MMO "Economies"

[Vinadil]

I know that most players do not put "In-game economy" on the top of their list of why they play a game.  But, if you are going to take the time to PUT an economy in the game, then why not make it a GOOD one?

I have written a number of things on this topic, but most of them have probably been discussed here already... but as I either have to necropost or start a new topic, I figured I would start a new one.

I am one of those wierd people that will keep playing a game that has ceased being fun (say Lineage 2) merely because I am intrigued by certain decision they have made with their in-game economy.  In that particular example, it was interesting to me that one could actually make a good living simply Transporting Goods (buy low, sell high).  They had a regional marketplace in effect, and it was the first time I had experienced that in an MMO.  If there IS an economy in a game, then I will likely play it long enough to get a grasp on their mechanics.  Sadly, most games I see these days fall into the same trend.

The issue in most games seems to come down to a simple lack of understanding of basic Supply and Demand functions.  Almost every game has an ever-increasing Supply of *insert currency* with a limited Demand.  EVE online is the only game that has succeeded here... and they are FOUR years old, which makes it even harder to understand why other people still fail at this.  I am left with 2 options.  1) People have failed to learn and are still just creating what they think should work, or 2) People use "economy" as a hook to gather in the cafter/harvester crowd, but not intending it to be a working part of their game.

A good economy should Run your game (in my mind), just like the economy now runs the world.  It is simply natural that Control of Resources will determine who has "power".  Perhaps it is my RTS background, but I think that if you put an economy into a game, then you should do it properly.  Otherwise just let us play without having to work around a broken system.

Anyone else interested in Game Economies, or have some other reasons why they don't seem to stand the test of time (without huge inflation/deflation)?

[Stephen Zepp]

I know that most players do not put "In-game economy" on the top of their list of why they play a game.  But, if you are going to take the time to PUT an economy in the game, then why not make it a GOOD one?

I have written a number of things on this topic, but most of them have probably been discussed here already... but as I either have to necropost or start a new topic, I figured I would start a new one.

I am one of those wierd people that will keep playing a game that has ceased being fun (say Lineage 2) merely because I am intrigued by certain decision they have made with their in-game economy.  In that particular example, it was interesting to me that one could actually make a good living simply Transporting Goods (buy low, sell high).  They had a regional marketplace in effect, and it was the first time I had experienced that in an MMO.  If there IS an economy in a game, then I will likely play it long enough to get a grasp on their mechanics.  Sadly, most games I see these days fall into the same trend.

The issue in most games seems to come down to a simple lack of understanding of basic Supply and Demand functions.  Almost every game has an ever-increasing Supply of *insert currency* with a limited Demand.  EVE online is the only game that has succeeded here... and they are FOUR years old, which makes it even harder to understand why other people still fail at this.  I am left with 2 options.  1) People have failed to learn and are still just creating what they think should work, or 2) People use "economy" as a hook to gather in the cafter/harvester crowd, but not intending it to be a working part of their game.

A good economy should Run your game (in my mind), just like the economy now runs the world.  It is simply natural that Control of Resources will determine who has "power".  Perhaps it is my RTS background, but I think that if you put an economy into a game, then you should do it properly.  Otherwise just let us play without having to work around a broken system.

Anyone else interested in Game Economies, or have some other reasons why they don't seem to stand the test of time (without huge inflation/deflation)?

I mentioned this briefly in another thread, but the fundamental issue here in my view at least is how resources "spawn"--be it gold, powerful items, or crafting supplies.

Most MMO's try to balance this by having value drain out of the economy--one shot potions, training costs, crafting supplies destroyed on failure, etc, but invariably when this is the only mechanism for controlling the total value pool in an economy, you put control over that value in the very people who have the least amount of concern for the "big picture".

One other large issue I don't see addressed very well is the concept of value add over time--similar in some ways to the concept of the VAT (Value Added Tax), when an item X has value added to it a good "economy" needs to be able to track that somehow and take it into account. I'm a lot more fuzzy on exactly what I mean to be honest--we called off the project before we got too deep into the research in this area, but our initial researched showed that items had two major concepts of value--resources consumed to produce the item, and time/skill/magic/processing used to increase the value of the item.

To give a quick example--if a finely balanced, "metal folded 200 times" sword and a "journeyman's forge practice result" sword both use 3 ingots of steel and various support crafting materials--where does the difference in total value lie? Obviously, it's in the skill and time spent on crafting the weapon--but most crafting and object creation systems don't take that into account--at best they simply assign a higher (internal?) gold piece price to the resultant item.

[CaptBewil]

In many MMO "Economies" you get money for doing something.  You get money for killing something.  Of these both, there is very little in the way of restricting how much you are able to get at any given point in time.  Now, the money that is taken from that pool that you obtain (particularly from a player that "farms" money all day) is an extremely low percentage (often times a fraction of a percent).  Money is taken away for things like Travel, or Maint. fees, etc.  Because there is no cap (similar to the functionality of a "price ceiling") on how much money can be generated into the economy each day and of that the relatively minute percentage of that taken away, you are left with raw inflation.

So, you are left with three options:

1.  Simply CAP the amount of income a player can generate a day.
2.  Develop more systems that take money out of the economy AND scale current pricing systems (such as for travel) with the economy as it inflates.
3.  Change the classical game mechanics of being able to do something over and over again or kill things over and over again that respawn.

Option 3 requires thinking outside the box because it basically means coming up with an entirely new system.  One of the options proposed here is with a "Fixed" economy.  That is to say that there is X amount of money in the economy and when it is gone, it's gone.  So far, this hasn't worked to well.  I think the reason why is that they were still using repeatable activities.  The economic system i came up with is follows:

Fixed economic system requirements
  - 2 factions with an equal split of the economy + starter money for all new players to get the economy going
  - Equal starting control of resources with the rest (limited supply, but plentyful (enough to last at least 4 real years)) "up-for-grabs".
  - Faction players are paid salaries - nonfiction players have to find their own way of "earning" money (ie, buy low & sell high (see also Smuggling) or through other systems like Bounty Hunting - these activities would be unrepeatable because they would be limited by supply)
  - players must be able to still function with no money at all ("Bum Survival" aspect to the game, ie hitchhiking "bumming a ride" from a player) for it to remain "fun".

