Runescape Economic Update

[Wessan]

Hey guys, I was just thinking up some stuff today and thought about focusing on a specific economic topic: the BXPW, especially since we have one coming up in a couple days. I was thinking about an attempt for the Tip.It Times, but it would be too late.

 

Also, I just want everyone to know that the "patterns" spoken of about BXPWs and the RS economy during those times are based on my memory and historical graphs from Runescape Wiki. And although they may not have been the highest prices of their time, BXPWs in the past have caused large spikes in goods (other than this one).

 

So here goes:

 

This summer’s Bonus XP Weekend seems to defy the pattern legitimate players of Runescape have seen the economy follow leading up to previous Bonus XP Weekends. In the past, the RS economy has inflated itself to account for the massive XP gains to come, but this year Turmoil can be yours for the cost of a full set of Bandos Equipment. Thousands of players are wondering why this is occurring and what they should do with their equipment, stockpiles, and cash. Unfortunately, if you were asking those questions, this article is not here to answer them. This article is meant simply to report on the happenings of the Runescape Economy at the present time. First however, an examination of the past Runescape Economy must take place in order to understand the altered atmosphere of the one today. The facts of the past should be known to any player who has kept up with Runescape throughout the past two years, but it is always nice to have a refreshing rehash of information.

 

The first Bonus XP Weekend (BXPW) occurred in March 2010. Much like the Bonus XP Weekend about to occur, this was a game changer. Not only was it the first time Jagex was going to simply give away extra experience at no cost or time to the player, but it was still experimental because Jagex learned a few lessons from it. The biggest lesson learned was that Summoning is quite easy to train with a 2.7x multiplier. Also, Jagex found a few flaws in the system of the Bonus XP distribution and how long each multiplier should last. In essence, the first BXPW was an anomaly in terms of its concept and game-play, but set the standard of how the Runescape economy reacts to such an event. This standard was one of increased prices as the supply for skills like Herblore, Fletching, and in this case, Summoning evaporated like water in the Sahara.

 

The next BXPW happened in September 2010 and was much the same as the first with a few tweaks to the multiplier, timer, and the nerfing of Summoning, but this BXPW had much the same effect on the Runescape economy. This is mainly due to the unpredictable nature of the first two BXPWs. Players had no idea they would be coming until Jagex announced them only a few weeks in advance, so when players found out, they bought out supplies over a short period of time for high prices. It is also worth noting the first two BXPWs occurred under the Restricted Trade Era in which prices were already inflated due to the reduced purchasing power of the Gold Piece (GP).

 

It did not take much for many people to suspect the third BXPW to come in March of 2011, but its legacy is born from the Free Trade Era. However, the removal of trade restrictions only a month before a suspected BXPW brings data for the third BXPW into question. It continued the pattern seen under the Restricted Trade Era, but why? Was there not enough time to collect goods? Did the removal of trade restrictions lead to a merchanting boom that forgot about BXPW until only a short time beforehand? And it must be called into question: were there just not enough bots in RS to make a difference yet? It was a combination of these and other factors. For these reasons, the economy acted in what seemed to be a now predictable pattern for BXPWs. And then six months past.

 

On August 24th, 2011, Jagex announced its Refer a Friend Program in which players can receive extra experience for bringing a friend into the game. Whatever. The note bene taken from this announcement was the small snippet that stated the next BXPW would occur from 9-12 September 2011. That is the day the new graphically updated Grand Exchange had its foundations shaken to the core. Prices were up, down, skyrocketing, and plummeting all at once. The mid-level Rares saw a swift decline (but have since made a recovery), Bandos armour when from 18mil per piece to around 15mil and swiftly came back to 17mil in the course of almost 6 days. Items like the Amulet of Fury, Dragonfire Shield, and Berserker Ring experienced declines in excess of 10% within a day or two. Herbs and their seeds were hit hardest as most players (and bots) had stockpiled them in speculation that Herblore would be a major skill to train again during the BXPW. It was as if the residual inflation of items in the Restricted Trade Era was wiped out in two days time, and when the panic seemed to die down a bit, players got to catch a glimpse of one word: predictability.

