"Morality is how people want the world to work.
Economics is how the world works."

-Freakonomics: A Rogue Economist Explores the Hidden Side of Everything
Levitt and Dubner, 2005

For a gamers purpose you could replace the word "Morality" with "Rule sets" and the word "people" with "Devs".

Most MMOs use one of 2 economy types.

-Simple Leveling with money
-Simple Leveling without money 

Let me define a few things.

Money == Standard transferable unit representing some measure of work/activity.

Simple Leveling with money == Economy represents a treadmill like advancement mechanism.  Money is exchanged for any purchasable item from NPC or player.  Money is accumulated through various activities.  Money is transferable.

Simple leveling without money == effectivly economy is reduced to non-transferable personal attainment of items and status.  Basically any game where one player can not profit from trade with another player, but can advance and attain material on thier own.

The vast majority of games are of the Simple Leveling type, the economy in such games is essentially nothing more than a way for players to measure thier advancement relative to other players.  These games may or may not have crafting, in all cases the crafting isnt so much a full time activity but a compliment to other combat-centric aspects of gameplay.

Coin and resources in game are used for nothing more than simulating a more complex economy than actually exists, also because a certain segment of players derives pleasure from the act of creating new items.  Items I might add that are non-unique, and in every case inferior or equal to items that can be gained by looting.  Those games that had bucked this trend or tried to circumvent it have in the end buckled under the collective weight of the non-crafting popultaions.  Games like WoW, EQ1, DAoC, EQ2, SWG, etc all follow this norm.

A note on crafting systems:

Crafting systems can be complex or simplified.  I view complex crafting systems as a waste of developer resources, for a couple reasons.
     1.  They require an inordinate amount of dev time for content that a realitivly small number of players actually persue for a majority of thier time.
        2.  Player customers only buy the best crafted items anyway, when given the choice.

Dont misunderstand me here, I do enjoy complex crafting systems, I do enjoy systems that allow me to make superior items by using superior resoruces and superior skill.  However, in the one game that actually had that (pre-nge Star Wars Galaxies), the system collapsed because the fundamental problem of game economies created a situation where anything other than absolutely stellar items simply did not sell. 

The fundamental problem of game economies is ... Money. 

In the real world, money represents work.  I work x amount of hours for y amount of dollars.  Therfore, 1 dollar is worth some measure of time spent working.  In life money works because the simple act of living requires a great deal of work.  We trade our time/money for anothers work, the farmer produces food that we buy, because there are lots and lots of people doing different tasks in which they trade thier free time/work for money the system works.

In games, living doesnt cost anything, or very little compared to what you are "paid" for it.  You do not pay rent (if you do its trivial), you do not need food, medicine, insurance, pension, kids, etc to survive.  This is not to say that the games are without costs, they do but the cost is so little that paying poses nothing more than an inconvienience.  Over time players accumulate collectivly much more wealth into the game than that which goes out of the system.

Theres a good reason game economies are tailored for easily consumed fun-nuggets.  Real economies are not FUN, its called Work because there is almost always something you'd rather be doing.  Dont get me wrong, some people do love thier work and are fullfilled by it so much so that it becomes the focus of thier being rather than a means to an end.  Rest assured though that these types of people are in the extreme minority, also notice, that they are not the types of people that spend a great deal of time playing computer games.

So for the rest of us, I see many people wishing for more "realistic" economies.  What do they actually mean?

What I see people writing here are mostly nothing more than variations on the same theme, they all have the same fundamental problem.  Just living in the game is disproportionally lower cost than real life, and wealth is daproportionally more than yo'd normally receive for an hours worth of work.  The simple fact that because living costs ARE so low compared to income;  heavy inflation is inevietable in anything other than the most simplistic and heavily regulated representations of an economy.  WoW uses things like equipment decay, high cost skills, bind on Equip gear, soulbinding to diffuse inflation, these work very well, but they do impose a very simple economy onto the game.

The real question is do we have to actually solve the money problem?  Why dont we just approach the whole idea a different way.  The answer is definatly not to make a more complex economy or a free-er economy, indeed, SWGs economy was very free, but still had the money problem.  Weve already seen that artificial controls work but lead to simpler economies with little chance for diversification of play.  What we need to do is make the game play experiance more "expensive", bring costs and profits more in line.  At the same time the guiding principle of fun must be observed, after all who wants to play with 1500 econo-masochists on a daily basis, not me.

