Should the Ped be Devalued?

[cyco animal]

I've been thinking about this issue for some time, now i'll addmit im no econmist or financial expert or anything but,

if MA devalued the ped by half, that means

every item ingame woud have to have its TT value doubled,

everybodys Ped balance would have to be doubled.

armours etc wouldnt be any cheaper for RL cash they'd just cost twice as many peds.

this would no doubt be a major headache for MA too

more ammo/bombs for your money tho, thats not an unrealistic idea, However then loots would be less, deposits smaller & you think ppl complain about loot now?

its a nice idea, but MA has made the bed, you either lie in it or you dont

[Minder]

It would be much easier to just raise the loot and/or change the ammo cost if they want to make the game cheaper to play. Devaluate the PED is, as most other players already said, a very bad idea.

[truantduck]

The Ped is being devalued.

Since the Ped is tied to the U.S. dollar, and the U.S. is going through another period of monitary inflation, so is the PED.

One effec of this will be cheaper PEDs for non U.S. players.

As a side effect, you may also see the ped value of rare items increase.

[Wren]

Originally Posted by truantduck

The Ped is being devalued.

Since the Ped is tied to the U.S. dollar, and the U.S. is going through another period of monitary inflation, so is the PED.

One effec of this will be cheaper PEDs for non U.S. players.

As a side effect, you may also see the ped value of rare items increase.

shush, you telling them all the secrets.

I am actually wondering how tightly the U.S. economy flucuation will affect the world of calypso.

On topic:

The devaluation of the PED will not make the game cheaper to play. Everything will still cost the same relatively.

[P-J]

Hmm some interesting ideas…a quick response…

1. “It will devalue our items”…nope it would probably make them more valuable. Value rests on relative scarcity, perceived need etc. The more people playing the higher the relative scarcity and the more people with a perceived need …therefore the higher the value. This isn’t about kicking the ubers…they will profit just as much as the noobs.

2. It will devalue our items… nope they would hold their value as they are pegged (in our minds) against real monetary (USD or whatever currency) value – and you are going to hang on to them until they sell at their ‘real’ value. Prices would rapidly become normalised.

3. Lower loots… I am not an expert on this one…but I don’t think so …the game should have a higher turnover, therefore, the loot pool should improve.

4. “It’s a stupid idea”…please elaborate…seems a simple blend of economic policy, business strategy and marketing (see Michael Porter’s work on competitive advantage and Rapp and Collins on Marketing).

Hey, the bottom line is that I think MA is missing an opportunity because of the high number of new players with the cash to play, who are within the target group to play MA and who are leaving because of the high initial costs. They are not turning potential customers into long term customers and are therefore losing significant chunks of revenue. To be successful they have to attract players and then retain them… the quality of the game is attracting them but the cost of playing it is meaning that they are losing players to competitors they should and we need to retain. See the posts on other gaming forums about this game ….and weep!

5. Increase the loot in-game...yep but that just increases the pot in the hunting 'casino'. I would like to see the average cost per hour for a player (mining/ crafting/ hunting to decrease - this means reducing the cost of the raw materials sold by PE. For you Americans .. PE is a bit like pre revolutionary America... where a British Govt set the prices of everything (lol)

[Devil Doll]

Interesting thoughts. Because I work in the Financial Sector I have keen interest in this discussion. Here is an article that relates very closely to some of the economic problems encountered on Calypso during recent years. In addition, you will see that currency devaluation has a direct correlation to many issues.

Riding the monster of inflation

PHILLIMON MOLAODI
Staff Writer
9/27/2005 9:12:25 AM (GMT +2)

Perhaps the most evident sign that the Botswana economy is in trouble is the rising inflation that has been felt by a vast majority of the people. But what really is inflation? There is still academic feuding over the definition of the term.


However, all explanations are agreed on one thing - that inflation occurs when general prices in an economy are rising. It mostly happens when there is “too much money chasing too few goods and services”.

The monetary surplus and the shortage of commodities and services means that only the highest bidders can buy. A persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services also causes inflation.

In recent times, annual inflation in the country has risen at an alarming rate. The latest report from the Central Statistics Office (CSO) indicate that inflation is 9.6 percent - the highest figure in the past 26 months. Prices last spiralled to unprecedented levels of 12.2 percent in June 2003 following the unpopular introduction of Value Added Tax (VAT). Since then, price increases have never been within the desired targeted levels.

In the previous year, a combination of hefty wage increment, devaluation and soaring oil prices in the international market saw Bank of Botswana (BoB) failing to contain inflation within the 4–7 percent target. The future looked bright this year with a restrained fiscal policy. When launching the monetary policy roadmap for this year, BoB Governor, Linah Mohohlo expressed optimism at the turn of events. “There will, therefore, be minimal external pressures on the domestic inflation in 2005. Domestically, it is expected that demand pressures will be moderate, with both government expenditure growth and credit expansion generally consistent with the inflation objective,” she said.

Given the benign inflationary outlook, she pleaded with those influencing domestic prices to assist her clamp down on price increases. Her only fear on the domestic front has always been “any further substantial increases in administered prices in 2005, as well as from any adverse movement of the exchange rate impacting on import prices”.

In view of anticipated decrease in inflation, the governor then went ahead to set a target of prices increasing by not more than 6 percent this year. From January until April, everything looked well. Inflation fell from eight percent recorded at the beginning of the year to 6.2 percent – the lowest in 16 months. BoB even gained confidence in the target it had set by cautiously slashing the costs of borrowing in the commercial banks by 0.25 percent in April.

Interest rates are some of the tools used by central banks world wide to control inflation. When interest rates are low, the level of borrowing increases and that results in too much money floating in the economy. The bank therefore adjusts interest rates from time to time in an effort to control circulation of money.

