how will the goozex economy not collapse on itself eventually?

kudrowfluffer

kudrowfluffer

CAG Veteran
was considering writing a letter to them directly to see if they could explain this as it only occured to me the other day -

goozex allows people to trade games for points between one another, but they ALSO allow you to pay cash for points, which are created out of thin air from the owners of goozex. now since there are more points than actual tradeable games equal to the value of the points, this devalues the points already in circulation, leading to inflation in the goozex economy. (and the fact that they give a discount if you buy points in bulk makes the problem even worse)

now what i THINK the goozex people hope is that enough new users are entering the system with yet untraded used games that this will never be a problem. unless i am mistaken, there is no mechanism for taking points OUT of the economy, meaning the more people that join and buy points the more worthless the points in circulation will become.

it is POSSIBLE that the owners are taking points out of circulation to balance this out by trading enough of their own used games into the system and then "destroying" the points, which is esentially equal to having the owners be able to convert their own points into cash, but the amounts that they would have to be doing this in to truly balance things out are completely unfeasible as they would be doing tons of work for absolutely zero reward.

i have a couple solutions to the problem, but would really like to hear the explanation from the owners before saying anything further. (who are members here, correct?)
 
This has been discussed at length over on the Goozex forums, you may want to take a gander there. The general consensus is that it's a moot point, it's currently not a problem most users don't buy points. Often on a strict monitary value it would be cheaper for you to go buy a game str8 out rather than buy points to get it. But if you can trade some games of equivalent values you're getting extra value out of your games vs. the pittance you get at most trading stores. If it were to ever become a problem it's an easy task for Goozex to seed games into the system and remove excess points. Since it's an internal currency it's fairly easy for them to manage the economy however it doesn't appear that that will be necessary for the forseeable future. It's a fascinating topic really and it's interesting to watch the goozex economy fluctuate.

Of note the pendulum swings both ways, a user can come to the system with a huge glut of games which might require the purchase of points to add points to the economy.

Generally it seems right now that there are far FAR more available games than points, based on my completely unscientific observations I don't foresee that changing anytime in the future.

I'd suggest go checking out the goozex forums and reading the discussion, add your own thoughts there as well, the owners are responsive to input and this is a topic that affects all us users so we are interested in following the evolution of the goozex economy.
 
[quote name='macdude22']
Of note the pendulum swings both ways, a user can come to the system with a huge glut of games which might require the purchase of points to add points to the economy.[/quote]

that solves absolutely nothing, until the game is actually traded it is not a part of the economy. and adding games does not solve anything either, unless the goozex people LIKE trading games in the system at a net loss to them. (shipping)

and i personally think that "not many people buy points its not a big deal" is a complete lie.
 
Is there a specific reason you think that a lot of users are buying points? It's been my experience of the users that I know that they are buying few points if any.
 
[quote name='macdude22']Is there a specific reason you think that a lot of users are buying points? It's been my experience of the users that I know that they are buying few points if any.[/quote]

why is it so hard to understand that even if only a very small percentage of users are buying points, as the site gets bigger the problem will be magnafied?
 
I understand it just fine, I just don't feel it's a big issue since it is fairly easy for Goozex to maintain control of the economy and maintain little to no inflation. I've thought about the question at length as well as discussed it with a couple economics students and we've come to the conclusion that because of the closed nature of the currency inflation will be relatively easy to keep in check even if a percentage of users make a habit of purchasing points.

I don't really it's an issue as of now, nor do I feel it will become an issue in the future. Hypothetically could it be an issue, yes if Goozex was to decide to do nothing to maintain the economy. I doubt they will take that route, rather I'm sure they monitor how it is doing pretty close and will take steps to adjust it if need be.

Question for you, why is it so hard to

a. Capitalize at the start of a sentence.
b. Spell correctly.
 
