The MMOG Economical Flaw

[schild]

Submission by Koboshi.

[Sairon]

The crafted gun vs the droped gun argument isn' t necesarely true. If for example the crafted gun is slightly better for its requirements compared to droped guns of equal quality, then that slight advantage means more market power. I don't think crafted items selling for more than the material to vendor is a good way to go either since it discourages interaction with the player market by crafters. Leting NPC prices scale with the inflation doesn't really work in most MMORPGs which I've played, since there's so little stuff actually bought from NPCs, especialy in end game where the largest portion of the economy is runing.

WoW has one sollution which is working fairly good, they have a very hefty repair bill. Money doesn't come all that easy once you reach 60 because of this. The economy is probably inflating to some extent, but it isn't that noticeable yet.

The best mechanic imo would be an optional money sink which regulates the inflation. For example lets say our game has a mechanic where you pay a fairly large sum of cash to a blacksmith which then improves an item. Every try has a chance of failure, everytime you suceed this chance of failure increases. This mechanic would stabilize the market since if the market is trying to inflate, then people will get their hands on money for "cheap" blacksmithing. Empire building ala Shadowbane is another money sink which could work fairly well. If there's enormous ammounts of cash in the system a lot of stuff will be built, and most likely a lot of it destroyed as well.

[Trippy]

Umm, that was all interesting and stuff but MMO economies have been studied ad nauseum since, well, at least UO and probably longer if you include MUDs (but the Web was just dawning back then so it was harder to find research about that sort of thing). I still vaguely remember that UO presentation discussing Origin's failed attempt at a "closed economy" (was that Raph's presentation?).

If you are interested in this stuff, you can search the Web and find lots of articles and papers on this sort of stuff. Here's an 107 page one as a starter:

Dynamics of massive multiagent economies: Simulation and analysis of inherent problems

Edit: changed wording

[Ironwood]

Surely it's still fair game to write about if no-one has got it right yet ?

[Trippy]

Surely it's still fair game to write about if no-one has got it right yet ?

Certainly but I didn't see anything new in Koboshi's analysis of the problem.

[JoeTF]

Two words: EVE Online.

[koboshi]

Surely it's still fair game to write about if no-one has got it right yet ?

Damn straight! I mean seriously Trippy I agree with your nihilism to some extent, this current model of MMOGs is doomed and to harp on it is only to kick a dieing guy in the crotch.  I mean that's basically the crux of my argument.  However, although that particular evolutionary branch of MMOGs might be doomed to extinction, until a viable competitor to that form arises it will never be replaced.

What is my suggestion for an alternative form?  An MMOG designed to have a functioning economy. I know it seems as simple as I tried to make clear in my article and yet it is seemingly beyond the comprehension of many, including our very own Sairon.

Sairon, I am sorry, but you are exactly the case I speak of.  NO, adding just one more patch won't magically make that lead balloon they call the flow through economic model float.

[Glazius]

So, for this economy to work out, who's going to be poor?

--GF

[koboshi]

So, for this economy to work out, who's going to be poor?

I couldn’t say, but there will be poor. There are two points I have to make on this topic.

One, MMOGs are by nature competitive, if for no other reason than you will compare yourself to other players in it. as long as you understand that then you must concede that there will always be losers in MMOGs in fact if you really want to be honest there is only one winner, the rest of the world is full of poorer people. The point I am trying to make with this article is that developers need to stop trying to tell those who are poor that they aren’t by flooding them with money.  Rather I want to encourage designers to face the real flaws and fix them. For example, figure out a way to make the game fun enough that the poor don’t mind being poor. (see: Puzzle Pirates, I could spend my life as a jobbing peon and still be content with the game.)

Two, if you still don’t want to play ‘cause you can't stand not being the most powerful cock in the world then play single player games. Think of single player games like a good prostitute. They'll stroke your ego and tell you that you’re the best they have ever had. They’re ready to go when you are and will get out of your life when you don’t want to play with them. MMOGs on the other hand are more like the bar scene.  It’s all too common to get cock blocked when someone who spends hours on their body wants the same thing as you. And sometimes you need a wingman to get what you want.

