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MMORPG Basics: Economic Design


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Brief Economic Overview for Online Games
30/08/2016 - V0.1


Note; It is not just for this Engine, it applies to all Online Worlds. Things here are a rule of thumb and a guide, not a law.

1. Introduction

MMorpg's or Massive Multiplayer Online Role-Playing Games are different to traditional games, we all know this. It's a game that is played concurrently by many players around the world, all interacting in the same game world. While people do not need economic degrees to play these games, it is often advisable to have a fundamental understanding of economics when designing the virtual environment. 

Through this simple guide I hope to give you a basic understanding of the concepts that you need to address and look at, as well as some simplistic approaches you can apply to your own development chain to save you time down the road. Often players create items as they develop the game or "on the fly"; This practice should be discouraged as it increases development time significantly and can give rise to inconsistencies. 


2. The cost of Interaction

    A player in a virtual world must have some costs. If a high level player can take down higher-tier dungeons/bosses with little to no cost you are doing something incorrectly. There must be a cost/benefit ratio. Examples are paying for gear to be enchanted, repaired or paying for an instanced version of the encounter with in-game currency. This is essential to offset the influx of higher level equipment into an economy. Some games require players to buy food/water to survive etc. If something is beneficial in a game it must be balanced. 

    The law of supply and demand could have an entire article dedicated to itself; It's defined as "the amount of a commodity, product, or service available and the desire of buyers for it, considered as factors regulating its price." What the hell does this mean? It means that the more that a good is wanted the higher its price will be, and the less that a good is wanted the lower the cost will be, simple! How does this affect our worlds? If we have a high tier weapon the demand will be high so the cost will be high, but if this item is easily attainable then the cost will drop and so will demand, this could potentially break our economy as players suddenly have access to higher gear very quickly, with MMorpg's it's often hoped that the influx of new players will offset this as more people will always need this higher end gear. 

    This often isn't the case, and eventually the market will become saturated with this item, so we must find a way to either remove the item in a fair way ( item degradation? ) or continue to introduce items scaling in power and difficulty to obtain. I'll throw in an example quickly. If we have 10 of item X entering the economy every 12 hours, than we need to ensure there is adequate demand for these. If more than 10 people are after these items we are okay, the price will hold or increase. That's great! Now if we only have 5 people who need this item what happens? The price of the weapon suddenly goes down as sellers need to offer a lower price to convince buyers to purchase one. When this happens the value of the item drops and we have a surplus of this item. On its own this isn't a major deal, it happens in real life all the time, the problem with a virtual economy is this can have a landslide effect onto other goods and you can see a game economy enter free fall in the space of a few days.


3. Adjusting Demand

    How can we adjust demand for an item in a way that suits our purpose and is fair to the players? This mechanism will have to be adjusted to suit your own particular project. In a fantasy project you might introduce a mechanism whereby if you have 5 swords you can merge them to create a slightly more powerful sword, this will reduce the number of original swords in circulation and create demand for a more powerful sword. In a sci-fi game you could create perhaps a more powerful fuel source that works by multiple quantities of the original commodity, once again the purpose is to create fairness and to increase demand and reduce market saturation reasonably. The sci-fi example uses a good that is perishable so it's slightly different to the fantasy example but operates fairly similarly ( It's a Geffen good which basically means some demand will always exist however, think of food).  The main idea here is to make an item be used more or less so it affects the price/value in the way that suits us as developers and the player in the long term.


4. Money Sinks

    For dealing with currency, games introduce systems such as gambling, repairing and perishable goods. This will always exist and will require players to spend money on them, removing their currency and helping curb the accumulation of excess wealth to a degree. Most games revolve around capitalism, so we always assume that a small percentage of players will have large stores of wealth. If too many have wealth, or too little than you've designed your game with inconsistencies. 

    If Player A decides to go to a dungeon that's high tier than how do we balance this? If there's no costs for him than he'll just accumulate wealth rapidly. So we introduce that for instance he will have to pay to repair gear if damaged, He might have to purchase potions because he wont be naturally strong enough to beat the boss; We introduce party systems that split the wealth accumulated proportionately and reasonably to stop low players accumulating wealth unfairly; We make him pay costs for a timed instance, where if he wants a shot at getting large rewards he hasto pay for that opportunity. This might come across as not that much, but long term it greatly affect everything. If a boss is swarmed with players fighting over one piece of loot than it's better for us then 100 players fighting 100 instances which could generate loot much quicker.

