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MMO in-game economics: questions
steamwright
Member Posts: 2,820
I've questions for you economic types.
At a friend's request, I've been visiting back at an old MMO I used to play (the 8-million player gorilla, if you must know), and my jaw hit the floor, hard, when I saw the prices in their auction house. Not just a few oddballs here and there, but the majority of prices on most items I investigated went to catastrophically high pricing levels. Even cheap crafting goods, which traditionally went for 1 or 2 silver, were selling across the board for sometimes dozens of gold. The viritual world went insane, I think.
So what cause this? I know there can be a bit of a creep upwards overtime, and some situations create choke points inflating a price (like a level 40 character suddenly needing to switch from a lesser type of armor to a heavier type) but seeing items sell 10x to 100x their value of a year or two ago just seems crazy.
Possibly more importantly, why is there no check to balance this? It used to be we'd annoy the price gougers by posting a mess of stuff at low levels, forcing the market back down, but I got the impression that everyone threw in the towel and are all trying to drive the prices to the moon.
So summarizing questions:
1. What causes this?
2. Is there no natural check to balance this?
3. Is there any reasonable unnatural check to balance this?
4. Will this always happen to an MMO with a form of an auction house?
5. Is such an economy truely reflective of a real-world economic nature when it is minus some real world pressures like natural disasters or sudden discoveries that effect suppy & demand?
At a friend's request, I've been visiting back at an old MMO I used to play (the 8-million player gorilla, if you must know), and my jaw hit the floor, hard, when I saw the prices in their auction house. Not just a few oddballs here and there, but the majority of prices on most items I investigated went to catastrophically high pricing levels. Even cheap crafting goods, which traditionally went for 1 or 2 silver, were selling across the board for sometimes dozens of gold. The viritual world went insane, I think.
So what cause this? I know there can be a bit of a creep upwards overtime, and some situations create choke points inflating a price (like a level 40 character suddenly needing to switch from a lesser type of armor to a heavier type) but seeing items sell 10x to 100x their value of a year or two ago just seems crazy.
Possibly more importantly, why is there no check to balance this? It used to be we'd annoy the price gougers by posting a mess of stuff at low levels, forcing the market back down, but I got the impression that everyone threw in the towel and are all trying to drive the prices to the moon.
So summarizing questions:
1. What causes this?
2. Is there no natural check to balance this?
3. Is there any reasonable unnatural check to balance this?
4. Will this always happen to an MMO with a form of an auction house?
5. Is such an economy truely reflective of a real-world economic nature when it is minus some real world pressures like natural disasters or sudden discoveries that effect suppy & demand?
Post edited by steamwright on
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That is a good point to consider, and one I tried myself, back in the day. You can control one or two resources for a while, but across the board, permanently, does not seem possible. In fact, I used to hear folks comment on trying to corner the market, saying it was not a sustainable action. Also, you'd usually know when someone is trying such, because all lower product would disappear from the shelves almost as fast as it came in.
Now as I think about it, I wonder if this could be a tactic of the so-called "Chinese gold farmers", which I've not heard from in some time. Pool all gold collected, then have a massive effort on a company-sized scale to control the market? hmm...
1. Not enough gold sinks and a game that it more than 8 years old with multiple level cap raises that each come with higher value vendor trash.
2. Gold sinks. In the game you mention, this is primarily the auctionhouse posting fee, and repairing fees for gear.
3. Reasonable? Not really.
4. No. The presence of an auctionhouse only makes it easier to see. Games without auctionhouses do the same thing only using chat and trade. Since there is no fee for trading this makes the problem worse by removing the largest gold sink.
5. Not even remotely similar to real world scenarios. In MMOs there are no "costs" to be paid, like food and rent. Your characters don't get sick, or need to sleep. So every energy credit, every point of dilithoum is yours to keep. It just piles up. Slowly or quickly depending on your actions, but it only increases. Each level cap increase comes with higher powered widgets that sell to vendors for more than the previous widgets did. Thus each level cap increase pushes the inflation rate higher. Developers make new stuff with higher prices to try and siphon that off faster. And this is the endless hampster wheel of the mmo.
In many MMOs crafting materials are more expensive than most crafted items, because players want to level their crafting skill to max and no one wants to use the low or mid-grade TRIBBLE you need to craft to get your skill leveled up. That means low supply of crafting mats and high demand for them. Simultaneously huge supply for crafted goods and zero demand. Look at green and blue upgrade kits compared to their materials to see this in action in sto.
In the real world, planks of wood are cheaper than desks. This is because there aren't hordes of people building hundreds of desks to learn to be master carpenters while simultaneously making computers and circuit boards to become master engineers while simultaneously volunteering at the emergency room to become a master emergency medical technician, etc. We tend to pick one job, do the minimum to get by and rarely become masters.