[Roac]

The hero can always underbid him, because, to the hero, there is no cost.

Bzzt, wrong answer.  Both the crafter AND the hero are causing inflation, because both are creating wealth.  They do so through time.  Killing creatures takes time, as does crafting.  Sometimes it may also take money (wear and tear on swords, shovels, whatever), but money = time.  In terms of economics, it's just a matter of who is more efficient at their business.  Which class has a better model for return on investment?

[Cheddar]

Two words: EVE Online.

Can you please expand upon this?

Koboshi, outstanding read, even if it has been written about before.  Only flaw I see is that there are limits to resources in RL as opposed to in MMORPG's.  This has obvious impacts on the issue also. 

[koboshi]

In terms of economics, it's just a matter of who is more efficient at their business. Which class has a better model for return on investment?

True, but you are side stepping the issue. The comparison I was making through analogy was between miners and crafters. The miner is collecting objects of value and selling them, the crafter is creating value by taking an object and increasing its value. The value added to the object by the player is made up of A) the value of the work required to gain the product, B) the market value of the finished product and C) the COST of the input resources. It’s basically only the third value that differs, B is by definition the same and I will say for the sake of argument that A is also equal.  For the miner C is tools + upkeep. Here is where you side stepped, for the crafter the formula is tools + input. But input is mined product.

Which means all of this logical argument is moot because a crafted product requires mining AND crafting work, mining AND crafting cost. So when the formula is compared again the miner's costs negate each other leaving miners with 0 as their relative cost. Or to put it another way

The hero can always underbid him, because, to the hero, there is no cost.

[Pococurante]

The crafted gun vs the droped gun argument isn' t necesarely true. If for example the crafted gun is slightly better for its requirements compared to droped guns of equal quality, then that slight advantage means more market power.

We've seen this dynamic before, Mythic and SWG come immediately to mind.  Basically the answer is no, there is no market power resulting from the slight advantage.  Remember you're comparing something that is "free" versus something that will cost a premium if it is at all attractive.  Additionally there are materials costs that the crafter needs to recover.

The end result is that only a few guild crafters do well and everyone else finds another game to play.

Personally I'd rather see almost no drops that are finished usable product, at least for weps/armor.  I'd rather see drops that are components with some "products" that cannot be directly used, only recycled into components.

All that is needed is reverse auction support and there is no more burden for the adventurer/crafter to get what is needed.  Crafters would truly be separated into master merchants versus master artisans.

[Samwise]

Mythic and SWG come immediately to mind.  Basically the answer is no, there is no market power resulting from the slight advantage.  Remember you're comparing something that is "free" versus something that will cost a premium if it is at all attractive.  Additionally there are materials costs that the crafter needs to recover.

Did you play the same SWG I did?  In the SWG I played, even a slight advantage was generally worth an extra 100k credits to the hardcore types.  (I know this because I played a weaponsmith.)

[Roac]

The miner is collecting objects of value and selling them, the crafter is creating value by taking an object and increasing its value.

Both the miner and hero harvest value; the crafter increases value by adding utility.

The hero can always underbid him, because, to the hero, there is no cost.

There aren't many games where hunting mobs has zero cost (Edit: Note that time = cost).  Equipment wears down, potions get used, bandaids are applied.  Sometimes heros die, either to mobs or PK.  All of these things introduce cost and risk.  It might be that for a given game, the ROI for being a hero is greater than being a crafter.  That is usually augmented by having crafting carry less risk and is something like the difference between an investment in blue chips vs junk bonds, but the degree of difference depends on the game config.  In some games (or for specific skills), crafting may have a superior ROI and less risk, which is highly problematic.

But assume the hero has better ROI and more risk; the crafters are still not dismissed, because they help create a baseline for supply precisely because of the risk involved with hero work; fewer people take that road due to risk, which reduces supply, which drives up cost.  Crafters can more easily create supply even with worse ROI.

[Pococurante]

Did you play the same SWG I did?  In the SWG I played, even a slight advantage was generally worth an extra 100k credits to the hardcore types.  (I know this because I played a weaponsmith.)