If people start buying points they can just jack up the cost of points and adjust what games are worth and vice versa. Point values for games already fluctuate.
 
switchplanet would collapes onitself long before goozex..

hell most other trading places will go belly up before goozex.

i do see them having to jack up their prices in the future (maybe 2 bucks per trade)

it would be interesting to see if this place is making that much of a profit
 
[quote name='TimPV3']How does any economy not collapse on itself eventually?[/QUOTE]


OH GOD WE'RE ALL GONNA DIE *jumps out window*
 
Like in the real economy, a lot of you are putting too much faith in the owners to "manage" the economy. What's going to happen is, as the OP said, goozex points will lose value over time. Goozex's owners will have NO problem with this, because this encourages people to trade and use their points as soon as possible, and they'll take their commission every time.
 
on a side note, when i first joined goozex there was a few games i added that was 1000 points. of course since ive only just joined, i wasnt able to get those games. then i noticed that you could buy the points. its almost as if they're trying to lure you into buyin them. maybe it was just me :)
 
I read the goozex thread and the goozex rep doesn't really understand what's going on either. Or he's pretending not to since the truth just makes goozex look bad.
 
[quote name='Brian9824']If people start buying points they can just jack up the cost of points and adjust what games are worth and vice versa. Point values for games already fluctuate.[/quote]

uh, this is called inflation, and is a REALLY bad thing.

point values fluctuate, but inflation only goes one way, up.

how will you feel if the game you traded in at 500 points now trades for 700 the next month?

and why would ANYONE trust the goozex people to be honest about this issue?

it is in their best interest to completely downplay this so people still have faith in the system and continue to buy points which will only devalue the currency further

and does anyone think for a second that they DONT hook up their friends and family with points so that they are esentially getting to "trade" for free?
 
[quote name='kudrowfluffer']uh, this is called inflation, and is a REALLY bad thing.

point values fluctuate, but inflation only goes one way, up.

how will you feel if the game you traded in at 500 points now trades for 700 the next month?

and why would ANYONE trust the goozex people to be honest about this issue?

it is in their best interest to completely downplay this so people still have faith in the system and continue to buy points which will only devalue the currency further

and does anyone think for a second that they DONT hook up their friends and family with points so that they are esentially getting to "trade" for free?[/QUOTE]
Thanks OP for starting this thread. Using the example of Goozex is actually a really good way to teach people how and why things go wrong in the real economy. Most college economics students I've seen don't have a very good understanding of this.
 
[quote name='kudrowfluffer']how will you feel if the game you traded in at 500 points now trades for 700 the next month? [/QUOTE]Same way I feel when hamburgers and gas prices go up. Pissed off.
 
[quote name='kudrowfluffer']uh, this is called inflation, and is a REALLY bad thing.


how will you feel if the game you traded in at 500 points now trades for 700 the next month?

quote]

Its happened with several games. Several games i've traded in are also worth less now to due to inflations cousin, DEFlation. it works both ways.

I traded Viva Pinata for 700 points, not its worth 600
I traded Animal Crossing: Wild World for 400 now its worth 350
Custom Robo Battle Revolution - is worth 100 points more now then when I traded it.

Prices will fluctuate and change, its not bad
 
The simple answer here is that the operators of the site have a responsibility that when people buy points they need to use the money to put some new games in the system. It seems to me that spending cash for points would cost more for any game then through ebay or other means, so Goozex can buy a new copy of said game off ebay (or anywhere else) and still make a profit.

To sum up, the operators just need to not be complete idiots and realize that they need to reinvest some of their profit back into the system.
 
Those price fluctuations aren't because of inflation, they are value fluctuations based on the market value of the game set by goozex based on a number of factors. Since Goozex is really setting the price, there technically isn't any "inflation" in the true sense of the word because they can still cap the prices at whatever they want. Every single user could go buy 5000 points, the games would still stay at their current prices. Point avalability is not part of the algorithm that calculates the point value of games. It's M.S.R.P, number requested, number avalable, etc. I think some users are confused on how point values are calculated. Even if there becomes some glut of points in the system, goozex doesn't need to jack the point prices of games. It simply means more people will be able to request more games. Having a glut of points in the "economy" is not a problem, having a lack of games however would be.

I trust goozex to want to sustain their business, if that means at some point they have to seed games into the system, I trust that they will. However looking at the large amount of games available I don't see that becoming an issue anytime soon.
 
[quote name='happy']The simple answer here is that the operators of the site have a responsibility that when people buy points they need to use the money to put some new games in the system. It seems to me that spending cash for points would cost more for any game then through ebay or other means, so Goozex can buy a new copy of said game off ebay (or anywhere else) and still make a profit.