 

Bonus XP Weekend had finally become such a pattern in Runescape, players and bots alike knew it was just over the next hill by the time August rolled around and back-to-school shopping started invading every Wal-Mart. So when the BXPW was finally announced as a certainty, caches of goods and raw materials were dumped on the Runescape economy with little regard to cost-per-item. This is because if you want to sell 10,000 Snapdragon herbs at 7,500gp each to make 75mil, but know (due to predictability and an inundated market) that they will not sell at that price, it is easier to short sell your goods for say 7,000gp per Snapdragon. The herbs have now instantly sold for lower than the current average and if they went for exactly 7,000gp each, only 9% and 5mil was “lost” in the transaction. It was a small casualty and certainly one a single player can afford. One thing different about this BXPW: everyone began doing the same thing.

 

It is not a new phenomenon to see a mass short selling of goods in Runescape. All players experienced the slashed prices of goods following only the announcement that free trade would return in December 2010. The path taken by the Runescape economy leading up to the fourth BXPW differs from December 2010 because it can happen again. Will it set a new standard of what the Runescape economy does in the weeks before a BXPW? I contend it will, to an extent. Where there is predictability, look for the unprecedented to occur. However, some bets can be made: a certain portion of the Runescape population will continue to be predictable. Let’s just say they operate solely on code, cue, and money.

 

 

 

*just a note: I did not really want to bring bots into the discussion, but it is incredibly difficult not to notice or report their impact on the RS economy.

 

**Also, please do not boil discussion down to Free Trade versus Restricted Trade. The fact that they were present and had an effect on the BXPW fluxes is the only reason it is mentioned.

[Bruhx]

'but this year Turmoil can be yours for the cost of a full set of Bandos Equipment.'

 

Wait, what? I just sold my bandos to get from 92-95..

I thought prayer didn't work on BXP, unless you like buried the bones.

 

I'm guessing I'm completely missing something, as always. :P

[Wessan]

Na, its just a comparison of how cheap things got.

[RU_Insane]

Regards the short-selling of goods regards this month's XP weekend, I thought they would have sold goods for higher considering demand for them would substantially increase, thus increasing the price. Or am I missing something here? >_>

[Wessan]

They would sell higher if the supply did not meet the demand. The fact is for this BXPW, the amount stockpiled to sell when BXPW was announced was greater than the demand for the materials, and this may be a trend that begins to occur around BXPW now.

[FirenLazah]

'but this year Turmoil can be yours for the cost of a full set of Bandos Equipment.'

 

Wait, what? I just sold my bandos to get from 92-95..

I thought prayer didn't work on BXP, unless you like buried the bones.

 

I'm guessing I'm completely missing something, as always. :P

 

I can get my prayer level from 85-92 for like 40M right now.

[RU_Insane]

They would sell higher if the supply did not meet the demand. The fact is for this BXPW, the amount stockpiled to sell when BXPW was announced was greater than the demand for the materials, and this may be a trend that begins to occur around BXPW now.

 

Ah okay :P I wonder if the tables would turn had it been announced much later -- say, two days before BXPW. Few people would have the chance to stockpile items suspected to rise in price, and the demand would increase past the supply since skillers et al. would be rushing to buy commodities. It's also possible that certain high-value items like godswords would drop as people would sell them cheaper to buy as many commodities as possible.

[Wessan]

And they did. The Amulet of Fury, Dragonfire shield, and Berserker Rings were just a few examples. Godswords and other equipment fell the same. :)

[Jacks0n]

can we get a tl;dr?

[Kimberly]

can we get a tl;dr?

 

Take the "back in my day, frankfurters were a nickel!" attitude and reverse it.

