of the objects being sold will be much more than being used, causing the prices to drop.

 

 

 

The new update DID get rid of the pkers but also stopped macros, by removing their ability to sell the gold or give it to a main account, therefore making autoing a waste of time. Because of this I feel that not just the demand would drop, but the supply would aswell. Also Jagex's stiff control over the prices stop massive decreases or increases in a short ammount of time. If the people at Jagex really wanted to, they could make the prices remain exactly how they are now, and beyond 3k above or below per 15 minutes, we couldn't do anything about this. However, I could be wrong about this, as I'm no expert in Runescape's economy. Even though the demand goes down, I think autoers being removed will easily make up for this. Infact I think we may even see an increase in these items. Only time will tell. :-$

[jackg243]

This may be true as well, that the reduction in macroers corresponds to the reduction in PKers, and understand as well that I am also no expert in RSeconomics. However, consider that 100% of the consumers (PKers) are gone, while perhaps (at worst) 40% of the producers are gone (macroers). This may slow the decline in prices, but will not eliminate it.

 

 

 

And sorry for not making the 1st post more interesting! I seen to have a problem of making a good point on something but making it uninteresting, and vice-versa :-X

[Skull]

This may be true as well, that the reduction in macroers corresponds to the reduction in PKers, and understand as well that I am also no expert in RSeconomics. However, consider that 100% of the consumers (PKers) are gone, while perhaps (at worst) 40% of the producers are gone (macroers). This may slow the decline in prices, but will not eliminate it.

 

 

 

And sorry for not making the 1st post more interesting! I seen to have a problem of making a good point on something but making it uninteresting, and vice-versa :-X

Don't worry, I was plenty interested, I can't pay attention to anything. :XD:

 

 

 

I'd think that closer to 90% of autoers would be reduced, because now that they can't sell the items the obtained, and then sell the gold for real life money, or give the gold to a main account which gives them no real incentive to continue autoing. I understand what you're saying though.

[raven_gaurd0]

Yes. Philanthropy is dead in this game though, which saddens me.

 

 

 

The problem mainly with these updates are with the economy, and it has really lost that beautiful gleam that Runescape used to have, that gleam of real life, that made it seem like you were there.

 

 

 

That gleam is gone.

 

 

 

And I hope my team and I can restore it.

[Roberthree]

 

And I hope my team and I can restore it.

 

 

 

Nothing will ever restore it unfortunately. The only thing we can do is adapt, which will be hard.

[raven_gaurd0]

I don't know. I think mass un-subscribing might be an ugly RS statistic that might catch the corporate eye...

 

 

 

I'm trying to be civil here, anyway. And rioting is the best way to do it. :lol:

[Death_Hippy]

Eh, i just go with the flow

[Roberthree]

 

I'm trying to be civil here, anyway. And rioting is the best way to do it. :lol:

 

 

 

The best way is to send a message to Jagex with a suggestion. I have seen no one give a way to keep old pking AND stop rwt. It's always "We don't care about bots! gimme teh pk!!!". Well, you don't like it when skillers say "We don't care about pking, at least I can cut wood" so don't flip it around.

[Solidus_77]

Liquidate (sell for cash) your valuable items, wait for prices to crash and settle out, and get ready to buy really cool stuff you could never have afforded before!

 

 

 

Selling stuff is going to just steepen the losses. Way to try and make matters even worse! The only things that are guaranteed to fall in price are luxury items and items demanded exclusively by pkers. Furthermore, the raise in price of all goods due to the disappearance of macroers means that supply will fall back as well, thereby raising the price and so there's really no way to tell where the price might be, although it will probably not be as low as people predict.

 

 

 

Also I don't like the use of the graph. You need to explain what the graph is about, you need to put more explanation as to what price falls where. All I see is one price equilibrium and a thing off to the right saying "lost profit". What graph is this? a supply demand one? if so, then profit shouldn't be on it, because profit is found using the cost of production (which isn't included). If you're going to draw a graph it's essential that you refer to it in your explanations.

[jackg243]

 

I'd think that closer to 90% of autoers would be reduced, because now that they can't sell the items the obtained, and then sell the gold for real life money, or give the gold to a main account which gives them no real incentive to continue autoing. I understand what you're saying though.

 

 

 

I completely agree that 90-100% of the autoers will be gone, I was just stating that the autoer population as a whole comprises perhaps 40% of total producing players, with the other 60% being honest players.

[Bxpprod]

I haven't read some of the responses, because I am in an argumentative mood and will cause a riot :D

 

 

 

Look, there is no doubt that with the lack of macro using players in the game, there will be a decrease in the supply of certain items (willows, yews etc). Of course, with the sudden drop in availability of items, whilst demand stays steady, the prices will inflate.

 

 

 

I guess this is a move towards the emphasis on skills as well as a move to oust "gold farmers", and real world trading. Whilst there are parts I don't agree with, because it is going to have a massive influence on "The RS Economy", I guess benefits out weigh the negatives.

[jackg243]

I haven't read some of the responses, because I am in an argumentative mood and will cause a riot :D

 

 

 

Look, there is no doubt that with the lack of macro using players in the game, there will be a decrease in the supply of certain items (willows, yews etc). Of course, with the sudden drop in availability of items, whilst demand stays steady, the prices will inflate.

 

 

 

But the thing is, demand will NOT stay steady. As I stated, PKers consume most of the finished products in the economy. Now that they (and thus, the demand) are gone, the demand level will fall far below the supply level (though supply will fall as well, with the loss of macroers).