To sum up, the operators just need to not be complete idiots and realize that they need to reinvest some of their profit back into the system.[/QUOTE]

At this point it's likely they are reinvesting all their revenues back into the business in various forms.

You've hit the money as to why most users don't buy points, it's "cheaper" in money to go buy the game in most cases. The whole point of goozex was to get real value out of the games you already have instead of having to trade them off somewhere for a few pennies. People simply aren't going to come to goozex looking to buy cheap games in US dollars.

However I've saved hundreds of dollars by trading here, ebay is a hassle and they eat a huge fee these days. Most game stores give you next to nothing in trade (I understand why this is, just still sucks for the end user). Here for the price of shipping and trade credits I've been able to send out games I wasn't playing and get dozens of new games to play for next to nothing. I figured out based on current trade in values at GameStop of games I've sent out, and the games I've received from trading here that even with trade credit and shipping costs I've saved at least $400, probably more. Simply put trading here has let me play more games, for less money, real stone cold US American dollars. So we can theorize about the collapse of Goozex all we want but until I see some evidence of it I'm going to continue to save money here and trade away.
 
[quote name='kudrowfluffer']uh, this is called inflation, and is a REALLY bad thing.

point values fluctuate, but inflation only goes one way, up.

how will you feel if the game you traded in at 500 points now trades for 700 the next month?

and why would ANYONE trust the goozex people to be honest about this issue?

it is in their best interest to completely downplay this so people still have faith in the system and continue to buy points which will only devalue the currency further

and does anyone think for a second that they DONT hook up their friends and family with points so that they are esentially getting to "trade" for free?[/QUOTE]


so they get to trade for FREE dude its only a buck. Its not like they are giving them 10,000 pts for free.

this is the best place out there to trade

only other places i know is

Swapsay ( i never get matched ) 5 bucks per trade
Gottaplay around 3 bucks per trade
Goozex 1 buck per trade

switchplanet 0 for trade but prices are insane (100 pts for a 10 buck game)

100 pts on switch is like 2000 pts on goozex LOL

just face it goozex is the best
 
It seems to me Goozex has the most sustainable business model, its a great value, and there is a great community. They are responsive to the users, friendly and helpful. I've saved a ton of money using the service.

kudrowfluffer: If you don't like the company, steer clear of them what can I say. I don't think anyone here is going to convince you differently. Everyone is entitled to their own opinion, but your logic about their internal economy is flawed at best.
 
[quote name='Brian9824'][quote name='kudrowfluffer']uh, this is called inflation, and is a REALLY bad thing.


how will you feel if the game you traded in at 500 points now trades for 700 the next month?

quote]

Its happened with several games. Several games i've traded in are also worth less now to due to inflations cousin, DEFlation. it works both ways.

I traded Viva Pinata for 700 points, not its worth 600
I traded Animal Crossing: Wild World for 400 now its worth 350
Custom Robo Battle Revolution - is worth 100 points more now then when I traded it.

Prices will fluctuate and change, its not bad[/quote]

you really arent understanding what you are talking about.

deflation occurs when the point/money supply is tightened, and the only way this could happen is if say goozex completely disallowed any new games into the system, as well as stopping people from buying points, and charging everyone a 20 point commission on a trade. there would still be the same amount of games in circulation, but there would be LESS points, and although you can buy more with the same points (as they have gained value), the amount of things that you can buy with them will be greatly reduced.

what you have described is general flucuation in the price of the game, which is a change in the value of the game due to supply and demand. (but the value of the points DO NOT CHANGE)

what i am describing is inflation, where the value of the game has not changed at all, just the value of the points slowly goes down over time (and loses value even faster as more members join)
 
[quote name='kudrowfluffer']

you really arent understanding what you are talking about.

deflation occurs when the point/money supply is tightened, and the only way this could happen is if say goozex completely disallowed any new games into the system, as well as stopping people from buying points, and charging everyone a 20 point commission on a trade. there would still be the same amount of games in circulation, but there would be LESS points, and although you can buy more with the same points (as they have gained value), the amount of things that you can buy with them will be greatly reduced.

what you have described is general flucuation in the price of the game, which is a change in the value of the game due to supply and demand. (but the value of the points DO NOT CHANGE)

what i am describing is inflation, where the value of the game has not changed at all, just the value of the points slowly goes down over time (and loses value even faster as more members join)[/quote]

You aren't understanding that this can't be exactly likened to an economy. Goozex has complete control over what games are worth and can take steps to fix any problems that might potentially arise such as changing their value on a whim and modifying the algorithim they have used to determine prices.

