Why The Bond Market is Just a Moneygrab

The bond system as it is right now is destined to fail. It offers players the ability to buy gold (and membership / other Jagex pay-to-win stuff), but it offers no way for players to SELL gold. This means it will be impossible for bonds to find a long-term equilibrium price. They do not satisfy the solution which is provided by gold trading.

The reason websites are able to sell gold to players is because they also buy gold from players. 99% of the RS Gold websites out there do NOT make their own gold. There is a misconception that these websites are gold farms; they are NOT. Gold farming and gold selling are completely separate businesses. It would be like saying Wal-Mart manufactures all of their own products. These websites buy from players at a lower rate and sell at a higher rate.

Jagex states that 45-50% of the community currently partakes in RWT. Who knows how legitimate this number is, and how it was calculated, but the implied statement is that they wish to provide service to this 45-50% of the population. The fact is, the target customer-base for Jagex is the OTHER 50%, the ones who DO NOT currently buy gold. The portion of the community that already partakes on third party websites, etc. is very unlikely to switch over to buying / selling from Jagex unless the prices are competitive.

Currently, the price for 1 bond is $5 USD. Their value on the Grand Exchange will be determined by supply/demand. They have no utility in-game beyond their membership value. They cannot be redeemed for real world cash (within game rules). Membership costs $8 per month on the site, and a bond provides 14 days of membership. If we count a month as 30 days on average, the value of a bond is (14 / 30 * $8) = $3.73. We see that bonds are already overpriced.

So now, we see that a bond carries $3.73 in value in-game. If we consider current gold prices to be about $0.40/M, then we can assume a player will expect the GE price to be approximately 9.3M for a bond. The bond was originally purchased for $5, so this means the person who originally bought the bond has effectively paid ~$0.54/m or 34% extra just by purchasing a bond.

Now, let's consider the assumption we made in this calculation:

Membership $ and Real Life $ are equivalent

REALITY: People certainly value real $ more than store credit on Runescape.com. This means that the GE price should actually be lower than 9.33M in the long run. Furthermore, the marginal value of a membership to one player falls as quantity increases. A player may want 2-3 Bonds for membership, but they likely don't need 10-20 Bonds for membership. With RL $, the first dollar is as useful as the last dollar.

Now, back to the point that Jagex has not offered a way for players to cash out into RL $. This means there is still a massive hole in the economy. These players who wish to sell gold will have no choice but to undercut Jagex's prices on the Black Market. Jagex can cry all they want, but they even admitted this economy exists and is not going away. So they've made a major mistake by neglecting this portion of that market. By not allowing players to cash out Bonds / GP for RL $, they create a market outside the game.

We will see gold prices drop quite quickly once these updates are implemented. The Black Market will find an equilibrium at a much lower rate for gold than the Bond market. The only players that will continue to buy gold with Bonds are the new customers who were afraid of transacting off-site. This update will only increase the amount of people RWT'ing, and will not stop any off-site activity. It's a complete money-grab in every sense of the term. It offers nothing to combat gold-farming, gold selling or RWT in general.

 

/Support the bond market needs a way to sell.

 

Interesting read. I kept reading how they claimed this would stop bots/goldfarming, and it didn't make any sense.

I was thinking "If I wanted 2b for a seismic wand, would I pay $1000 worth of bonds and sell the bonds for 2b (at current rate of 2m per $ spent), or pay $500-$800 to a goldseller and just get my 2b (at current rates of 2.5-4m per $ spent)." The answer is obviously the latter, so it made 0 sense to me how it would stop me from buying and goldsellers from selling.

It's like they are trying to sell overpriced gp to stop the sale of underpriced gp. In real world terms maybe selling Ipods for $200 to stop the sales of 100$ Ipods. What...

 

Main idea of this is to reduce payments from long time players for membership and make younger addicts buy bonds with their parents cards to exchange it for gold. So basicly if long time players will want to only SAVE IRL money they'll spend their virtual money (rsgp)
I think it's actually going to increase gold price. If not then bond will be expensive on GE, but it's not gonna happen.

 

The only people who are getting the raw end of the deal are membership sellers such as myself, I've seen bonds go for as little as 5-6M on world 2. That's 15m for 42 days.. Usually I'd easily sell a 30 day membership for 35M - Which is going to cause a huge dent in that section.

Mean while gold will fall for the first few weeks, but if everything goes right and people waste their money on these bonds it will rise again, or so I'm hoping.

 

Well HOT DAMN. You're absolutely right. Now I can spend 14m on bonds for 28 days of membership, and take my $7.95 savings and buy 24m from goldfarmers. Net 10m per month. Lol Jagex.

 

Pretty much.

 

I was actually intrigued to see (even a RWT'er myself) how they planned to stop Real World Trade. They still didn't address the issue on how someone could just buy GP. That's mostly what people buy, not membership. Can't wait to see this flop.

 

yeah the biggest damage will be the membership sales. Apart from that only an idiot would pay 200$ price per m.

 

"We don’t want players to be able to buy their way to success in RuneScape. If we let players start doing this, it devalues RuneScape for others. We feel your status in real-life shouldn't affect your ability to be successful in RuneScape."

Well that is out the window.

 

Now we can pay blackmarket sellers money for gp, and we can give them a bond for said gp...if anything bonds make RWT look more legit. Thanks jagex.

 

This.

 

There's no valid reason to buy a bond for $5 unless you are going to use it for gold. If you wanted membership, Runecoins, SoF, etc. you get more value just buying those directly. Bonds are definitely 100% RWT.

 

But Jagex shoots themselves in the foot with the bond because if the players "decide the price", then they can't differentiate black market RWT from their own version of RWT. Or they can't justify someone overpaying for a bond because they say we choose...which is a lie but whatever. You know what I mean.

 

Yeah as they stand right now it's like over $1/m.... Bonds going for like 8m last I heard. Honestly all they are doing is helping RWT'ers as we can now easily rise our prices.

 

Exactly, pretty hysterical. ^_^

 

Everyone is forgetting one thing. Jagex are getting really stingy with their bans and banning main accounts who have never botted (the mules remain ok). Although bonds may always be the more expensive option, what people or Sythe seem to forget is that they will be risk free . You won't get banned by using cash to buy membership, nor will you get banned at least getting gold buy buying bonds with your IRL. That is a 100% guarantee. Judging by the way bans are going, I think that safety net justifies the higher price for gold.

 

gold is .40 at best

bonds are at 7m street

.30+ more per mill is a justifiable safety net to you?

 

Have a look at the forums and see how many more threads are saying "my main got banned even though it didn't bot". All your numbers are just based on what you believe may happen as well. You and I don't really know what will happen and besides, 99% of time whenever people quote numbers Its more likely bullshit, simply because Jagex can at any time alter prices.

 

they mise as well make an option on rs ... Buy gold 50c/ Mil... Thye'd get a lot more sales , as there is no real way of getting scammed