MMO economics - Death by taxes, fees, and other costs and levies

Nephele

Administrator
Staff member
I've talked about money sinks in game economies before, and we've even had a few Crafter's Roundtables about them in the past. We tend to look at these things in a vacuum, but the truth is that they're all interrelated. For example, consider a 5% listing fee, every time you list an item in an auction house. That sounds reasonable, right? But what if the maximum amount of time you can list an item for is only six hours? Are you really sure that the item is going to sell within that time?

Most MMO economies end up suffering from severe over- or under-supply situations simply based on how items enter the game (feast or famine). It is very difficult to actually balance supply with demand when your supply comes from a static drop rate, or even worse when that supply comes from a leveling requirement on the game's crafters. As a result of that, prices will often end up exorbitantly high due to undersupply, or extremely low due to oversupply. This is one reason why when I talk about getting the game economy right for Pantheon, I tend to talk about itemization, viability, and scarcity first before I start talking about things like money sinks.

Money sinks are important to keep an economy functioning. There need to be mechanisms to pull currency out of the game because prices will always adjust to the amount of currency in circulation. Expensive items will always be expensive, and cheap items will always be cheap, but as players acquire more and more currency the distance between "cheap" and "expensive" gets a lot bigger. This, in turn, creates a situation where newer players are at a severe purchasing disadvantage. To use a real-world example, they're still making minimum wage, but everything they need or want to buy from other players costs too much. Unlike the real world, they don't have to stick around and try to put up with this in a game.

Most games try to set up multiple money sinks and limiters on their economy, which is generally a good idea since there's never a single solution that's going to work for every situation. But those games often don't consider how these things interact with each other, and the result is that they make pre-existing economic problems worse.

Consider the following example which is typical of many games:

  • The game requires crafters to purchase a component from an NPC vendor for every item they make, with a cost of approximately 1/5 of the item's base value.
  • The game also requires crafters to pay a listing fee to sell those items, again with a cost of approximately 1/5 of the item's base value.
  • When the item sells, the game deducts a transaction tax of 10% from the total amount of the sale.
  • Sales listings are only available for a maximum of 3 days.
  • Players can only have 20 items listed at a time.
This seems reasonable, right? Players can still potentially make a profit on their items this way if everything goes right. But what happens when items take longer than 3 days to sell? What happens when the sale price is very close to the base value of the item because of oversupply?

What happens when crafters are required to grind out those cheap items in bulk order to advance? And what happens if those crafters are new players who are essentially still on the game's minimum wage as far as their adventuring income? Now there's an in-game paywall in front of any new player who wants to be a crafter, and they're still being required to push through that paywall in order to advance.

It is important for Pantheon to have some money sinks present to try and keep the amount of currency in circulation from running wild. The game will also need some limitations to help keep people with far more time to spend from flooding markets, whether it's with loot or crafted items. However, if we want a functional crafting sphere within the game, those money sinks can not all be implemented in ways that severely hamper people trying to craft and sell their items. The sinks need to be spread out so that they apply directly to adventurers whether those adventurers are participating in the game economy or not. More importantly, the game needs a strong mechanism to help balance supply and demand and ensure that items maintain a reasonable value relative to other items. This could be as simple as reducing the drop rate or increasing salvage yields if there are too many copies of an item in circulation and doing the opposite if there are too few. Failing to do these things can potentially result in a scenario where players give up on crafting (and possibly the game) due to what is essentially death by taxes.
 

vjek

Apprentice
My economic ideas regarding having no trade-able currency addresses all of these concerns. However, a hybrid approach would also work..
I agree that sinks are required, yet, VR has expressed no inclination to address inflation in any meaningful way.
Fully equippable / sellable items will drop from creatures, directly.
The intent, again, from everything they've described or shown in the past 6+ years, is that players go into the adventure loop, obtain currency directly from humanoids. They also gain items they can sell directly to NPCs for currency.
As long as that is true, then time = money, literally. Every second you spend in combat provides you with currency. Guaranteed broken economy.
Yet, item repair, not going to be a thing. Consumables required to perform ALL roles? Not a thing.
Nothing they've described so far even comes close to approaching enough sink to counter the issue of ~infinite taps.

As far as crafted items goes, regardless of the currency/economic model, it's always been a premise of mine that any system should have infinite NPC demand for all PC crafted items, and other PC customers are a side-gig to the player being part of the world economy by providing items to NPCs. Everything you make in crafting? Some NPC should NEED that. And they will reward you for making it, or enough of it.

I've seen many other "100% player driven economy!" models in action, and they don't work, because developers inevitably turn them into punitive systems. Either they try to force necessity upon everyone (by things like one swing in combat = 1 item damage) or it's tied to PvP so every death damages all equipment, and you need to use cash-shop-only repair kits, or whatever other horrible thing they come up with.

Mathematically, it's trivial to prove the 'classic' model of 'everyone is rich' is just ludicrous. Yet, that's what most paying customers seem to be satisfied with. 😐
 

Barin999

Journeyman
I like the idea of having more auction space as my character grows. Unless all levels 1 to 100 go equally fast, I wouldn't be within the level 10 range for long anyway. But I might be longer in higher end levels and I'll accumulate more items that I would like to sell. So therefore it makes sense to have more auction space available.

