Could you ever have a realistic economy in an MMORPG?

[PibbyPib]

Every game I've ever played, including EVE, suffered from the fact that players *add money* to the economy as they play, instead of borrowing money from it. There's no set amount of currency in circulation.

 

The only way money is ever actually removed from the system is when players purchase things from NPC vendors. In EVE, money is also removed when players' expensive equipment is destroyed in PvP. But those are both just masks on inflation, and the actual money supply is completely unregulated.

 

Do you think a realistic economy, where the supply of money remains somewhat steady (maybe increasing or contracting by some set amount for each active player on the server), could work in a game like this? What sort of problems would you get?

Edited February 8, 2012 by PibbyPib

[DaxFlowLyfe]

Eve Online does it, and well.

 

 

Nothing in the game is put in by the developers.

All materials are mine, refined and constructed by players.

 

Every item on the market is made by a player and prices are determined by players.

 

If an alliance known for making a certain ship goes under, prices for that ship skyrocket due to low supply, just like in real life.

Edited February 8, 2012 by DaxFlowLyfe

[PibbyPib]

EVE's actually currency is unregulated. Players add wealth to the system by mining, and remove it by blowing up expensive ships.

 

It's really just the same old gold sink approach, with an unusually steep, and deep, hole.

Edited February 8, 2012 by PibbyPib

[archifikoss]

I can see it right now:

 

Quest giver: "Thanks for completing my quest! I can't pay you right now, come back in a month!"

 

Quest giver: "Sorry pal, I found a cheaper Bounty hunter, I have to let you go" *quest auto-abandoned*

 

No thanks... Many of us have to deal with that IRL Damn crisis.

Edited February 8, 2012 by archifikoss

[Tewnam]

EVE's actually currency is unregulated. The thing that makes it seem more realistic is that massive amounts of 'wealth' is removed during the normal course of playing the game, when ships are destroyed.

 

It's really just the same old gold sink approach, with an unusually steep, and deep, hole.

 

As long as the amount leaving and the amount entering are roughly equal, the net result is the same. EVE works because players can't just buy one piece of equipment and use it forever. There is always demand for more.

[Kelvian]

Every game I've ever played, including EVE, suffered from the fact that players *add money* to the economy as they play, instead of borrowing money from it. There's no set amount of currency in circulation.

 

The only way money is ever actually removed from the system is when players purchase things from NPC vendors. In EVE, money is also removed when players' expensive equipment is destroyed in PvP. But those are both just masks on inflation, and the actual money supply is completely unregulated.

 

Do you think a realistic economy, where the supply of money remains somewhat steady (maybe increasing or contracting by some set amount for each active player on the server), could work in a game like this? What sort of problems would you get?

 

What you get with an economy where there are very few money sinks is over inflated pricing on global sales networks, such in our case the GTN where you see prices for things like purple mods for lower levels like a level 21 purple barrel going for 15-20k. Why because money is to easy to come by in this game and very few money sinks, only thing really is repairing gear after death and speeders. I think a decay system would help to start with.

[PibbyPib]

I can see it right now:

 

Quest giver: "Thanks for completing my quest! I can't pay you right now, come back in a month!"

 

Quest giver: "Sorry pal, I found a cheaper Bounty hunter, I have to let you go" *quest auto-abandoned*

 

No thanks... Many of us have to deal with that IRL Damn crisis.

 

Well, a contract would still be a contract. Even if the cost of doing the 'job' had gone down since you accepted the mission, they'd still have to pay the agreed-upon price. I assume the server would have to set the money aside when you accepted the quest, and return it to the system if you hadn't completed it in some set amount of time.

 

Bleh, it already seems like a programming nightmare, lol.

[archifikoss]

Well, a contract would still be a contract. Even if the cost of doing the 'job' had gone down since you accepted the mission, they'd still have to pay the agreed-upon price. I assume the server would have to set the money aside when you accepted the quest, and return it to the system if you hadn't completed it in some set amount of time.

 

Bleh, it already seems like a programming nightmare, lol.

 

Hehe, my post was meant to be a bit tongue in cheek But the main problem is that actually having a realistic economy could be very open to exploit. I guess it could work for some games, mostly hardcore sandbox games designed in such a way that combat is not the only progression path. Don't think it would work too well for a theme park game though, especially if it's casual friendly, hehe.

