Runescape Gold Price/Virtual Market Trading

Two things ITT:

- I was wondering if anyone has ever compiled a Runescape Gold index price over the years. If they have I would really like to see it. You can either post a link/PM me if you're willing to share.

- I was reading Micheal Lewis's Boomerang book on cheap financing during the 2000's and basically cheap credit globally throughout 2002-2007. I wanted to see if there was any correlation to that in virtual markets. Is there anyway to see Sythe's statistics on bannings during that period in time? I don't know if any particular user would have that or Sythe himself would only know that. At least some statistics on frequency of historical scamming reports. Anything really.

I'm not really sure what I'm asking as I really don't have all of my thoughts together on what I want to do with all of this, but I guess at the very least it's just out of curiosity. If I can allocate enough information on this type of thing I wanted to see if I could make a relation to either prove or disprove whether or not virtual markets were effected pyschologically during this time of cheap/easy credit globally (trust).

I'm not claiming to be extremly knowledgable of the nitty gritty side of Economics. It's something I am incredibly interested in and am eager to learn about. Maybe this is something that can be the catalyst of figuring some things out by myself. I don't know.

At the very least a discussion about it.

 

Well sythe has only been around since 2005 so you wouldn't be able to get any data before then. For some price data, I'd look at http://sythe.org/archives/155753-r2...p-over-17b-sold-5-00-usd-m-mail-wu-egold.html (one of the first gold-selling threads on the site) http://sythe.org/runescape-3-sellin...rs-gold-shop-100-risk-free-bh-4-00-usd-m.html and http://sythe.org/runescape-3-sellin...old-new-holiday-sale-since-2007-1-seller.html

It will take some digging and going through posts to find what the gold rate was, sometimes you can see the price in the title thread at the time.

For example http://www.sythe.org/runescape-3-se...-new-holiday-sale-since-2007-1-seller-11.html at the top it reads "Re: :+: R2Pleasent's Runescape Gold Shop *3.50/M*[PP / WU / Mail / Interac / PS] :+:" so that $3.50 is probably a good number to go with for that time period

For the ban data you'd have to ask an admin for that kind of data and I'm not sure how far back the data they have goes. Also I'm not sure if they'd be willing to release that information.

No shame in trying to educate yourself and increase your understanding of a topic, more power to you and sorry I can't be more helpful

 

People ask about gold indices often, and there may be scraps of them lying around. You could also ask the user PlayerAuctions if he has data from PA prices - these probably stretch back further than Sythe does.

As for ban data, you could scape the report a scammer archives for all the reports (I think there are like 40k?), grab their dates, and go from there - but make sure Sythe is ok with you scraping from the site first, I don't know if there are limits on what you can and can't gather per his rules. My guess is that you won't find much of a correlation but yeah, if you want to talk about this further/want advice, hit me up on Skype or something (or Sythe pm) and I'll see if I can help you out!

 

if you do end up gathering data, do share

 

You'd be hard-pressed to find any correlation between the credit system in 2000-2007 and gold prices. There's just so many variables that play into gold prices that any results would be massively distorted, even if they did exist at some level.

Think about the direct events happening in Runescape 2007. It started with Jagex taking a massive anti-RWT policy, where they perm-banned people for simply BUYING gold. They never ban for that today. They then followed suit by fully removing free trade later that year. You can imagine the profound effects these events had on the marketplace.

It's likely that in 2007, due to a booming housing / stock market, consumers were willing to spend more money on luxury goods such as RS Gold. However, this would be more easily proved with a correlation to disposable income. And it really isn't an interesting observation; it's quite self-evident.

What type of correlation do you expect between the credit markets and RS Gold sales? The price of gold itself is a bad indicator for the market's performance BTW. What you really need to determine the health of the gold market is the total gold revenue in a certain time period, which would be near-impossible to ascertain. Using gold price as a metric for gold sales is a poor substitute and will not provide any relevant conclusions.

 

I see what you're saying that the real thing to look at isn't the gold price, but instead the gold revenue by gold sellers. Although wouldn't you say that there is a correlation of gold price to revenue? Again probably impossible to really make sense with all of the different angles, but apparent I would say.

I'm not sure what I expect. I guess I wanted to see if there was anyway to have an upper hand at predicting gold prices. Obviously just like the actual market there's variables outside of my control that in the case is implemented by Jagex.

Although maybe I'm taking an overcomplicated approach?

Appreciate the time you took to post the info.

 

Short term changes in gold prices are likely positively correlated with overall revenue from gold sales. Long term changes in gold prices are heavily dependent on the in-game economy. For example, RS2007 prices dropped exponentially as the supply of gold in-game increased exponentially. This happened over a short time period since RS2007 was newly released.