 

It really does deserve a proper read though. Was interesting, I'm not entirely sure I agree with everything but definitely interesting.

[pulli23]

You wrote it quite4 a bit melodramatic -.-.

[Racheya]

I thought this was an actual RuneScape update from the title.

[Sir_Squab]

Interesting post. Yeah, the fact that is was the 4th bxp to come around, combined with free trade and the resurgence of bots, made it that the bxp was a lot more passive then past years. I think bxp will always have a trend to cause items to slowly fall then fall a bit more around it as people sell items for exp. But the fact is, it is now in a predictable pattern and players simply stock up. Bots just collect because bots collect. I think it didn't happen on the 3rd one because, well, it takes 3 for humans to get into the pattern of it? Probably boils down to some deep psychology thing about humans and the number 3. It "feels" like it's the right time for humans to understand that it's a pattern but I can't explain it.

 

Also, the 3rd bxp was around with significantly less bots, not as many players were confidant about it being a pattern. Plus, I think prices were still a little crazy due to residual effects of free trade being so recently introduced at that time.

 

An interesting thought is what the next bxp will be like. Given how this one, prices for skills if anything DIPPED, we will see far less people stocking up for the next bxp, at least with the intent to buy. This in turn would lead to spiked up prices for bxp again. Plus, people wouldn't be willing to stock up for bxp without profit, and even then prices should theoretically be a little high around bxp, if nothing else because it messes with the exp/gp ratio.

 

So, I'm predicting a spike next year because I think less people will invest in bxp but the demand will raise all the same. But who the hell knows. The trick to making money on bxp is to buy/sell differently from most other players.

[Kaida23]

This would have made a nice Tip.It Times article, Wessan. :thumbup:

[Pete Party]

I wish short selling was possible in runescape.

 

Please use another term for selling your goods below the buy in price.

 

Short selling is where you sell goods that you do not own yet and where you make an agreement when you will deliver these goods, the price however is agreed at that time and when the time is to deliver you buy the goods for its current price and hand them over.

This is a money making setup in which you can make money when you know/predict an item is going down in value.

Short selling is mostly done on the stock market.

[HunterDexter]

Short selling is now banned in EU right? Or was it Belgium only?

 

About the article, very nicely written, I had the same ideas about what has been happening with this weekend.

[Will H]

Just edited the topic title a bit so it doesn't look so much like an official news post and confuse people. If Wessan would prefer it changed to something else, please feel free to PM me. :)

 

 

Will_H

-Tip.It Trainee Moderator

[loligo]

it's not that surprising of an effect if you follow the wall street adage of "sell on the news" to lock in your profits

[Sona]

It would be interesting for someone to track player numbers and see if this decrease in price is caused by oversupply or simply a decrease in demand. Correct me if I'm wrong, but in general, player numbers have remained at around the 200k mark, right?

[Sir_Squab]

Just edited the topic title a bit so it doesn't look so much like an official news post and confuse people. If Wessan would prefer it changed to something else, please feel free to PM me. :)

 

 

Will_H

-Tip.It Trainee Moderator

 

I was actually thinking that he should re-title it and change the word update to something else >_>

[Wessan]

You wrote it quite4 a bit melodramatic -.-.

 

I had a few drinks while I was writing. :)

 

I wish short selling was possible in runescape.

 

Please use another term for selling your goods below the buy in price.

 

Short selling is where you sell goods that you do not own yet and where you make an agreement when you will deliver these goods, the price however is agreed at that time and when the time is to deliver you buy the goods for its current price and hand them over.

This is a money making setup in which you can make money when you know/predict an item is going down in value.

Short selling is mostly done on the stock market.

 

Thank you for pointing that out. Honestly, I thought what I described was short selling, but since its not, I don't really know what to call it.

 

 

Also, sorry about the confusion everyone, I actually did make the title to reflect an "update" style thread.

[n64jive]

Undercutting or underselling?