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Nov 10, 2005



I'd say the big incentive is that people are lazy and don't want to work (in game) for stuff. So satisfying this desire would seem to involve making the game trivially easy so everyone can have everything. Not a good way to keep your game running past the month or two it takes players to get bored of being king-of-the-world.

More specifically, buying gold is a way to avoid the timesink that farming gold is. But again, if you let people effortlessly acquire tons of gold, you break the game worse than the gold farmers do.


Blizzard will never implement a 20 for 50 program because leveling alts is one of the big timesinks that keeps the sweet, sweet recurring subscription revenue flowing in. In fact, I'd argue that it's the ONLY endgame that exists for people who don't PVP and lack the infrastructure for 40 player raiding.

Ignoring that practical consideration, I agree with Brent. The "problem" is that people want things that money can buy but don't want to go get the money on their own. So there are two approaches to dealing with this problem. You can eliminate the things the money can buy (i.e. make skills and mounts free and all useful items BoP so that you can't pay anyone to get them for you), or you can make players want to go get the money on their own by making the grind for cash quicker and/or more fun. The former all but eliminates the economic side of your game. The latter leads to inflation in the player-to-player market, so while no one would need to hit IGE for money to buy a horse from a vendor when each mob drops 900 gold, there would still be an incentive to buy gold with which to purchase things from other players.

I think the trick is NOT to eliminate the desire to use a secondary market, but rather to design a game that isn't harmed by its existence. For instance, the oft-fondly-cited Kingdom of Loathing webgame has what's functionally an official RMT secondary market ("donate" to the game for an item you can sell for a relatively stable amount of in-game currency). That game recently implemented an ascension mechanic, where characters are reincarnated and attempt the game again with restrictions on what they can bring from their previous lives and a temporary ban on using the player mall (which I suppose is functionally my "eliminate the things people can buy" option) that last until you win the game again or spend long enough trying that it gives your stuff back. The game offers better rewards if you voluntarily take on greater restrictions (e.g. no use of your old items until you win no matter how long that takes, or even more stringent ones like no use of food whether or not you found it in your current life). Thus the game can continue to be a challenge even though anyone can theoretically buy anything they want for real-world money at any time.


What are the big and/or most successful money sinks in WoW and other MMOs?


Off the top of my head, the biggest money sink in WoW is class and profession training.


The biggest money sink in WoW, IMO, is equipment repairs. The better your gear, the higher the repair bill. One death will cost me around a gold now, and I'm in mostly blue gear -- no 40-man content for me.

I'd agree with GreenArmadillo -- the end-game of WoW is playing another character, 40-man raiding, or fulltime PvP. I'd further generalise it to answer the original question: one incentive to secondary market is avoiding time sinks, especially those that appear designed to hide a lack of things to do.

I have a Hunter alt who's nearly level 60. I'd like to equip him in his Beaststalker's set, which drops from the three 5-15man level 60 instances. The trouble is, I've run those places dozens of times each, already. I'll have to run them dozens more each to get the drops. A secondary market exists that would allow me to pay someone else to run my Hunter through those instances. If I did so, ToU and trust issues aside, I'd get to skip the stuff I've already done to death, but then I'd have nothing to do.

If I were to skip the time sinks, I'd have to face up to the fact that there is nothing but the time sinks. I believe Raph Koster pointed this out around a year ago in a comment here on TN. :)


Russ > What are the big and/or most successful money sinks in WoW and other MMOs?
Hair dye and trophy kits from UO are the larger sinks, not counting "maintenance" type expenses.


I used to oppose commodification emphatically until I needed my Level 40 mount in WoW. Despite my very careful spending habbits I only had 40g, but I needed 100g. I looked at the time required to farm for the remainder and compared quickly the amount in US$ my employer values my time at. Going to IGE became the most logical behavior for my circumstance. I was in WoW for end-game PVP, not spending my life fighting bad AI. The "time-sink as game" mentality just isn't there for me.

Let us look at the numbers for an epic mount. You need 900g, and at 60 can farm at a rate of about 5-10g/hour. Let's be fair and go with 7.5g/h for this example. It would take 120 hours to fulfill this requirement for an in-game object necessary for end-game PVP. Now let us consider the value of one's time, using the lowest economic rung as an example, with an average hourly rate at around $12/h. With this meager income the player could earn $1440 in 120 hours. The cost of 1000g is around $80, which can be earned in 7 hours.

