Game economy in MMO's
Author
I tried looking up how game Economy works. I'm thinking in a MMO sense. If someone has a few links on where to get info or knows the basics of how the Economy works, that would be nice. I would like to see an MMO where very very few people have a lot of gold in the end, so much that they don't even use any of it any more. But again, that the majority of people, even a minority of people don't live in virtual poverty. Money has to go somewhere and come from somewhere. Having items in the world cannot be infinite as the market would get saturated with too many.
Asside from this, I'm still unsure what makes a good economy or what a good market / auction looks like.
Well first I'd separate the ideas of good economy and MMOs. It's rare you see the two go hand-in-hand.
MMO economics are typically a balancing act of time, money pools and money sinks. Ideally, players should gain and expend a roughly equal amount of money or items in a given time. Assuming your paying missions are 'creating' money (the usual method) this gives a zero inflation rate, as no 'new money' is entering the system.
It's unusual to have a fixed amount of money in the system - this would rely on tracking the money through several NPC chains to produce a viable model. It's only really the Elite style trading games that attempt to do this.
It's sad to say, but the economic system of an MMO is often a 'rush job', tacked on top of various 'interesting' things to develop (like crafting recipes).
For Primogen, we're designing a flexible economic structure which is based on a flexible 'money pot' - there is a set amount of money in the system and we can add more or remove it, and it is tracked from its starting positions. There's a whole set of AI functions required to run the simulation which takes raw products and turns them into usable items of set quality (allowing us to have the system sometimes select quality over quantity, and also allowing us to give player crafters a niche). It works a bit like an abstract version of the Settlers.
Whilst this gives us a *functional* economy it's pretty experimental in terms of MMO grounds - there's a hell of a lot of NPCs that'll be wandering around. It should make a Primogen game world look busy (nice), but it may cause problems on low spec clients / connections and servers (bad!).
A good economy is one that's fun to play in! If you're having crafter players, they need a niche and an opportunity to make as much money and xp as a combat player. A combat player needs to be able to replace / repair their equipment and save a bit. Item design actually has a massive impact on game economies (actually terranova.blogs.com is probably a good place to look around now I think of it). Removing item decay (damage when you die / use it) from Starwars Galaxies made life suddenly very difficult for the crafting community, and all of a sudden many of the player cities became ghost towns. Nobody had to shop for kit any more. Further reducing the effect of item stats in combat made the choice of weapon pretty much irrelevant - again, shafting the crafters.
Having too much usable / high level loot is dangerous to your economy. If the best items to use are loot items, nobody will bother crafting in the end. At any potential stage in the development of your economy your money sinks (paying for stuff) should be in play. If all people do is loot for money and kit, and never spend the money (other than perhaps to buy stuff they can't be bothered looting) you're left with hyper-inflation in a money-generating system, and a stalled economy otherwise.
MMO economics are typically a balancing act of time, money pools and money sinks. Ideally, players should gain and expend a roughly equal amount of money or items in a given time. Assuming your paying missions are 'creating' money (the usual method) this gives a zero inflation rate, as no 'new money' is entering the system.
It's unusual to have a fixed amount of money in the system - this would rely on tracking the money through several NPC chains to produce a viable model. It's only really the Elite style trading games that attempt to do this.
It's sad to say, but the economic system of an MMO is often a 'rush job', tacked on top of various 'interesting' things to develop (like crafting recipes).
For Primogen, we're designing a flexible economic structure which is based on a flexible 'money pot' - there is a set amount of money in the system and we can add more or remove it, and it is tracked from its starting positions. There's a whole set of AI functions required to run the simulation which takes raw products and turns them into usable items of set quality (allowing us to have the system sometimes select quality over quantity, and also allowing us to give player crafters a niche). It works a bit like an abstract version of the Settlers.
Whilst this gives us a *functional* economy it's pretty experimental in terms of MMO grounds - there's a hell of a lot of NPCs that'll be wandering around. It should make a Primogen game world look busy (nice), but it may cause problems on low spec clients / connections and servers (bad!).
A good economy is one that's fun to play in! If you're having crafter players, they need a niche and an opportunity to make as much money and xp as a combat player. A combat player needs to be able to replace / repair their equipment and save a bit. Item design actually has a massive impact on game economies (actually terranova.blogs.com is probably a good place to look around now I think of it). Removing item decay (damage when you die / use it) from Starwars Galaxies made life suddenly very difficult for the crafting community, and all of a sudden many of the player cities became ghost towns. Nobody had to shop for kit any more. Further reducing the effect of item stats in combat made the choice of weapon pretty much irrelevant - again, shafting the crafters.
