SquareEnix Earnings Call

Although its true that we probably would not get an AH, but what you are saying is completely and utterly ridiculous.

You mentioned about using YG and this site to find items, as well as LS mates. To actually require a third party website just to browse items just shows how poor the retainer system is at the moment. Why should people need to log on a website just to find an item?

For a game that is designed around the transference of items between one player to the next, you would reasonably expect to be able to find an item easily. Also, not everyone has an LS, let alone with master crafters in the game. To argue your point based on this is very selfish. Everyone deserves to be able to get what they need even if they do not know anyone in the game.

Also you mentioned that it takes 10 minutes or less to find an item. That is definitely not true. What happens if you are in LL and need to go Grid wards just to pick up an item that is posted for cheap? that is a 90 minute walk for you right there and some people are just not willing to spend time doing that.

Even within the city itself, even with the ward update, people are still not posting the right items in the right wards, and so if i would want to find a rarer item, i may need to browse multiple wards just to find it. That takes more then 10 minutes in itself. Hell the UI lag during the teleports between the wards would take up a few minutes alone.

Why do people want an AH? So they can get what they want, when they want, fast, at a competetive rate. From my experience in WoW, to get an item from an AH takes me less then a minute, and i can find almost ANYTHING i want, whenever i want.

As for undercutting, regardless of the system, it would always exist. Even in the market wards you so dearly love. Most crafters worth their salt would use prices from other existing items they see, as well the price statistics from your precious YG site to price their items. No different from an AH. Explain to me why people need to use a third party site to price their items?

Undercutting in the AH does not reduce prices. Demand and supply does. If you don't understand how demand and supply works, then perhaps you should have not embarrassed yourself by writing this post.

Despite the obvious benefits of an AH, i do believe that a retainer system might work. Just not in the state it is in now. They do not do a good job of categorizing items, as well as relaying the information to the player effectively.

Market was destroyed in XI well before the new level cap and the influx of R/E gear..



How long have you been playing XI? Even when the demand is ridiculously high, AH still encourages undercutting due to a large portion of sellers being completely impatient. I've seen items that sell, and sell constantly drop to over half their price, just because people want THEIRS to sell before other people's.. I understand supply and demand, it does play a part in the XI economy, but the AH system itself is more directly responsible than supply or demand.

The benefits of the market system vs. AH is quite clear. Your item doesn't have to be the absolutely lowest priced of the bunch to sell.. It may take a bit longer for something fairly priced to sell compared to the undercutting, but the undercutting doesn't destroy the market the way it does on AH.

While I agree that I shouldn't have to rely on outside sources to find what I want (which is soon to be remedied anyways) it's a damn bit better then the alternative, the Auction House. I wasn't arguing that system is perfect, I was arguing that those bitching about the current market system refuse to let the system to work just because it's not an Auction House.

this x100..they've been putting together ***and slapping the final fantasy logo on it for sometime now. If things don't change with the way this company is going I forsee them going out of buisness.

Uh.. undercutting is a good thing. People forget that a real person actually purchased that product at a cheaper price and can now spend gil on other products as well. Artificially trying to keep prices high is a bad thing because it hurts the buyer and creates a more stagnant economy with less being sold overall.

I don't think it makes much of a difference because all of it's based on "phoney money" and arbitrary amounts charged for things and given as rewards. I don't think the so-called "holy grail natural economy" will fix the economic problems MMO's have. The problem is there is no creative way around the system itself.. people will game whatever aspect they can to get rich.. be it a quest or a item that NPC's for a large amount.. and you just can't do that in real life.. there are no NPC merchants in real life who will buy your endless supply of fly trap leaves for $1000

.. but thats just me.

There's a difference between fair prices and undercutting any and all profit out of any given item, a line clearly quite a few people in XI don't seem to understand. It's not like someone's walking into your personal shop and you save them a few cents here, they're more inclined to spend a few bucks extra there, once the money on an item is lost, it's lost..

Having a fair priced system is good, undercutting is not.. Tell me how it's a good thing when 3 or 4 people engage in a price cutting war, on practically every single item out there. Person A sells item for 1000, then Person B comes along and sells for 950, then Person C comes along and undercuts the both of them and sells for 900, Person A comes back and drops price yet again down to 850 and this cycle repeats itself.