Sure and a few times I was one of those people who sought WS like you out.  But these are the very high-end weps you are talking about correct?  Not low or mid-level items.  Same problem with DAOC - tedious not-fun crafting with no real market unless one is maxed out or a guild supplier.  This really is my point - drops were perceived as "free" and craftables did not rise to premium (let alone) epic specs.  Adventurers tend to see gold as a brag ranking, not something to trade for stuff.

Crafting should be viable at all levels - a level 1 should have no problem earning copper selling items consumed by adventurers of all levels.

[Samwise]

I actually was able to make a little money during my WS grind by selling cheap grenades, which were handy for would-be commandos grinding combat exp (this is before the CU so I'm sure that market is gone now).  For the most part, though, yeah, you just had to grind to master first and foremost, because there was almost nothing to do before master.

(edit) So craftables WERE worthwhile in SWG, and were almost always enough of an advantage over drops that people would buy them, BUT the only ones who could make craftables that didn't completely suck were people who'd already hit master in the profession.

God, thinking about it just makes my blood boil all over again.

[Pococurante]

In some games (or for specific skills), crafting may have a superior ROI and less risk, which is highly problematic.

I agree - crafting/merchanting is my preferred playstyle and I don't like this anymore than the adventurers.

There is almost never the true time value to an item - what little there is focuses solely on resource gathering.  This is where we segue into on- versus offline mechanics.  I should not be able to run out tens of highly-valuable items in mere seconds.  And definitely not to skill up.  Skilling should be a long offline project.  Artisanship should also have on and offline characteristics.

[koboshi]

Roac, you once again missed the point so I will make it totally clear with a bar graph

|
| Mining costs
|
| Mining costs + Crafting costs
|
----------------------------------------
               Cost

Whatever hardships a miner must endure for their resource is of no consequence because the crafter must mine as well as craft and so pays the costs innate to both professions.

The problem in this case is, as the others have discussed, with comparing miners (hunters, heroes, or even actual miners) to crafters.  This happens when a hunter can retrieve a weapon from a corpse that is comparable to one which a crafter produces, which is created by first either mining product or purchasing another’s mined product, and taking that product and creating another product from it.



Now, to regain some semblance of topic I will point out that this entire example was simply meant to point out that the "gold" flow through model includes more then the gold that monsters drop, it includes anything they drop.  The point is that despite the fact that too many say that the economic model is good enough there are consequences to acceptance.  Until the players, like the communists in the example I gave, realize that they are really getting fucked by the economy they aren’t going to complain. I look at this like AIDS or cancer; people don't die of AIDS, they die of the flu or the cold. It doesn’t matter if they got the flu shot or if they took Nyquil they are still going to die because they aren’t treating the cause they are treating the symptoms. Players must be told what this disease is and what steps they must take to cure it otherwise they will keep asking for the patches thinking that’s all they need. 

“I’m sorry MMOGs you have a bad economy.  No, no, it’s nothing you did, it’s genetic.  The bad news is its fatal, the good news is now that we know about it you don’t have to pass it on to the next generation.”

[Kail]

I'm not really proficient with economics, but one of the things I hear brought up whenever someone in WoW mentions "Gold Farmers" over the general chat is the insistance that inflation isn't always bad.  If crafters decide to charge 1000g per stack of Ore X, then either the market will support them or it won't.  If inflation gets so bad that few people can afford their stuff, they'll have to pull their prices down.  But if most people can afford their stuff just fine, then what's the problem?

For example, in WoW, I have a herbalist who makes WAY more now in the auction house selling stacks of herbs than he did at launch, presumably because of inflation (lots of high level players want to power their alts through the alchemy profession and don't mind dropping some gold on my crappy mid-level herbs to speed up that process).  I generally take that cash and use it to pay my bills, which are not affected by inflation (training costs, weapon upkeep, et cetera).  Now, if I was buying  herbs, yeah, I can see the rising prices bugging me... but if they bug me too much, I could go out and pick my own.  So, from where I'm sitting, inflation is helping me more than it's hurting, and I can keep it that way as long as I don't buy too heavily from the auction house.