As it's been stated basically no one buy's points. $5 for 100 points is a joke. I trade a $5 bestbuy game and get 500 points. $10 game for 800 points, etc.

Your problem is just you having a panic attack over a pointless concern.
 
The OP's point has been my thought on this thing from the beginning. You can't just keep injecting artificial points in the system w/o it eventually becoming a big problem. Personally I'd never trade a game for those points. No telling what they are going to be worth done the line.
 
The thing is i see users leaving with points too, I can imagine a NICE amount of points are lost everyday from users who decide to not bother with the site anymore.

Also if people aren't buying points then the only way for them to enter the system is to trade games. I know quite a few people who use goozex and none of them would even consider actually buying points. So every new person with points is adding games to the pool.
 
Well but then a new, or current user comes to the plate with more games to balance that out, they are injecting new games into the system. This becomes a problem, if and only if there becomes a lack of games available in the system, e.g. new users come in and only buy points, not adding games. If one user buys 1000 points, and another user lists 1000 points worth of games there's no problem. And I expect it's more along the lines of one user buys points, another user lists 3000 points worth of games. I'm pretty sure there are many more games being listed than points being purchased. And most of those games are continuing to be retraded. As has been stated before, you can't make typical economic conclusions because of the nature of Goozex. There is a false idea propagating here that more points=bad because of inflation or whatever else. In reality as long as there are games available there's no issue in fact it will help facilitate more trade.

The points have to come from somewhere anyway, I expect the first points were let into the system by goozex themselves requesting games and then sending users points.

In short, as long as there are plenty o games brought in, plenty o points isn't an issue.
 
[quote name='Brian9824']The thing is i see users leaving with points too, I can imagine a NICE amount of points are lost everyday from users who decide to not bother with the site anymore.

Also if people aren't buying points then the only way for them to enter the system is to trade games. I know quite a few people who use goozex and none of them would even consider actually buying points. So every new person with points is adding games to the pool.[/QUOTE]

The points have to come from somewhere for new users, you could easily have an issue where tons of users come to the site with tons of games to trade. If no users have available points, they can't request those games. What do you do then, well buying points gets points in the system, and starts to facilitate those trades. As I've said before, as long as there are plenty of games there's no problem with plenty of points. On the flip as long as there are plenty of points, we need plenty of games in the system.
 
[quote name='macdude22']The points have to come from somewhere for new users, you could easily have an issue where tons of users come to the site with tons of games to trade. If no users have available points, they can't request those games. What do you do then, well buying points gets points in the system, and starts to facilitate those trades. As I've said before, as long as there are plenty of games there's no problem with plenty of points. On the flip as long as there are plenty of points, we need plenty of games in the system.[/quote]

The point though is it would be cheaper to buy a popular game likes Gears of War to trade for points then to buy an equivalent amount of points that would equal gears of war. As long as that's the case then users buying points are basically a non-issue.
 
[quote name='macdude22']Every single user could go buy 5000 points, the games would still stay at their current prices. Point avalability is not part of the algorithm that calculates the point value of games. It's M.S.R.P, number requested, number avalable, etc.[/QUOTE]

You don't understand. Point availability may not be part of the algorithm, but it affects number requested vs. number available. So it does affect the point values of games.
 
Want to see a online trading site crash (unless they jack up their pts on items very very fast)

Gottaplay

It used to be 3.00 per trade BUT Now they changed it

pay as you go is now

4.99 per trade

or
you pay a monthly fee of 9.99 , you get 25 pts and each trade cost 1.99


just checked now and they do have a POKEMON PEARL for 25 pts complete. so if anyone wanted to take the risk and get it for 12 ??


(NOTICE YOUR TAKING YOUR OWN RISK GOING TO THIS COMPANY. I DOUBT THEY WILL BE AROUND LONG OR THEY TRIPLE HOW MUCH GAMES COST)
 
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