The same effects take place in RS3, but are not so pronounced, and therefore can be very difficult to separate from other variables. Year over year changes in RS3 prices would offer little insight into the overall revenue for RS3 gold sales.

What variables would you be comparing to predict future gold prices? If you want to build a linear regression model to predict prices, you'll need to make a very robust model. Simply mapping US interest rates, or disposable income, against historic gold prices is not going to give you anything of value.

Incorporate Runescape's userbase growth rate. You can find very useful statistics here: http://www.misplaceditems.com/2007online.php?avg

Also you'll want to account for month of the year (Runescape certainly has seasonal impact).

If your regression model includes 5-6 truly relevant variables, you might have something neat. Otherwise you'll have garbage!

 

I really doubt you're going to get anything seriously predicative out of that model, even with all the data R2P mentioned. And even if you did have that model, it's unlikely that it'll be robust enough to shocks (be they from game updates, banning sprees, whatever) to bring you any profit. Is your goal to hoard like 100b to sell when prices are high and rebuy when prices are lower? I just feel like this isn't worth the effort (but would be happy to help; models like this are fun - hmu if needed!)

 

That user base chart is phenomenol appreciate it.

The actual relevant variables are something I would have to look more before I put it out there.

I'm not sure what I want to do or what I'm going to do. That's the main reason I really posted this thread, so I could have you guys walk through the whole thought processes with me.

Here's a question:

Would you think that if enough capital was pooled that hedging would be possible in RSGP? At least in the Sythe community? Buying out the small sellers and having a huge operation... If so, would RS3 or 07 be more stable. Season to season operations. Everyone would set aside and hedge during a dip in player activity and then when it spikes (I would have to assume more gold buyers during this time when the spike occurs) that the fund would then be sold. Or would this pose to much risk?

 

Well you gave me the idea on what I said below. The linear model does sound interesting. I'm thinking about taking the next semester of college off and building more of my savings so I would have a fair amount of time that I want to invest and am looking for something other than just a job to spend some free time doing. This could be an option.

 

Ik this was addressed to R2P so sorry if I'm butting in... Is hedging theoretically possible? Yes. Is organized, calculated hedging ever going to happen on RS or Sythe? I doubt it. Incentives to forgo cooperation are too great, and I think anyone with that approach to investing is better off spending their efforts elsewhere. Most people make reasonably good profits simply flipping gold around whatever the market price is. I doubt you're going to be successful in holding, or convincing people to hold, gold long-term as the risk of bans is non-negligible. Also, are you thinking of hedging rsgp with other assets, or ...?

Oh, I definitely don't mean to shoot you down, I'm just saying take a step back and think about the model for a second. Robust, predicative models are hard to come by, and I just wanted to warn you before you devote yourself fully to a potentially ill-fated enterprise .

 

Good luck trying to price those hedges as well. Strikes in the real world are relatively cheap because it's typically throwing away money (unless you're the one selling the put/call) but as others have mentioned it's too hard to predict the probabilities. Jagex obviously has massive power - similar to the US Gov't I suppose with the real world economy - but they're not nearly as moderate or rational.

 

I think the storage costs will outweigh any potential edges you get from your model. That is to say, even in the case where you create an amazing and robust model which can provide insight towards the future price of gold, that edge will never outweigh the risk you take for holding the gold over that time period.

 

You're not butting in man it's a discussion lol. I was actually giving you kudos because it made me think of the whole hedging scenario. I agree with ban rates and such it would be too risky to lose the actual RSGP. What if say you would just apply the gold instead into items, say the whip. Buy out all of the whips and make the price rise and then sell it and profit in real life currency terms if you know what I'm saying.

I think a model would be pretty useless, but I think hedging RS items from RWT'd RSGP would not only reduce risk, but be pretty successful. What do you/anybody else think about that?

 

True. It's just too damn uncertain when it comes to ban rates and such. Plus it's so much risk for what may not even be much of a reward.

 

I don't see how holding items would be that much safer than holding gold, and you'd still be liable to bans. Also buying out items hasn't worked that well in years, but if you have a few hundred bil you could try it. The only issue you'll have is selling that stuff, assuming you're talking about things like 3a. You can't buy out whips or furies or things like that, just won't happen.

 

Tizz -- Here's my advice.

Compile as much price data as you can historically, back to 2007. Obviously create separate data for RS2007 upon its release in Feb 2013. Get a nice chart on that, show it here, and we'll see what we can do as a community from there.