In May after the reduction in interest rates, the bank might have cursed its decision. The Ministry of Energy and Water Resources announced an increase in the price of fuel and at the end of the same month, Ministry of Finance added salt to the injury by cutting down the Pula by 12 percent. The two actions resulted in a major price spiral. BoB had limited options in August other than to rescind its May decision of reducing interest rates.

Instead, it padded the rates by 0.25 percent. This is not a good development because high interest rates are bad for investment.

In August, BoB’s confidence in keeping inflation between three to six percent faded. In mid-term review, Mohohlo announced a new target four to seven percent.

The highest domestic risk in inflation is the 12 percent currency devaluation. BoB anticipates that the rise in inflation due to the devaluation would at least be limited to two and four percent. However, chief executive officer of Motswedi Securities stockbrokers, Martin Makgatlhe doubted if BoB would achieve its new inflation target. “The outlook is not as positive as BoB would like it to be,” he explained yesterday. He said BoB has no control on some of the variables affecting inflation and fuel oil prices.

Indeed, a consistent threat remains the surging crude oil prices, which have recently hovered above US$65.00 (P365) per barrel. In the basket of commodities that influence the direction of inflation, fuel and power, contributes 2.58 percent. But the problem is that an increment in the price of fuel affects a majority of commodities in the basket such as transport and communication, which claims 19.73 percent and the food basket, which accounts for 25.53 percent. An increment in domestic fuel prices replicates across other sectors.

The bad news is that government principal energy officer, Kesetseneo Molosiwa said last week that another fuel price increase is imminent. A recommendation has been sent to the Minister who is yet to submit it to cabinet for either approval or rejection. Molosiwa said it should be borne in mind that the May increment was effected when oil prices in the global market averaged US$57 (P319.20) per barrel but now the prices hover at US$63 (P352.80).

He added that the National Petroleum Fund is stressed and its capacity to cushion consumers against hostile crude oil prices has been significantly reduced. Energy officials have been reviewing possibilities on increment every three months but Molosiwa said if the current tide remains unchanged, adjustments are likely to be effected on a monthly basis.

“Prices are changing very fast,” he explained.

Source

Originally Posted by PJ

Hey, the bottom line is that I think MA is missing an opportunity because of the high number of new players with the cash to play, who are within the target group to play MA and who are leaving because of the high initial costs.

My response to this is that the initial cost is not high assuming you listen to all of the advice out there and learn how to play the game. If you want Nem and a whoopass gun upfront, you are asking for trouble. That isn't the type of game PE is.

DD

[Franck]

Originally Posted by Devil Doll

My response to this is that the initial cost is not high assuming you listen to all of the advice out there and learn how to play the game. If you want Nem and a whoopass gun upfront, you are asking for trouble. That isn't the type of game PE is.

Well said. Devaluating the PED would put everyone in trouble : MA, depositers and "froob" traders.

The SG cap was raised, allowing newbies to sweat more and avoiding multi-account exploits. The maximum amount of sweat was raised as well, first to 8, then to 20+.

Crafters can now choose to make nearly broken weapons with optimal success rate (best skilling option), which is a good thing for newcomers as they can get their first weapon for a very reasonable price.

Also, the ingame tutorial is annoying for old players, but may still be appreciated by a newcomer who is too shy to look for a mentor. And it is here to show just like the rest that MindArk actually cares about new players.

Just like Devil Doll said, if the first thing you want to do in PE is getting yourself the best equipment for cheap, you are probably either too immature to play PE or not ready for a real economy system. No offense - everything has a price, and über items have to be rare and therefore expensive

[KapokWu]

Originally Posted by Franck

Devaluating the PED would put everyone in trouble : MA, depositers and "froob" traders.

Well, there are ways around that. For example, MA could inject
a substitution of the drop in their market networth to all players.
E.g. if a drastic 200% devalvation would occur, 50% of the char's
networth would be given in PEDs. E.g. let's assume that Deathifier
would have -umm- 40 kUSD in-game (not only the money he deposited,
but the perceived networth at the moment). He would be paid
200k of new devaluated PEDs.

Defining the networth would be simpler for medium players and noobs.
The top guys would need a sort of council to make decisions over
items which are sold seldom. There could be a kinds of a negotiation
phase involved, but MA would naturally have a strong position in such
negotiatins .

Another way would be to introducing PELs (Project Entropia Liras).
Simply a second currency in PE. Liras would be accepted by TT's
and one would buy and sell only some special items - probably
a different set of noobie equippement.

Third alternative would be to start a second PE world, but then
the benefits of the existing community would not be there.

Adjusting loots may not be a big-scale solution because then
a section of players would become unbearable moneysinks for
the economy. Trying to counter that by increasing the lottery
nature would be bad too, since there has to be
a tiny sensation of advancement in the game.

[Tigerman]

Are you nuts?
Do you have any idea what kinda impact it would have to even devaluate the PED 10%?
Lets just say that it would mean 10k PEDs (1000 USD!!) easilly to a lot of people. Now that would be something that would make the community happy and would bring MA lotsa good rep and credibility now wouldnt it?

Also, keep in mind that Project Entropia IS NOT "any other MMORPG" and thats why people keep playing PE for years instead of months like they do for example SWG or WoW...

It is also a REASON why the PED is linked 10:1 to the USD and its not because its such a nice figure. They coula linked it 100:1 to the USD if they wanted to, but they didnt.
If MA want to kill PE quickly, they can just follow your idea and devaluate the PED and itll be done real soon..

[geten]

What a splendid idea! <insert a mammoth deposit of sarcasm here>