Instead.  Design a game from the ground up where survival is the goal.  Not necessarily on the individual level but on the community level. The thing is you have to trick people into working for the greater good (good meaning survival), how you do this is by appealing to thier own desires to advance themselves in the context of the world.  Because of the design of this type of world a level based system really wouldnt fit, nor would a strictly skill based system, in fact, anything that required an experiance point accumulation probably wouldnt work.  I do believe that if you manage it from the begining you can grow an organic economy over time, but you wouldnt be able to from the begining.  Eve-Online has arguably the most complex economy in any game right now and that took years to evolve to that point.

There must be a way forward.

-Gooney

Good points, nice read.

At the highest level I agree with you in the sense that a great game will leverage a players self interest, but in a way that drives the economy forward.

I also agree that money, or the way it comes to players is the problem.  Fighting computer generated monsters for months on end to obtain items that eventually become necessary to face other players (if you wish to win every once in a while) shifts the games focus from players playing in a world against each other, to players playing a 1 player fantasy game, together. 

For most of us, grinding endlessly is work, not fun.  If that weren't the truth the market for play money wouldn't be so big.  People would rather pay real money, that is money earned in the real world performing tasks that most people don't like, to avoid having to do other tasks in game they don't like, earning money.

The secret imo, is to pay pay players for doing what it is they like to do......

show.zoho.com/public/talinguard/MMORPG%20economics1

In simple words you are saying that players should earn money from other players and not mobs. That makes sense.

Yep, exactly, the trick is how to do it without making it easily exploitable.  The simple answer is don't make it (money) infinite.  The reason you and  I don't give money away is that  it's difficult to obtian.  Getting from another player who doesn't want to give it up could be tough.  After all thats kinda the point, right?

"In the real world, money represents work.  I work x amount of hours for y amount of dollars.  Therfore, 1 dollar is worth some measure of time spent working."

This is false.  Marx was wrong, no reason to repeat his mistakes.

Only if everyone is equally productive does money represent work.  The fact is that people are not.  Money represents production and the value of production is strictly contextual and can not be measured in hours worked or costs involved.  If I need a particular service, I am willing to trade a certain amount of my time (in the form of money I've accumulated) in exchange for that service, but I don't care how long it takes another person to perform it.  I am ambivolent between hiring one guy who will take 10 hours or another who will take 5 or yet another who is very smart and can do it in 10 minutes because of some invention of his.  What matters is production, and all I care about are the results, not the sweat that went into it.

"heavy inflation is inevietable in anything other than the most simplistic and heavily regulated representations of an economy"

I don't think this is the case.  Didn't UO have heavy deflation as goods became more and more rare?  I believe the inflation is more dependent on a closed economy vs. a faucet-sink economy.  But even in a faucet-sink economy, if there are enough faucets and enough sinks, then an equalibrium in prices and money supply should be reached eventually.

Anyway, do you really think people want to play a mmorpg where mere survival is the goal?  That is what we do outside the game.  In the game, we want to explore, socialize, kill, or become all powerful and achieve an efficacy we can't in the normal world.

Marx?

Ouch, thats a little heavy don't you think.....Whats next Hume's concept of Justice, or Locke's social contract?

While I agree with on both points, production and inflation,  I think, at least in the case of work vs. production it's easy to think of work as production, but thank you for clarifying that for the rest of us.  Lighten up a bit bro....

In terms of inflation in general I agree with you. 

The way I see it, there are two basic ways to control it.  Create a closed loop system and control virtually every aspect of it leaving players at the fringe, or create a finite economy and control wealth based on the amount of production.  However unlike the "real" world, people can quit at any time taking there money with them.  Players can also, at least if you were to follow the current model, bank money removing it until the player introduces it back into the economy.  These are fundamental problems in the online economy that have to be solved before closed loop economies can be made viable.

I have some ideas I'm working on that I believe solve both these issues, but like all games the biggest problem are the players themselves.  People always seek the path of least resistance and exploitation is, imo, always the hardest problem of all.

Originally posted by JeffL
"In the real world, money represents work.  I work x amount of hours for y amount of dollars.  Therfore, 1 dollar is worth some measure of time spent working."

This is false.  Marx was wrong, no reason to repeat his mistakes.

Only if everyone is equally productive does money represent work.  The fact is that people are not.  Money represents production and the value of production is strictly contextual and can not be measured in hours worked or costs involved.  If I need a particular service, I am willing to trade a certain amount of my time (in the form of money I've accumulated) in exchange for that service, but I don't care how long it takes another person to perform it.  I am ambivolent between hiring one guy who will take 10 hours or another who will take 5 or yet another who is very smart and can do it in 10 minutes because of some invention of his.  What matters is production, and all I care about are the results, not the sweat that went into it.

