Norrath Economic Report Now Available 175
Edward Castronova writes "Some months ago, Slashdot posted a note about on a survey I was doing for a report on the economy of EverQuest. The report is done and can be downloaded (Scroll down for the Document Download button). Tidbits: Norrath's GDP per capita is higher than that of China and India; its currency sells for about a penny per platinum piece, which makes it more valuable in $US than the yen; a typical person can make about US$3.50 an hour working there by farming the bots and selling the loot; the deflation rate is almost 30 percent annually. There's also some microeconomic analysis and an overview of the MMORPG market. Comments and reactions appreciated. Thanks, Edward Castronova, Associate Professor of Economics, Cal State Fullerton."
Need for interest rates like ECB (Score:2, Interesting)
Exchange Rate? (Score:5, Interesting)
But the idea of these virtual economies is quite interesting. How about using them to experiment with possible economic models? Why not set up a modern-day game with different shards representing economic models and see which one works best? The US government or the EU could fund it. Players could play for free and the government could see how they'd react to e.g. different interest rates.
OK, it's a bit stupid, but it would be a cool experiment.
Economy Schmeconomy (Score:3, Interesting)
reminds me of Descartes (Score:2, Interesting)
who said more or less that "after all,
the world is maybe just an illusion
that devils move in front of our eyes".
(the point being that the only certitude
is that we think).
The confusion of virtual and "real" worlds
is indeed a step in that direction.
Everquest Hardware (Score:1, Interesting)
Re:Deflation rate? (Score:2, Interesting)
Trade barriers (Score:5, Interesting)
Would economic trends in the real world influence the virtual one? In this case yes, to some degree; if people can't pay their subscriptions, they can't exist in the virtual world and production will fall. Consider this quote:
> It is important to stress that the external
> market for Norrathian goods is
> underground. Sony has stated that Norrathian
> items are its intellectual property
> (Sandoval, 2001). Trading these items for US
> currency is considered theft. Nonetheless,
> trade goes on.
Scary, no? Enforcing such a law would be equivalent to forcing the devaluation of the virtual currency. So, the virtual world economy would continue to function, but with its ties to the real world (partially) severed.
Does that bode well for Entropia? If the virtual items and currencies are the (intellectual) property of one individual, or corporation, or government, then can virtual economies be any use at all?
Or, to turn that on its head, can EverQuest be used as a model for the distribution of intellectual assets in the real world?
Having read that last sentence, I'm sure I've had too much coffee.
Re:reminds me of Descartes (Score:2, Interesting)
The reasons he says it is impossible are pretty lame though, basically he says "God wouldn't let that happen".
What have horses done to this? (Score:5, Interesting)
For those that don't know, the latest upgrade (Shadows of Luclin) introduced horses to the game. You can buy a horse which lets you travel fasters. (And look cool).
The thing is, they are *very* expensive. The cheapest one is about 10000 platium for a slow horse going up to well over 100,000platinum for a fast one.
Even the cheapest one is more than the vast majority of players can afford and the expensive ones only a few people can affort at the moment.
I'd be interested to see how this affects the economy.
Obviously it's a huge money sink, which should reduce the prices of things. (If people have spent all their money, they won't pay so much when they want to buy things)
But also, it means that many people have got all the old junk they had in the bank and started selling it. So does this reduce prices as there are more for sale, and people want whatever they can get, or does it increase prices because people want the money to buy a horse and so are unwilling to part with items for a bargain price.
It's interesting. But I have no answers.
Re:What have horses done to this? (Score:2, Interesting)
I don't believe horse have taken much plat out of circulation... at least not as much as Sony hoped.
Re:Interest rates are pointless in deflation (Score:2, Interesting)
>as fast as they can recieve it.
Actually, no. Deflation measn the amount of "goods" or "gear" or whatever a given amount of money buys INCREASES over time.
--therefore, if I have 10k pp and I keep them for 1 month without spending any of them, I will be able to buy *more* after that period of time than at the beginning.
To simplify, *money increases in value over time*
This means that everCrack players are better off never spending their money, as tomorrow they would be able to get more for the same $$.
You were thinking of inflation. No normal economies have deflation. In fact, I cannot think of *any* economy that has had deflation in recent times.
www.playerauctions.com (Score:2, Interesting)
Or the EQ currency Platinum.
For referance. A level 1 character loots about 2 silver a kill. 10 silver are 1 gold. 10 gold is 1 plat. 10k plat ~ $75-$100. A level 60 can make about 300pp a 'night' ~5 hours just from the money that drops, that does not include actual items that can sell for as much as 150k+ (We're talking VERY rare dragon lvl drops such as cob bp etc)
Player Auctions [playerauctions.com]
eBay removes all EQ auctions due to them being against the EULA. (All EQ items are property of Sony etc..)
How has EQ affected the real-world economy? (Score:2, Interesting)
Re:Deflation rate? (Score:3, Interesting)
One approach was broadening the currency base: 100 copper = 1 silver, 100 silver = 1 gold, and so on up through mithral. It is much harder to accumulate the higher denominations for a given high level character. The combination of hard to earn plus depth of economy helps slow down the deflation. So, in EQ a platinum piece is almost worthless, in DAoC it is a real measure of wealth.
