In the United States there is renewed debate about whether Social Security (public pension system) should be restructured to be based upon individual private accounts. The public policy discussion is beyond us here. However, a fair question is which would be more fun for you? A pension scheme of fixed guaranteed rewards? Or one in which you may feel compelled to proactively engage (game) over time to maximize your retirement income?
The answer to this question, I suggest, may shed light upon the putative conundrum of market-based in-game economies from the player's perspective...
On the one hand in-game economics and markets can be a fun and engaging subgame for some. Yet, they also may be unsettling to others: if I don't participate, am I losing out relative to my peers who do engage, and btw... gee, I probably should do it (though I'd really prefer to be doing something else).
True, as with most activities in life, virtualized or not, opportunity cost seems to be a brutish force that keeps people on paths of one sort or another. In real life, yes, I can probably obtain a better return on the stuff I sell in my garage sale if I listed them on ebay (or so many of the business tabloids would have us believe!), but that would mean more work than I would care to undertake - at the expense of golf or EQ2 or a pint. In game worlds, however, it sometimes feels like choices are too easy, the switching costs minimal. How many times might have you preferred to dump some mid-valued goods on an Non-Player Character (NPC) and be done with it and move on, but instead decide to try to sell it yourself on your local in-game market. Not because you really think it would be fun, but because, gee, you know it to be worth 30% more on the market than the NPC will give you and, well, what a waste of time.
Because the cost of opportunities in game worlds is a side-effect of game-design, and game-design is a step-child of a game developer's estimate of fun, it seems we are often left with only the thinnest of margins separating opportunities in these worlds: common wisdom regarding collective fun seems to require easy transitions for players to splash over from opportunity to opportunity. Worse yet, because players can switch easily with only modest penalties - why not deconstruct the game into many subgames and have everyone engage in most of them! And still worse, because world design often encourages simultaneous engagement - multi-tasking across activities... don't you hate it when someone in your group just closed a big deal and needs to run back to town for 15 minutes?!
Easy transitions is liberating, but also damning: fluidity between option categories prevents deep specialization. If game developers make distinctions between choices too arduous, too costly, then the players seem to resent it - infringing upon a player's sense of fun fairness: I really should be able to roll-back choices and do (almost) anything I want to.
My perception is that most players in MMOGs want to dabble in markets once in a while, but most really aren't keen to become too involved. Then there is a small minority who relish it and are quite happy doing nothing else but. Consider for example my hunch about Eve-Online, arguably one of the most "market-driven" game worlds out there. My gut feel is that probably only 5% of the players are "hard-core trader types" and the rest, while they necessarily engage in it from time to time, they really care much less about it. [If any of you can cite harder figures and distinctions along these lines with MMOGs - 'much obliged ].
So here lies a question on the road towards trying to understand in-game markets. How important are markets to you as a player? And should they play a central role in a virtual world, does that then mean that there should be real choices with winners and losers? Do players begrudge the mercantile opportunity?
If I recall my history correctly, there was quite a bit of tension in days of old between the knights and the merchants. Between those who fight their way to riches, and those who scheme their way to wealth. So perhaps there would be room for a MMOG that firmly separated the two? Make the Adventuring world NO-DROP. Then an Adventurers equipment would be a fair summary of quests completed and foes defeated. And keep merchants and crafting as the city domain, for fine clothes and furniture. I think if purchased goods were for display only, characters furnishing their homes courtesy of a “rich uncle” (IGE) would be much less intrusive than adventurers dominating their foes with weapons from mysterious sources.
One huge advantage to me of Adventurers only carrying equipment they earned, is it would finally allow the rogue I would like to play. In any current MMOG, rogue skills are nerfed to oblivion. Simply because someone will always find a desirable treasure to pickpocket or sneak to, and repeatedly does so. In a NO-DROP world, a piece of equipment for a rogue could be judged by how hard it was to sneak to, and for a warrior, how hard it is to fight to. That would be a change worth giving up the merchant aspect of adventuring for.
I would like to see crafting in MMOG follow some of the ATITD model, where real player skill and creativity is involved. This does tend to be hell on frame rate though, and isn’t too compatible with a combat MMOG. So how about reserving crafting and trade for the “indoor” realm, of home and city, and keep Adventurers gear more utilitarian (in terms of polygons and shaders etc.)? I’m a fan of both the Adventure game and the Merchant game, but mixing the seems to bring more trouble than its worth. They could both live in the same VW though, one in the town, the other in the country.