This adds a strategical value to every good (or contraband) sold in the game.  It also enables the economy to be a part of the overall factional strategy (resource control, etc).

This is the type of system i envisioned for my game.

[Vinadil]

I am very much "all or nothing" when it comes to crafting and items.  I think that if you are going to have crafted items in the game, then they should be equal (or near enough) to any dropped item.  Again, I really see EVE as the ultimate online economy tutor.  The "value added" difference of a certain item might be .1% faster tracking speed... but the "value" as defined by what a person will pay for it could be 100x.

I have always been a big proponent of Demand-based economies.  Most games seem to run Supply side.  And, as you mentioned, they always have a problem with how the resources spawn into the game.  The supply Always outpaces Demand, and no amount of "cash sinks" helps in the long-run.

The real mystery is why this generation of games (mainly I am thinking of Vanguard, but I would not be surprised to see other '07/'08 releases do the same) do not include some basic ideas that EVE instituted years back.

1. The "Buy" Order.  It still boggles my mind that WoW does not have a "I want to BUY this many of object X, I am willing to Pay Y" on their Auction House.  Of course I also hate that you can only have a 24-hour auction, but it is very annoying to constantly go searching for things when I could just see the going rate, put in my buy order at slightly below (or above if I am in a hurry) and come back to a full mailbox.  VG was the same way... intricate Exchange system with a vast search engine... and NO buy orders?  This just seems counterintuitive if you want crafting/crafters to be using Harvested materials.

2. "Low-level" materials retain value.  EVE is the only game I have seen where 4 years into the game the baseline material STILL retains its value to the point where new players can go out and make significant amounts of money easily.  I just got back into EVE after a year off and the first thing I did was check some baseline buy/sell prices on "Staples"... and they were almost identical to when I left.  That is stability on a scale that still amazes me.  For all of the other Newb-killing things EVE does, at least their economy has open arms.  Imagine if a Noob-friendly game like WoW ALSO had an economy where Copper was necessary when you hit level 70?  It would be yet another hook to pull in the masses.

This whole thing really could be a not-so-subtle attempt to look at some deeper design issues.  The only reason EVE's system works so well is that when people die their ship blows up.  That matched with a game design that encourages risky behavior (through PvP or Mission/Ratting) and you have an automatic Demand Creator.  Games like WoW, that are built around Epic items that Nobody wants to lose, would have to come up with other consumables.  I have always been a fan of the "city" or "fort" or something along those lines, as they take mass amounts of All kinds of resources, and people like putting their name on the map.  Make those forts destroyable, or at least damageable, and you have some sort of Demand also.

[Vinadil]

CaptBewil -

I have heard a system that sound similar referred to as a ZeroSum system.  I think that it Could work, but I don't really see it as necessary.  I suppose this is the way that most RTS games work, and it works well in that setting.  The problem I have with it in MMOs is that it could force people to play in a way they do not want to play.  Personally I am a "jack of all trades" type, so this is not a big deal.  But, I have friends in EVE who Mine Asteroids.  That is what they do... all day... every week.  And, I know that they are not alone.  There are thousands more like them.

In a ZeroSum, or fixed resource world there would come a time when resource gathering was no longer possible.  I suppose you COULD set the resources so high that it took years to get there, but then you really don't have a "Cap" that has any meaning.

In the end you still need a good way to Create Demand other than just limiting supply.

[CaptBewil]

well, keep in mind also that if you "miscalculate" how much you need from the start, admins can always add more so long as it's done in such a way that everyone has an equal chance of obtaining it.  Which mostly means location, location, location.  But it should certainly be a manual process and not an automated one...

I think it could work if done right.  I'm in the process of setting up a DEMO world that will test all of my various systems out.  Because, we can sit here and theorize and talk about it until the end of time, but until the systems are test within a realistic sample group, it's just cheap talk if you ask me.  So, we'll see what happends. 

[Stephen Zepp]

I came up with what seemed to be a nifty little design that factored supply/demand (and the concept of a "buy" order, although not specifically for direct use) system about 10 years ago, but as it is with most complicated systems, the implementation was lacking.

Basically, every economic transaction had meta-information stored about it (time, location specifically), and this information was transmitted throughout the economy actors (npc at the time, we didn't have a formal auction system that worked with this at all) over time to influence other prices.

The net effect was to try to mimic the concept of demand controlling price instead of supply, and to allow the economy to adjust for that. For example, if it turns out that players bought tons and tons of heal potions at location X, this information would eventually navigate it's way through the economy, and adjust the prices and availability of not only heal potions in other places, but (in the design at least), cause npc economy actors to "consider" starting to sell heal potions as well--or buy them up themselves.

The goal was to provide better pricing and availability feedback mechanisms to the system itself so that you could not only have npc's successfully set up trade routes (because they "knew" what was selling, and what wasn't), but also have control points to manually adjust not only money making "scams", but also increase/decrease both supply and (npc) demand--and finally control both the "buckets" and the "wells" of value inflow/outflow to hopefully handle cases of inflation.

I wasn't ever in the position post-mud days to really work out the details, but I'd think this would be a good way to go for a stable and influence-able (making up words on the fly ftw!) economy.

[Stephen Zepp]

well, keep in mind also that if you "miscalculate" how much you need from the start, admins can always add more so long as it's done in such a way that everyone has an equal chance of obtaining it.  Which mostly means location, location, location.  But it should certainly be a manual process and not an automated one...

I think it could work if done right.  I'm in the process of setting up a DEMO world that will test all of my various systems out.  Because, we can sit here and theorize and talk about it until the end of time, but until the systems are test within a realistic sample group, it's just cheap talk if you ask me.  So, we'll see what happends. 

That was exactly the approach we had, but an added benefit is that (properly done), you can allow for RMT--players can actually inject value directly into the economy by (literally) buying extra resources/items/whatever for cash.

I know RMT is a dirty word for most, but the idea of my team at the time was to build an economy and game who's business model was fully RMT run. Didn't go anywhere for legal concerns (this was 10 years ago, and damned risky as SL is finding out), but it was a nifty little mechanism.

