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Economy as it stands - analysis and suggestions

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Nov 12, 2004 Soltis link
This topic is not a new one. I am aware of that, and make no apology, since I want to present my ideas from the ground up, and believe my suggestion differs from the other topics I've seen in both scope and repercussions.

I do, however, apologize for the length of this post. If you are offended by pages of reading, this is not the topic for you.

The problem thus far is that the economic system used in VO is that it is no at all responsive to the game community. The only way true demand can be created is to establish a link between the expenditure of things like ships lost in combat and the like, and the economy and process of moving things about.

ANYTHING else is flat out fake. No other word for it, it's fake, and fake is boring as hell.

If you create demand for items, and create ways to procure them, and make the prices of items in demand fluctuate depending on how strong the demand is, you have the basis for a self correcting system.

Since the system I propose is 'realistic' in a lot of ways, I want to explain some factors present in the real world and not in VO, and what makes their absence important.

The real world is based on limited quantities of EVERYTHING.

The real world has such things as transportation costs, licensing, contracts, and other hoops to jump through, not to mention taxes, litigation, metrics, and logistics. The game environment has none of these things. These things are what the big players can use to squeeze out the smaller players.

Without those mechanisms, without the ability to leverage, coerce, or exclude the smaller players, there is no reason a low end player cannot get rich.

Since even RICH players can't pay others to haul their cargo for them, they are limited in their ability to generate profit by what THEY can carry. This means that the playing field is further equalized, since the tools which do matter, namely cooperation, organization, and being informed, are equally available to both high end and beginning players.

The only real advantage an experienced player would have would be to have contacts, faction standing, and money to buy escorts and protection. Since profits per trip are limited, there is a limit to what a player can logically pay another for protection. This being the case, the newer players will not have too terrible time making money, especially in protected space where an escort is really not needed most of the time. Faction standing is not a huge issue, especially if trade items and components remain open to everyone who doesn't have spectacularly bad standing. Contacts are not that huge of an issue either, and joining a guild can help a lot. So can chatting on channel 100.

What I've said here demonstrates that the playing field is very even. With that in mind, we can examine the basis of the economy as it stands now.

Basically put, trading at the moment consists of moving useless items that nobody needs from station A to station B. Station B pays more, but it's painfully clear that the only reason for this is that station B is programmed to do so. Station B may not sell the item in question, but neither does it do anything with it once it has it. The prices on weapons or ships don't change. The availabily of items doesn't change. The supply of other items doesn't change. This is a static model based on infinite supply and artificial demand, and is about as interesting as eating cardboard.

The suggestions people tend to throw out generally have to do with either tweaking the current model of fake demand, or replacing it with another model of fake demand, or placing weird and arbitrary limits on the prices items can be, etc. None of this addresses the fundamental flaws with the system.

There are currently two unrelated economic systems VO. The ship/weapons business and the trade business. One has artificial demand and infinite supply; the other has real demand and artifical supply. Soon there will be a third, mining, with artificial demand and real, limited supply.

The travesty is that, between these three systems, we have the components for a sound, self regulating, and dynamic economy that would react to the player base on a continuous basis, create the constant opportunity for profit, and be very clearly not artificial.

The first step is to impliment mining and make it so that mining is a fun, profitable, practical, but challenging business.

The second step is to begin to break down what stations have a logical need for what items. Mining stations need ore and produce alloys and raw materials. Manufacturing stations need alloys and materials to produce components. Heavy manufacturing stations need components, and use them to make weapons, electronics, ship components, and other miscellania. Commercial manufacturing stations need components and raw materials to make luxury items, consumer goods, etc., which are needed by all other types of stations. Capitols, population hubs, governing centers, and the like need consumer goods, food, etc. They don't produce anything, but they buy for the highest prices. Finally, barracks and outposts need ships, weapons, electronics, and other supplies, and possibly sell scrap metal and salvaged goods from bots they've killed.

I am not sure how to address the final stage in the direct supply chain - namely, the step of actual ship production. I was thinking that since all stations have the ability to repair ships, that maybe it can be explained that the repair facilities can be used to make ships from scratch. After all, repairing a ship at 1% hull integrity has to be pretty close to rebuilding it. However, not all stations would be able to build all ships. The complexity of the ships each station could make would vary, so some stations, especially outposts and heavy manufacturing stations, would have the ability to build everything up to proms, valks, etc.; while others could build medium ships like rags, hornets, vults; and still others would be limited to things like Centurians, busses, and the like.