Posted by: Hellinar | Feb 20, 2005 at 16:19
"I think if purchased goods were for display only..."
Crafting wouldn't be much fun if you could only make eye candy. That doesn't seem fun at all.
I like crafting specifically because I can make useful items.
Posted by: Adam Miller | Feb 20, 2005 at 20:54
Adam Miller > Crafting wouldn't be much fun if you could only make eye candy. That doesn't seem fun at all. I like crafting specifically because I can make useful items. <
When I go to a “Craft Fair” in my hometown, I expect to see items made more for the art of it than their utility. That is more the crafting style I am thinking of. Clearly it wouldn’t appeal to you. But clearly it is also a very popular take on "crafting". What I am looking for is some new VWs that vary from the “standard model”. The problem I see with utilitarian crafting is it leads to utilitarian trade. And that prevents the use of items as a true record of the story of your character. Since I am attracted to the fantasy MMOGs partly as a means of telling a story for my character, this to me is a big advantage.
In the world I’m proposing, crafting supports the display of wealth, and success in the merchant world. Socially, a very utilitarian function. And not unlike our own world. I’d say far more of manufacturing industry in this world goes into displays of wealth and power than it does into purely utilitarian functions. The popularity of housing in VWs as a place to display your stuff, or the take up of non functional pets in WoW, all point to market for this kind of crafting. I’m not proposing all MMOGs drop utilitarian crafting. Just that a MMOG without it would be a distinct and interesting place. Saying that people who like the current set up would not want to move there isn’t a good argument against building such a world. The open question is, are there enough people who would be attracted to it?
Posted by: Hellinar | Feb 21, 2005 at 09:32
On crafting art versus utility: enchanters in World of Warcraft tend to advertise the glow their effects cause as one of the main selling points. The look of things has real value.
But on Nate's larger argument, about the way market activity can become non-optional. I wrote a paper about this, where I termed to effect 'achievement bias': the tendency in cultural evolution for activities that acquire cultural resources to over-select themselves for survival, relative to activities that would make us happy (or would be more fun). So, two brothers are exactly identical in all respects, except that one likes solitude and the other likes public speaking. Suppose this 50-50 difference in core desires is typical of the entire population. Yet because the speaking brothers speak more, they have more cultural resources, in the sense that it is easier for them to create speakers among the young than for the silent brothers to create silent types among the young. Nobody hears the silent types! So their type, their cultural gene if you will, is under-selected relative to the speaking gene. Put another way, the speaker types have more influence on the activity choices of the young, and therefore cultural evolution will tend to create societies where 70 percent of the people are public speakers. The reason this is a bias, a not an acceptable desireable outcome, is that 20 percent of the people would be happier just being quiet, but the relative preponderance of speakers has made them err in choosing their life path: they've chosen to become speakers when their hearts would have told them to stay quiet.
This bias applies to all activities where one can identify an acquisition of youth-influencing cultural resources, including fame, knowledge, power, and money (of course! That's the easiest example). I label all of these activities 'achievement' activities, and characterize the situation this way: cultural evolution drives us all to pursue achievements that leave us less happy than necessary. Achievement bias.
One day I hope to test these ideas in MMORPGs. To me, there's a very nice smoking gun: the tendency for showy acquisition to dominate game culture, for exactly the reasons Nate describes in his post. Namely, I do not desire to play the market, but because others do, and because the results have an effect on my status in this culture (glowing swords), I am forced to play the market. Even though it is not fun. It's a tragedy of the commons situation: every player has an incentive to wring the maximum value out of his loot, yet when all players do this, the game is less fun. Instead of seeing markets as an opportunity to make money, they become an obligation. When the distance between merchant prices and player prices is extreme, it becomes an onerous burden.
This is a bias (as opposed to something we wouldn't care about) because the market is, for many, an un-fun way of acquiring cultural resources. Yet because there are cultural resources to be had there (the powers that lead to broad social influence - +STR, +Magic Resistance, Color:Black, etc.), society becomes biased toward that activity. There are more people working the markets than who want to work the markets.