So, I guess what I'm wondering is: why is inflation such a big problem with MMO economies?  What kind of negative effects does it have on the players?

[Pococurante]

The only concern I've ever taken seriously is the difficulty introducing future subs into the game.  It is a barrier to entry to bring new folks into a crashed economy as much as it is a retention mechanism for older subs who can't let go.  UO comes to mind, hence why OSI was correct from a business POV to begin selling jumpstarted characters, etc.

I maintain though that with sane drop rates and plentiful gold sinks that incent players rather than penalize them, no MMOG economy can ever be that oppressively crashed.  Dupe/exploits do far more to damage economies than anything else.  Players need incentives to burn items and cash, something that fights the inertia of using gold as a brag metric.

[Roac]

Roac, you once again missed the point so I will make it totally clear with a bar graph

It's a pointless graph, because you assume that the cost of "mining" mobs is identical to the cost of mining raw material (say, iron for swords).  Beyond that, you've just argued against your statement:  "to the hero, there is no cost."  That statement is absurdly false.

The mere point that there are multiple methods of introducing wealth means that whether A or B is more expensive is determined by config - but neither one is free.  Simple UO-ish example; you can get a sword by either mining iron (harvest) then forging it (craft), or killing a certain mob ('harvesting' mobs).  Based on that statement alone, you have no idea which is more efficient.  It says nothing about how uncommon the mob drops are, how uncommon the mobs are, how uncommon iron deposits are, how difficult the mining process is, how difficult the crafting process is, or how tough the mobs are to kill.  One could be absurdly simple over the other.  Even if the crafter has to harvest + craft, both steps could be by far easier and/or more easily reproduced (volume) to killing a mob.

Until the players, like the communists in the example I gave, realize that they are really getting fucked by the economy they aren’t going to complain.

Another bad analogy.  Not about communism, but the blanket statement that inflation is a bad thing.  It's not, and even basic macroeconomics tells you that at its core, inflation is a "tax on having money".  Meaning, it encourages people to invest.  It's only a good thing, that is, at low levels; too high it's extremely disruptive to economies, as is deflation. 

You might try to make a pitch for an open economy with 0 inflation, but you'll never see it in an MMOG for one reason - people want to hoarde wealth.  They want to get rich, but doing that means taking money out of the economy and putting it in their house, bank, etc.  You can't just code away banks because again, people want to hearde wealth.  Don't remove such a basic feature that customers want.  Nor can you go with a closed economy - it's just not going to work, and far, far too easy to break.  If it's open, you're almost certain to wind up with inflation just because there is *any* sort of hoarding.  The trick is trying to govern it. 

[Lt.Dan]

I have a herbalist who makes WAY more now in the auction house selling stacks of herbs than he did at launch, presumably because of inflation (lots of high level players want to power their alts through the alchemy profession and don't mind dropping some gold on my crappy mid-level herbs to speed up that process). 

Faction grind (for Kingsblood at least).

[koboshi]

So, I guess what I'm wondering is: why is inflation such a big problem with MMO economies?  What kind of negative effects does it have on the players?

Good serious question. So, here goes my attempt at an adequate answer...

The three main problems with inflation:

  The first one, which I covered in the article, is that inflation makes it hard to recognize the true value of the currency. If you started out selling your product for 100 and you’re now selling it for 1000 how much of that is value and how much is inflation? Are you selling it for more or less than you used to? If someone offers to sell you a sword for 100,000 is that a good price or a total rip-off? When people can’t answer these questions the usual supply and demand economics you spoke of can't work correctly because a balanced market is one where everyone knows what everything is worth.

  The second one is that when a new character enters a game they are asked to take the same quests you did when you started. They will be rewarded for the quests with the same amount of money as you were, but when you were paid that money a while ago it was worth more than it is now because of inflation, which means that the new guy is really getting paid less than you did for the same job.  Or to put it another way, let’s say he got paid 100 for the first quest he just finished (I got no idea if this is reasonable in this case but its an example so just go with me on this). If he was playing at the same time as you he could afford the herbs you sell but with that same 100 today he isn’t even close to being able to afford them.