Having too much usable / high level loot is dangerous to your economy. If the best items to use are loot items, nobody will bother crafting in the end. At any potential stage in the development of your economy your money sinks (paying for stuff) should be in play. If all people do is loot for money and kit, and never spend the money (other than perhaps to buy stuff they can't be bothered looting) you're left with hyper-inflation in a money-generating system, and a stalled economy otherwise.
For long-term stability of the economy, you need to take money (and items) out of the system at roughly the same rate as you add them. If you're having a standard MMO model where rabbits drop gold coins and goblins drop swords and gold coins, then every battle is adding wealth to the system, and you need to have money/item sinks to compensate (NPC shops, item decay/loss, penalties for death, taxes on sales).
OOH! OOH! OOH! My favorite topic!
Ok, Rule number 1. Throw out everything you know about real world economics. This is important since there are so many differences that trying to apply the normal rules of economics most often does not work.
Rule number 2. Put back in any economic principal based on psychology. People still act like people in game or not.
The single biggest problem that MMO economies have is inflation. Now I can't say to have solved the problem of every more Uber gear, but as far as in game currency goes, that aspect of inflation can be controlled. But you have to learn to think a little differently. The idea of encouraging players to take money out is the dominant line of thought Bob Janova and _winterdyne_ booth demonstrate this point.
This line of thinking, to me is completely wrong (nothing personal guys) because it depends on players voluntarily putting money into something that removes it from the game. The problem is that people will not voluntarily do this unless it gets them something better; it is in the player's nature to hoard things unless they have to get rid of something, and many times they will get rid of it by trade with another player, which really removes nothing from the system. Simply put you can not count on players to just throw their wealth into a hole in the ground because the developer thinks that they should.
So what's the alternative? First you need to know that MMO money is Fiat Money. There are four major causes of inflation in the real world; Discovery of precious metals, Debasement (mixing precious metals with cheap ones), Supply disruption, and Printing of money. The first three are unlikely to happen in an MMO, but the last one Printing of Money happens frequently. If in the game every time you kill a rat, you get a couple of pieces of copper or whatever, the game is often just creating money out of nothing. The cumulative effect of millions and millions of dead rats will cause problems. So clearly this creation of money must be controlled in.
_winterdyne_ mentioned the idea of a fixed money supply as a possible solution. I don't really like this since it tends to benefit the already wealthy players, and new players will have a harder time escaping in game poverty.
Instead I prefer the Reward Restriction method. In an MMO you have an opportunity that real world economists would drool over. You can track every single transaction in the world and know exactly what the economy is doing at any given time. Because of this you can calculate exactly what the rate of inflation is in the game for a given time period. With this information in hand, you can then adjust the rewards players receive in game, If inflation is occurring, you reduce the amount of the rewards. If deflation is happening, you can increase the rewards.
Basically this is the inverse of the 'money sink' solution. Instead of trying to match the rate money moves out to the rate money moves in, you match the rate money moves in to the rate money moves out. Once this is working, you can get things to move faster by having plenty of reasons for money to move out. Consumables are the best way to do this. Healers need bandages and medicine. Archers need arrows. Blacksmiths need Coal for their fires, Bullets cost money, whatever is appropriate for the setting. You have got to nickel-and-dime the players to death.
It is absolutely critical that you control money going in, since the task of controlling money going out is impossible because money going out depends on the voluntary behavior of players.
Ok, Rule number 1. Throw out everything you know about real world economics. This is important since there are so many differences that trying to apply the normal rules of economics most often does not work.
Rule number 2. Put back in any economic principal based on psychology. People still act like people in game or not.
The single biggest problem that MMO economies have is inflation. Now I can't say to have solved the problem of every more Uber gear, but as far as in game currency goes, that aspect of inflation can be controlled. But you have to learn to think a little differently. The idea of encouraging players to take money out is the dominant line of thought Bob Janova and _winterdyne_ booth demonstrate this point.
Quote:
You need to take money (and items) out of the system at roughly the same rate as you add them. -Bob Janova
MMO economics are typically a balancing act of time, money pools and money sinks. -_winterdyne_
This line of thinking, to me is completely wrong (nothing personal guys) because it depends on players voluntarily putting money into something that removes it from the game. The problem is that people will not voluntarily do this unless it gets them something better; it is in the player's nature to hoard things unless they have to get rid of something, and many times they will get rid of it by trade with another player, which really removes nothing from the system. Simply put you can not count on players to just throw their wealth into a hole in the ground because the developer thinks that they should.