So it would be a nice little test of the ideas. Gotta get a functioning experimental world going first, though.
Posted by: Edward Castronova | Feb 21, 2005 at 10:22
One of the major design elements for the game I'm developing is finding a way to support these multiple cultures without allowing any one of them to dominate the others.
I address crafting of non-trivial items by ensuring that crafting is a two-party participatory activity, rather than the "factory" model that many MMOs use today. An important aspect of this is the design requirement that very few objects of real power are directly tradeable between players. Most are instead set as "bind on pickup".
As I mentioned elsewhere, I have many "tiers" of reagents that go into crafting, and individual players discover their own individualized sets of recipes as they proceed through the game. Crafting of power-giving items for others requires the direct interaction of the other player. The player who will receive the item must have all of the necessary reagents in their own possession for the crafting session to succeed.
As part of the transaction, both players see an "ingredient list" necessary for the item they are trying to create. Most reagents are not directly tradeable between players, either. Instead, there is a centralized anonymous marketplace for acquisition of reagents that you don't already possess.
Once all of the necessary reagents are acquired, the crafter can start the crafting process with the player who wants the item. The item is being "tuned" to the receiving player as it is created... the end result is a bind-on-pickup item being created directly in the inventory of the receiving player.
The crafter applies the use of their crafting skills during the crafting process to affect the quality of the outcome, and they receive skill point bonuses depending on how well they perform the activity. Sub-standard results can be improved upon using follow-on crafting techniques, but only upon items that the crafter created.
Where does the trade aspect of crafting arise, since this appears to be a one-way service? As part of the crafting window, a player can designate a number in a "favors" column.
This is really just a note-taking convenience for the player... it allows each person to track how many favors have been done for other people, and to reconcile the books as part of a private one-on-one barter system. Favors are non-transferrable to third parties, but anyone can "balance their books" with anyone else by popping up a favor-trading window and cancelling them out in any manner they agree to.
An example might make it clearer. Joe is an armor crafter. He's midway along his development path, and Bill would like some new armor. Bill and Joe get together, and Joe lets Bill see the list of items that he can make for him.
Bill selects a pair of steel gauntlets as a good upgrade from what he currently has. Joe's recipe for that item calls for a few ingredients that Bill doesn't have at the moment... Bill flips over to the market interface and fills in the gaps by purchasing the ingredients he was missing.
Now that the ingredient list is satisfied, Bill and Joe finish the negotiations... Bill offers a favor for accounting purposes, and lets Joe know that he's available during most evenings for group support, and is willing to escort weaker players between cities at a rate of 4 favors per hour.
Knowing that he'll need to make a few trips later this week, Joe asks for two favors instead of just the one that Bill originally offered. Bill agrees, and updates the favors column. Joe proceeds to craft the gauntlets, and after 90 seconds of tinkering or so, gets a moderately good result. The gauntlets appeared in Bill's inventory, and are bound to him. Joe now has a note in his character sheet that he has two favors from Bill, and Bill can verify that by examining Joe's character. Joe also picked up 3 crafting skill points in armor as a result of the
crafting he did.
Joe points out to Bill that he can likely improve that crafting result by a few points if Bill has some extra of a particular ingredient... and he'd be willing to give it a shot for free. Bill agrees, and Joe tinkers with the gauntlets for another 30 seconds, improving them somewhat and consuming 2 units of a fairly common reagent from Bill's inventory.
Bill's previous gauntlets were also bound to him, and to free up inventory space, Bill sells them to an NPC vendor, recouping some of the costs he had spent on purchasing reagents from the marketplace.
Later that evening, Joe is set up in his guild hall, busily crafting for his friends. They don't bother swapping favor points with each other... they all help each other out on a continuous basis anyway, and there's little point in bothering to keep track of it.
In a few days, Joe sends a tell to Bill indicating that he'd like to travel over to a different town, and could use an escort for the 15-minute trip... and reminds him that he has two Bill favors on account.
They meet up, Bill escorts Joe, and they trade one Bill favor for zero Joe favors. Joe's balance sheet updates, and now shows only one Bill favor left.
The whole time, of course, Steve has been busy buying and selling reagents and basic items on the marketplace, and has happily increased his net worth through shrewd buying and selling of these commodities. His increased wealth leaves him well-positioned to have the best ingredients on hand for that hard-to-make ring that his guild jewelry crafter discovered how to make.