[Calsidian]

Realistic? I don't think so. At least I don't feel it would be worth it to try. However, there could certainly be much better MMO economic systems than we have currently. But that kind of thing requires some level of sacrifice by the players (who will certainly ***** and moan over any minor inconvenience), and has to somehow deal with the issue of gold sellers. Therefore, it is unlikely to happen anytime soon.

[MithurElb]

DISCLAIMER: English is not my native language, and I'm unfamiliar with some economic terms in English, so please, take that in account.

 

The money value depends not only in the nominal mass of money, but in the creation of wealth.

I.E, if the value of thing in the game rises, crafters making more new things, then the monetary mass must rise to accomodate all this new wealth.

 

In the same way, if there are fewer crafters, and the things wear out and can be broken, the wealth is diminished, and the money mass must be reduced.

 

If you don't make that adjustments, then you got inflation/deflation, at least in theory.

 

I say in theory, because that only will happen if the money's velocity of circulation is enough, and this just don't happen in a MMORPG, simply, there aren't enough transactions to raise the velocity of circulation.

 

And because the information is very partial an assimetrical, many people don't modify prices because they don't appreciate changes in the market, only in long lapses of time.

 

Also, in a MMORPG a lot of money and objects (Wealth, again) are out of market: Stocked, abandoned in an inventory, in possesion of a character that is not playing anymore, and so on...

 

 

So, to have a good economy in a game, you must:

 

1. Make a lot more of transactions per player/day.

2. Make a goos information system about prices. Not only a Market, but a Stock Market.

3. Control thee influx of money, based in the destroy wealth/create wealt; that is, a modification in all credit rewards so you add more money to the game or remove money to the game based in that.

4. Control the savings (That is, money/objects stocked, in inactive accounts, etc..)

 

 

And, of course, for this to work, must be a sandbox game with a lot of enphasis in crafting and gathering, and no a themepark, witch is very, very limited to do so.

 

EDIT: Also, you need a huge playerbase for this to work, so no sharding: all the players must be in the same economic domain, not isolated, or could very well happen that a single actor accumulates wealth enough to crash the economy (And that is realistic, see Soros, but undesirable)

Edited February 8, 2012 by MithurElb

[AHChrist]

You forget...everyone that is level 50 is either on the dark counsel, a rogue agent, greatest bounty hunter ever....

 

Everyone at level 50 should have unlimited credits because they are the best of the best. They need to re-write the entire MMO. Maybe call it GW2

[Erevan_Kindelar]

Every game I've ever played, including EVE, suffered from the fact that players *add money* to the economy as they play, instead of borrowing money from it. There's no set amount of currency in circulation

 

This is also, to a certain extent, relevant for the real world as well. Central banks add money to the economy by printing new notes, typically without withdrawing the same value of old notes from circulation, although they do withdrawl some.

 

Additionally, new *wealth* (not the same as physical money) is being created in the real world constantly, through the issuance of promisary notes and the development and sale of securitized debt and assets.

 

An economy such as EVE is not going to have that second option, of creating new wealth, because of the lack of trust of player-run banking schemes, so the increased reliance on production of new money (through mining/PvE elements) or buying PLEX from CCP compensates accordingly.

 

It is not a perfect model of a real-world economy, but it is probably the closest you will get.

[ForceCowboy]

BoP and BoE games without item loss will never have a viable economy. Period.

 

If there's no loss of equipment, then there's no need to keep making it. Crafting in SWTOR is just as garbage as every other BoP and BoE MMO. Do it for fun if you like, but somewhere someone just looted a sword ten times better than one you can ever make and it will never go away once he picks it up.

[EnzoForMe]

Runescape, for all it's faults, has an econOmy that functions like the stock market. Jagex provides its players with useful graphs for each item that includes 30 and 7 day averages. Money is added and removed from the game at a good rate through "money sink" skills, ehich require millions to train.

[PibbyPib]

As long as the amount leaving and the amount entering are roughly equal, the net result is the same. EVE works because players can't just buy one piece of equipment and use it forever. There is always demand for more.

 

Sure, the net result will be similar while those conditions persist, but it's still just the same old game economy approach.

 

EVE's also got a truly massive amount of people in one setting, which helps stabilize things a bit, I think.

[PurpleMagick]

BioWare when are you going to regulate derivatives?

Why haven't we gotten an answer on this issue?

 

BioWare will never regulate derivatives as long as all the devs play neoclassical macroeconomists DUH!

[Tzirk]

There is a doctor of economics working on EVE. It probably helps, to get this things done by people who know what they are doing.