Once these details were hammered out, they would need to be implimented slowly. This would not be an overnight process. I think the most logical order would be to work from the ground up - first work out the mining business, then make mining stations start to make alloys predominantly and cut down on the other items they sold, make their production of alloys reflect the amount of ore that was brought in; then work up to manufacturing stations, impliment limitations there in terms of their production, and hammer out those bugs; then the commercial stations, factories, outposts, etc.

Finally, after everything else, the step could be taken to actually make ship and weapon availability dependent on the delivery of ship components. This could not be TOO complicated, because it would be a hassle, but the idea would be that X hulls, engine components, and misc. ship components(targetting, life support, etc. - these would prolly not be separated into seperate trade items; it would just be assumed that 'misc. ship components' meant all of the twiddly bits needed to make a working ship) would be needed to make Y ships. I know it would be insane to make this a 1:1 ratio, since it is both illogical and impractical. Maybe for every set of all three items(components, engine components, hull components) delivered, ten ships could be made. Or 20. Or 5. Whatever the number, it would be a concrete number connecting ship production to ship components delivered, and each preceding step would have a similar number, stretching all the way back to the mining of ore.

I think that low level ships/weapons, like busses, gov't issues weapons, and free batteries, should always be free in supply - this makes sense; they're not cutting edge items, they're not made anymore, they're obsolete junk which stations give away or sell dirt cheap just to get rid of. This makes it so you can't end up in a rut, stranded and bankrupt.

I don't pretend the details outlined here are ideal - maybe I've outlined too many steps in the supply chain(too many types of stations), maybe too few; maybe the steps I suggest to impliment the system I've outlined are in the wrong order, or too abrupt, or too gradual. I know the number of steps needs to be scrutinized, because each step involves a step up in price, and we don't want the end items, like actual ships and weapons, costing a fortune, while nobody can make any money; conversely, if there is too much slack in the system, we don't want everyone getting unthinkably rich overnight.

The main reason I outline this precise suggestion is that in its current state, the economy model on which VO is based in fundamentally broken. This is an alternative which, if implimented right, would remedy a great number of issues.

Things to ponder:
1. One might ask how anyone would know where they can go to make money - what stations need which items. The answer is that with the news system in place, there will be price announcements. If any place says it will pay a lot for part X, traders will rush to fill that demand since they know reacting quickly will result in profit.

2. I suggest that station supplies of goods gradually dwindle on their own, since the NPCs will be using them as well. This will insure that demand cannot stagnate, even in areas where players are not constantly buying things.

3. Commercial entities might put out long term trade missions such as 'keep us supplied with X item for the next <insert time here>' missions, with a status message telling you when they need resupplies. These missions would reward very, VERY well, but would not prevent other players from selling goods to that station. You would be limited to one, MAYBE two of these missions at a time, and they would prolly last a matter of a day or two. I don't know if this is possible, or how logging out would fit into the equation, but it's an idea.

4. Commercial entities should prolly give a slight faction boost when you supply them with something they actively need. Not a lot, but enough to show they've noticed that you helped them out even when not under contract. Maybe .5 standing, maybe less.

5. Competing commercial entities might give you missions to sabotage other companies' supply chains. Something like, "A competing company has just received a big contract to make X item. They will be receiving a shipment of Y components soon, and we want to make sure they don't receive it." This could tie in with the 'keep us supplied' missions outlined above, in that you might be hired to hunt down another player who got a contract to keep a station supplied. Of course, in that case, the player taking the other mission would need to be warned before they took the mission... "We have a competing company who might try to prevent you from delivering your shipment, be sure to travel with an escort" or something like that.

6. If you've read down this far, thanks for spending this much time reading my ideas - please let me know what you think, but be open minded.
Nov 12, 2004 Spider link
Celebrim: Seems the challenge is up.

edit:
Soltis, if you think thats inflammatory, then I'm not sure what you wouldnt think of. it was meant as a sidenote that there is now another author who thinks about his posts and starts to post pieces out of a novel about game-design to the forums ;-)

Celebrim has a history in the forum, a history of posting VERY long suggestions that are quite detailed and throughout. Check his posts recently for commentary.