"heavy inflation is inevietable in anything other than the most simplistic and heavily regulated representations of an economy"

I don't think this is the case.  Didn't UO have heavy deflation as goods became more and more rare?  I believe the inflation is more dependent on a closed economy vs. a faucet-sink economy.  But even in a faucet-sink economy, if there are enough faucets and enough sinks, then an equalibrium in prices and money supply should be reached eventually.

Anyway, do you really think people want to play a mmorpg where mere survival is the goal?  That is what we do outside the game.  In the game, we want to explore, socialize, kill, or become all powerful and achieve an efficacy we can't in the normal world.

The terms "production" and "work" are completely interchangeable in the context of this discussion, money is still a representation of them both.   I have no desire to argue competing econonomic theories, it is fairly well established that they follow fads and evolve just like every other idea, in fact theres so much overlap between theoretical economics and behavioral psychology now that its hard to say just who has the best picture right now.  Regardless of which filter you use to define your economics (and yes it is a filter) some things dont change; survival has a cost, if you have no means at all you will perish period.  How those means are acquired is immaterial to the discussion.

Would people like to play a game where survival was the goal? 

I think so, if it was presented right.  Survival doesnt have to mean individual survival, it could mean communal.  Its a game right, so you could use representations, the goal ultimatly is to remove some of the artificial and silly components of modern MMOs while at the same time providing a rich framework upon which the player base can create thier virtual economy and culture.   You want it to evolve naturally and be as close to self regulating as possible.  What I really want is to move away from the treadmill economy, the one that says at level X you need X amount of baubles to buy the skills/items/doodads you need to continue to the next level.

-Gooney

Communal survival is an interesting idea.

In my game, we have to have periodic universe resets to clear out the universe and we re-randomize a new one.  It keeps things fresh and interesting, but the players generally dislike it because they all have economies and bases that they've set up and have already explored the map.  One thing I was thinking about adding is alien invasions, where each day or two there is a big spawn of aliens who try to kill everything they see and make their way to the center of the universe.  If they make it, then the universe would be reset, which the players want to fight, but each successive spawn will be more powerful than the last so the aliens are destined to win eventually.  The thought is that the players will band together to fight each incoming wave to try to preserve the universe.

Just a though, but why have AI controlled aliens doing the the dirty work?...Why not have the players themselves do it.  To the faction that manages to complete some task they would rest the universe and for that they would gain some favor in the new universe.  Players fighting against players...

Just thought....

lol - that's how it is now, but none of the players at all want universe resets, so we end up having to dictate arbitrary resets instead of letting one team create the reset as originally designed.

Originally posted by JeffL
Communal survival is an interesting idea.

In my game, we have to have periodic universe resets to clear out the universe and we re-randomize a new one.  It keeps things fresh and interesting, but the players generally dislike it because they all have economies and bases that they've set up and have already explored the map.  One thing I was thinking about adding is alien invasions, where each day or two there is a big spawn of aliens who try to kill everything they see and make their way to the center of the universe.  If they make it, then the universe would be reset, which the players want to fight, but each successive spawn will be more powerful than the last so the aliens are destined to win eventually.  The thought is that the players will band together to fight each incoming wave to try to preserve the universe.

You identify the trap of that kind of game design choice.

"The thought is that the players will band together to fight each incoming wave to try to preserve the universe."

The problem is that as a designer you can not count on players banding together to meet a particular challenge.  This is what I mean when I say that you have to find clever ways of "tricking" players into "working" for the common good.  As long as the players themselves understand that connection it gives a value to thier own survival and that of thier community; and by extension value to whatever you use for exchange in the game.

Designers can just about never count on players doing what they want them to do in the spirit in which it is intended.  Just a couple of illustrations of this.

-Battlefield games where Commanders dont command and Squad leaders dont lead, where players more or less do thier own thing.
-Planetside, same phenomena
-Star Wars Galaxies, jedi refusing to "act" like Jedi, which lead of course to the total collaps of the Jedi "profession" in the first place, if players actually played like Jedi the problems of them being an alpha class would never have occured because they would have behaved in accordance with the Jedi rules (whatever they are).
- World of Warcraft battlegrounds, this is why pre-mades are so dangerous in certain matches.  Premades refers to groups of players from the same guild/server all playing and communicating together.  These have an inherent advantage over pick up groups.  Even though both groups have the same base desire, the pick up group more often than not will loose because they simply do not support each other as well as the premade group does; in short they do not do what is in thier best interest.  Its purely psychological and organisational, both groups have the same level, same basic class overlap, roughly same equipment and capabilities.

This is also why rank in games as designed now is impossible to enforce.  Ranks and titles are nothing more than status items, they hold no inherent value.  They might have access to different things due to rank or title but they cannot enforce thier will on anyone.