[Alkiera]

1. The "Buy" Order.  It still boggles my mind that WoW does not have a "I want to BUY this many of object X, I am willing to Pay Y" on their Auction House.  Of course I also hate that you can only have a 24-hour auction, but it is very annoying to constantly go searching for things when I could just see the going rate, put in my buy order at slightly below (or above if I am in a hurry) and come back to a full mailbox.  VG was the same way... intricate Exchange system with a vast search engine... and NO buy orders?  This just seems counterintuitive if you want crafting/crafters to be using Harvested materials.

I was amused to see EQ1 had put this in, in the 'new' bazaar.  No idea why more companies haven't... it's not a difficult thing to track.

2. "Low-level" materials retain value.  EVE is the only game I have seen where 4 years into the game the baseline material STILL retains its value to the point where new players can go out and make significant amounts of money easily.  I just got back into EVE after a year off and the first thing I did was check some baseline buy/sell prices on "Staples"... and they were almost identical to when I left.  That is stability on a scale that still amazes me.  For all of the other Newb-killing things EVE does, at least their economy has open arms.  Imagine if a Noob-friendly game like WoW ALSO had an economy where Copper was necessary when you hit level 70?  It would be yet another hook to pull in the masses.

This whole thing really could be a not-so-subtle attempt to look at some deeper design issues.  The only reason EVE's system works so well is that when people die their ship blows up.  That matched with a game design that encourages risky behavior (through PvP or Mission/Ratting) and you have an automatic Demand Creator.  Games like WoW, that are built around Epic items that Nobody wants to lose, would have to come up with other consumables.  I have always been a fan of the "city" or "fort" or something along those lines, as they take mass amounts of All kinds of resources, and people like putting their name on the map.  Make those forts destroyable, or at least damageable, and you have some sort of Demand also.

The issue, as you point out, is WoW's 'advance via equipment gathering' system, which they share with most DIKU games.  In EVE, as you advance, you gain the ability to use marginally better equipment, but in the end, character power is mostly a matter of character skills and player-skills, and your ship having T2 over T1 fittings is not going to make a large difference.  A minor one, yes, and assuming characters with equal skills and players with equal skills, the T2-equipped ship should always win out against a T1-equipped ship, but generally not by a great deal.  This is very unlike WoW, where a lvl 60 character in greens/some blues compared to a lvl 60 in Tier-N purples are night-and-day difference in power, even if they are the same class and equally skilled.

In WoW, 'normal' equipment is 'crap' to a top end player, whereas in EVE, it still has great utility.  Only the big big corps really outfit everything in T2/officer/whatever grade modules.  And they still use the normal grade stuff in some ships, just because it's not worth the shiny stuff for that ship.

The result is that ships and modules are all commodities, just like minerals or what-have-you.  So if you lose it, it's bad, but not subscription-ending.  You just look around and buy another set just like the last one. (You did insure it, right?) In WoW, it's simply not possible.

--
Alkiera

[Vinadil]

The Biggest Difference between EVE and WoW on an item-base is really that even your Biggest, Baddest ship in EVE requires the Base-level mineral.  In fact, the AMOUNT of it that you need is Huuuuge.  So, as the game population ages the Demand for the Starter Harvesting materials is actually increased rather than decreased.

In WoW this would never fly, as nobody would want to used 2,000 Copper Bars to craft their level 70 Sword of Mightiness.  But, if WoW ever allows players to "own" Forts/Cities, etc.; then you could have Copper be part of a Town wall, as well as Iron and many other low-level components.  It is not just a matter of Item Scaling, but Resources required.  In WoW once you out-level a zone you never need to go there again.  In EVE I could spend all day in a High Security area and still be fruitful (if what I am after is Tritantium).  Of course, it is much more efficient to just pay noobs to mine it for me...

I guess we WILL have to wait until someone puts out a different system, or a ZeroSum type.  Though, I do wonder why go through the trouble to create something new instead of just copying the one EVE has?  Or, do you think the other system will work better in a less PvP-centric environment?

[ajax34i]

I know that most players do not put "In-game economy" on the top of their list of why they play a game.  But, if you are going to take the time to PUT an economy in the game, then why not make it a GOOD one?
[...]
EVE online is the only game that has succeeded here... and they are FOUR years old, which makes it even harder to understand why other people still fail at this.

You have your answer already, I think.  Developers only need to put in the bare bones of "an economy"; extra features don't neccessarily mean "more players."  Like seat belts, air bags, and the spare wheel in a car; nobody spends the time and money to make them pink, add flower patterns, perfume, and different operating noise patterns because the cost/benefit ratio isn't there.

[CaptBewil]

Vinadil, my hope is that it will work better for BOTH environments.

ajax34i, the ironic part is that it "should" take less short-term and long-term development to operate a newer system such as is described above.

Besides, the cost/benifit ratio IS there, though the companies never think about their 3rd+ year of game operation (mostly because when they first begin developeing, that's 6-7 years away at that point).  That's when the economies become very n00b unfriendly...

[DarkSign]

From an economic point of view, Problems with MMORPGs abound.

Unlimited animals.
Selling items to a store does not reflect supply and demand, static prices.
Selling goods from the animals produces unlimited currency (or you stupidly get instant money for killing), no one mints the money. Unlimited inflation.

No real ownership rights on most goods.
Most of the world exists in the wilderness and first extraction rule applies.
It is the tragedy of the commons, thousands of people are trying to over-extract respawning creatures and time becomes a more important resource.

Players kill as many as they personality can, because: there is no need to invest in future population of monsters, any you let go is just benefiting someone else at your loss.

Another problem with MMORPGs is that it makes the scarce resource of time a zero-sum game. Doing things as fast as possible usually makes it slower for others. In the aim of giving everyone everything, comparative advantage is destroyed and replaced with first extraction and everyone is screwed.

What do the hunters need? The people that use bots desire: In-game money, in-game fame and power, and/or real money.

The last one is the only one based on supply and demand! As more people sell game items the price will go down, which in turn will mean more camping and bots to keep the same income.

In-game money and character power given in exchange for time is automatic and maximized the more they exploit, time becomes even more precious when they are charged for it.