Posted by: Barry Kearns | Feb 21, 2005 at 12:49
Edward Castronova wrote:
On crafting art versus utility: enchanters in World of Warcraft tend to advertise the glow their effects cause as one of the main selling points. The look of things has real value.
Definitely, though generally less than the utility of things. For instance, you might have to spend $200 to buy a nice artifact sword from us, but only a bit over $20 to customize that sword (or whatever else) with a personalized look.
--matt
Posted by: Matt Mihaly | Feb 21, 2005 at 15:34
In a well-designed game, the main reason why non-Traders may feel compelled to engage in market activities is pure utility. If a little trading is the fastest way to get the UberSword 5000, then they sacrifice a little fun and do it. To me, that's a valid choice. However, if the source of need for the UberSword 5000 is to 'keep up with the Jones', then it can turn into a rat race - a race for dominance instead of a race for fun. This is rampant in the real world and it's not something we want in our games. However, I'm don't you want to eliminate that effect of social pressure since it can be an important source of motivation and achievement for the player. I agree with the comments that the way to solve this is to equalize the utility of both options through specialization.
I think the key to making Specialization work is to encourage robust social and economic networks for players. With strong guilds and alliances that draw from diverse player types, this allows for equitable division of tasks. Applying opportunity costs for these choices also helps, but that is only a stumbling-block unless the social/economic network is there first.
Back to the example of EVE-Online, there are many strong social networks in that game. Each Corp has a variety of players who often specialize in useful tasks. Advancement of the Corp is often the primary goal of the players and resources are contributed and allocated on that basis. Beyond that, in the player Alliances, entire corps specialize in certain services that are critical to the Alliances. They establish symbiotic relationships that leads to even more specialization such as a mining corp calling in an
allied PvP Corp for protection.
Opportunity costs also factor in to encourage specialization. Each role in EVE requires different character trainings which require time - delaying alternate trainings. This is a subtle cost since no loss is permanent - only delayed. Also, advanced play requires alot of virtual capital. Buying and Equipping a single PvP Battleship can cost 200-500 million ISK (1m ISK ~ $.60 on eBay). To be a professional trader, I recommend having about 1 Billion ISK. Few can afford the time, effort, and money to do both.
Posted by: Cris Streetzel | Feb 22, 2005 at 01:20
The devil is in the details. I think it is tough to manage the balance over time.
With the trend in instancing, developer may start instancing trading gameplay from exploring gameplay.
Posted by: magicback | Feb 22, 2005 at 09:19
I forgot to mention that Tim Burke's paper on MMORPG economies (Rubicite Breastplates) highlights the effect of powergamer norms on the entire culture of a gameworld. It's exactly the sort of thing I'm talking about.
Posted by: Edward Castronova | Feb 22, 2005 at 15:43
Barry,
Seems like an interesting idea, but I think it falls down a little bit in the bookkeeping process. One the reward to the crafter is set before the quality of the item is determined. If the item falls short of expectations then the adventurer is shorted. If the item exceedes expectations than the crafter is shorted.
Secondly, it seems like it would require trade imbalances to be public. Otherwise there is little incentive to repay the crafter. The favors on the adventurers end aren't concrete goods the way the crafter's service is. If you had a mission system robust enough to accept a player created mission it might be workable. IE: I accept a crafting task, in exchange for you accepting an adventure task.
Without some type of contractual / escrow system I don't see it working well.
Posted by: Thabor | Feb 22, 2005 at 16:56
I considered Tim's paper to be important in helping to identify the root aspects of the economic model that I'm wrestling with, and I recommend it today as much as when I first read it.
At this point, I'm lingering on the notion that any form of conventional economic model in an MMO environment is probably going to lead, inexorably, to precisely the sort of merchantile dominance over the moral economy players... or as Edward noted above, "I am forced to play the market. Even though it is not fun."
That's why I've been trying to work out an economic and game-world model that departs fairly substantially from the typical mold, while still allowing diverse player types to find something enjoyable. It's a definite struggle.
I've tried as much as possible to eliminate (for the core game) the ability to transfer lasting unearned power between characters, which should make the system fairly commodification-proof, at least from an item/currency standpoint. However, in order to do that, I've had to eliminate most conventional player-to-player trades.