The problem of RMT is simple capitalism meeting bad game design. Throughout the world we value different peoples time/effort/worth differently. If a VW requires a player to perform actions that player finds unamusing for great durations a market will arise on the backs of those whose time is worth less. These wortless people we exploit are now a habbitual part of our way of life.

I enjoy having comfortable shoes for end-game sports mini-games, I don't make my own shoes I buy Cambodian labor. I enjoy having children for end-game social mini-games, I don't raise babies I adopt Chinese toddlers.


Detritus, that was an excellent analysis.

I think the faucet-drain model of money supply is one of the biggest incentives to gold purchase. Faced with inflation, devs put in these huge money sinks. Huge money sinks lead to RMT demand. RMT demand leads to (1) pharming, and (2) old accounts selling off their gold instead of just closing the account. (1) increases inflation, (2) decreases deflation. Net effect on inflation from the money sink plus the secondary market effects: probably nil. On net, they do not draw money out of the system. They do, however, strongly encourage RMT as a mode of gaming.

It would help to just get away from the faucet-drain money control system.


Puzzle Pirates seems to have hit the balance, right? What is it that they've done better than the rest?


Ted, as we've talked about before, I'm rather fascinated by the deflation that seems to be occurring in WoW as the servers mature.

Is it possible that WoW's faucet-drain system is an incremental improvement over those of the past? Here's the questions I'd like an economist to consider...

If a game primarily provides gold as mob drops, then farmers (and the companies that employ them) collect gold and transfer that gold to a middleman (IGE) via RMT, who then subsequently trades it to players, again via RMT. The net effect is an increase in the gold supply for the number of real players in the game, and inflation ensues. The degree of inflation is tied to the amount of gold introduced by farming, right?

Now, imagine a game where the mobs drop saleable items, but no gold. (I'm sorry if this is Econ 101 -- which I've never taken -- but I have to think this through step by step.) We have the same pathways as above, but before the farmer can trade with the middleman, he has to sell his items to other players. By the time the gold goes from farmer to middleman to player, we notice that farming activity has not changed the supply of gold, but instead has changed the supply of goods. This ought to lead to deflation, right? Consumers have more choice, and can end up buying higher quality items for a given price. In fact, if farmers had no way to monetize their loot (in this hypothetical game) other than sale to other players, then the pressure on prices would be very intense.

WoW, of course, is neither of the above. Players and farmers always have the option to sell loot to vendors at some basement price. And mobs drop a mix of gold and loot. But I've wondered if Blizzard has attempted to change (not eliminate) the impact of farming by providing a model where non-questing farming introduces more goods than gold into the economy, and where they can attempt to balance inflation vs deflation in the game by tweaking the ratio of gold vs goods in the mob drops.

I chose the phrase "change the impact of farming" above, because farming is still viable, and will always impact the game. Obviously, Blizzard hopes to reduce it. But rather than have hyper-inflation (or hyper-deflation), we would expect to see secondary effects from this mixed model. Those would show up where farming has a significant impact on certain sectors of the economy. And I think we are in fact seeing those: Shards are suffering much worse deflation than other commodities, because sharding helps farmers extend their stay in the field and reduce strain on their inventory space. High-end mining is very difficult because farmers are able to include efficient mining in their farming routes, leaving few spawns for regular players.

To some extent, the prevalence of these secondary effects may speak to Blizzard's incremental improvement of the basic faucet-drain model, no?


Dmitri Williams wrote:

Puzzle Pirates seems to have hit the balance, right? What is it that they've done better than the rest?

I'm unsure what you mean by this. They've hit the balance right in what way? The existence of a secondary market is hardly indicative of not having done something right. It's hard to point at WoW, for instance, and say, "They sure screwed up."



Dmitri, YPP has hit a good dynamic balance, but you have to consider that a) they have a careful approach to their economic game design (pieces-o-eight and doubloons), and b) they have a relatively small population -- small enough that I suspect the sorts of large-market dynamics driving RMT on games like WoW (and fueling companies like IGE) haven't yet arisen.

I think Detritus' analysis above is a solid one, and rests on the fundamental time-vs-money principle that's been discussed many times here: as the game population ages, many are going to have disposable money than disposable time. This coupled with the current kill-monster-get-gold gameplay dynamic virutally guarantees active RMT in any game with a large (>100K?) population.

It would help to just get away from the faucet-drain money control system.