The exploiter has no in-game needs and the game imposes none.

This the biggest problem in MMORPGs: The player needs no one and everything is commonly owned for extraction, exploiting is the best thing to do in pursuing your goals. MMORPGs will never become complex without scarce resources and comparative advantage. PVP adds an element to this. The exploiter mite need to hire player guards.

Why don't we let the exploiter declare ownership over an area and have guards go after people that enter. How about we throw monster breeding code in instead of respawning. Looks like the exploiter can't kill everything in sight now. What if a purely player-made item comes out that increases breeding, but it requires land to grow. Looks like the player is forced to buy the item from other players if he still wants to maximize killing monsters. Both can persue comparative advantage and trade, both winning.

You can exploit the mindless game but you can't control other people and the trade must be agreed to by both parties.

Privatization and scarce goods can produce more cooperation and interaction then ever thought possible, and make things many times more interesting then any other MMORPG.

What Im really interested in is creating factions that live or die based on their finances - and letting players effect that. Take post-apoc street gangs for example. On one level they may be petty thugs that get shut down by the police and never raise enough money to be influential. On the other hand, say they rob 100 people for cash and get enough to have a permanent hideout and bribe some cops to look the other way. Now they've got a foothold.

We' re working on inter-dependent socio-economic systems that work within a political structure. But the player can have as much or as little to do with it as they want.  This is why the question I asked about the legal system becomes important - if certain items become contraband their value goes up or down.

One of the things that was really great about Shadowbane was localized pricing. I always felt like different vendors in different areas should have different prices. Sure, SB did it with player owned vendors, but the same thing could be done for NPCs using relative scarcity and polling procedures.

[Vinadil]

I think you have to make several Basic design decisions if you move into too many specifics of an economy.

1) Will you have NPC vendors buying/selling, or just PC?  Until I see a better system I am going to use EVE as an example.  You CAN sell things to vendors in EVE, but not the actual items generally.  You must first break them down into component parts and then sell the parts to the NPC.  This creates a Price Floor so that items never drop to Zero value.  MMOs are a strange phenomenon in that they have both Huge Inflation (of currency) and Huge Deflation (of commodity value) at the same time.  I think it comes from the fact that so many people who play them have more Time than Money, and so they do not value the time they spend playing the game appropriately.  I don't believe NPC vendors should sell ANYTHING outside of your most basic goods and noob equipment.

2) Will you have PvP, and if so, what kind?  Again I like the EVE system where PvP is possible anywhere, but there are still many, many places that are very safe for your average Joe.  If you put your most necessary Resources in a part of the world that has Free PvP, then you have just combatted the Farmer.

I really do not see Famers/Botters being an issue in a Resource driven game, when those resources are in an Open PvP environment.

Now, if you want to design an almost purely PvE game, then you will have to become much more creative in policing your players through your game mechanics and design.

[Johny Cee]

You people need to take a few steps back,  and first define what your intended systems will accomplish within a framework of generally agreed definitions.

Then you need to have some grasp of the fundamentals of economics.

It seems like people complain/attempt to solve different problems or confuse massively different problems with each other due to ignorance.

I have my bachelors in economics,  including some grad coursework in developmental and game theory,  and I have no fucking clue what most of you expect your systems to do.  A good portion of the proposals are contradictory,  or would lead to situations that are obviously more screwy then present systems.

[CaptBewil]

Wow, you have a BS degree in economics (a business major).  I suppose we are suppose to be impressed?

But seriously, degrees mean exactly dick in this day and age.  I took two course of economics in college and learned enough to know that some basic economic principles can't be applied to a MMO game for the simple fact that no one would play it if you applied them.  DarkSign's system sounds a lot like my system.  PvP is certainly a control factor (which would never apply in real-world economics).  Create a senario where you have a "paniced" economic need for resources, and you've added another control factor.  Plus you generate the perfect environment for smuggler's and bounty hunters to play in a decisive role (even if they never choose a faction).  My system goes a step further by adding a Class System (Status System) which is perfect for pulling Role-Players and Socializers into the economic loop.

[Stephen Zepp]

Wow, you have a BS degree in economics (a business major).  I suppose we are suppose to be impressed?

But seriously, degrees mean exactly dick in this day and age.  I took two course of economics in college and learned enough to know that some basic economic principles can't be applied to a MMO game for the simple fact that no one would play it if you applied them.  DarkSign's system sounds a lot like my system.  PvP is certainly a control factor (which would never apply in real-world economics).  Create a senario where you have a "paniced" economic need for resources, and you've added another control factor.  Plus you generate the perfect environment for smuggler's and bounty hunters to play in a decisive role (even if they never choose a faction).  My system goes a step further by adding a Class System (Status System) which is perfect for pulling Role-Players and Socializers into the economic loop.

Don't dis Johny! (too much anyway :P)--he does know his economic stuff.

I do agree though, the (mmo) model is just way too different from how economies really work to even attempt to implement--but there are approximations that can "feel right", and be stable--we just haven't seen many of them at all yet (Eve being a notable exception from reports--haven't played it myself).

[DarkSign]

While we're discussing credentials, when I graduated from university over 10 years ago I have a Masters in Economics, with 2 B.A. majors in International Affairs and Finance. Furthermore, I have an degree from the Lermontov Institute of Language and Finance in St. Petersburg, Russia and went to law school at Loyola in New Orleans. Not that any of that matters.   

The reason why you cant tell from a short post the overview of an economic system is we all have a vision of it in our heads that we weren't trying to put totally down on paper...er the screen.

I'll give you a bit more detail:

Macro Level

• Guilds (and players who want to horde for power) gather resources
• NPC groups also attempt to gather resources
• Guilds, NPC groups, and players attempt to gather wealth
• Resources = ability to build and monetary value needed to expand and empower
• Wealth and influence will tie into the political shifting of factions on a large, behind the scenes scale - how the can arm their guards, whom they can bribe etc.