The result feels strange at first... there is still a direct in-game currency, but there's no way to trade it on a person-to-person basis. All currency transactions are mediated using NPCs and/or the anonymized central commodity marketplace.
I'm left with trying to shift the focus for the economy-focused player to commodity speculation, but that aspect becomes more of a single-player mini-game than anything else. The currency that accumulates from this gives utility when interacting with the game world, but not directly with other players.
You can accumulate reagents more easily as you become more currency-rich, but you're generally not going to be able to stand in anyone else's way economically, nor will you be able to accelerate past someone else's progress without the assistance of (generally multiple) people focused on crafting skills.
Crafting and other power-transferring abilities (buffs, etc.) become much more of a service industry than a goods industry... it's the utility of what another player can DO FOR YOU, rather than what they can GIVE TO YOU which makes them relevant in the power-acquisition game. I'm hoping that this increases the incentives for socialization/grouping without making is as mandatory as some implementations.
But lacking the ability to trade in any form of direct currency leaves the crafters in an interesting spot when it comes to measurably realizing the value of their contributions to the gameplay of others.
In a way, crafters become the equipment-equivalent to healers or buffers in regular gameplay... they fix and improve your equipment, and can even craft entirely new items for you, many of which will be substantially superior to items that are available for NPC purchase or as drops.
Crafters don't get "paid" directly for the time that it takes to complete a crafting session with another player... but by that same token, most spellcasters don't really expect to be paid directly for casting a whole chain of spells to benefit another player, either. Instead, it's more of an "I'll scratch your back, you'll scratch mine" situation.
Major crafting efforts are different than most major implementations today, though, since it is not the crafter that must supply the ingredients to produce something powerful... all of the components are supplied by the person receiving the item. In this case, crafting is similar to what is seen today in many MMOs where players will offer to build something for free (or a nominal charge / tip) if the person supplies all of the materials. In my implementation, this is mandatory rather than optional (crafting for personal use is the degenerate case of two-person interactions in this model.)
This should hopefully be ameliorated somewhat by the ready availability of reagents on the centralized marketplace. Participation in that market is not entirely mandatory, either, since all reagents can be gathered, substituting time/effort for in-game currency.
The last piece that I'm currently fumbling with is something to act as a substitute for a player-tradeable currency. I have the "favors" system noted above, but it's a kludge at best.
I'm left with that, skipping that system entirely and letting people work out on their own how to track what someone else "owes them" for their services, or some other novel form of player-tradeable currency that's separate from the NPC/marketplace currency.
The most promising candidate that I've come up with is to allow people to trade subscription time with each other as a form of "micro-payment".
Since many of the service-related benefits that players can provide to each other devolve into little more than a time commitment with some nominal amount of effort, it would seem the logical way to compensate someone for the time that they've "lost" in helping you... is to give them back some time.
Under such a system, players would be able to trade subscription minutes with each other either directly, or as a component of the crafting screen.
Players dedicated to crafting could eventually end up playing the game entirely for free, assuming that the amount they are being paid exceeds the burn rate of their subscription.
While this does open the door to external commodification of game minutes, I don't know that it forces merchantile participation just to "keep up", nor do I think it gives the cash-rich the ability to zoom past other players who are playing the game "straight up".
A rich player isn't necessarily going to proceed significantly faster through the game, and even relatively small (but well-coordinated) guilds will be able to do at least as well as the most cash-heavy player out there... the ability to provide services will be ubiquitous enough that I wouldn't expect significant market-distorting forces to appear when it comes to "time costs" for craftings services. The lion's share of player power will still derive from their experiences and short-term buff/spell benefits.
Would anyone else expect commodification of subscription time to distort the "fun" of such a game in a meaningful way?
Posted by: Barry Kearns | Feb 22, 2005 at 18:05
Cris>
In a well-designed game, the main reason why non-Traders may feel compelled to engage in market activities is pure utility. If a little trading is the fastest way to get the UberSword 5000, then they sacrifice a little fun and do it. To me, that's a valid choice.
On the face of it, seems like a sensible point. However, I wonder if this viewpoint is too grounded in a type of tradition RL economic sensibility that makes less sense for game worlds.