In favor of what, I wonder? In our economy agriculture, mining, farming, and some forms of human service are the "faucets" -- they don't create actual gold pieces ex nihilo but they do create economic value to which monetary value is assigned. Our sinks are, if nothing else, pollution, un-recaptured waste, and our enormous landfills, plus the friction that occurs in almost any economic transaction. Games could certainly do a much better job of modeling these (and create a ton of gameplay in the process) but at some level I suspect we're stuck with a faucet-drain formulation.


Mike, it makes a difference. If the faucets only produce items that will get traded to other players, the faucets do not contribute to inflation. The problem is that the faucets insert the item - gold - that has no use other than as money. The item whose only use is "I am the money" should be introduced to the system by a means that is 100% in control of the devs. It can be a faucet, but a) the players can't touch the faucet, and b) the faucet must have a "reverse" switch.

Having players mint their own money is what causes the problem. It is OK if the players mint hides and logs and ore - all things that get traded to other players. Minting money creates the inflation.

Now, as R. Koster pointed out to me long ago, let's suppose to solve the money inflation problem. You may still have a "too many goods" problem, or what he called "database inflation": as the server matures, there's more and more items being held by players. In economic terms, that's not inflation (which is always and everywhere about money and prices, not goods). That's an increase in per capita wealth. In game terms, that translates into a decrease in the average challenge level. ALso a problem; but it is not the inflation problem, and also does not spur an RMT problem.

As for WoW's deflation: deflation happens when the growth rate in goods trade exceeds the growth rate in the money supply. All I can guess is that at the top end of WoW, lots of goods trading occurs, but that money drops slow down. It is interesting to me, for example, that gold farmers (according to reports) must meet their quotas by selling item drops in the AH. In player markets. In that case, their pharming does not increase the money supply, it only transfers money among current players. In fact it is deflationary: in theoretical terms, it is an increase in goods trade with no concomitant increase in money supply; in simpler terms, the arrival of these pharmed goods drives down the price of goods.

Maybe at the upper end, Blizz has removed the money faucet and provided mostly a goods faucet. Have to go level my chars some more before I can get a sense of the upper-end market. Boy, my job is tough. See you in Silverpine!


Mike Sellers wrote:

"....the fundamental time-vs-money principle [has] been discussed many times here: as the game population ages, many are going to have disposable money than disposable time. This coupled with the current kill-monster-get-gold gameplay dynamic virutally guarantees active RMT in any game with a large (>100K?) population."

Absolutely. And since the current crop of games slavishly follow that same dynamic, wouldn't it be prudent to choose another if you want to remove the secondary market? If the developers decide to go with promoting the importance of loot, they are swinging the vault door wide for anyone with a truck to back up to it.

Of course since, as we assume, no one will fund a virtual world that doesn't embrace that dynamic, the discussion would appear to be moot. So... speaking entirely theoretically...

Imagine chess tournaments designed as virtual worlds traditionally are, allowing players to acquire through much effort a new pawn that could be placed on the board at some point after the opening move and response. IGE would be selling the means to acquire that pawn.

Now imagine the converse: the way chess tournaments really work. There is advancement, achievement, peer and public recognition, exploration, power, and the opportunity to commit genocide. Those appear to be rewards enough for players. Unless IGE decides to sell PR, lobbyist services, or goons with baseball bats to pop a few knee caps, they are out of business.



Ted: Interesting stuff. So suppose for a moment that are you are creating a new MMOG. It doesn't have to adhere to any of the established norms of our industry, you've got enough funding to make and launch the game you want to make, and you are anticipating having at least 200k players/subscribers. How would you, with your knowledge of economics, go about designing the faucets and sinks of the player economy? Besides faucets and sinks, is there anything else you'd change (or keep!) about how we've thus far designed player economies?

Lee: I wouldn't put it past them. After seeing the RMT panel at AGC, I fully believe that if there were a market in the gaming world for thugs with baseball bats, IGE would find a way to tap that market. :P


MMOG developers have as much trouble creating artificial scarcity as RIAA, eh?

In the case of MMOGs, isn't the problem we can buy skill? An eBay'd level 60 is just as powerful as one you leveled up "by hand". Why should a game be this way? Why can't players themselves develop skill and that skill simply manifests as the actions of the avatar?

Often I find myself saying stuff like "thanks for working with me" to group members. Is this a game or a job?! MMOGs won't really break into something unique and wonderful until they leave behind the artificial scarcity and pale imitation of meat space economies. (What do they have now? Shared fantasy role-playing and permissible social violence. That's entertaining to me at the moment, but I often wonder why something so promising is so shallow. Maybe I need to experience VRs that are not games. SL seems to have more depth than WoW for example. True?)