  The third one is that the game has some hard coded values, in the form of NPC shops, money sinks, NPCs that give quests, and monsters that drop loot.  When inflation changes the value of money it also changes the prices and rewards of these systems. In this case it’s a problem of NOT having inflation. How to put this… it’s the same problem as a flat tax. The wealthy pay a smaller percentage of their money to the money drains whereas you pay much more of your income relative to them. It keeps the poor down and makes the rich, richer. This means essentially that the carefully measured balance the game devs worked on before releasing the game is meaningless, as was the real world time and money spent on that part of production.

Every player is negatively effected by one or more of these problems as such it seems to me to be an important issue to address.

[koboshi]

Roac, the communist tale is about the failure of the One More Patch mentality, not inflation.  I was pointing out that OMPing leads not to a solution to the problem, but to the obfuscation of it.  When this situation arises people search for the cause of their problems and since the true cause is hidden they rally around snake oil peddlers, flashy politicians, and cult religious figures. (Read: dupers, game devs, and Uberguilds.)

Furthermore I have not suggested that inflation can be stopped, nor that it should be. If that is what it seems I regret it.  However inflation is destructive in its current form and it is a failure of developers and players alike to acknowledge that it is. It’s like crabs in a pot of water with the temperature being slowly increased. Each one just keeps trying to climb on the others to find the coolest part of the pot to sit in, absolutely ignorant of the fact that they all should be trying to climb out of the damn pot. I want to change the focus of discussions from what a reasonable KPH is with buffs from various skill trees, to what inflation percentage is acceptable in a growing economy.

[Margalis]

There are pitfalls to a closed system, but are they really unworkable?

I guess the main problem is item hording, and dealing with it. Players don't like decay, but you can't have players just grabbing up a bunch of stuff and storing it away, thereby substracting out the amount of free floating value in the economy. New players coming into the game is a not a big problem, as you can just inject some money into the economy. Old players leaving isn't a huge problem either I don't think.

The problem in games is that given enough time you can create an infinite amount of wealth, and the amount of time that "enough time" is is relatively short. You can just kill rabbits all day every day and collect their skins and you are creating wealth. Now rabbit skins are worth 1/10th what they were before. In real life you run out of rabbits, at least temporarily.

[Strazos]

I'm not really proficient with economics, but one of the things I hear brought up whenever someone in WoW mentions "Gold Farmers" over the general chat is the insistance that inflation isn't always bad.  If crafters decide to charge 1000g per stack of Ore X, then either the market will support them or it won't.  If inflation gets so bad that few people can afford their stuff, they'll have to pull their prices down.  But if most people can afford their stuff just fine, then what's the problem?

For example, in WoW, I have a herbalist who makes WAY more now in the auction house selling stacks of herbs than he did at launch, presumably because of inflation (lots of high level players want to power their alts through the alchemy profession and don't mind dropping some gold on my crappy mid-level herbs to speed up that process).  I generally take that cash and use it to pay my bills, which are not affected by inflation (training costs, weapon upkeep, et cetera).  Now, if I was buying herbs, yeah, I can see the rising prices bugging me... but if they bug me too much, I could go out and pick my own.  So, from where I'm sitting, inflation is helping me more than it's hurting, and I can keep it that way as long as I don't buy too heavily from the auction house.

So, I guess what I'm wondering is: why is inflation such a big problem with MMO economies?  What kind of negative effects does it have on the players?

This isnt' so much a result of inflation, but more a result of rising demand.

Overall, inflation sucks. In real life, salaries are adjusted for this. In a game, nothing is done; those orcs are always on the same loot table, and the amount of stuff within the open market is not going to change their loot tables.

[Roac]

Roac, the communist tale is about the failure of the One More Patch mentality, not inflation. 

That's nice, except I wasn't talking about the One More Patch mentallity, but about inflation.  Your allusion to "getting fucked" was the result of inflation stealing from players.  That was why I started my paragraph to your quote with "not about communism". 

Not that the communism analogy was that hot either, because even capitalist nations (say, like the US) are also always tweaking the economy.  Point of fact, it *needs* constant tweaking in order to meet the needs of a changing environment.  In that respect I don't see devs tweaking with a game, or politicians tweaking with an economy to be all that different in principle.