First off, the game world economic system seems to me a really odd beast: non-rivalrous goods, faucets and drains, etc... I wonder if one needs to be more timid with these sorts of measures of utility: is it still sensible for a world view predicated on "fun"?
...I was just reading this article in the SundayHerald-
In his new book Happiness, Richard Layard, who advised the Labour Party on unemployment issues from 1997 to 2001 and who is founder of the Centre for Economic Performance at the London School of Economics, urges the government to monitor our happiness as closely as it monitors gross domestic product (GDP). Only by doing this, he says, can the government produce sound economic and social policies which will make for a happy and healthy society.
I wonder if this sort of yardstick makes more sense in our domain (as well) rather than a "ends justifies the means" utilitarian view?
Just thoughts-
Posted by: Nathan Combs | Feb 22, 2005 at 22:24
Here is a real (virtual) life thought experiment regarding alternative ways to pharm:
Probably one of the more interesting meta-games I've become involved with lately is commodities trading at the WoW auction house.
I set up a mule character (actually a mid-teen level warrior I abandoned from boredom) with numerous bags, gathered together 15 gold from all of my other alts, and set him to trading.
I do this for about 15 minutes every morning before going to work, and when I return home that afternoon, I can see the results of my efforts.
It took a little practice to get the trading ratio just right, but after a week, I now have over 15 gold and multiple items in my inventory waiting to be put up for auction (you can't flood the market, after all).
What I've discovered, though, is that there is a high level of price fixing going on in such markets. With enough capital, you can easily raise all of the prices of a given commodity (those of your competition) to near or above your minimum bid price; by setting a reasonable buyout price you can consistently guarantee an XX% profit. On the rare occasions that you actually win price-fixed auctions, the commodity is still within your profit margin. While I have tried this, and it was fairly successful, I should note it was "taught" to me by several other frequent auction traders.
What I find particularly interesting:
1) The outlay for such an effort is minimal (1 gold would potentially set you up as a virtual trader); my 15 gold was an arbitrary safety net.
2) Profits can fit within a 10-45% return as a daily average.
3) Time spent is 15 minutes for setup, 5-10 minutes to collect profits and won items later in the day. Profits are relatively proportional to time invested, though there are only 3 to 6 major trading cycles in a given 24 hour game day (i.e., when a good majority of players are using the auction house).
4) Absolutely no knowledge of "going rates" / price histories is needed (things like Thottbot could help a trader earn a few percentage points more, but the effort would outweigh the return). Though, it does take a little intuition to know what has a high turnover rate in the market.
5) Given a concentrated effort and 2-4 hours of time, a player could see a return of 1 gold for every ten invested, bare minimum.
I'm not enough a of a business person to determine (mathematically) whether this method of gold pharming is more profitable than directly accumulating items and flooding the market for even the merest profit. It seems to be case of Wal-Mart vs. business-to-business enterprise, with the pharmers being akin to high-volume Wal-Mart.
It actually surprises me that more people don't engage in this type of activity (it is one of the truest forms of PvP without bloodshed). And it also surprises me that there aren't more examples of MMORPG pyramid schemes that might evolve from such efforts.
Final questions: Is treating an auction house or similar trading system like an unregulated stock market better or worse than standard pharming? Which one contributes more to mudflation? As long as the market tolerates it, does anything need to be changed? Would the MMO world benefit from a server-side Securities and Exchange Committee bot?
Posted by: Michelangiolo | Feb 23, 2005 at 09:53
Yes, it's lots of fun, and there tend to be plenty of profit opportunities for those who are alert and a bit savvy. I've made close to 200 gold so far using a level 20 character starting with less than 5 gold. Total time investment to produce that: about 10-15 hours.
To quote Han Solo: "Great, kid! Don't get cocky..."
You've discovered a niche market that's currently fairly inefficient. That leaves room to make money by making it more efficient. Don't, however, mistake your early successes for a foolproof scheme to print money endlessly.
There are at least 176 isolated marketplaces (88 servers x 2 factions), with potentially hundreds of different commodities being traded on each... and only a small fraction of the player base finds auction-house gaming to be "fun". That leads to a distinct chance of finding a niche or two for yourself at any given time... until someone else notices your activities and starts to "game" you.