Now I don't know about you, and I'm not at all for artificial inflation (this goes for pretty much everything I sell, I account for shards/materials/losses/profits, and price items fairly) but I don't want to spend 3-4 hours of my life making all of 50k because the margins on EVERYTHING have been dropped down so low due to undercutting wars.

That's just me, if spending a week solid farming up items for gil to sell just so you can buy one decent weapon or one piece of gear is your thing, then have at it. I know that it's not for most people though.

Personally, I'd rather enjoy the game the way it's meant to be enjoyed, not spend half my time farming gil just so I can get decent gear/weapons.

no AH is the problem... i spent two days soloing mobs and selling all crap to NPCs and shards and made over 1 mil... this game needs some REAL competition.

Making gil in this game is way too easy and when everyone is RICH, no one is. They need make gil hard to come by and encourage competition thorugh an auctionhouse.

The way I look at it is like a bunch of 16th Century Farmers in a Stable selling Manure. S.E. has the technology to put a 21st Century autionhouse where poeple can buy and sell stuff just like the NYSE, AMEX, NIKKEI, BOLSA, FTSE, NASDAQ!

Remember undercutting is done by players. If an item is valuable enough, it would always be priced within a range. If it falls below a players price threshold, he simply would not post and wait for a better time to do so. However you need to understand that if an item is desirable, and people are willing to put in the effort to make it, they would be expecting a fair return on it.

Using your school of thought, everything should be priced the same and at almost no value because you believe that undercutters are there to drive the prices down to nothing, which is not true.

If the player noticed that the prices has dropped drastically, it either means that the demand for the item has dropped and noone wants the item, or someone is flooding the market with many of the same product.

The underlying price behind an item is the amount he payed for the mats. If a player is able to price an item lower then another player and still make a profit, he deserves to do so. The buyer also deserves to be able to buy the item at the lowest possible price. I mean would you be willing to buy an item that is 10% more expensive then the other just because you hate undercutters?

I personally have not played FF1, but i do believe the same concept applies to all auction houses.

Then you have no idea what I'm talking about to begin with.. If you weren't there to witness rampant undercutting even when supply is down but demand is constant and 30, 40 even 50 of the same item or stack of items is being sold daily I've personally witnessed countless common items being sold dirt cheap, simply because people are impatient. Maybe everyone who keeps talking to me about supply and demand is just missing what I'm saying, I'm not saying that the market is flooded with the item and that stocks are outrageously high.. I'm saying prices plummeting for no good reason..

Here's an example for you.. Tav tacos, 18~ stacks being sold a day, consistently for 29k, with an average of 4-5 stacks up at a time. It's doing just fine, prices are stable, supply is fine. Then, along comes another person who hadn't been selling them, and puts them up for 20k a stack, they sell at the normal 20k for awhile, until someone comes and bids lower then the going price and discovers someone has put them up for cheaper then the normal price. This continues until he's the only one selling them and for 20k a stack.. Guess what happens next? EVERYONE starts dumping them off and before you know it they're down to 10-12k a stack..

That's not a competitive market or a simple pricing war, it's pure idiocy. The supply went up all of 5%, demand remained the same, but prices dropped to damn near 30% of what it was 2 days ago. All because of an impatient asshat undercutting the hell out of everyone.

Now what happens in the XIV marketing system? Idiot that wants to undercut loses profits, no one else has to drop prices just to sell their stuff, the overall market value for said item remains stable..

I've personally witnessed both situations in both games. Auction House = one idiot can *** up the market for everyone (because as long as he keeps putting up his items for the prices he is, you have to put them up for an even lower price, or they won't sell, until his stock runs out, which could be days, weeks or never.) XIV Market System = even a few idiots can sell their stock at ridiculously low prices, and your stuff that is priced at a fair price, and the general going price will still sell, even while his stocks hold out.

...thank you to Mr Slipispsycho of Valefor, he actually couldnt of explained it any better. It is & was always that simple...

People undercut because they see the supply exceeding the demand...