[Xenich]

Every game I've ever played, including EVE, suffered from the fact that players *add money* to the economy as they play, instead of borrowing money from it. There's no set amount of currency in circulation.

 

The only way money is ever actually removed from the system is when players purchase things from NPC vendors. In EVE, money is also removed when players' expensive equipment is destroyed in PvP. But those are both just masks on inflation, and the actual money supply is completely unregulated.

 

Do you think a realistic economy, where the supply of money remains somewhat steady (maybe increasing or contracting by some set amount for each active player on the server), could work in a game like this? What sort of problems would you get?

 

Until they simulate the full costs associated in a real economy, no. People will not accept such a system. That is, if people had to deal with the costs associated with bringing something to market, storing it, transporting it, selling it, and all of the additional fees and costs that come with products, many would stop playing.

 

Few understand what it takes to truly do business, they only quote off things like "supply and demand" as if this is the only functionary within the system. They never think that in reality, they couldn't put that item up for a ridiculous price and expect to sit on it indefinitely until someone passes by and stupidly over pays it as to do so would eat them out of their profit.

 

This is why in reality, most businesses have to evaluate cost to bring it to market and then price it to sell. Sure, some ride the fads to which people will over pay, but this is extremely risky. If a business isn't pricing competitively and they aren't pricing to sell their item, likely they will eventually go out of business.

 

The problem with game economies is they do not simulate all of the costs associated with a real economy. If people want to experience games that do, they have to look through many games of old that were designed specifically to be an economic system game (I think there was one called Capitalism), but I doubt you would see many willing to play such a system as the consequences to such are far too "real". Lets face it, if making money in reality was as easy as it is in games, all gamers would be rich beyond their dreams in reality, but they aren't and that is because gaming systems in no way shape or form truly emulate reality.

[Uben]

Eve Online does it, and well.

 

 

Nothing in the game is put in by the developers.

All materials are mine, refined and constructed by players.

 

Every item on the market is made by a player and prices are determined by players.

 

If an alliance known for making a certain ship goes under, prices for that ship skyrocket due to low supply, just like in real life.

 

Don't forget... EvE keeps an economist on the payroll to help. Literally the economy is SO good in that game that they need a real world economist to help manage it.

[ForceCowboy]

Until they simulate the full costs associated in a real economy, no. People will not accept such a system. That is, if people had to deal with the costs associated with bringing something to market, storing it, transporting it, selling it, and all of the additional fees and costs that come with products, many would stop playing.

 

Few understand what it takes to truly do business, they only quote off things like "supply and demand" as if this is the only functionary within the system. They never think that in reality, they couldn't put that item up for a ridiculous price and expect to sit on it indefinitely until someone passes by and stupidly over pays it as to do so would eat them out of their profit.

 

This is why in reality, most businesses have to evaluate cost to bring it to market and then price it to sell. Sure, some ride the fads to which people will over pay, but this is extremely risky. If a business isn't pricing competitively and they aren't pricing to sell their item, likely they will eventually go out of business.

 

The problem with game economies is they do not simulate all of the costs associated with a real economy. If people want to experience games that do, they have to look through many games of old that were designed specifically to be an economic system game (I think there was one called Capitalism), but I doubt you would see many willing to play such a system as the consequences to such are far too "real". Lets face it, if making money in reality was as easy as it is in games, all gamers would be rich beyond their dreams in reality, but they aren't and that is because gaming systems in no way shape or form truly emulate reality.

 

In the real world we all have bills to pay. In game worlds your character doesn't need a car, or electricity or a house or anything so there's never any bills to pay so wealth is constantly being created but it isn't precious because there's no demand that you have to spend your wealth. You spend it how and where you like.

 

I'm pretty sure that no one wants a game where they have to pay bills tho, so I wouldn't call this a "problem". It's just a fact.

[ZDProletariat]

Every game I've ever played, including EVE, suffered from the fact that players *add money* to the economy as they play, instead of borrowing money from it. There's no set amount of currency in circulation.

 

I have to stop you right from the first sentence. How is it a problem for an economy to grow? Adding money into the system isn't a problem, is shows growth. Have you not taken econ 1010?

[PibbyPib]

I have to stop you right from the first sentence. How is it a problem for an economy to grow? Adding money into the system isn't a problem, is shows growth. Have you not taken econ 1010?

 

Ask the feds how they feel about regular citizens adding actual money to the system. Counterfeiting money is not the same as 'growing an economy'.

Edited February 8, 2012 by PibbyPib

[-sasori]

Every game I've ever played, including EVE, suffered from the fact that players *add money* to the economy as they play, instead of borrowing money from it. There's no set amount of currency in circulation.

