It’s all about the money, Penny

Thinking recently on some issues I’ve observed in various games, it occurred to me that they are all related to game economies. So, I asked an old acquaintance of mine to write a couple of blog posts on these topics. I now give the floor to ms. Moneypenny.

MoneypennyHullo. Let me introduce myself: my name is Moneypenny, and I’m a trader of assorted goods hailing from Orgrimmar. I’ve been in the business for about seven years now, and have bought and sold everything from gems, herbs and enchanting goods, to exotic pets and fresh fish. As long as you know your market, you can make a profit on nearly anything!

However, I won’t be trying to sell you anything today. I’ve been asked to say a few things on in-game economies. You see, nearly all games involve some sort of trade, be it based on bartering or on Hyrulean rupees, rare fluorite gems, replenishing energy bars or real-world cash. We might be spending it on items, talents, repairs, games of chance, or simply to play the game. Whatever the case, the keyword today is balance.

It’s pretty obvious why games require proper balance. By balancing enemy stats and individual skills, you ensure that encounters in the game are challenging, without being impossibly difficult. Player skills need to be balanced, to prevent people from resorting to spamming their single-most powerful attack, and so that different character classes can engage in fair player-vs-player combat. The power and availability of items need to be balanced against each other — you don’t want everyone running around with legendary swords. The challenge across levels needs to be balanced against the player’s learning curve and increasing skill set. Without proper balance, we’d have a poor excuse for a game indeed.

money scalesBut, getting the game’s economy right is just as important. Without economic balance, the player’s access to items may become unbalanced, which will in turn disrupt gameplay balance. Players may end up with powerful items or skills too early in the game, or they may find themselves doomed to an eternity of mindless grinding, trying to save up for that Staff of Awesomeness. There needs to be a proper balance between what is earned while playing, and what is spent while playing. Whenever trading or the availability of currency plays an essential role in gameplay, economic balance becomes even more critical for success.

Sometimes, game developers seem to count on the self-regulating properties of economies, to sort things out for them. To some extent they’re right: if a system has enough buyers and sellers, some form of equilibrium should soon be reached. True as that might be, said equilibrium might not be appealing to players at all. It may not make sense in your game world, either.
Take Diablo III as an example. After the success of their World of Warcraft auction house (my alma mater, if you will), Blizzard seemed to want a similar auction house system for their new hack-n-slash title. As promising as this seemed at the time, they made one mistake. They counted on the system evolving in the same way that it had in Warcraft, without considering a few key differences:

  1. The drops in Diablo III have far more variety and random stats, even on high-level items,
  2. Salvaging and crafting don’t work exactly like disenchanting and enchanting do in WoW,
  3. A single auction house served a whole region (e.g. Europe), while in WoW each server has its own auction house,
  4. In WoW, auctions have a fee and an auctioneer’s cut; in Diablo III there’s also a limited number of running auctions,
  5. They wanted to expand the system with sales of in-game items for real money.

My view on things is as follows:
Random stats resulted in many items that didn’t really suit any player’s class or style. Salvaging them seemed obvious, but crafting required money in addition to lots of materials, and rewarded you with yet more random-stat items. In other words: you’d end up crafting and salvaging, until you ended up with a whole lot of nothing (unless you got very lucky). Selling the crafting mats only worked until other players figured out that they didn’t want to craft either.
Without salvaging and crafting to get rid of items, the auction house got an oversupply of mediocre items and crafting materials. This was only remedied in part by the auction limit, simply because there were too many players on the same auction house.
The oversupply made searching the auction house nearly impossible, caused prices to plummet, and ruined the aspect of the game that involves hunting for items. It became far easier to buy cheap items on the auction house, than to find them in the game (again largely due to the random nature of the stats). Nearly any conceivable combination of stats was on auction, at any given time. With a wide assortment, players could shop smart, and had to replace items only occasionally. The number of items in the economy kept growing much faster than people were wearing them out.
Finally, this oversupply also translated to the “real-money” auction house, where a minimum price was required (because Blizzard wanted a small cut of the price). When faced with a huge oversupply, people are not willing to pay a lot for an item, the only exception being very high level items with (nearly) perfectly rolled random stats. This made it pretty much impossible to earn any money (either virtual or real) with sales, as I’m sure Blizzard also felt in their own earnings.

Clearly, the main problem here was that the developers had not struck the right balance between items entering the economy, and items leaving the system.
It has been a while since I’ve played my copy of Diablo III. The bad initial experiences with item farming and auction house sales were a big disappointment for me. I have heard that improvements have been made since, but I’d have to play to check how things are currently going.

In my next posts, I’ll move beyond simple supply and demand and discuss money sinks and inflation. We’ll see that these things are tied in with the problems that were just highlighted, but can also affect other aspects of a game.

—Penny

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