What this means is that you can never design something that forces people to involuntarily to behave in a certain way, you have to design things so that desired behavior is the most desirable action from thier point of view, ideally you want it to be the only choice they have, but that as a design principle isnt all that fun, and goes against the basic freedom principle of an MMO.  Even then you will have people who will not make the right choice for one reason or another, in which case you have to design a way for thier poor choice to

1. be very personally expensive to them.
2. not disrupt those who made the correct choice.

All of this does actually tie into the economy I'm talking about, its a whole hog affair and has to be designed from the ground up.  Survival as a game concept is powerful, and hasnt really been done yet, but the implications of it are quite profound.

I should also point out that this kind of a design is in no way intended to appeal to the mass market, it is solely intended for a niche; which in my opinion is what we need more of, more niche titles. 

-Gooney

Originally posted by JeffL
lol - that's how it is now, but none of the players at all want universe resets, so we end up having to dictate arbitrary resets instead of letting one team create the reset as originally designed.

Lmao, you are such an ass.

Instead of deliberately setting your players up for failure with this successively more powerful alien invasion, why not focus on creating content that'll attract new blood to the established world your players are bent on preserving?
I mean, if worst comes to worst, the reset mechanism is still there... think about it.

As a matetr of fact, I think there might be a way of making the economy of a game actually work, while still making it both realistic and believable, and yet enjoyable.

Of course, you can't have an infinite amount of money used in your MMO world. But tracking constantly the amount still in at any time can be a pain.

So let's say you simply make a calculation based on the number of paying months spent on the world yet? If that value appears on the ID of every character in the database, then it should be simple to make the addition, right?

Ok, now, let's get to the SECOND part of the plan.

Crafters, farmers and adventurers are separated from each others, and only the crafters receive a monthly share of the total amount of money in circulation, that share being bigger or smaler depending on the time already spent on the game. In order to get anything in the MMO world, you have to go and get a job from the crafters. A simple "fetch me" quest, which you will be paid for either in goods or in gold. Once an adventurer gets some money/currency, he can go to any crafter or farmer, and buy whatever he needs from him. But currency never gets dropped from any mob. Only from human players. What you CAN obtain from dead mobs is raw materials PROVIDED you have the adequate skills and tools.

So what does that change, in practice?

Equipment for the adventurers can only be obtained from crafters, which means that, at some point, most of the gold should be flowing towards crafters, and won't be kept in pockets, apart from that of the crafters, whose prime interest is to be the richest anyway. Adventurers will always be struggling with prices difficult to pay for, since no equipment or money will be obtained for free.

I'll agree that it may be boring to always get some "fetch me" quest in order to get an item for adventurers, but I can't think of anything else right now.

Anyway. If the only way of obtaining currency in a virtual world is through work and trade, it might NOPT be enjoyable anymore. But if it has to come to that to avoid the virtual economy crumbling...

 

Originally posted by JeffL
lol - that's how it is now, but none of the players at all want universe resets, so we end up having to dictate arbitrary resets instead of letting one team create the reset as originally designed.

I think the problem is you need to link the reason for the reset to some sort of universal player accomplishment.

 

If there is something to be gained that players want to need they will work to achieve it.  It sounds to me, though I could be mistaken, that players don't want to have their world reset.  Sounds like shortsightedness to me, or I just don't understand what it is your trying to accomplish.

 

 

SWG preCu had players "working" for other players.  Best example I can think of is scouts/rangers going out and harvesting avian meat (which was a very labor intensive task) for crafting doctors, who needed the avian meat to make buff packs.

Of course, the CU annihilated the entire pharmaceutical economy, in two ways: eliminating the demand for buffs by destroying the power of buffs, and destroying the entire purpose of  pharmaceutical crafting by giving the healers magic spells instead of skills that required pharmaceuticals to be used.

One problem with describing money as work in another form is that the majority of those who hold wealth do not work at all.  They simply hold wealth in such quantities that the necessities of life are trivial to obtain...often through utterly non-productive means, such as inheritance and rents.