Another DAoC economic feature is the variety of money sinks. The most prominent of these is loss of Constitution Points when your character dies. To gain these points back, you must visit a non-player character healer in a town or village. For a fee, the healer will restore your constitution points. The fee is tied to level, so, as your character gains levels, it costs more to restore constitution. In addition to being a money sink, this is a mechanism for encouraging grouping, since several character classes get the ability to resurrect dead characters without loss of constitution points.
One of my favorite money sinks are dyes. Most clothing and armor in the game can be dyed. This is a huge money sink for characters who wish to maintain a certain color-coordinated look. Dye prices go up dramatically based on the color. Many players can and do spend an inordinate amount of time and money fooling around with their character's appearance.
I think Mythic's biggest attempt to stabilize the DAoC economy is item decay. As noted above, EQ's economy suffers because items never leave service. All objects in DAoC, on the other hand, experience decay with use. The items do not disappear with decay, but they do lose effectiveness. This process can be delayed by frequently repairing items (another money sink). It cannot be stopped though. All items have a finite usable lifespan. After that, they lose most of their effectiveness and are usually sold or given to low level characters. This disturbs the economy very little, since the effectiveness and worth of the item are very little. Most of these devalued items eventually end up being taken out of the economy by being placed in storage or sold to a non-player character vendor.
Also because of item decay, lower level characters are harder to "twink" with high level items. Items that are too high a level decay and become worthless at a vastly accelerated rate. Items thus tend to get passed down slower, thus slowing economic deflation. Low level characters can and do receive "twink" items, but the very high level items are generally placed in storage until the character is at a level they can effectively use the item. This item banking serves to further remove items from the economy, thus slowing the deflation rate.
Mythic's approach isn't perfect, but it does point out that there are techniques for balancing a virtual economy and thereby improve game play.
I.V.
Re:Need for interest rates like ECB (Score:3, Interesting)
The fact of the matter, however, is that EQ is not designed for PvP and so PvP sucks.
Scarcity of resources is a nifty concept. It'd work great for my guild - since every other guild on our server is 9 months behind us. But that's rather unfair to others.
Currently items are removed from the economy by making them NO DROP - that is, once you loot the item off the monster's corpse, you can't trade it, sell it, give it away, drop it, etc. You either wear it, keep it in your inventory/bank, or destroy it. It's not a perfect solution, since it just means that all the droppable items of lower quality get sold more often, but it does keep the highest end items restricted to those who have earned them and reduces twinking.
Oh, and interest would be bad. Deflation is GOOD for the EQ economy. It's the ONLY way things fall out of the game really. I currently have over 600,000 platinum in my bank, and have another million or so worth in items to sell (I'm the guild treasurer). At one point my guild controlled 40% of all the platinum on the server. You really want us earning interest on that?
How do we spend all that cash? Well, burning 10-20k per day in peridots and other reagents is one way. On the rare occasions that a total wipe out demands necro's doing corpse summons that costs another 5k or so. And there's the odd items, quests, etc. that can suck up plat. I expect for there to be many large money sinks in Luclin still.
Re:But unique items suffer inflation (Score:2, Interesting)
Take rubicite armor. Rubicite, early in EQ's life, was considered to be excellent armor. It only dropped in one place (the Temple of Cazic-Thule), very rarely, and when compared to the armors existing at the time--banded, bronze, etc.--was strong. C-T turned into a campground with people trying to get rubicite. It was a mess.
So they yanked it out of the game and replaced it with various mid-level class "quest" armors--crafted for warriors, darkforge for shadowknights, etc. They didn't do anything with existing pieces of rubicite, but it simply disappeared from all the monsters' loot tables.
Nowadays, rubicite is crap compared to what 2/3 of the twinks on the server are wearing. But it's red, and it's rare, and it has a sort of old-school legendary quality, and people are willing to pay a lot of money for it. So, players that have the stuff hang onto it and sell it when the price is right. It doesn't sound any different than the real-life equivalent of buying rare art or collectibles--by themselves, they aren't "useful", but for whatever reason there's people out there willing to pay excessive amounts of money for them.
There's other no-longer-dropping items, like manastones and pre-nerf Circlets of Shadow, that keep their value because they're actually useful. (Manastones let you turn health into spellcasting mana instantly, and the CoS used to allow the wearer to instantly turn invisible. Verant changed it to have a 5-second casting time, but they left older ones as instant-cast.) Rubicite just looks cool as hell. Personally, on my server (Innoruuk) I don't keep up with trading that much because I'm bad at it. But from what little I know, manastones, rubicite, super-rare stuff from zones like Temple of Veeshan, etc., are subject to inflation. They don't enter the economy faster than the money supply increases, unlike 99% of the other items in the game.
Really, the problem seems to be that items enter the economy faster than money. It's hard to earn more than a couple thousand plat in a night's play, even if you're camping things like hill giants that carry a lot of coin and sellables. (And remember, you'll probably have to split that money among your group, up to six ways.) But it's trivial to go into, say, Old Sebilis, sit for a couple hours and score 10k worth of items to sell.
3 pvp servers (Score:2, Interesting)