You mention FFXI and how bad undercutting was, but you're completely wrong. Sure, people would undercut to make their items sell faster; however, if an item isn't selling as fast as the supply requires then that means the demand isn't high enough, drop the prices and suddenly demand goes up. If you take a look at core items like sushi, prism powders, or other various items that people always need, they stay relatively steady. Sure, undercutting happens to help drive the demand, but that's not because there's an AH there, it's basic economics.

It's supply and demand, a healthy economy needs competition to remain healthy. Could you imagine if eBay seller accounts couldn't view competitor's prices? Or if Shopko wasn't allowed to ever walk into a Wal-mart, or use alternative means of checking competing prices? Nobody would ever shop at Shopko because it's too expensive, and nobody would use eBay because there's no structure.

It's the same thing with FFXIV's economy right now, nobody wants to use it because a lot of people don't know where to set their prices, so when they do set a price and it never sells they get frustrated and give up. Then on the other hand the buyers are also frustrated, as they look through countless random grab bag retainers to find the one item they want, they don't shop for a good or fair price, they either contact a crafter or give up.

The retainer and market ward system don't encourage any kind of competition and what Square needs to do is gut the whole thing and turn it into a pseudo-ah at the very least.

your example can be explained by supply and demand as well.


Okay, i'm assuming for this you are implying that supply and demand until now have been constant.


A new entrant has come in for this case, therefore supply has increased. Prices are expected to fall as demand is constant.

In addition to that, for whatever reason he is able to sell the identical product for less. Im assuming he is rational and is still selling the product for a profit. For a single person to be able to drive the prices below 20k, he would need to be able to produce enough to be able to single handedly satisfy the server demand, leaving poor Tav tacos stuff unsold.

However for market prices to be able to be declining constantly, the said new entrant would need to consistently supply items at that price or lower. A consistent supply is needed as if the new entrant only sells a few items, prices will not be affected much as his undercut items would quickly be bought out.


Obviously if there still is profit to be made, everyone else, including Taco tavi will need to adjust prices or stop selling the item altogether and pursue something else

Prices will continue to fall until people are no longer willing to sell their product at that price, leaving a few who is able to sustain a margin left in the market.

So what happens after?

With people leaving the market, supply decreases. Assuming demand constant, prices will rise again. If prices do not change, the demand must have. If not, the same cycle will repeat itself over and over again.

The person who undercut prices to 20k deserves to have his items sold first. To be able to produce so many items and are still able to sustain a profit from it if he other sellers are not able to means that is is able to find cheaper mats then they are. Therefore the old players would need to find a cheaper way to make the same item, or risk losing money. Businesses today are run similarly.

Its true that crafters would earn less per item in an AH system, but remember that you will be able to buy items at the same reduced rate as well, negating the loss of profits.

To say that demand and supply does not affect AH IN FF11 specifically would mean that people who play FF11 are irrational people, which i fail to believe. ALL auction houses are the same, regardless of game.

My advice to Taco tavi? either dump your items at a loss and explore other items, or wait till prices improve again.

Unfortunately because Wes0001 has not played FFXI, he/she is unaware of a few of the nuances of the FFXI auction system.

The first is the visible transaction history, a feature shared with all of the auction house systems I have ever seen in any game (DDO, COH, Champions Online, RFO, etc.) but in this case is 10 transactions or so in length. FFXIAH.com is actually different from the in-game AH system in that it retains transactional data beyond the initial 10 trades, which is part of the reason this site is so popular. The fact that the "fair market price" (prior to undercutting) is lost within 10 transactions means that those looking to dump items at an undercut price will often end up affecting ongoing transactions as a result especially if they sell in volume, similar to what Slipipsycho said (although not always, depending on the item and the volatility/frequency of purchase.)

The second factor is the limit of 7 items per character to be sold on any in-game AH system. While this certainly can be worked-around by using mules or other proxy characters to post more items up, the impetus is very much present to liquidate items as quickly as possible, and is an integral part of the FFXI system implementation.

These two factors (the short AH transaction history and the 7 item limit) tend to be unique to FFXI. Other games that I've played, like City of Heroes or DDO or RFO or Champions Online, all allow for far more in-game loot items to be posted simultaneously, and tend to have more detailed history of sales. So in regard to Slipi's statements, he is quite right in that is how the supply v. demand game plays out in FFXI.