Originally posted by Gooney
- World of Warcraft battlegrounds, this is why pre-mades are so dangerous in certain matches.  Premades refers to groups of players from the same guild/server all playing and communicating together.  These have an inherent advantage over pick up groups.  Even though both groups have the same base desire, the pick up group more often than not will loose because they simply do not support each other as well as the premade group does; in short they do not do what is in thier best interest.  Its purely psychological and organisational, both groups have the same level, same basic class overlap, roughly same equipment and capabilities.
-Gooney

This statement pretty much disproves your entire economic argument.  The idea that work and production are interchangeable in an economic sense is a little off.  Both are closely related but work is an input whereas production is the output, and a more acurate measure or value or money in a system.  Time does not equal money or everyone would be paid the same.  I understand you are from Sweden so your experience may be somewhat different than mine, being from the US.  Still, your point above makes it fairly clear that given the same inputs of levels, equipment, skill, etc. does not equal the same output.  The key difference, and the counterpoint to socialism, is that work is not equal to production.  The key is in the intangible.  It is the organization of the pre made group from which they derive advantage over a disorganized opponent.  All inputs being equal, an organized and focused group will prevail every time.

 

Originally posted by xcatlkd

This statement pretty much disproves your entire economic argument.  The idea that work and production are interchangeable in an economic sense is a little off.  Both are closely related but work is an input whereas production is the output, and a more acurate measure or value or money in a system.  Time does not equal money or everyone would be paid the same.  I understand you are from Sweden so your experience may be somewhat different than mine, being from the US.  Still, your point above makes it fairly clear that given the same inputs of levels, equipment, skill, etc. does not equal the same output.  The key difference, and the counterpoint to socialism, is that work is not equal to production.  The key is in the intangible.  It is the organization of the pre made group from which they derive advantage over a disorganized opponent.  All inputs being equal, an organized and focused group will prevail every time.

 

I live in Sweden, I am from  the US, so whats your point? Are you alluding somehow that a Swede is less able to grasp the realities of free market capitalism than an American because they live in a country that practices social democracy?  If so your a buffoon.  Sweden is more democratic than the US of A  (according to The Economist, google Democracy Index) as well as possesing and developing some of the most advanced market transaction technologies in the world (google OMX).  In fact Swedish technology drives a significant portion of the worlds economies, if that is you consider exchanges as being instrumental to modern economy.

That aside,

Im not saying that in the REAL WORLD time equals money (although for many of us it does), but for the sake of simplicity it is defined so in the OP.  Were talking about a GAME economy not the real economy with all its permutations.  This is because in standard MMOs time spent generally directly equates to wealth growth and level gain generally means larger money gains.   The last is true if you assume that the players are on a treadmill advancement model, which most are.

Now, as to the rest of it, yes you may have a point if and only if the economy consists solely of a small group, but when you have a large group (ie an MMO population) then you can get results by tweaking subtle factors.  Just as the Fed controls US money supply by either increasing or decreasing interest rate.

 

Remember that the example above was to illustrate the problem of designing an aspect of the game that requires players to voluntarily act in the greatest interest of their own and their groups good and has not much to do with the real Money Problem.  Which is in my opinion what is holding up the development of more sophisticated in-game economic systems that would lend themselves to the game as avenues of active interest.

-Gooney

 

 

 

Originally posted by Talinguard
Yep, exactly, the trick is how to do it without making it easily exploitable.  The simple answer is don't make it (money) infinite.  The reason you and  I don't give money away is that  it's difficult to obtian.  Getting from another player who doesn't want to give it up could be tough.  After all thats kinda the point, right?

This seems like the same old debate that has been going on for a couple decades in muds.  How do you stop hording and the effects of hording in your system?

I can think of three solutions to hoarding off the top of my head:

1.  Introduce real banking, as Gooney suggested in one of my threads.  Saved up money would be invested back into the economy rather than just sitting there.  A credit based economy like the modern one would solve the problem.  I'm not quite sure how exactly to go about implementing it, but I'm sure someone has some ideas.

2.  Limit the amount of secure storage a player has.  Instead, give them a large amount of storage that can potentially be robbed, with great difficulty and at great risk.

3.  Control the input of currency so that it compensates for both the players hoarding and suddenly spending a large amount of hoarded money.

The best system might be a combination of these things.  Hoarding was once a problem in real economies, but primarily thanks to the credit economy it's not. 

Originally posted by Impacatus

I can think of three solutions to hoarding off the top of my head:

1.  Introduce real banking, as Gooney suggested in one of my threads.  Saved up money would be invested back into the economy rather than just sitting there.  A credit based economy like the modern one would solve the problem.  I'm not quite sure how exactly to go about implementing it, but I'm sure someone has some ideas.

2.  Limit the amount of secure storage a player has.  Instead, give them a large amount of storage that can potentially be robbed, with great difficulty and at great risk.

3.  Control the input of currency so that it compensates for both the players hoarding and suddenly spending a large amount of hoarded money.

The best system might be a combination of these things.  Hoarding was once a problem in real economies, but primarily thanks to the credit economy it's not. 

Credit is the way to go IMO.  That is what I have been playing with in my system.