5. Proportionate Costs

    This is where a lot of indie/amateur game developers hit problems. Decide early on a formula for calculating a base introductory cost into an economy. A tier 1 sword should not be more expensive than a tier 3. The costs and attributes must mach the increments in power. If a weapon is cheap relative to it's strength than we create the supply/demand issue, demand for other items will drop, raising their prices and suddenly a tier 1 sword is more expensive than a tier 3! I always write down my items/spawns on paper first, and see do they make sense by comparing costs and values and the percentage that their various attributes differ. If it works on paper it will usually work on your game, as long as existing items are taken into account. Items with identical attributes should not differ in price unless there is an aspect we don't consider such as additional affects/aesthetic appeal etc.
    When it comes to money sinks the same principal should apply. A higher level dungeon should cost more to create an instance of than a lower level dungeon, proportionate to the loot that can be accumulated from such a dungeon. There can be exceptions made such as if we see a particular area is deserted and another more heavy we can attempt a de-centralization policy whereby we decrease the cost temporarily or increase the loot that can be obtained at the more deserted one within the perimeters of the dungeon. ( Let's not throw super gear into a weak dungeon ) This approach must be monitored of course, don't forget what you've done and don't make it permanent or to the extent that it can damage your economy. 


6. Short/Long term adjustments

    Short and Long types of adjustments will make up the most part of your development as they will account for most tweaks, medium term do exist but are less common. 

1. Short term is any adjustment with immediate effect that is designed to temporarily increase supply/demand before fading.
2. Long term is any adjustment with a lesser immediate effect that will over time create supply/demand and remain steady if other policies are taken into account.

If we see demand of an item is soaring we need to examine why this is happening, is this what we intended? A short term adjustment is to raise the spawn rate or ability of the item to enter our game world, and while short term it might curb the price, long term it will be detrimental. This is damage control. It can also be used to test an idea before a larger roll out. We can create quick money sinks, such as adjusting the rate at which a piece of armour degrades or introducing a special requirement to use. 

A long term adjustment would be to look at the amount of places spawning and other factors such as why do players want this? We could increase places it can enter the world or reduce the number of places, adjust spawn rate and/or attributes. The difference here is the item is adjusted to take into account the long term economic plan, whereby a short term effect is just a quick fix to limit damage, this long term implementation should take time to see full effects, but once complete should over-ride the short term fix and stabilize the issues. It takes into account data acquired from the short term fix. If you are fixing long term strategies with short fixes you will run into issues down the road. Do it once and do it correctly.


7. Attribute balancing

    This is slightly off the topic from the main article, however similar concepts apply and so I will address this topic while I'm here. There are a few things to bear in mind when designing these attributes using the principles of economics.

1. Players must level proportionately on a steadily increasing curve, sometimes this skews at the end to make higher end players increasingly more powerful.
2. Attributes must be useful and serve a purpose, not because they sound cool. 
3. Appropriate Strengths have Appropriate weaknesses. If magic is overpowered compared to melee for instance than more players will opt for this route ignoring melee; having detrimental long term effects.

This is simple, but it will work. Using a pen and paper I want you to write down completely how you want players to increase in strength, and writing out what attributes should roughly be at each level, using this we can design how we want players to increase over time, accounting for how long we want each level to take roughly etc. These numbers are guides however, as environments with lots of players will be subject to great variation. Doing these tasks while taking overall design into account leads to smarter game environments. And it's an area we can't ignore while developing the economy we want these players to interact in, as we're essentially creating the consumers as well as the products! I strongly encourage developers to develop graphs and charts while taking all of this into account, visualization is better than any amount of writing!


Using player information we can develop a general model of how players are allocating points, creating an average player which can then be used to create predictions on where players will be at certain levels, this can be used when creating furhter content.



Thanks for taking the time to read, it's a very simplistic article but I hope I even got people more interested in this type of content, it's not an after though and is a very important part of online game development. A lot of these ideas are ones that I have used before when balancing my own projects, and I'm sure many people have many different approaches. I certainly haven't covered them all and this guide is nothing more than a child when compared to the plethora of resource available, what the purpose of it hopefully has been is to get you thinking more as a developer and perhaps to shine light on something you hadn't thought of before. There's bound to be mistakes and the likes, and if you spot any please shoot me a PM and let me know so I can change it, I'd like this to be a decent resource one day. All the best.


-Craig Brady

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Excellent write up man. We need more posts on here like this. Hopefully other users take the time to check this out; though I knew most of this myself a lot of other amateur developers can avoid game breaking mistakes knowing how to handle their games balancing and economy :D

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The in game economy is by far my favorite part of any mmo, Without enough money sinks eventually the price of everything goes up and it can totally ruin a game for new players.

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A good read, Interesting to me since I'll be having to do this for Nightmare soon. I also am a firm believer of not doing game balancing like npc's, items and skillsets until everything else in the game is done. I'll be re-visiting this topic later.

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