EDIT: This is really off-topic, though, as interesting as it is to read the discussion. LOL

It's worth pointing out real world economics don't 100% fit virtual economies where subtle differences can cause drastic differences. For example lack of anti fraud and anti monopoly laws.

In FFXI a single person can have a huge impact on the perceived value of an item; even when that items supply and demand has not changed at all I could simply manipulate going rates or deliberately sell below production cost till I am the sole supplier or maybe forget to account for breakages when setting my prices - dozens of ways things can go loopy. Sometimes people are just sheep. Sometimes it is a side effect of game design. Happens ina lot of online games. If HelmetX is "the best" and the game does not really support alternate builds everyone wants ONLY HelmetX and there is no reason to craft HelmetY, its not going to sell. In a game where HelmetX and HelmetY are both viable options for different usages (builds) the player base is spread out more.

Going back to FFXI again, look at the hundreds of items not on the auction house. Our high level crafters concentrate on the same HQ results, and NQ is rarely profitable after breaks and opportunity cost. I've noticed people on FFXI sell themselves short by not accounting for all of their time spent making that gil. Heres what I mean: In real life if you spend 8 hrs working on something before its finished, and it takes another 8 hrs to sell for $20, and you say "I made 20 bucks in only 8 hours!" your selling yourself short. What else could you have done with that 8 hours you didn't count? Was it really worth 20 after 16 hrs? People think gathering their own mats = free. What they should really be doing is looking at how many of a thing can sell. Craft and list up that limit, and sell remaining mats or make a different item with them. Spread out. Without an army of mules because we can't try and volume sell anything that sells slower and in smaller amount it has gotta be either big or fast or its wasting a slot and thus valuable time so that 7 slot limit sucks.

Eh..I dunno if I made a whole lotta sense there, I need sleep. Felt like I was trailing off in the 2nd half.

p.s.
extremes suck. It sucked when we had hyperinflation, and it sucks just as much to see things your trying to sell plummet. At least recently that's because we have new stuff, instead of just vile deflation.

It becomes blatantly obvious to me that either people can't read, don't play ffxi at all, or have no idea how the AH in ffxi barely resembles a real life economy. Slipispsycho is explaining the true nature of the ffxi AH perfectly.

Undercutters are 1 of 3 types of people; 1. Underage who have no idea of markets and economy(might as well class noobs in this category) 2. Impatient people that want their (zomg 7 items for stupid AH for 8 years) to sell or 3. Trolls that enjoy pissing off people by undercutting them.

As he/she has stated, Slipispsycho is not saying the market/retainer system is amazing or anything... just that the AH was so horribly flawed and that the people screaming for it don't seem to understand how much it will hurt FFXIV.

No the worst thing with FF11's AH was the blind bidding. This caused multiple issues.
1) You couldn't see what other people were selling for, and only had the limited history which was useless anyhow.
2) People thinking they could get rich on the blind bidding system would place rediculessly low prices so they would pay lower fee's and sell quicker in hopes that whoever was bidding would check history first and bid what was "proper" or close to it. IE selling at 1 gil. If you were lucky maybe someone only checked for a few hundred gil under the history price and you made out ok. If they put down 1 gil. welll tough luck I guess
3) The 7 item limit was indeed another bad point, but most people circumvented it by just getting another mule or 2. As you could pick up 3 mules and at that time and still be paying the same fee as someone playing most other subscription based MMO's

If you're seeing constant undercutting on an item chances are it's something that used to be in constant demand but is no longer wanted (i.e. tav tacos... you can thank the mass exodus of pld tanking in abyssea for this). Try selling something that's always needed (like bullets) and you'll see that undercutting goes in cycles. Someone changes the price while trying to dump stuff fast and their stuff sells, some people might sell at that price and their mats exit the AH quickly but the base price still remains and once all the cheap items are bought the price rises again. I see the same trends in sushi, abyssea pop items, nin tools, and other in demand consumables. Old content sales, and stuff that saturates the market (spells, gobbie bag mats, rare gear becoming less rare) on the other hand are crashing fast.