*sigh*
Nov 12, 2004 Soltis link
Edited:

It sounded like an egging on, rather than a compliment.

Oh well, I apologize for misinterpreting.

Thanks for the compliment.

(I'd have edited this sooner, but I couldn't get online till just now)
Nov 12, 2004 Starfisher link
It was more of a compliment.
Nov 12, 2004 Anevitt link
Soltis I think you have some really good ideas for the economy, provided that its possible to impliment them into the system. I hope the devs take a look at your suggestions.
Nov 12, 2004 Durgia link
I suggest you read this thread, http://www.vendetta-online.com/x/msgboard/3/6631

Spellcast and you have similar ideas. Perhaps you could pair up and talk it over in IRC and come up with a extremely good idea. Also I have no doubt in my mind the Devs plan on doing some changes to the economy, however mining and even more important, exploration may need to be possibly before some of these things can be done.
Nov 12, 2004 Demonen link
I have no idea if I'm right or not, but I have a feeling this is pretty much the way it's headed...

Devs?
Nov 12, 2004 Celebrim link
In a nutshell, your wrong, but I don't have time to prove it at the momment. Maybe at lunch.

Things to ponder in the meanwhile:

1) How is the role people want to play in a game different from the role that most people play IRL?

2) What fundamental assumption about the nature of the game universe are you overlooking?

3) What is fundamentally different about combat in a game and combat in the real world?

4) Is it ever possible for an artificial universe to not have artificiality?

5) I see this statement as the fundemental assumption underlying your whole argument: "ANYTHING else is flat out fake. No other word for it, it's fake, and fake is boring as hell." Everything you suggest proceeds from that assumption. Is that assumption really true?
Nov 12, 2004 goatwarrior link
Ultima Online attempted to make a real dynamic economy, but it failed. The problem with making a realistic ecomony in a game is sometimes realism isn't fun and a dynamic economy based on realism could cause some unforseen problems.

The problem would cause the developers to work hard to make sure there's an adaquate balance, but for what? A realistic economy that provides no 'fun factor'? Really, why would they want to dedicate so much time and effort on something like in-game macro economics when they could be implementing capital ships instead.
Nov 12, 2004 goatwarrior link
I'd like to elaborate on Celebrim's question:
Celebrim: "I see this statement as the fundemental assumption underlying your whole argument: "ANYTHING else is flat out fake. No other word for it, it's fake, and fake is boring as hell." Everything you suggest proceeds from that assumption. Is that assumption really true?"

My question would be, why would a real system be any less 'boring as hell'?
Nov 12, 2004 Durgia link
"But what we _really_ want to do is make a completely different economy actually based on production cycles and actual demand for actual items based on its necessity for production (ore/metals/etc) or sale (luxury goods) or life support (water & food). This is coming, and I am pushing hard for it." -A1k0n

This is in another economy related thread that I am too lazy right now to grab the link for.
Nov 12, 2004 Wubby link
Maybe the problem is not entirely the "system". We all want an economy system that does things "like this" or "like that". We want it to do what we expect it to do.

The truth is, no economic system does what anyone want it to do. Thats one of the things about its dynamics, and keeps so many brokers, bankers, analysts and others employed. Real systems work because they are very complex, and do not simply "do" what they are told.

Real systems do not need "tweaking". Oh, sure, there all always those that try, but for the most part, people change to adjust to the economy, not the other way around. If people can't they either drop out (die, move, join a commune) or the system collapses and has to be rebuilt from the ground up, like a reset.

Game econo-systems are by design false, and are hoped to work "in place" as they are created and setup. Users are plugged in and off it goes. Yet no real system starts that way. Real systems have people doing things that create a more and more complex system till someone notices that it takes computers and hundreds of people just to understand it.

So, is it possible jumpstart a realistic virtual world economy and hope noone notices? The problems may be how you go from "fake" to "real". In a virtual world, options are fairly limited in what can be done to solve problems. I can't really make something worth bartering for. I can't create new services, since I can't manipulate the game mechanics or physics.

There might be a lucrative repair business, but it's free at the stations. There might be a way to make weapons and sell them, but that isn't allowed by the game.