I want to change the focus of discussions from what a reasonable KPH is with buffs from various skill trees, to what inflation percentage is acceptable in a growing economy.

That's fine.  The issue with inflation isn't that you tried to pose, let alone answer, the question of "what inflation percentage is acceptable" - you flat out said that ANY inflation is bad, and that it leads to players "really getting fucked".  Yes, inflation is destructive in some games in its current form, but not for the reasons that you mention.  Any inflation is taking away from existing wealth, but that's not always a bad thing - the issue is what higher inflation does to an economy, but it's not a question you ever addressed.

Nor did you attempt to address any issues that you might face upon release, when the economy is out and out empty, sans whatever gold a lv 1 char gets.  You really have no hope but to induce massive inflation, since as soon as you've killed your first mob you have potentially inflated the economy by an infinite amount (with that first mob containing all the wealth in the world).  But you don't really notice a collapsing economy, do you?  There are socialistic elements in MMOG economy in terms of NPC shopkeepers; by maintaining an infinite supply of certain products, they do actually attain the communist ideals you described.  While problematic IRL, they are not so much in a MMOG because things really can be free.  It removes some wealth from players, but then again, that's the general goal of socialism anyhow.  In the context of MMOGs, they serve to help stabalize the economies of these games by forcing a baseline for trade and helping to simulate a much larger economy than really exists. 

All in all it isn't a bad article.  You made a few comments that are off the wall though, and I've no idea why you are trying to defend them (killing mobs is at no cost to the player?  When did hunting mobs never take *any* time or material?).

[shiznitz]

Why is inflation even a bad thing in a MMOG? Is it only because latecomers to the game have a harder time catching up? Is that even true? I re-started on a new EQ1 server more than a year after release and I had no problems finding gear at reasonable prices.

[Roac]

There are pitfalls to a closed system, but are they really unworkable?

Yes.  As demand for product rises, supply remains constant, and this drives prices through the roof.  It would in effect force a massive economic depression, where nearly everyone is poverty stricken.  As soon as you say "you can just inject some money into the economy" as a counter to this situation, you no longer have a closed system.

I think a point that some people may forget is that MMOGs are not very large economies.  That is, you only have a few thousand or ten thousand agents in the system, and never more than a few hundred or couple thousand active at any given point in time.  Adding NPC vendors helps mitigate this somewhat, but still doesn't avoid the problem, namely that a system this small is somewhat unstable.  The average wealth of one person represents the 1/10,000th of the entire economy (assuming 10k users on this fictional shard) - the equivalent to a small city, if the game were scaled to the US.  It only takes around 40-50 players to represent a city somewhere around the size of greater New Orleans.  On a world scale, 100 people represents more people than most countries (factoid - the top 4 countries have ~half the world's population).  This is just to try and put things in perspective when considering how to make an MMOG economy stable.  They can't take much disruption without spinning off course.

As a result of the inherit instability of MMOG economies, socialistic elements have found a place.  Namely, devs almost always introduce NPC shopkeepers, whose primary benefit to the economy is to help flatline problems.  Normally they will buy just about anything, and sell basic supplies.  In general they represent the "feel" of a much larger economy than actually exists, since a very large economy would not be noticably impacted by local trends, since its size allows it to absorb small problems.  It's protection against too much supply or demand; they will buy at a minimum price, ensuring that nothing drops below a certain value, and sell basic required goods at a maximum price to ensure demand doesn't outstrip supply.  The general intent is that players (either heros or crafters) can compete within the margins of NPC shopkeepers, or in rare or high end markets.  For example, devs don't normally stock shopkeers with Holy Avengers or Vorpal Swords. 

It's possible to get an idea what might happen to a market without these NPCs in place.  Just look at most games, and the higher end goods available.  When I was selling magic weapons in UO (years ago now), each tier of magic item was almost exponentially higher than the one above it (tier 1/2 about worthless, tier 3 around $1k, 4 around $10k, and tier 5 $100k++).  Each tier was far from ten times harder to get.  The supply of each level did drop off but not that much; it was demand that was rising.  Here, the best pressure to help keep demand down is that you could be entirely looted if you died, which limited how many people wanted to take $100k or million dollar items into combat.  There were no NPC sources of these items, so no market control on how high prices could go.