What Xaero said is indeed the true problem of the AH system as it was in XI. The blind-bidding system left it to where no one could ever see what the price of an item was up for.. So 10 people who have an item would all have to list it based on the last known sold price, and worse compete with each other by undercutting below that to ensure they get a sale.

And that's exactly why many people undercut, to try and ensure they got a sale at all. I mean, even if 10 people all put their item up for exactly an equal value, the server could take quite awhile before it decides that last player of the 10 gets selected on a bid.. In fact, often times that last player would not get a sell at all before either the item was sent back to them for being up for too long, or the item price went down from either someone else undercutting or demand naturally going down..

If the AH worked more like WoW, where each player got their own individual listing of the item this problem never would have occurred.. Would people have still undercut? Yeah. But not in an effort to just make a sale at all.. And really, WoW's system of individual listings is no worse than it is in XIV right now with people having their items spread out across their individual bazaars. (And it'll become practically exactly the same thing anyway once the search feature is added to the market wards.)

I'd never want to see XI's AH return, but that doesn't necessarily mean ALL kinds of AH implementations have to be bad.. Likewise though, when item searching is implemented I don't see a reason we'd need an AH anyway.. because we'll essentially have exactly that, minus the transaction history.

I do have to agree with Xaero's point about blind bidding. Sometimes I think the system was flawed anyway. I would put an item on AH that would be the only item for a couple hours. Lets say I put it up for 10k, the history was 12k,11k,11.5k. Somehow, after that couple hours where it was the only item, one would sell for 11k... This happened a lot for me too, I dunno.

Anyway, I just hope they enhance the "retainer" system to be more search friendly and efficient rather than be another crappy AH like FFXI.

FFXI's AH wasn't a real AH. It was a turd dressed like an AH operating as a consignment shop.

11 and 14 could both benefit from a real proper AH - but that is not going to happen for either of them and if enough bitching causes SE to make an AH for 14 you can expect it to be just as crappy as 11's was.

I WANT AN AUCTIONHOUSE IN 14!!

I still like the AH where any idiot can make prices go up an down.
I made a profit with Planitum ingots @ 360,000 a stack. I can still make a profit at 120,000 a stack as base materials prices have dropped.
I can make profit on sole sushi (and i don't fish) at 30,000 and still make a profit at 22,000 a stack (cost 18,000) to make, and you get extra +1's FREE along the way. Made profit on Ninja tools Shithei (woodworking) and Jusatsu (Alchemy), as well as Darksteel ingots and bloody bolts.

It doesn't matter if people undercut, I can undercut anyone when I feel like it and still make a profit. Economics of scale is what prevails.

All you gotto do is take any craft to 80+ and have fun watching others complain. I'm sure the player paying 20-22k for my sushi is not complaining.

PWR!!!

I don't think an AH should be implemented. If an AH is put in, it will be like the one in FFXI which didn't work fairly to begin with. It actually worked against what an Auction house really is. The market wards are fine. They just need that search function to work right and we'll be golden.

i dont want auction house, they should just put search funtion for retainers

they are, next update

/signed

Who are you people? Why on EARTH wouldn't you want one?

Yeah AH no thanks

No AH means no price fixing.

How does an auction house encourage price fixing? Do you mean by knowing a price history, one can maintain a value on goods?

I like LOTRO's AH system. The interface could use some work (though I haven't checked it out recently, and there have been UI changes elsewhere since). It has the individual listings for the items and actually allow bidding on the item (can set time limit of auction and an instant buy amount).

This is essentially how WoW's AH works, and what I was describing in my previous post. The implementation of an AH doesn't have to be a bad thing at all, it's just XI's particular AH system that was horrible.

I reiterate though, that we don't NEED an AH. Once the item search system is put in place for the market wards, we'll have all we really need to maintain a decent economy.

I like how every step to improve the market wards make it look more and more like an auction house...

It proves that the market wards system is a step back and that ultimately it will evolve into an auction house. Adding a search function to the market wards is just like having a search function in an auction house, EXCEPT you get to go find the retainer that is selling the item. Price fixing/undercutting happens whether you have an auction house or not. Once the search function is added, sellers will just scan the ward for the item they will be selling... and undercut/price fix.