Town Level

• NPC vendors are intitally stocked with goods that have both universal and relative/local price variables
• The universal variable is used to track total values of assets in the world
• The relative/local variable (based on recent surrounding sales and other events) creates realistic fluctuations, allowing players to go bargain hunting
• Players may set up SB style vendors (although they wont be 24 hours) load them with items to sell, profit %, and even selling type personality (curmudgeon, helpful, geeky, slick sales type)

Player Level

• Players can learn to craft a bazillion things - modual weapons, modular vehicles, drugs/viruses, wearables...etc
• Player crafting will create items as good or better than drops
• Many crafting components will come from the world itself..others will be manufactured
• Players can sell to another player, at auction, or using an NPC vendor

So what you have is a world where crafters are important, local prices matter, and money influences not only player politics, but NPC politics as well.

[Vinadil]

I actually started this post after re-reading a 4-page post I had made on my guild forums on the matter.  Those 4 pages just gave a basic description of the system I have in mind.  That is one of the reasons I reference EVE so much, hoping that people might have actually played the game.  Personally, I think if you have any intention on designing a MMO economy you should play in the EVE world long enough to grasp theirs.

The basics of it fall in line with what Dark said above... but my idea is even more basic than that.  I want Resources to drive everything.  Nothing enters the world unless it first comes out of a harvestable resource.  Currency is used to make transactions easier.  Basically I want a Real-world model put into the Game.  This is what EVE has done and what some other games have attempted, Vanguard being the most recent.  They failed, but not completely... Gold duping was one of their big issues, but they had other large ones a well.

My original title was going to be "MMO Economies... do these companies even talk to Economists?"  Interesting how this article hits this week :).

http://myeve.eve-online.com/devblog.asp?a=blog&bid=481

[Johny Cee]

Wow, you have a BS degree in economics (a business major).  I suppose we are suppose to be impressed?

But seriously, degrees mean exactly dick in this day and age.  I took two course of economics in college and learned enough to know that some basic economic principles can't be applied to a MMO game for the simple fact that no one would play it if you applied them.  DarkSign's system sounds a lot like my system.  PvP is certainly a control factor (which would never apply in real-world economics).  Create a senario where you have a "paniced" economic need for resources, and you've added another control factor.  Plus you generate the perfect environment for smuggler's and bounty hunters to play in a decisive role (even if they never choose a faction).  My system goes a step further by adding a Class System (Status System) which is perfect for pulling Role-Players and Socializers into the economic loop.

Don't dis Johny! (too much anyway :P)--he does know his economic stuff.

I do agree though, the (mmo) model is just way too different from how economies really work to even attempt to implement--but there are approximations that can "feel right", and be stable--we just haven't seen many of them at all yet (Eve being a notable exception from reports--haven't played it myself).

Thanks Zepp....  I think.

My point above was that all economic principles are broadly applicable, everywhere.  Either this works out in the formal economy,  or when you have excessive interference in market mechanisms,  it generates an informal economy. 

The only MMO or pseudo-MMO that really had no economy at all is Diablo, and that's because rampant duping meant that you had no scarcity at all.  Most MMOs have functioning economies,  it's just that due to limitations/in game issues much of it takes place on the informal (outside the setup game mechanisms for economic transaction) level.  Ebay, gold sellers, message boards, and the like.  Or just the broadcast/trade channel for a popular zone.

I can't really tell,  just from what most of you post,  what your goal is.  Expansion and refinement of ingame systems of transaction to reduce the cost of arbitrage/asymmetry of information seems to be one,  but then there's also some wild haring off into the methods and manner of resource extraction.  Jumbled together in an odd manner,  and combined with proposals about pvp/total amounts of resources which seem to work against the proposals already made.

For sake of debate,  start with what you think the problems are and what your goals are.  Present your proposals,  and give some reasoning why you think the proposals will work.

My point in stating my background wasn't establishing my internet cred,  but to let you know I have a fair background in this and I can't figure out what you're trying to say.  That,  and from past experience,  discussion of MMO economies quickly becomes inane just due to a lack of background knowledge (search for a talkback on an article here by Destro on MMO inflation...  the highlight is 4 or 5 pages of people calling bullshit on the definition of inflation/how inflation works.  Essentially, the author of said article based the entire thing off of a poor understanding of inflation).

[Stephen Zepp]

I think part of the problem is what he said--we never actually defined specifically what we see as the problem, so I'll give it a shot:

An incredibly large portion of MMO games have a combination of cycling price rises across the board, combined with certain stages where an entire "class" of items that had stable prices suddenly drop to near zero.

The second problem is pretty obviously item value inflation related to expansion release, because invariably new expansions come out with "the new phat items" that everyone ones. It's also related to items becoming over-farmed, but that is actually a working aspect of the economy, since supply becomes greater than demand, prices drop.

The first issue is what most people want to address I personally feel, and the reason why items escalate in price over time is that we feel the "infinite supply of gold" due to spawned value doesn't allow for any direct controls.

As an ancillary goal, we'd like to have reasonably predictable price fluctuations based on purchase/consumption rates, value added (raw materials < refined materials < worked materials) price adjustments, and at least a reasonable expectation that the recognized value of an object is inherent in the object itself.

That last one is hard to understand I know, so I'll give an example from EQ:

--to raise your various trade skills, you wind up making hundreds if not thousands of combinations of items, and routinely sell them back to vendors at a small loss. However, there are certain points where you may spend 5k for raw materials, make a successful combination, and the value of the final item is 1 gold or less.

What I perceive as broken personally is that I could sell thousands and thousands of a certain type of combination back to a vendor at the same exact price, yet the second type of combination I pay thousands and thousands of gold, yet each  sale is the same price--just extremely low.

Darksign does actually describe a decent set of goals above by the way, although I don't personally agree with all of them.

[Johny Cee]

Edit -- Wrote this before I read Zepp's above post.

To poke discussion:

What is the consensus on the underlying systemic problem with MMO economies,  as you see it?


For myself...   I don't have a problem with present systems.  Essentially,  in most systems,  the NPC vendors are set up with two primary purposes:

1. Provider of staples (basic crafting ingrediants) and inferior goods (readily replaceable by drops/crafted items).  

Essentially,  they provide homogenous staple items at a relatively fixed price,  in good approximation of what markets do with the same goods in real life when connected in a sufficiently large market.  