In contrast, there were caps on how high the price for iron ingots could go.  While iron could be harvested either from smelting loot drops or mining ore, you could also just buy ingots from vendors.  It was unrealistic to sell iron for 12 gold per ingot, since even pricy NPC vendors could underbid that.  While $100k worth of ingots could represent a great deal of work, getting a single vanquishing (tier 5) weapon did not represent an equivalent time investment; but it did require significant skill, experience, and character development.  On the other end of the spectrum, selling $100k worth of tier 1 weapons would be a near impossible endeavor, both because of the difficulty in getting the sheer volume of items needed, and finding anyone willing to purchase them (you would probably do better to smelt them and sell their ingots...).

All in all, I think the goal of eliminating inflation in MMOGs is about impossible, not because it is outside the scope of possibility, but because it is a very difficult problem set in an unstable environment, and frankly not worth the effort of trying to fix.  The UO economy, after all, is still here despite being a very old economy for MMOGs, and having gone through dramatic changes.  Is it more important to make a realistic economy, or add better quests and dungeons?  If you demand an improvement, it must by neccessity come at the expense of something else.  What is that something else?

What I do think is that devs could pay a little more attention to the issue.  Not to fix it, because I really do think it is for practical purposes unfixable, but in order to make the market more interesting for the players.  I don't think that many players want to turn into amateur economists, but I do think they want to see a world that is more dynamic.  For example, I would like to see different ways in which the very rich in a game get to save their money.  I don't much care for an infinite bank vault where players can store more gold than Ft. Knox; I would like to see something more like older banks, which charged YOU to keep money.  Keeping money safe is a service.  The amount charged can be small, or even tiered; don't kick in at all until you have a million, and even then only at 0.1% / mo.  There will be *some* point at which players can no longer practically keep money in the bank, because they can't make more than the cost.

That's not terribly fun, so give players something else to do with it.  Give avenues to invest it; in city governments, city shops or guilds, etc.  If these investments are successful, they pay dividends, with their success being dependant upon people using the facilities, growth, availability of resources.  All of those things could in turn be affected by players - resource lines could be disrupted, players could be chased away from some cities, etc.  The safety net of NPCs with base resources always available still exists, but anyone wanting more specialty equipment (most everyone) will look to participate in these sub-games.

In Medieval times, people could buy nobility titles; have the same thing here, except that it is a recurring cost.  Allow the purchase of positions within the city that might grant certain privledges.  Nearly everything decays, has maintenance cost, or gets used up - this encourages crafting / hunting.  Think up more complex chains of money flow; instead of housing maintenance just going away, deposit it into a city treasury.  PCs with titles might have some small authority to manage (not withdraw) that money, or a fraction thereof - say, focus on increased guards, city beautification, or whatever else.  Those resources in turn flow somewhere else; paying for new city buildings requires resources, which requires flow to another city.  Resource lines may be hijacked, either by players or NPCs.  If NPCs, players may now have the opportunity to ransack or camps to ... liberate that money.  Or they may assist the NPCs and receive a cut, as well as help strangle a city.

This isn't exactly a closed system, since I don't see normal spawns ever going away.  I do like the notion that if you kill rabbits all day, all you get are pelts (no gold, no swords, no magic rings) - but there might be a real demand for the pelts.  Of course, it might be in another city, so you can either travel there yourself, or just sell them on the local market for cheaper and let caravans trade them.  Or the market may be flooded, in which case you fall back on the baseline NPC prices.  But it is /more closed/, and more tied into other aspects of the game.

Want emergent behavior?  You have to have something like that.

[Pococurante]

It's possible to get an idea what might happen to a market without these NPCs in place.

AC2

That's not terribly fun, so give players something else to do with it.