 

The only way money is ever actually removed from the system is when players purchase things from NPC vendors. In EVE, money is also removed when players' expensive equipment is destroyed in PvP. But those are both just masks on inflation, and the actual money supply is completely unregulated.

 

Do you think a realistic economy, where the supply of money remains somewhat steady (maybe increasing or contracting by some set amount for each active player on the server), could work in a game like this? What sort of problems would you get?

 

"realistic economy" will never work in MMORPGS. Because we, humans , playing a game.

 

Create new character and avoid the limitation of one life where each decision impacts your whole life.

 

That's why we make expenses where we don't need, and avoid expenses which we would never avoid in the real life.

 

 

Even basic concept ideas like consumable virtual food does NOT work. Simply because i make an alt and trade the money.

 

 

 

Why even aspire to be "realistic". It's clearly not gonna work, and you have meaningful deep systems without trying to simulate need and demand.

Edited February 8, 2012 by -sasori

[Slightlycampana]

I don't really know enough about economics to answer, but here is an interesting article written in 2003 (excerpt in the spoiler):

 

http://www.gamestudies.org/0302/castronova/

 

 

 

True, at first glance there are many similarities between Earth economies and their virtual counterparts. In an earlier paper (Castronova, 2001a), I described the economy of Norrath (the virtual world of the game EverQuest) as if it were a normal Earth economy, complete with statistics covering such activities as production, labour supply, income, inflation, foreign trade and currency exchange. There is evidence that the economies of these virtual worlds generate a surprisingly high level of per capita production, and that people who “live” there (a substantial fraction view themselves as citizens) have accumulated significant stocks of real and financial wealth. All of this suggests that there is something very normal and mundane about cyberspace economies; people live there, work there, consume there and accumulate wealth there, just as they do on Earth.

 

However, further thought suggests that virtual economies may be anything but normal.[1] As an example, consider a simple policy question: Should governments attempt to control prices? Most economists would say “no,” since the costs of doing so outweigh the benefits. Moreover, the costs often end up being borne by the people the policy is supposed to help. These perverse effects happen because any effort to control prices creates either excess supply or excess demand, which in turn generates all kinds of social costs. Surplus goods must be bought up and destroyed, or shortage goods must be allocated by a mechanism that usually turns out to be both unfair and costly. But what if it cost the government nothing to buy up a surplus of goods and destroy it? And what if the government could simply produce whatever quantities were demanded, at no cost to itself? If those two acts were possible, then a policy of government price control would be feasible. In cyberspace, the coding authority does indeed have the power to create and destroy any amount of any good, at virtually zero cost. Therefore, as a de facto government, the coding authority can indeed control prices. And, therefore, price controls may actually be good policy in cyberspace, even though they most certainly are not good policy on Earth.

 

The preceding example suggests the possibility that virtual economies may be very different from Earth economies, in certain well-defined ways. As economic and social activity gradually migrates from Earth to cyberspace, these differences may begin to have an impact on the lives of large parts of the population. Details about the functioning of virtual economies may, in time, become important public issues. Even today, small changes in the code of a game can generate intense controversy among the players. If these little firestorms are a portent of things to come, it would be useful, even now, to analyze some of the unique features of virtual economies and ask how these features may eventually influence economic and public policy questions.

 

 

[SpaceDust]

EVE's actually currency is unregulated. Players add wealth to the system by mining, and remove it by blowing up expensive ships.

 

It's really just the same old gold sink approach, with an unusually steep, and deep, hole.

 

The amount of credits in a system does not depend on the amount of minerals mined, or goods crafted or anything like that. Credits only enter the system if the minerals are then sold to NPC vendors. Basically, credits only enter the system via NPC:s, either when you directly sell stuff to them, or via quest rewards.

 

In the same way, credits only leave the system if you buy stuff from NPC:s, or pay fees for repairs, taxi, GTN etc.

 

For example, I mine 1000 minerals. How do I turn that into credits? If I sell them to another player in direct trade, the total amount of credits in the system did not increase. Only some of it changed hands, no credits were added or removed. Only be selling those minerals to an NPC is the total amount of credits in the system increased. If the sale happened over GTN, then some credits were even removed from the system via the GTN fee.

 

Only way for any MMO to simulate a real economy is to also simulate the economy for NPC:s. They have to earn credits before they can give it away to players as quest rewards.

Edited February 8, 2012 by SpaceDust