 

 

 

Thus, prices will deflate.

[Bxpprod]

I haven't read some of the responses, because I am in an argumentative mood and will cause a riot :D

 

 

 

Look, there is no doubt that with the lack of macro using players in the game, there will be a decrease in the supply of certain items (willows, yews etc). Of course, with the sudden drop in availability of items, whilst demand stays steady, the prices will inflate.

 

 

 

But the thing is, demand will NOT stay steady. As I stated, PKers consume most of the finished products in the economy. Now that they (and thus, the demand) are gone, the demand level will fall far below the supply level (though supply will fall as well, with the loss of macroers).

 

 

 

Thus, prices will deflate.

 

 

 

"Finished products" are not the main part of said "economy". The majority is with raw materials, that people buy to smelt/smith, to burn/fletch, to craft etc etc.

 

 

 

Whilst certain items may deflate in price - cooked food for instance - there are still people who go out and buy the items. If I had the cash, I'd buy cooked lobsters instead of fishing them myself. But I don't.

 

 

 

:thumbsup: Agree to disagree :thumbsup:

[jackg243]

"Finished products" are not the main part of said "economy". The majority is with raw materials, that people buy to smelt/smith, to burn/fletch, to craft etc etc.

 

 

 

Whilst certain items may deflate in price - cooked food for instance - there are still people who go out and buy the items. If I had the cash, I'd buy cooked lobsters instead of fishing them myself. But I don't.

 

 

 

:thumbsup: Agree to disagree :thumbsup:

 

 

 

-------------oops deleted first quote-thing----------

 

 

 

Let us agree to disagree indeed : ) best way to do it, though i cant help but saying...

 

 

 

The reason a lot, though not all, people smelt, smith, fletch, etc. is to get exp in such a way that does not cause them to lost alot of money (by selling the materials to PKers). So finished products actually are a main part of the economy. If very few people will buy them, why would people bother to process the raw materials?

[Bxpprod]

Just from a personal viewpoint, alot of my skilling is to make money :D

 

 

 

Get starting ores ---> Smelt ---> Sell bars on GE ---> Buy back ores ---> Bank profits ---> Wash and repeat.

 

 

 

That said, I don't really do the whole "fish ---> cook ---> sell" thing, so I don't really get involved much with "pkers".

 

 

 

XD

[King_Peter18]

"Finished products" are not the main part of said "economy". The majority is with raw materials, that people buy to smelt/smith, to burn/fletch, to craft etc etc.

 

 

 

Yes, but what do people do when all of that raw material, all of a sudden is a finished product? I can see selling to people who do quests, alchemists (They are usually in it to raise their magic level or make money) but other then that? I can't see much money making any more, just leveling up skills. Unless I am missing something?

[jackg243]

Just from a personal viewpoint, alot of my skilling is to make money :D

 

 

 

Get starting ores ---> Smelt ---> Sell bars on GE ---> Buy back ores ---> Bank profits ---> Wash and repeat.

 

 

 

That said, I don't really do the whole "fish ---> cook ---> sell" thing, so I don't really get involved much with "pkers".

 

 

 

XD

 

 

 

Consider this though - a lot of people buy the bars on the GE to smith them to sell to alchers. Alchers alch them to get their magic lvl up, largely for PKing. If the alchers stopped buying stuff to alch, the smithers would stop buying your bars to smelt. And then where would you be?

 

 

 

It's all interconnected :thumbsup:

[jackg243]

does anyone have any feedback?

[jackg243]

I am interested to see how accurate and/or inaccurate this prediction will be.... I truly hope it's inaccurate!

[jackg243]

ok, im not bumping this thread anymore. hope i could be of help!

[AzDad]

All economies fluctuate and change.

 

 

 

As the PKers decrease other consumers will increase. It's simply the nature of economies.

 

 

 

It will take a little bit for the market to 'correct' itself, but people will catch on pretty quickly on what sells and what doesn't.

 

 

 

If I had to guess, I would say that raw materials for skill leveling will go up in price (pure essence, seeds, runes, ores, etc.).

[jackg243]

"As PKers decrease, other consumers will increase"

 

 

 

Where is the logic in that? I dont see any major group stepping up to take the place of PKers. The "nature of economics" is that other consumers will not increase, and there will be less demand and a surplus of supply.

[yanksrule]

i see im not the only one who saw the effect of the ge. i also see that im not the only one expecting either a price jump or fall. i told every one on my friends list to just stay put and sell all their bulk items and expensive ones. the most expensive item in my bank is my crystal sheild and before that is my obby sheild then dragon skimy. these are things that i cant really part with so they stick with me. people usually like to show off their "wealth" with expensive weapons armor capes boots etc. but what the dont realise is how unstable the market is. it could just go under in a blink of an eye and before you know it the trade with yanxrul option is to be a thing of the past. i read the guys trusthscape article and what REALL stuck out to me was the part where he said isnt this an mmorpg? what's going to happen to the multiplayer part? that was like the gunshot in a really quiet room :!: . i thought to myself.... what has jagex done?..... they got rid of the rsof basically....i mean thats a chunk of what made runescape runescape. i mean come on how often do (did) you go on there to see if some one made a new forums game. probably not often. how about the market place? that how you got the 1000 post count? i bet it is :wink: .

 

 

 

all in all i mostly agree with what yah said and kudos to you :o