So what's the alternative? First you need to know that MMO money is Fiat Money. There are four major causes of inflation in the real world; Discovery of precious metals, Debasement (mixing precious metals with cheap ones), Supply disruption, and Printing of money. The first three are unlikely to happen in an MMO, but the last one Printing of Money happens frequently. If in the game every time you kill a rat, you get a couple of pieces of copper or whatever, the game is often just creating money out of nothing. The cumulative effect of millions and millions of dead rats will cause problems. So clearly this creation of money must be controlled in.
_winterdyne_ mentioned the idea of a fixed money supply as a possible solution. I don't really like this since it tends to benefit the already wealthy players, and new players will have a harder time escaping in game poverty.
Instead I prefer the Reward Restriction method. In an MMO you have an opportunity that real world economists would drool over. You can track every single transaction in the world and know exactly what the economy is doing at any given time. Because of this you can calculate exactly what the rate of inflation is in the game for a given time period. With this information in hand, you can then adjust the rewards players receive in game, If inflation is occurring, you reduce the amount of the rewards. If deflation is happening, you can increase the rewards.
Basically this is the inverse of the 'money sink' solution. Instead of trying to match the rate money moves out to the rate money moves in, you match the rate money moves in to the rate money moves out. Once this is working, you can get things to move faster by having plenty of reasons for money to move out. Consumables are the best way to do this. Healers need bandages and medicine. Archers need arrows. Blacksmiths need Coal for their fires, Bullets cost money, whatever is appropriate for the setting. You have got to nickel-and-dime the players to death.
It is absolutely critical that you control money going in, since the task of controlling money going out is impossible because money going out depends on the voluntary behavior of players.
Quote:Original post by zangetsu
OOH! OOH! OOH! My favorite topic!
Yay! I like this one too. I have a feeling it might get interesting, well, as interesting as economics gets...
Quote: ... Basically this is the inverse of the 'money sink' solution. Instead of trying to match the rate money moves out to the rate money moves in, you match the rate money moves in to the rate money moves out. Once this is working, you can get things to move faster by having plenty of reasons for money to move out. Consumables are the best way to do this. Healers need bandages and medicine. Archers need arrows. Blacksmiths need Coal for their fires, Bullets cost money, whatever is appropriate for the setting. You have got to nickel-and-dime the players to death.
It is absolutely critical that you control money going in, since the task of controlling money going out is impossible because money going out depends on the voluntary behavior of players.
True - but the cost of required consumables (bullets etc) can be altered as well. This is actually a fairly good control point (since there are things that everybody needs). However you can't (as touched on) rely on 'work' money sinks, there always has to be something interesting to do with your cash.
Yes, the fixed money supply is a feature that can overbalance the economy if there isn't fixing of pricing. Put the price limitations (min and max) in place and you have a mechanism to force a certain level of stability in the economy. Of course, this disallows a true 'free market' except in the case of items not covered by the price limitation - ie unique or special items. If the game is designed in such a way that unique or special items aren't essential (they're just nice) the game remains playable to all.
There's a similar problem with reward restriction - assume a new player is receiving lower rewards for quests (because the economy is inflated) - how do you control upkeep and maintenance (consumables) costs in check so that everybody can afford what they need? Again price fixing is a really useful tool for stabilising the economy. You can't simply evaluate how much money someone has because there's nothing to stop them from muling it, and keeping their 'working' character broke all the time.
Author
One of my visions is to have base weapons and consumables which are free to all. Any better items would then be subject to these unfixed prices.
Take bullets. You have rough bullets and smooth bullets. Smooth being the better. The rough ones are a fixed price and useful, but the better, more sought after smooth bullets price goes up and down. Sometimes if the market is deflated enough, the price of smooth bullets will be less than rough bullets. This may ensure that new players will always at least be able to afford the cheapest items as they are fixed. If they want better items, they will have to be subject to inflation or deflation.
Take bullets. You have rough bullets and smooth bullets. Smooth being the better. The rough ones are a fixed price and useful, but the better, more sought after smooth bullets price goes up and down. Sometimes if the market is deflated enough, the price of smooth bullets will be less than rough bullets. This may ensure that new players will always at least be able to afford the cheapest items as they are fixed. If they want better items, they will have to be subject to inflation or deflation.
