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The RuneScape Market Crash of 2007 - Surviving and Even Benefitting from the Crash TruthScape Special Reports - RuneScape 2007 Year in Review and Report Card

Naturally, everyone wants to know what’s going to happen with the economy as we move forward. Will prices continue to drop, or will they stabilize? If they stabilize, how long will it take? Is Jagex going to make modifications to the Grand Exchange? What will the markets look like in a month or two down the road?

The honest answer to these questions is that I can’t give you an honest answer to these questions. J Looking backwards at what has happened over the last few weeks is much easier than predicting what will transpire in the weeks to come. Too much of it depends on unpredictable group psychology, as well as on whatever tricks Jagex has up its lengthy sleeves.

Don’t worry, though, I’m not going to wimp out on you entirely. Below I’ll provide you with some of what I expect to see in the near future. Just bear in mind that while some of these predictions are educated guesses, others are, well, just guesses. J

The going may be a bit tough in the current RuneScape economy, but all is not lost. Even though I’ve said that I think what we are experiencing is a crash of sorts, that doesn’t mean that I believe the economy is going to completely crash and burn. The game is not going to “die”, and there’s not going to be any “collapse”, so don’t get whipped into a frenzy by the hysteria.

I believe strongly in the power of the free market, and that lower prices on good products just make them even more attractive. There was demand for sharks and prayer potions and addy bolts last month, and there will be demand for sharks and prayer potions and addy bolts next month too. Prices may still go lower from here, but I don’t think by much. In fact, many items have already recovered from their lowest prices earlier in the week, such as nature runes (see Figure 60).

If everyone can try to calm down a bit, it will benefit us all as we move forward.

While I do feel the market will stabilize fairly soon and many items will actually increase in price, I don’t think that many of the high prices we got used to during the autumn are likely to return any time soon. In particular, I don’t see sharks being at 1k or prayer pots being 7k to 8k for a very long time (barring significant game content changes that affect these specific items, of course.)

The reason why I don’t expect the market for many items to return to earlier levels is that those prices were inflated by the inefficiencies inherent in RuneScape’s marketplaces before the Grand Exchange. These inefficiencies led to large quantities of items being withheld from the market, which artificially restricted the supply of goods that are in fact present in enormous amounts within the game. Short of Jagex deciding to yank the Grand Exchange from the game entirely, I can’t see that situation arising again.

Perhaps I’m being naïve in thinking this, but I do believe Jagex will, sooner or later, have to make some fairly significant changes to the Grand Exchange. Whether it takes a few more weeks or a few more months, I believe most educated observers will eventually conclude that the tight price ranges and other restrictions in the GE are not good for either the exchange or the economy.

I’m sure you know that I hope that the price ranges are removed or at least relaxed. Beyond that, I believe Jagex could—and should—streamline the user interfaces of the GE, and add essential features that improve the transparency of the market, so buyers and sellers can make more informed decisions. Near the top of this list should be the ability to display current buy and sell offers for items, or at least to view their past transaction history, just as is possible on any modern real world exchange.

While we can compare the current RuneScape crash to past real world economic downturns in many respects, there are also some very important differences. One of these is the level of control that authorities have over the economy as a whole. In the real world, governments can influence economic behavior, but Jagex can do much more than that. Through its decisions it can dramatically alter nearly everything related to the RuneScape economy.

One way out of economic crunches is to raise morale and provide incentives for people to start buying again, which can then reverse a deflationary vicious circle. This is very hard to do in the real world—it arguably took a world war to end the Great Depression—but very easy for Jagex to do in RuneScape. With a few changes to certain features and the release of new skills or dungeons, demand for many items can be increased.

We’ve seen this pattern occur many times in the past. For example, when the God Wars Dungeon came out, prayer pots and food went up in price; when the new ZMI altar was released, pure essence soared over 25% in a day or two. Similarly, if Jagex decides to move on from its recent “RWT holy war” and onto good, high-quality content updates, this could very well help turn the market around. The new Summoning skill, in particular, could cause a lot of excitement and get people buying things again in a way we haven’t seen since Construction was released.

The RuneScape Market Crash of 2007 - Surviving and Even Benefitting from the Crash TruthScape Special Reports - RuneScape 2007 Year in Review and Report Card