Systems form by many simple things combining into a complex thing. I think we just need many more "simple" things to do, and the "complex system" will (hopefully) take care of itself.

IMHO, anyway.
Nov 12, 2004 kriss link
I'll bite.

Celebrim, you may or may not be a very nifty chap. I've read some (if not all recent) of your ramblings, and while you obviously do use your head, you do have a rather condescending tone. I wish I could add 'from time to time' to the previous statement, but that would be stretching it.

Or, in plain english, please drop the attitude. You will be percived as a) somewhat more composed and b) perhaps a somewhat nice person.

That said..

I think you've got caught up on the wrong thing. The "ANYTHING else is flat out fake. No other word for it, it's fake, and fake is boring as hell." quote is, as far as I can tell related to the assumption that "The problem thus far is that the economic system used in VO is that it is no at all responsive to the game community." (and the following sentence)

That, as a whole, I'd agree looks like the underlying assumption. The former quote by itself is grossly misrepresenting.

Additionally, point #1 - 5 seems to be quite unrelated to to nature of the ideas in general, as it derails into 'why a game', with some jabs and sarcasm. I'd suggest spltting that into a separate thread, if you really feel the need for it, rather than split a perfectly interesting thread into two entirely unrelated discussions.
Nov 12, 2004 Celebrim link
kriss: Thanks for your advice. When you are finished telling me how much nicer of a person your are than me, let me know.

I frankly don't care whether you think I'm rude, rambling, or nice.

If you feel better thinking about me as rude, arrogant, condescending, and so forth then that is your perogative.

I think you would have learned abit more by trying to answer my questions than you would by trying to correct my manners, but that is just me.

Let me suggest some possible answers:

1) In a game, almost everyone wants to play the protagonist. You aren't going to get alot of people who set out to play a bit part. The vast majority of players not only don't want to be poor, they want to have wealthy, powerful, and 'cool' characters.

2) In the real world, every role is enacted by someone whether they want that role or not. In a game, lots of roles aren't held by anyone because noone wants them or there simply will never be enough players to populate the universe. The game universe depends invisibly on a vast network of NPC's and its my contention that without modeling the behavior of those NPC masses, the economic system will never be 'realistic' in the sense people are clamoring for. However, to model the masses of NPC's in any computationally reasonable manner involves a certain ammount of faking it. We can't model every citizen of Itan, nor is the game going to be 'realistic' if we assume that the only citizens of Itan are a few players.

3) Real world wars if engaged in intensely generally destroy economies. Game wars are engaged in far more recklessly and intensely than any real war, because the players expect no long term consequences of real importance. But they also expect this warfare to not bankrupt them completely, but rather to be able to quickly recover from any loses. If we actually had a realistic economy, we would end up with a simulation not of interstellar wars, but of work.

4) A simulation of a system can never account for everything that happens in a real system, because the simulation would then be more complex than the system itself. There will always be checks and balances on real world economies that you've left unmodeled. Throwing more and more detail at a system won't generate a more playable game, or even a more interesting game.

5) Games are fake. Movies are fake. Art is fake by definition. Illusion is fun. Reality is something more complex than fun. What is wanted is not realism, but the illusion or reality with the not fun parts cut out. An economy that is wholly, or even largely, dependent on player driven supply and demand won't even work with out some fakery, and certainly won't be fun without well designed fakery.
Nov 12, 2004 Wubby link
LOL. Celebrim, there is nothing more infuriating than someone else who is both arrogant AND right. You rock! (And I'm NOT being sarcastic.)

Is it possible that "making" an economy wont work, and that letting an economy evolve out of what get put into the game is best? The main drawback being noone can predict how players will react, which is NOT what a business (like Guild Software) wants to bet its future on.
Nov 12, 2004 Celebrim link
Even Solitus admits that, "station supplies of goods gradually dwindle on their own, since the NPCs will be using them as well. This will insure that demand cannot stagnate, even in areas where players are not constantly buying things."

That's an important insight. Let's carry on from there for a second.

Suppose we had a dial which determined the number of NPC's in the universe. As we twisted the dial 'up', NPC's would increase, buy more things, make more things, and so forth. It's fairly obvious that if we twisted the dial up to infinity, then the players efforts would never impact supply and demand. They simply couldn't produce enough and couldn't buy enough to effect the overall economy.

