Sunday, February 10, 2008

The Art of Economies, MMO tangent

Linear progression in games has been segueing into open-ended experiences in every genre. From Tony Hawk to GTA, players are becoming more responsive to non-linear narratives where they can choose how to experience their own story inside the framework of a game.

This freedom is perhaps most popular in MMO’s. When the fundamental object and design of a game becomes to sustain gameplay infinitely, the old way of telling a linear story in a game becomes not only obsolete, but something to be avoided. This is assuming that the MMO’s developer is not suicidal, and intends not only to retain every subscriber and widen their subscriber base, but that they also crafted their product to entice and engage current/potential customers with said intent.

While linear vs. open arcs have their pros and cons, both are still methods that share a common goal of making a game interesting to the players. The transition to more open modes has one glaring difference on the game mechanics side; when a game gives up a linear progression, it looses the ability to arbitrarily use a stick to motivate players along a set path, and can only use carrots in an attempt to lure players in a direction. As most veteran MMO players already know, this carrot is usually ‘things’. Gear is the most common form of this, but for the sake of argument, we will roll gear, money, property, and any form of player ‘owned’ virtual ‘stuff’ into our virtual carrot called ‘things’.

Chris Chapman makes an excellent point in how most games will use two currencies, XP and money. While I agree with this notion, and even think that the blending of the two, as he suggests, might help alleviate some of the problems encountered in MMO economies; I think that the amount of XP goals in most games are so small compared to the amount of ‘thing’ goals, that his one-currency idea is one of many solutions available, not the only one. Game developers also seem to consider the XP balance of games very carefully. The number of patches, polishes and planning that are common in most class/level scenarios attest to the importance developers place on their XP balance. Why game economies do not get this same amount of attention is what intrigues me.

So what are the biggest problems with current MMO economies? Supply and demand fluctuations which create risk/reward loopholes would be the simple answer. Once it is understood that inflation is a supply and demand problem (increased supply of currency, decreased supply of demanded products/services), almost all economic problems in MMO’s can be attributed to supply/demand fluctuations and overly complex variations inside their economies.

One common mistake that developers make is in assuming that variations are synonymous with choices (see Golden Rule #4 for more clarification). They mistake intricacy with engagement. Oversimplifying a virtual economy is not solved by adding complex variations, because all that accomplishes is obscuring the supply/demand chain, making the hunt for efficiency more complex, but not impossible (hello Excel!). Simple or complex, players are going to go on efficiency hunts if the economy is not balanced, seeking out the one crafting skill or loot drop that increases their time/reward ratio.

These small imbalances of time/reward are then magnified by sheer volume in the context of an MMO, creating the dual-headed monster of Inflation/Deflation that can ruin, or at least demoralize, a game’s economy. To combat this monster, the universal solution is money sinks and reward levels. They combat inflation (too much money in circulation) with money sinks (mount costs, transportation fees, durability, etc.) and fight deflation (not enough money in circulation) by increasing rewards (quest rewards, loot drops, etc.). The problem with this print-money/burn-money solution is that it is impossible to fine-tune when used in a massive population.

As MMO’s become microcosms of the real world, the economies of these games become simplified models of real world economies also. In the real world there are two common solutions used to combat inflation/deflation: interest rates and circulation volume. Burning wheelbarrows of cash in order to fight inflation or printing money to fight deflation is like using a sledgehammer to perform brain surgery. Scaling money-sinks and rewards to character levels and player-time-investment is impossible, and inconsistencies lead to imbalance, which leads to loopholes. That is why interest rates are used to fine-tune the day-to-day fluctuations of real economies. Why are games so different?

I think the idea of introducing interest rates into games both scares and overwhelms developers. The demands of creating and maintaining a MMO while making a profit is so daunting that adding a complex (and misunderstood) element to a game that requires specialized knowledge and daily attention ranks lower on developers ‘to-do-lists’ than spending money on qualified Community Directors. The problem is that by not adding interest rates, games continue to place band-aids in gaping wounds. Once understood and implemented, interest rate manipulation not only solves the inflation/deflation problems encountered in MMO’s, but does so elegantly and consistently.

Incorporating interest rates is not as complicated or potentially theme-breaking as most players and developers fear. Encouraging players to deposit money rather than spend it or vice-versa is the crux of this mechanic. This can be done using existing common MMO game mechanics already commonly misused in most games, preserving the core game mechanics and limiting player confusion.

Death taxes, or any such variation such as durability repairs, are already common in most games. Simply adjusting this ‘tax’ so that it both scales with gear level and includes a percentage of the ‘money’ a player has on the dying character is not too radical. Player held ‘money’ would also then need an arbitrary cap, which is once again common in most games, either by giving ‘money’ an encumbrance weight or by simply capping the maximum volume a player can carry at one time.

These two simple changes would encourage players to deposit most of their net worth, carrying only enough gold to pay for services needed when they are at risk of dying.

Once this ‘money’ is deposited, it would earn interest, the rate of which would be a variable changed constantly by the developers in response to inflation/deflation. Raising interest rates would encourage saving, while lowering the rates would encourage spending. The addition of reserve amounts, a percentage of total deposits each bank has ‘on hand’ would limit massive amounts of players from withdrawing too much money collectively on any one day. Bank reserve amounts could also be paired with personal withdrawal caps, limiting a player from massive withdrawals in one day by having a hardcap (flat value) and/or percentage of total net worth limit, all in an effort to limit economic terrorism (can you grief an economy?).

The advantage of elegant control coupled with consistency is hard to ignore. Simplification of variations while expanding choices coupled with interest rates would not solve all the problems MMO economies are facing, but they would address the most pressing issues of balance (like hyper-inflation) while also solving some annoying problems (like pigs that give ‘currency’ as a loot drop…).


Todd Bursztyn said...
This comment has been removed by the author.
Todd Bursztyn said...

Holy lord, this is a massive post! Nevertheless, I never thought I would learn so much about economics in a virtual world with no practical impact on reality. I love non-linear game narratives, and find the new technology that enables them to be truly fascinating. But "money sinks" and...whatever else dictates the fiscal aspects of an RPG is a discussion for a very gamer-savvy audience, which your blog seems well-prepared to accommodate. Bravo.

MagicPanda said...

The difficulty with creating this system is a way of creating it in a way that is properly substantiated by the in-game lore and background. Particularly in a genre defined by its sprawling history and varying characters, you simply can’t render gameplay for its own sake without disconnecting the gamer, and the list of actual solutions is far too expansive for one person to properly brainstorm without alienating at least one section of the player base. It’s definitely doable, but function is going to have to fit form.