Example:  Just because your area has a bad harvest,  it doesn't mean the local price of wheat is going to fluctuate much if at all.  Why?  Because wheat is grown in a myriad of places,  and the available supply of a good that's pretty much identical across geography will make up for the fact that one small area is producing less of it.  This is assuming the transaction costs (transportation, selling/buying expenses, etc.) are small.

2. Buyer of last resort:  they buy items useless to players at a salvage value.  


Because of this,  in most games,  the player economy pretty rapidly separates from the npc economy to the point where goods take on an approximate price equal to their scarcity and demand for the good (utility of the item for gameplay).  NPCs are only good for selling off your junk loot and crafting failures,  and subsidizing new players and casuals.

So is the main complaint that people want the NPC economy to match and keep pace with the PC economy?  The first and best problem with this:  how do you do that and keep the game fun?

Take a noob zone on the launch of a new MMO.  NPCs are fixed to adjust the prices they buy and sell items for.  In noob zone,  you have a constant influx of new players that run off to hunt mobs/gather resources and sell the junk loot to the vendors to upgrade their noob weapons and armor.

By week 2,  the prices of vendor weapons and armor has jumped while at the same time the payout they give for junk loot has dropped.  Does the level 2 noob now have to make the run through the dangerous purple mobs, in an unexplored zone, to try and find a new vendor?

What happens by month 3,  when noob zones have continued to be hit by new players?  Now the closest higher level zones have changed their prices and payouts as well.

The catasses will be the ones on the far outliers, continuing to hit new zones.  They will also have the most time for the travel involved in playing the differences in the system,  and will be the first ones to discover and exploit the hell out of bugs.  By the time a determined casual hits a new zone, the catasses will have already bought items at a bargain price while eliminated the premium on the proceeds of selling the common loot drops.

[Stephen Zepp]

All of your points make a lot of sense, especially the "buyer of last resort", and the description of how prices would actually propagate, but at least in my eyes having to have a buyer of last resort implies having to farm for gold (indirectly), which means that you have spawned items that have no game value except to give players gold....which I think is the mechanic we want to get away from.

[Vinadil]

It might help if we make a lis of Games to compare.  That way we can move out of all of this speculation and "for example" and use actual game mechanics from specific games.

The ones I generally compare when I think of Economies are: Shadowbane, Lineage 2, WoW, Vanguard, and EVE.

I agree with Stephen about the issue of simultaneous Price inflation of certain goods with complete price devaluing of other goods.  At this point most people turn to Supply to solve it.  They say things like, "We need to manage the amount of gold entering the system".  You can replace "gold" with any resource/currency/good.  I see it from the other side.  It is hard to think of a FUN system that strictly manages Supply.  People always want to be going UP.  So, if I can harvest 2units/hour when I am level 1 I want to be harvesting 20units/hour when I am level 10.  If you do some wanky system correction and my level 10 guy now harvests only 5 units because the Supply is too great... then I am likely to be pissed.

So, instead use a system like EVE has where DEMAND increases exponentially with level.  (Level here meaning skill set + items)  So, base level ships (frigates) may use 10 resources whereas second level ships (cruisers) use 100.  The next level uses 1,000 or eve 10,000.  At the same time allow harvesting skills (whether combat or whatever) to increase supply in a LINEAR fashion.  So, at level 1 Harvesting I bring in 1 resource/hour.  At level 2 I bring in 2.  Demand is going up exponentially, supply is moving in a linear fashion.  At first this means people have to pay crazy prices for goods since demand will so outweigh supply, but in the long-term it helps balance out the endless-supply problem.

To help the other side of the issue (item devaluing) EVE instituted two things:

1)Price Floors.  They did this with the normal NPC market.  NPC vendors will pay X price for Resource A.  That means that if your PC crafters want to get into the market they MUST offer more than X that resource. 

2) No Resource Left Behind.  It really irks me that in games like WoW and Vanguard there is NO use for ANY resource except the last 1 or 2 tiers.  No one crafts with the base level resources once they have levelled beyond them.  That means that when a new character enters the game 3-4 months in there is NO market for their harvesting goods.  That means you get to grind a skill up to Max level with NO benefit for the entire grind.  EVE has a different model, in fact the exact Opposite.  Instead of leaving the Base resource (Tritanium) out of the end-game crafting they make it a HUGE part.  You will ALWAYS need the Level 1 resource, and in fact higher level players need more of it than any other resource.

Personally I think most of my issues with gaming economies can be addressed with DEMAND increasing ideas.  I don't have a problem with WoW and their desire to hand out Epic loot that can never break and never drop.  But, if you are going to do that you must put a HUGE consumable market (in the way of potions, or perhaps forts/cities) into the game if you want resources to have any meaning.

[CaptBewil]

No one wants to hear this, but honestly, I think one of the biggest issues with MMO's is Player Crafting.

I don't think you have to have crafting to have a fun game.  It seems to just be one of those "shticks" that developers throw in there because they know it attract customers.  From as far as I can tell, crafting is not a MRPG requirement.  Additionally, most crafters have a second character on the same server that is actually their "main" and the crafting char is a "support" role/char.

To that end, it begs the question, "What is fun?"  To answer that question I looked at some of the game I had thought were really fun:

Monopoly - Economic control strategy, fixed economy
Dark Froces II - FPS style combat, item storage and consumption, special ability progression and ussage
Rebellion - Resource control, resource management, strategic movements and unit placements, area control, infiltration, technology research and development, fixed economy, and more
Battlefield 1942 - Solid base FPS class system (with medic and engineer intergration), combat vehicle support

The other big issue is Open vs Fixed economies.  These two are futher broken down as either Complex or Simple.  The more complex you make the system, the more difficult it is to mange (from an Operational stand-point).  So, the "solution" is to automate the economy.  This comes in the form of mission terminals (repeatable missions/quests) and respawnable mobs.  Both of these things pump more money (or value contained items) into the economic system.  Harvesting resources also doesn't work if it is unlimited.  Those are characteristics of an Open system.  The fixed economies have failed because they tried to automate a complex system.  The solution, in my opinion, is to have a fixed simple system.