Rather than model an economy like that in detail, we could just have a static economy and no one would be able to tell the difference.

Likewise, we could twist the dial down to zero. Nothing could be bought unless some player made it. Nothing could be sold unless some player was there to buy it. Nothing could be made unless someone was there to make it. This obviously has its problems as well. Players would first have to build up the means of production. They would have to organize and manage supply chains on their own. Only the most dedicated economists would really enjoy the game. Everyone else would deride the game as a 'mining sim'. And there would be no set of NPC's to provide any sort of buffer for the poor choices of players in predicting thier future economic needs. It would have recessions, shortages, inflation, deflation, bankruptsy and everything else just like a real world economy. If you think this sounds fun, its only because you are used to playing games where the NPC's are always (or almost always) there to be the losers.

In between on the dial are various kinds of dynamic economies. But once we realize that the aggregate behavior of the NPC's can be modeled with a simple numeric value (our dial), we immediately realize that other complex behaviors can be modeled as well. We also immediately realize that since either extreme doesn't do what we want, that we better be careful about choosing our numbers if we want to get the expected behavior. By that point, I would hope we've gotten away from bold statements like, "The only way true demand can be created is to establish a link between the expenditure of things like ships lost in combat and the like, and the economy and process of moving things about." or
"The suggestions people tend to throw out generally have to do with either tweaking the current model of fake demand, or replacing it with another model of fake demand, or placing weird and arbitrary limits on the prices items can be, etc. None of this addresses the fundamental flaws with the system."

Neither does, in and of itself, a player driven economy.
Nov 12, 2004 a1k0n link
This is a reply to not just this thread but at least two others.

The economy is currently built on a semi-static model that has actual supply chains. This is used to compute the minimum and maximum pricing from the virtual availability of raw materials from nearby asteroids and manufacturing facilities from the station and its neighbors. The main problem with this setup is that the "X depends on Y" relationships are somewhat nonsensical and were developed to ensure enough stations have enough supplies in the right places. Also, even though X's static price depends on Y's static price, X's dynamic price has nothing to do with Y's dynamic price.

The price you see at stations is somewhere between the min and max (and is fixed for the end-products: ships, weapons, etc). The min is computed in such a way that even if you do completely max out a trade route, you can still make a profit. The demand will come back to a full level (max price), if the station is left alone, within a week.

Mining, by the way, will probably not be all that profitable unless we drastically change the distribution of ore. Pretty much all stations near rocks of a certain type of ore can be expected to have the price bottom out on Monday. I'll talk to Waylon about this to see what his plans are. And, incidentally, rocks are not ever going to run out of ore, so there will be no limited supply of the building blocks of everything in the economy. In a real economy this would cause massive inflation.

In order to allow for crafting, we will have to revise these supply chain relationships into more logical steps, so we intend to do that. So the basis for this "real" kind of economy will exist.

Chao argues that the "price drop" model does not allow for enough money into the game. The advantage to it is that we can adjust the amount of money entering the game pretty easily. (He also argues against having the "price drop" in the first place, and then suggests it again as a solution to "treadmilling".) Chao, by the way, currently owns 11% of the money in the game. There are still a LOT of unexploited trade routes in space. So the problem may not be as bad as he computes it right now, and I had initially thought it was bad but I'm not sure now. It may be too early to tell.

Soltis' post makes the claim that the playing field is currently completely level (it is), and that this is a bad thing (it is?). Do we want large, monopolistic guilds? I understand this is a problem in Eve Online. A real economy is something I like the idea of, certainly. While it will make things interesting, in the long run all it will provide is deprivation compared to what's there now. Is that more fun?

Celebrim argues a "real economy" will make the problem worse, and that it's too hard to design one that's both realistic and fun.

I think the main argument in favor of a "real economy" is that player choices have a real impact on the world. But what impact is it, really? Well, one simple one is that the price of Ore A would have an effect on Refined Ore A and in turn Metal A which is used to make Item A. You could make items cheaper if you could deliver lots of raw materials (but it would be less profitable for you to do so). You could blockade to starve a rival faction so they couldn't build some items. You could even starve a station so they'll pay you lots for whatever you deliver. Is this more fun? Maybe, maybe not. If players happen to own those stations, then yeah, probably.