In the case of MMOGs, isn't the problem we can buy skill? An eBay'd level 60 is just as powerful as one you leveled up "by hand". Why should a game be this way?
You're not really buying skill at 60. That's just a level. One's abilities come from their equipment, and that is where the imbalance occurs. While some good equipment can be purchased for Gold, the real stuff is Bind on Pickup, effectively not part of the economy except in its status as a gold sink (expensive repair bills). They draw no dollar value because they cannot be traded. Other stuff takes its place, but the best items one can get, even the second best, all require all players expend the same time-based effort.

However, I have a question for the group:

Do we really need to stop RMTing?

For years I've read one idea after another. During that time I've seen the RMT business continue to grow. While veterans may consider this the same sort of profanity as "forced grouping" or "death penalty", it's really just another form of micro-payments, a legit business methodology. At the end of the day, whether SOE collects money or IGE does so, the concept of wanting to pay a bit more to get a bit more is not foreign to consumers.

The games compel it, yes, but they do so with a mindset already predisposed to accepting it.

Is this bad in general? Or is it bad because it's a different way of playing?


Ebay is not IGE.

Trying to ban RMT clearly does not work. Trying to deny that it exists and sticking your head in the sand - which is the position of too many companies - just leads to less regulated RMT and more people being ripped off.

However, I see no need to tolerate the organised farming of IGE and its shills, however - it IS supposed to be a game, after all.

In the end,

*if you have a level grind
*if gear is all, rather than player skill
*if you need 1001 foosberries to craft with

Congratulations, you just encouraged RMT


Regarding the Faucet-Drain approach:

Where you place the drain can have a significant impact on whether a player would be inclined to try RMT. In some games, while monetary gain comes from battle, the drain is distributed to all different play types.

The result is that people who don't optimize their time for combat (roleplayers, socializers, etc) do not experience as much of the "faucet" as rampant hack-n-slashers but experience an equal share of the drain (rent, travel fees, etc)

Since roleplayers and socializers are less likely to value achievement, they may be less likely to see the RMT as a "cheat." They'd be more interested in insuring they can play the game they want as they want.


To me this sounds like putting lipstick on a pig. The heart of the peoblem is not that people can buy gold on the secondary, it is that the mechanic of gold farming is bad. Games that suffer from this do so because the economic model of faucets and sinks is not properly applied. For instance, killing mobs should not generate gold in major quantities in and of itself. Instead the bounty off of those deaths should be paid into the system and should wax and wane according to supply and demand. If the shop keeper needs lumber, let him buy it from the players and let that cost be variable on supply and demand. Quests that are one off don't need to worry to omuch abouthtis but the general principle of farming is whats at fault and, as I say, to me, would be a better place to concentrate efforts in design.


I've tracked the economies of several WoW servers and my observation is that farmers have pushed prices down on highend goods by creating too much supply.

The prices on certain high end crafting commodities like Arcane Crystals and enchanting supplies tends to fall as a server matures.

The prices of epic weapons however seems to be completely driven by Ebay'd gold. Across servers most epics hold the same prices regardless of the age of the server. Within a week of a WoW server going live, you can buy gold online. So if you realy want to spend 500g on a level 40 epic, you can drop $50 onto your credit card and it will be yours.

The main way Blizzard has dealt with the gold buying problem is to make the most valuable items non-sellable. Market economics have worked pretty well to keep prices on the auction house reasonable.

Making me farm gold just so I can afford the repair costs of my gear after a raid is a waste of my time. I'd much rather buy the gold for $10 then spend four or five hours farming. Is that bad game design or am I just lazy/too busy?

Why not remove transferrable money all together? Any and all transactions in-game would involve doing something, a quest, a small task, crafting something to trade, etc.

Would players balk at a lack of "virtual consumerism"? Are we as a society so consumeristic that we can't develop a game where money in a modern sense isn't present? I mean honestly, I never remember Frodo worrying about having enough money, or if luke skywalker could afford the repairs on his fighter. If you make games where we are all supposed to feel like heroes, then why are we acting like bums and begging for money and slogging away at virtual day jobs just so we can afford to adventyure?

Granted I do see the entertainment value in virtual economies too. Both the early days of the merchant class in SWG and the present day auction house manipulation in WoW are fun game mechanics you could only really do in an MMO.

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