One other hue factor that has influenced a few of the more major MMOs s the real world trade of in-game currency. Games like Ultima Online, World of WarCraft, and Final Fantasy XI all suffer from this. Item prices are ridiculously high. Especially in the case of FFXI.
In FFXI something as simple as a Leather Vest(Level 7, 7 Defense) will end up costing newer players 5,000gil. The problem there is at an armor shop it only costs 625gil. People run bots that will sit at the armor shop and buy it out whenever there is a restock. It gets even worse when you look at the price of the Leather Vest +1. Same level, two more defense. It can cost up to 20,000gil.
Crafting is even worse. People have it in their head that the cost of crafting items should equal the cost of the item that they make. It costs a alot of gil to even start up. Would be crafters have to wait till they have 5 or 6 months of playing under their belt before they can afford to get anywhere with the crafting.
When I began playing this simply wasn't the case. The prices started to sky rocket when certain Linkshells(think Guilds) were founded. These Linkshells manage to have every character on 24/7(ala they have three or four people per character working in shifts). They have groups that constantly camp Natorious Monsters that drop the most sought after items. These items often end up costing players tens of millions.
In FFXI something as simple as a Leather Vest(Level 7, 7 Defense) will end up costing newer players 5,000gil. The problem there is at an armor shop it only costs 625gil. People run bots that will sit at the armor shop and buy it out whenever there is a restock. It gets even worse when you look at the price of the Leather Vest +1. Same level, two more defense. It can cost up to 20,000gil.
Crafting is even worse. People have it in their head that the cost of crafting items should equal the cost of the item that they make. It costs a alot of gil to even start up. Would be crafters have to wait till they have 5 or 6 months of playing under their belt before they can afford to get anywhere with the crafting.
When I began playing this simply wasn't the case. The prices started to sky rocket when certain Linkshells(think Guilds) were founded. These Linkshells manage to have every character on 24/7(ala they have three or four people per character working in shifts). They have groups that constantly camp Natorious Monsters that drop the most sought after items. These items often end up costing players tens of millions.
That's an interesting point regarding the shift-work to buy stuff out of the shops when they're restocked. I'd regard this as exploiting, definitely, and it's one of the reasons NOT to have quests as money-generators. Without access to infinite money, this sort of tactic is much more limited, perhaps to only one line of products, even from a fairly large number of players.
Definitely worth bearing in mind though. Again, having a fixed amount of money in play, and not having money-generators makes trading in it for real world money difficult - as wealth is accrued it is harder to obtain more, and it can't be done consistently and continuously.
Definitely worth bearing in mind though. Again, having a fixed amount of money in play, and not having money-generators makes trading in it for real world money difficult - as wealth is accrued it is harder to obtain more, and it can't be done consistently and continuously.
Quote:Original post by trapdoor
One of my visions is to have base weapons and consumables which are free to all. Any better items would then be subject to these unfixed prices.
Right, there needs to be a way for players to play even when they are destitute, but thats more of a mechanics issue then economics.
Quote:Original post by _winterdyne_
how do you control upkeep and maintenance (consumables) costs in check so that everybody can afford what they need? Again price fixing is a really useful tool for stabilising the economy.
This is something of an aside, but here is what you do. Each time a player buys or sells anything, where there is a single item (or multiples of the same item), you can record in a database that player 1 accepts that item X is worth N. Then you can take all the transactions for item X and calculate what the world as a whole thinks Item X is worth. you can then instruct NPC merchants to use this price (maybe adjusted slightly). The causes merchant prices to move into line with Player to Player purchases. Nothing makes me crazier than NPC's paying 1 gold for something you can easily sell to other players for 100 times that amount (anyone remeber Crushbone Belts in Everquest?)
The other part of this is that NPC merchant prices need to react to supply and demand. You can create a demand rating for every object. Each time the item is bought, you can increase its demand rating up to a hard limit of %100. Each time a player sells an item to a merchant you can reduce the rating to a lower limit of 0% (worthless). This rating slowly decays over time. THen you can muliply this rating by the price. So an item that a Merchant just can't sell will slowly become cheaper until someone thinks the price is reasonable.
There are probably flaws in this stuff, but to me it is very important to get the NPC merchants prices to change over time, and to be honest its kind of hard to come up with the mechanics to do it. The other trouble is what happens when players know too much about the system? could they try to manipulate it?
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