In addition to straight buy-and-resell opportunities, there are also a large array of arbitrage-like opportunities via trade skills as well. Market floods of certain raw materials can be taken advantage of, transforming the depressed prices for that market into different items for a market that is more profitable.
That's not price-fixing, that's people efficiently closing margins. I'd caution you to avoid the concept of "you can consistently guarantee an XX% profit", as it's a recipe for disaster when someone else with higher capital (and significantly higher inventories in your commodity of choice) takes notice and skims your accumulated profit off of you while driving a commodity price down.
In such an environment, when someone sees you driving up the price by bidding up their auctions, they will tend to wait until you've bid up a large number of their listings, and then bracket under you with buyout prices on a bunch of new listings about 4-5% below the price point you're trying to create.
People will tend to not bid on those items you were bumping up any longer, since they can get them cheaper at buyout than by continuing to bid... so your capital is tied up waiting for the auctions to finish (since you can't cancel your bids), and you're forced to buy a bunch at higher prices than the new even-lower price point that your opponent establishes.
You can go round-and-round like that, but if you're competing with someone with a substantially larger budget and inventory in that commodity, you'll often end up on the short end.
Keep in mind that standard farming is a "positive sum" endeavor... new items and gold are being manufactured by you out of thin air.
Auction house gaming isn't even a zero-sum game for the competitors... it's a negative-sum game. The game charges listing fees based on the vendor-sellable value of the items you list, and also takes 5% of the final sale price. Your only opportunity to net a profit then comes from identifying inefficiencies that exceed those transaction costs.
It's like comparing gold-panning to playing casino poker where the house rakes the pot. In gold panning, you're basically spending time and effort, but you're adding new wealth to the marketplace when you discover something.
In casino poker, you have to be smarter / better than your opponents by a high enough margin that you can show a profit... but if all of you keep playing at the same game for long enough, the "house" will have almost all of the money eventually (assuming player skills converge towards parity).
The listing and sales fees on the AH serve as a net money sink... nothing is ever created in an AH listing. Items and a portion of game currency is moved around, and a fraction of the game currency is destroyed in the process. That leads to a net deflationary effect from usage of the auction house. It acts (along with things like armor repair and skill fees) as a "drain" to the "faucet" of gold creation via loot drops and item sales to vendors.
Barring code-bug exploits being fixed, I don't think anything needs to change in the AH implementation... it looks like it's built to support making commodity markets more efficient for the average buyer, and to allow sellers to "PVP" each other along the way.
Most anything that is in large enough volume on the AH is readily available enough that people will bypass the AH and gather the items themselves if the seller prices get too silly... and some of those folks will start gathering them precisely for the reason of ENTERING that market and driving prices back down. They'll make money along the way as they make things more efficient.
Posted by: Barry Kearns | Feb 23, 2005 at 11:38
Im not sure that there is a good solution to the acheivement bias problem. To summarize my understanding of it:
- Players derive utility from status
- Players derive utility from playing the various "games" that exist in MMOs (adventuring, crafting, trading ... etc).
In order to increase their status they may have to engage in an activity they don't derive positive utility from (trading for an adventurer).
The only solution I see to the stated problem is for players to derive status from only the activities they enjoy. However, such a game would really cease to be what we think of as an MMO. MMOs require player interaction. If it's just a game composed of players involved in independent activities, it fragments into multiple MMOs in the same environment.
Maybe the real solution is to make the common interactions more fun. An adventurer may never enjoy crafting, but perhaps a game could be designed that makes the interaction between crafter and adventurer more enjoyable. Most games fail in this regard because farming is not fun. You have to manage a large inventory of useless junk to translate your adventuring success into status.
Perhaps the answer is less item drops and during a quest with a better payout at the end of the quest. A player wouldn't feel like they were farming if they quested for 2 hours to return victorious carrying the head of a vanquised foe or a rare herb which was turned in for cash or a nice item.
Posted by: Rich | Feb 23, 2005 at 21:59
Not sure where to put this news, but the fact that in China Shanda (SNDA) and Ebay (EBAY) have come to a partnership points to RL money driving the wedge to widen the divide:
http://www.newratings.com/analyst_news/article_494641.html
Not note in the Press Release is the recognition by major players that RL sale of VW objects is big business.
Posted by: magicback | Feb 25, 2005 at 00:38