Also income tax is the most effective gold sink yet devised.
1. What causes this?
Demand exceeds supply. It sounds impossible, but it's true, if only from a niche perspective. Exchange prices go up because people buy more than they sell. It has less to do with the number of the item in the game or the availability, but it has to do with what people sell on the exchange.
2. Is there no natural check to balance this?
"natural" is by definition inapplicable. The closest thing we have is the price people are willing to pay. IRL there are things people need, in game it's a matter of how much they want things.
3. Is there any reasonable unnatural check to balance this?
This is entirely based on how much players want things. Do people want beam array upgrades enough to pay 3M for each one? If so then upgrades will sell at that price. If not, then they won't.
4. Will this always happen to an MMO with a form of an auction house?
yes, and no. Player driven economies tend to revolve around the same few principles. However, some games have a tax imposed on the in game market place. This makes flipping things(buying with the goal of immediately reselling at a higher price) less lucrative.
5. Is such an economy truely reflective of a real-world economic nature when it is minus some real world pressures like natural disasters or sudden discoveries that effect supply & demand?
Yes and no. In-game economies change as the game changes. For an example: Trellium was dirt cheap before DR because of the peeps who were doing ISA in their sleep. Massive supply means low cost. Then DR hit and Borg space missions became harder to do in advanced. That lead to a rise in the price of Trellium.
My character Tsin'xing
Totally possible....back when Orion female officers sold for millions I had it going for a while....I have 24 max lvl toons so it wasn't hard ...
I found a mission that would always drop 1 ...it didn't take very long for me to buy the rest up and I think I got them up to around 14 million...kept the market on them for about a year...
So trust a player can control one particular commodity for a long period of time...then swtor came out and I left the game for awhile...
Sounds extremely interesting I would love it if you would let me read the paper if you could post it somewhere or maybe we could trade email addresses?
Pm me in game @nitewingnyc
Hmm...what you're describing appears to be a "want" as opposed to a "need", at least to a point. If I'm going into an end-game encounter, and I have mark 1 beam arrays that just changed to a "need". I use the blatantly extreme example to suggest there are times when a player has no choice but to gut his virtual wallet, or go grind some low stuff until he has the funds to pay what is demanded in the market.
Anyone wlse feel free to chime in, but I've another question:
-- How might game auction houses of the future be crafted to avoid the pitfalls of today's models?
One thing that you can do is build in a form of regulation. Some governments IRL have a regulatory body set up to prevent monopolies. One thing game devs can do is build in an inflation system where the value of an item will go down as the market becomes saturated and have this determine the min/max price a player can set.
However, there is a trick players can do to kill this kind of thing. I used to actually respect the value of an item I put on the exchange, especially when I sell BOFFs. They have a value of 500 dilithium, so I sell them for 800 EC. The result? Well, I used to sell particle traces on the Exchange for 1k. Came back to post another and found that I'd crashed the market by selling so cheap.
When a market becomes saturated with low-price goods, the high-price goods don't sell, so the people selling them have to drop the price even further to remain competitive.
But, I tried this with lockboxes once; no go. They get bought up so quick that there isn't a chance for the market to get saturated. Plus, the lockboxes are extremely common - the keys are a better source, but you have to use your own IRL funds (or grind dilithium) to get them, so it isn't really worth it.
I remember the [REDACTED] who would put pre-Mk IX Quantum Torpedoes up for 1M EC (even for MkIs!!!!), so after a while, me putting my stuff up for reasonable prices (IE based on their vendor value then the state of the market) became more about trying to crash that market when it got too expensive so players could actually BUY what was being sold.
I could see a whole guild trying to coordinate this kind of thing to keep the market from spiralling out of control, but I doubt STO has such a thing. Fleets trying to keep the market prices inflated? Hell, yeah. You can bet they're around.
You know, that might be a reason for me to return to the game on more than a 'when I get the itch' basis. Having a cabal of other players trying to keep the STO Exchange from inflating sounds like fun!
Trials of Blood and Fire
Moving On Parts 1-3 - Part 4
In Cold Blood
This is a very important point here. If there are no ongoing need costs such as food, rent, insurance, raw materials, paying others for labor, transportation, taxes and regulatory fees, warehouse fees, etc. then the market is free to go into hyper inflation mode if there are no other major currency sinks (and we all know that STO does not have any major EC sinks; all of the sinks go to the premium currencies). Even if the producers never add bigger and better widgets to speed up the inflation rate, the economy will naturally inflate anyway due to the lack of aforementioned ongoing costs and the inevitable increased efficiencies players find to earn the existing widgets and currencies (see: Tour the Galaxy "exploit" and foundry farms before both of those were nerfed). Games are almost never a perfect microcosm of meatspace economies because they only have a partial set of factors (like supply and demand) that a meatspace economy experiences.