But we could also just use our current min/max model and introduce the same dependencies and then item prices would also fluctuate within limits, and you could trade to change the situation, and you don't have to worry about inflation.

My stance right now is that I'd really like to try making a simulation so I can figure out what would be required as far as "well-designed fakery". In particular there needs to be some sort of mechanism for preventing widespread inflation, ensuring adequate supply to newbies, ensuring adequate "safe" trade profitability, and preventing one faction from being totally shut out. And then figuring out how much more interesting this is than what I just mentioned.

I'm definitely not in favor of replacing the economy without a working simulation of something different first.

Once the News system is in place, we will be able to make the economy more transparent. I could easily, right now, generate a list of trade routes that are near-optimal as far as credits per jump. Showing this to players might make things more interesting, because the mere act of making them public might then make them suboptimal five minutes later.
Nov 12, 2004 Chao link
11% of all money ? Hehehe :) My amassing millions was a demonstration of my original point, actually. When one single player can hold much of all the potential money that can be made by trading an deprives others from making a *meaningful* buck, it means that the system is flawed. I saw this happen in a MMORPG my brother was playing, when newcomers realized they couldn't EVER afford the same equipment as the vets (because whatever items they gained from killing monsters would drop in value proportionnally while the items they craved grew more expensive, as they tried to amass the needed coins) they usually went play something else :(

Fortunately it seems from your explanations that it IS possible for other players to still make decent amounts of money even once the world is "dried up", as long as the "min-max" values allow for a decent net gain in its lowest state. Even if I had exploited all the trade opportunities before everyone else, they can still make a profit, and that's exactly how it should be: no upper cap to the total money in the VO universe, and no cap to the money that can be made.

So the current economy system in VO avoids both pitfalls. I had assumed that after dumping hundreds of one traded good in a station its price could go much LOWER than what it was paid for (I remember selling a thousand or so Consumer electronic crates and see their price drop well under the 600 or so I had paid), but I was wrong. I'll just stop rambling then ;)
Nov 12, 2004 Phaserlight link
Soltis, you have some good arguments, but perhaps they would be recieved better if you used less absolute language. I personally do not think the current system is fake (any more so than your proposed system) or boring as hell, I actually have a lot of fun trading, discovering new profitable routes or realizing an old route has become over used and dried up.

I agree with chao, elite players strangling new players economically is a very, very bad thing for any MMO. As far as real economies go, they don't work in MMO's because nobody wants to play the part of the poor working class pleb. Everyone wants to be a hero, that's why they bought the game. I think Celebrim's post says it best:

http://www.vendetta-online.com/x/msgboard/3/7350#87748
Nov 12, 2004 a1k0n link
Celebrim's dial of NPC Trader Activity, by the way, is exactly the dial we intended to use to regulate the economy. There are NPC traders doing their thing right now. But their activity doesn't yet affect the economy, because we didn't bother to calculate useful trade routes for them, we just wanted to watch them go.

Anyhow, at a very low level, we can point out the basic differences between what a real economy would do and the current one does not do:

1) When you buy an item from a station, the price of the item does not increase because there is an unlimited supply.
2) Though Ore A might be used to produce Item A, the current market price of Ore A has no effect on the market price of Item A.
3) A station supplying Widget A, B, and C and demanding D, E, and F will always supply and demand those same widgets for all eternity.
4) There is an artificial cap on the minimum and maximum selling price of trade goods.

Let me know if I'm forgetting something.

If we only change #1, let the price of an item increase, the economy will stagnate (there will no longer be any profitable trade routes in the end). Regardless of whether there is a price cap or not, everything will even out without a strong outside destabilizing influence (or I guess if the price cap makes it impossible, which is kind of what it does now).

If we change #1, #2, and #4, then the economy will definitely inflate and we will end up with Chao's Brother's MMO's Syndrome. Mining will exacerbate the situation. #3 could fix that, depending on how it works, exactly.

Another, totally different solution to the problem of overall availability of money is to keep a zero-sum of all changes to demand across the board. That is, for every price drop a trader creates, create a price increase somewhere else in a chaotic manner.

Crap, I had intended for this post to be short.