What I did in my system (since it was designed around the idea of a FPSMRPG (I think that's the future of MRPG's)) was to first take out crafting and replace it with Research & Development.  What would happen is that you have your character join a faction, go to a R & D faciltiy.  At the facility, you would have to play a "mini-crafting-game" where you experimented with different systems, etc.  After so many commulative attempts by you and the other Engineer's in your faction working on the same schematic, you'll have success and that schematic can be sent off for production.  When this happends, the faction leaders will have the option of assigning a percentage based bonus for each player involved with that based on how much "work" (time) they put into it.

This does a couple of things, in particular from a strategic point of view.  1 - The more engineers you have working on schematics, the faster you will get newer and better technology to use.  However, this takes away from the personel you could have on the front lines (even as engineers to fix vehicles or blow up enemy stuff).  So it's a trade off.  2 - Engineer salaries aren't cheap and neither will be the bonuses they receive.

That is, at least, one element of concern that I have with economic systems in mmo's and a solution that I think my system address.  The others issues deal with:
- Fixed economy "pre-calculations" (leaving open for the economy to be stimulated, sort of how it's done by the government in RL).
--- Resource Management (goes with the above).
--- Salaries vs grinding professions or for gold (to a limited extent, capping potential income)
------- Bum aspect to game (have to have a system for casual players where you don't have to have money for the game to still be fun).
- PvP (Player control of certain economic aspects and general strategy change for economic need).

[Stephen Zepp]

BTW, at the design level, it would seem that if you threw away hand designed items, and simply made everything "crafted" (and yes, I mean items NPCs spawn with, if you haven't dropped that concept already), it would pretty much eliminate the whole "player crafted items suck compared to drops" issue.

I fully admit I haven't spent the design time to completely explore this, but it's one of my fundamental systems in a "perfect mmo".

[CaptBewil]

So, who would set the initial price scale?  I would think that that would be largely dependant on two things:

1 - How much starting money players had
2 - How much time as elapsed since "hour one" and the first item goes on sale.  The longer it takes, the more likely it is to go for a higher price...

[Vinadil]

CaptBewil - Question:

You say that complex, open economies in which resources are unlimited cannot work.  I assume that means you believe the economy in EVE is broken.  How so?  (Perhaps you just meant it is too complicated for the average player and therefore broken, to which I would agree... it will always be a "niche" game if niche means less players than WoW)

Stephen - EVE also addresses the "crafted vs dropped" with at least 2 factors.  Baseline crafted = the cheapest for a fraction of the cost while maintaining most of the benefit.  It is the classic 80/20 rule.  Basic gun = 80% of the effectiveness at 20% of the cost.  So, spend 4x as much money to buy the dropped item and get a 20% (it is not even that much honestly) increase in effectiveness.  But, to top it off you have the Tech 2 crafted unit which is actually MORE effectiveness at LESS cost than the dropped item.  A very easy way to help this system along is to have Marginal Increases in effectiveness.  I have been out of WoW for 6 months now, and the items they have available now that are the basic equivalent of what I had (PvP gear/raiding gear) are almost TWICE the power of what I was using.  So, I come back to a game in 6 months and I have lost 50% of my effectiveness due to new gear?  That is a system that is not friendly to a player economy :).  Obviously you don't have to have a real economy to have a fun, or successful, game.

Edit - Just to clarify, I really don't consider myself an EVE fanboi, but when it comes to economies I use much of their design as my "perfect world" with a few additions.  When people mention systems that contradict the EVE system I assume they see that system as broken or so specific to the EVE game that it won't translate.  More often I come to find out those people just have no experience with the EVE model, which is why I ask and reference it so much.

[CaptBewil]

CaptBewil - Question:

You say that complex, open economies in which resources are unlimited cannot work.  I assume that means you believe the economy in EVE is broken.  How so?  (Perhaps you just meant it is too complicated for the average player and therefore broken, to which I would agree... it will always be a "niche" game if niche means less players than WoW)

1 - I'm not saying it cannot work.  I do feel, however, that it would require more work then current systems and it is doubtful that the producer would see the value in spending the precious coding time it would require to develop correctly.
2 - Too come close to developing a complex open economy, it would require control systems such as open PvP (which I believe EVE employs).  You can also play with time (how much time it takes to do something or go somewhere), which will often affect prices.

However, from a design prospective, the amount of work needed is not worth the gain.  I have found that the most simple answer (or simple system) is quite often the best (or most correct).  In this case, the less coding you can get away with in a game, the less time it will take to develop and the more time you have for creating content (which is what keeps players hooked and coming back for more).

[DarkSign]

The lack of scarcity is the biggest problem, people can extract at different rates and nothing goes away. So the infinite resource becomes meaningless and makes people with more time to grind, more powerful. A set level for extraction that doesn't require player action would be better. Maybe better still would a flat number that allows production up to that value like how the Kohan games did it (a sawmill produced 4 wood and having a bow company used up 4 wood as long as it operated, limiting you permanently until you upgraded).

Also the lack of interaction between players and non-existent contract enforcement. You can't hire anyone to help you because there is no way to enforce or punish misbehavior on either side, this makes Guilds even more insular and able to ignore the rest of the world.

If someone steals something, you should be able to get it back. But with metagame in MMO's the resources can just vanish if they log out or transfer to another character.

And if you agree to pay a toll to pass an area and they still kill you, you can't send a video file captured on your ship to warn the world and have a built-in contract-honor system. There isn't an easy to way to agree to pay small amounts up to exit warp point and actually follow the contract.

You can't get players arrested and brought before a trial like real societies do.

EVE probably goes the furthest in creating an open game world but to create a truly open MMOs you need:

1. Scarce resources: No unlimited farming
2. Ownership of scarce resources
3. Contract enforcement

That is how the real world functions, without it you just have boring farming, static trade routes, and very limited player cooperation (because you can't make real deals).

[Vinadil]

I guess I am still one of those wierd people that sees 100k to 200k subscribers as a Successful MMO release.  I am more interested in user retention than in creating the next WoW.  (Well, I am not a game dev, so it is really just Playing the next WoW).