I'm a huge fan of this approach - goldsinks should rarely be coercive but rather be incentives that do not imbalance PvP combat.  Hence why I'd absolutely detest any game that charges me to store my money for example.  Instead let me buy a safe from an NPC wandering tinker who is a semi-rare spawn.  That sort of thing.

[Roac]

Hence why I'd absolutely detest any game that charges me to store my money for example.

I do too, but what I was trying to do here was to come at the problem with both a carrot and stick, and only use the stick for high end (aim for something like the top 5-10% wealthiest players, for example).  For the vast majority of the population, there would be no mandatory charge, but they can opt-in to the carrot if they like.  The few people who would be pressured would still just be pressured, and not forced - and they would have multiple options to work with.

I would not like any option that corners players.  For example, banks can only have X gold, and there's nothing to do with your x+1th gold, but give it to newbs, since that devalues the currency. 

[HaemishM]

One of the problem with applying real world economic theory to virtual MMOG worlds is not so much that there is inflation or a closed system, it's that the world of MMOG's is a truly primitive one. While fantasy MMOG's try to emulate a feudal Medievel society and sci-fi MMOG's do other sorts of things, they truly are Neanderthal, binary systems with only two roles. Hunter/Gatherer and Nurturer/Producer. The players are cavemen, dragging dead varmints back to the cave so the cavewomen can skin it, toss some varmint steaks on the spit and feed everyone. Not quite sure where the mutal exchange of virtual fluids occurs, but it's probably somewhere with 40-year old virgins who smell like cheese and dress up their avatars in female night elf flesh.

There is no variety of roles the player can have within the world. You can either gather resources for crafters, hunt and kill varmints for food or gold to fuel future hunting expeditions, or you can take the resources gathered (either by yourself or another hunter/gatherer) and turn those resources into something which fuels future hunting expeditions or are useless trinkets meant to remove money from the economy. What else is there? The only game which has even come close to providing some other form of profession is Shadowbane, in the form of a military career defending the homeland. At least in PVP worlds, there are options beyond those two, but they mainly consist of either being a militiaman or an outlaw.

Crafting has the problem of being not fun for the majority of people. It also has the problem mentioned earlier of being not much good to most people in the economy unless the crafter is of master level. Of course, that's also contributed to by the linear level treadmill, which also makes the hunter/gatherer superfluous unless he is of master level as well.

In short, in order to even bother with trying to simulate a real economy, players have to have more to do than just be hunter/gatherers or nurturer/producers. What's the point of trying to craft a deep, dynamic and functioning economy when the players are given the choices of Cro-Magnon man?

[Pococurante]

How is that any different than the real world today?  How many of us on this board for example actually extract resources from the ground, the only real economic creator of wealth?  The number of farmers in relation to overall population is also quite small.  Miners, etc.  Most of us are simply doing nothing than pushing bits of stuff around or taking care of the people who do the pushing.

I'm not arguing your point that MOGs are overly simplified - these are games after all and not virtual worlds.  Just trying to get a feel for how you'd expand it.

[Roac]

While fantasy MMOG's try to emulate a feudal Medievel society and sci-fi MMOG's do other sorts of things, they truly are Neanderthal, binary systems with only two roles. Hunter/Gatherer and Nurturer/Producer.

RL roles are categorized fairly broadly as well; agriculture, industry, service.  You don't really have the first or last in an MMOG, so you're just left with industry; industry is (a) harvest resources or (b) add utility to resources.  I don't think agriculture would add much to the game anyway, since it is just, in effect, "create resources". 

More interesting I think is the third category; the type of services you can add.  It doesn't make much sense to have a "writer" or "painter" service, although I suppose Second Life has done a bit on the second.  More appropriate would be people willing to take missions, and I've discussed possible ideas on how to have player-generated missions.  If cities need resources, to extend my discussion above, that could spawn quests within the city for players to take.  Some of the cost of getting resources could serve as a reward to players willing to take the quests.  Assassinations or bounties could be other services as well.

But yeah, if you just look at things categorically like that, you're not left with much.  You could just lump all of MMOGs into... well, the MMOG category.  Or all strategy games, etc.  Doesn't mean that the actual impliementation of any category can be interesting - or not.