RE: Monopolies: I used to do battle with people trying to corner the market on consumable foods that were used for the Chef and Bartender doff chains by undercutting their price gouging with an enormous inventory of supply that would take 3 or 4 full characters to post on the exchange (120-160 exchange sale slots). I always got a sort of evil delight from watching my mailbox fill up with exchange sale notifications that all had the same person's name attached to them, just throwing their money at me trying to corner the market when I had a nearly infinite supply of product to counter their gouging attempts. There seems to be a lot less demand for those items these days so prices stay low now and I don't Robin Hood those items anymore (despite the delight, it also gets tedious to do, and Cryptic's nerfing of unlimited mail storage made the logistics of transferring the stuff between characters more annoying). Now I only do it during Q's WW with foods for recipes; people still try to price gouge those but I smack 'em down.
Joined January 2009
Cryptic's original auction house model, in city of heroes actually had this mentality built in from the ground up. It doesn't work with as complex an item-based environment as sto, but the short of it was the house was a blind system. You would place a bid and sellers would set a minimum sell price. Then the lowest sale price went to the highest buy offer if it was at least equal to the sell price. When posting an item for sale you can see the five most recent sale prices, and how many items or bids exist right then. But you have no idea what the prices of those items and bids are.
So, let's say four people want to buy green mark 12 neutronium armor. Their buy offers are 5 ec, 5,000 ec, 5010ec, and 15,000 ec.
I put one up for sale for 1ec. It immediately sells for 15,000 ec. If monopolist man sees that and lists one for 14,999, it sits there and doesn't move. Keep in mind, from his point of view that's a reasonably smart move. He sees three people want his item and the most recent sale was 15k.
I post another for 1ec and again it immediately sells for 5010. Monopolist man takes his down and relists for 5009. It doesn't sell. I put another up for 1ec and it immediately sells for 5000. Monopolist man finally tries putting his up for one ec and gets the last sale for 5ec.
If I put a bunch up for 1 ec, I run the risk of buyers finding this out and bidding 2ec and buying them all. So there was some interesting strategy in knowing when to put a real sell price and when to list for 1. And if you were looking to buy, you could virtually always get what you wanted overnight by leaving up a crazy high buy offer.
Tie bids and tie sale prices had a weird semi-random system that was weighted towards last in first put, it was messy but everything did move.
That was an awesome auction house. Totally can't handle items with mods though.
1) many things. But the big one is that in general, in most MMO, credits/money/whatever are generated in-game. You kill a mob. You get a piece of junk. You sell it to a vendor. Money is created because the vendor has an INFINITE SUPPLY OF MONEY with which to buy worthless junk. Whether players or farmers or more, this constantly generated cash supply is quite large over many players. Worse, quests offer vendor trash AND money. Worse, mobs drop money too. But the bottom line is money is created at a neverending and alarming rate. There are *very few* money sinks in most games... a small repair bill, respec (for the mmo mentiond), one time buys like your mount etc, or travel fast costs, but in general, its a drop in the bucket to the money created. This causes inflation just like printing money, econ 101 stuff.
2)no. It must be created .. the games need better money sinks (expenses that destroy the money as fast as it is created).
3) yes. Again, repair bills for your gear, etc. Another bright idea --- drop less loot?
4) It is not really related to the AH. Its simple value of item is determined by supply of coin. The more coins in play, the less each is worth.
5) yes and no. Mostly no ... MMO economies have a god in the machine (the devs) if things get out of hand, and they allow things that real world does not (monopolies etc). Its not even close to real world BUT all your econ 101 theory does apply. Its just that the exploits are not allowed in the real world to the extent they are in a MMO. You cant go out in the real world, kill a rat, cut off its tail, take that to wal-mart, and sell it for 5 bucks, in other words. Kidding aside, you cant go to the one and only global marketplace and buy up 100% of the leather armors or something, then resell them for 1.5 times to cost. If I had enough money, I could do that in STO or wow or whatever else --- just sit there and buy low, sell higher all day long. Take sto and say rubidium --- if I had the money, I could buy ALL of it from the AH and relist it at MY price, and if I had the time to sit there doing it, I could control the market for a month and make even MORE money. You can't really do that IRL -- even the biggest corps get into trouble if they go TOO far.
(E.g. I used to own the market on Crossfire tribbles)