Bevil I agree that both PvP and Long-travel times are helpful in regulating a player-run economy.  Of course I see those as staples to any meaningful MMO.  If I want the ability to hop around anywhere I want to see, then there are plenty of games that allow me to do that now.  But, you can have no sense of "territory" or "ownership" with instant travel.  I guess my main issue with what you are saying has more to do with your Goals than anything.  I do not agree that Content is the best way to keep people around.  EVE definitely does not release new content all that often, and when they do it is generally just a new Skin (ship) to fly around in.  The real content is mostly Player-created.  Even WoW does not release much content, especially for your average gamer.  They just have a fun game that is easy to move around in.  Most of the content that players enjoy there (especially after hitting 70) is also PvP based, even on the PvE servers.

Dark.  I do not see any reason why unlimited resources will not work in MMOs.  You say we operate with limited resources in the Real World.  That is just not true on a practical level.  People have some idea of when some of our resources May run out at some future date, but I don't know of a resource that just... runs out mid-year and then we start harvesting it again in a few months when it respawns.  What we DO have are limited harvesters/refiners/shippers, etc.  All of that is generally based on Demand (and government interaction).  I still think your best time will be spent working on DEMAND creation rather than Supply control.

[CaptBewil]

To clarify, I meant art driven content such as new territories, cities, areas plus consumable art assets such as weapons, devices, vehicles, ships, etc.

I totally agree that players have to have the tools to create their own fun (see my detailed game outline here: http://forums.f13.net/index.php?topic=10097.35).  Someone's hogging the resources in a certain area?  Call in your faction buddies as reinforcements to removing the player from the area OR pay someone to do the dirty work OR place a bounty (contract to kill) on the players head.  But in a PvP system, you have to have a way to handle grievers and I think i've handled that in my system.  Someone's going around killing unarmed players?  An automatic bounty attached to his head should handle the situation.  Maybe vendors can install a "panic button" that will alert near by npc security personel to come and restore order.

I think another big aspect to this is that you have to take grinding out of the game.  I think the way to do is that is to simply remove experience and levels from the game.  You still have to reward your veteran players and I think the way to do that is to give slight attribute modifications periodically (3 months).

[KyanMehwulfe]

No one wants to hear this, but honestly, I think one of the biggest issues with MMO's is Player Crafting.

I don't think you have to have crafting to have a fun game.  It seems to just be one of those "shticks" that developers throw in there because they know it attract customers.  From as far as I can tell, crafting is not a MRPG requirement.  Additionally, most crafters have a second character on the same server that is actually their "main" and the crafting char is a "support" role/char.

The issue is developers are more and more using crafting as nothing but another form of character development ala Levels and Classes.

They're designing the systems with that same mentality of mass consumption and customization appeal. There's little concern for the additional supply of resources and wares which are added, and the (inevitable, despite attempts to create it with lazy rarities) diminishing demand said supply could of potentially garnered. Which isn't to say that a mass utilized craft system innately taints an economy. It's just that because some developers are indeed treating them like a secondary (or even lower) priority progression system, they're placing little value on treating them as an economic tool.

The problem of the stressless supply of gold-encumbered rats was issue enough, let alone having magical ore vending machines sprouting all over the world and only compounding to that supply.

It's a matter of priority. They focus on the 'carrots afore the donkey', and if an economy begins to stale, mums the word and they just subtlety bandage it with a new sink to try reestablish new standards and value for the supply. Which suits them just fine; why waste the time on creating a natural ebb of supply and demand when you can just use sinks, especially with a sink-seeking playerbase subconsciously in need of new 'carrots'. Which is a further advantage since it doubles as new content.

[Roac]

1. Scarce resources: No unlimited farming

A few people have mentioned this, but EVE most certainly has unlimited farming.  You can do missions all day, mine all day, or hunt rats all day.  All of these things generate/spawn new resources into the game environment where resources didn't exist before.  I could in theory mine the hell out of a particular ore and flood the market with it.  In actuallity, it has and does happen.

There are several things EVE has going for its economy that helps make it work. 
-NPCs don't undercut players on price. 
-By lumping everyone in one world, the economy is much larger than most other games and
   thus less prone to variance by a handful of individuals. 
-There are LOTS of items, with the majority of them having a functional role in the economy
   (most goods will get more profit by sale on the market than even 100% efficient smelting). 
-By spreading out resources, trade is required. 
-Low level gear has functional value.
-Crafting has so many levels as to require trade.
-PvP is a mechanic used to assist in generating resource scarcity and trade.

One problem many MMOs come up against is that as a newbie, you simply cannot make money in the game economy.  Your loot has no viable market, either because it cannot be turned into raw materials (by you and your shitty skills) or it cannot be used (because only other newbs would buy your stuff, and they don't need to when they are up to their eyeballs in their own junk).  Another is that the goods provided are so narrow, relative to EVE, that you can either do it all yourself on a crafting mule or farm it yourself with your main.  This means you have little to nothing in the way of trade.  In turn, trade is good because it forces things to go up on market; without goods on a market, you can't have much of an economy.

[Stephen Zepp]

One problem many MMOs come up against is that as a newbie, you simply cannot make money in the game economy.  Your loot has no viable market, either because it cannot be turned into raw materials (by you and your shitty skills) or it cannot be used (because only other newbs would buy your stuff, and they don't need to when they are up to their eyeballs in their own junk).  Another is that the goods provided are so narrow, relative to EVE, that you can either do it all yourself on a crafting mule or farm it yourself with your main.  This means you have little to nothing in the way of trade.  In turn, trade is good because it forces things to go up on market; without goods on a market, you can't have much of an economy.

Interesting that you bring this up--it was one thing that EQ actually did right in one way: higher level (200+ on a scale of 0-300) crafts in some cases required resources that either a) dropped semi-rarely, or b) could be crafted out of very common drops.

Velium blocks for smithing was an example--the problem was, the velium weapons that you could use to "uncraft" out blocks were not stackable (makes sense), and normally were sold to vendors for a couple of plat--who then turned around and sold them for much higher. Not a huge help to the "newbie", and a serious PITA to the high level crafter.

EQ's auction system theoretically should have covered this, and there was a niche for those that were willing to farm the unstackable weps and uncraft them to blocks, but in general the logistical issues weren't worth the trouble.