That said, I'm willing to live with a fee to get my items listed.
A fee can indeed be fix. I like your examples @Nephele . I would add: * allow different fees for listing items for different durations. And again with a 3 option ending: 1) item is sold, 2) item is not sold and is returned to the character, 3) item is not sold and player accepts a cash return. They could accept this to clear a slot in their available broker space. This return design, is close to an automated broker system. I'm not a fan of automated systems, but perhaps this could help clearing items from the broker and stabilizing prices over a longer time period. Also depending if * is in the game, player might choose to disable to return option and accept the choice of having to manage their brokerlistings by themselves on a routine basis.

This post brings me back to my auction example. Sadly, I can't find the link to that example. It goes something like this; if you're placing items on the broker you're aware that items that are not sold after X time, items are cashed in automatically. Unless chosen otherwise, but this second option requires more cash investment to keep the sale going.

Heck, I could even accept a growing fee as the item remains on the broker. Example: It costs you 5 copper to put a bread on sale for 1 week. The bread is not sold after a week, after a check up, the player decides to keep it listed. The cost to prolong it, is now 5 silver. Two weeks in, the bread is not sold. After checking in, the player agrees to keep it listed still for another week. This prolonging costs the player 5 gold. The inherent value of the bread, remained the same, the expected turnover value however has dropped already, seeing it's not selling in 3 weeks time. So the player might be thinking about lowering his price on that bread. After a while, the two meet in the middle. Where the upkeep of the enlistment nearly exceeds the price the player is wanting for his bread. Going further, either the player is losing money now or they take off the bread from broker and "consume it by other means". (aka sell to npc, eat it, salvage it, destroy it)

How do you want to get rich and why does it make sense? Can you enjoy a game where you appear to run in one place, due to not getting richer. I think the feeling of earning more and a bigger cashflow is very addictive in games and in real life. It's a matter of really thinking hard and long about a design. I would like to say that playing a game gives you options. You can design pathways that can be accepted by people if they want to play this game. Obviously you're trying to avoid overkill designs that push away people. In the real world, you can't enforce this to people this directly. (Governements, CEO, etc do this much more subtle and people accept it!)

Perhaps the aim is wrong...try different markets. Similar to the housing rent idea, I've suggested. Only this time, it's the available broker space that is scaling up with the character. Let's say access to broker is linked to the highest level of that character. This means if 10 is your max level, you'll have access to broker (-items) of level 10. A level 30 character no longer has access to items in lower tiers, but is lifted onto the platform of level 30 items and relevant pricings. This might be too restrictive for some. (Again, I think you can get away with it within the context of a game and players willing to play this game.) But at least beginning players will be absorbed into the correct priceranges in due time.
When a character levels up and goes beyond a level treshold. A mail could be sent informing the player; Hey, you've outleveled your previous brokerrange, do you accept cash return for the outleveled goods that are still listed or would you like to have them back (via mail or directly on you, when you log in next time).

What if the design is such that if X amount of the same items hit the auction market, it triggers an interest by npcs. Not to just sell the items to those npc's, but to salvage them and hand in those resources. This however can only occur, when the player obtains enough of the same items, bought from auction. This could be enabled by allowing a design where you have sequential purchases. This basically means; you agree with the game's ui, by deposting the coin in a temporary place, you're willing and able to purchase X amount of the same items one by one (or at the same time, if it's done by the game itself) and accept the salvaged returns. You will not be salvaging yourself, but an npc near the auctioneer does that for you. With the salvaged goods you can then hand in. The salvaged goods themselves have a temporary no value ID on them, so they can't be used for anything other than going to the specific npc. The return would be either a specific faction hit or a cash return. The cash return might be the average value of the item on sale. (or any other mathematical equation).
Come to think about it, this doesn't have to be linked to the auction market per se. You can apply this outside this context. It can help keeping auctions from being flooded and it might stabilize the prices on broker a bit more.

Another possibility is to deposit a certain cash amount at the broker. The amount will depend on how long the items are on sale. The longer the more expensive it will be. The cash needs to be there up front. When the time has passed, the entire listing goes to a none-sale state. Similar to how players are locked out of their homes until they cough up more upkeep. Consider this deposit option as a Ease of Life feature.
A player either accepts this and pays up along the way of their gamingcarrier. Or they do not, and choose to not use the broker system that abundantly and will flip their winnings in a different way. Items might dissappear more quickly from the market and item value could remain higher/stable for longer.

You could play with the design, where you have X amount of broker slots for free. This way, you enable every player to try and interact with the broker system in the game. If you aim the amount of free broker slots in such a way, you might see a lot of players drifting in this area, instead of paying more for more slots. This seems contraproductive, but this again means that more items will not hit the market but will be removed by other means. This suggestion could coexist with the more slots per level treshold suggestion mentioned above. So a higher level player will have more free broker slots. It makes sense and still you're not handing over all the cards.

Now you could say, it turns to pay to win. But the difference here is, the cash is coming from within the game and dissappearing in the game. The goods allowed on broker by those "exploiding players" will remain longer on broker or be more abundant on the broker, compared to more casual players. But here again, you can use the list duration fee.
None exclude the other.

What do you say?
 
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kazyovka

Novice
Most MMO economies end up suffering from severe over- or under-supply situations simply based on how items enter the game (feast or famine).

Money sinks are important to keep an economy functioning. There need to be mechanisms to pull currency out of the game because prices will always adjust to the amount of currency in circulation. Expensive items will always be expensive, and cheap items will always be cheap, but as players acquire more and more currency the distance between "cheap" and "expensive" gets a lot bigger. This, in turn, creates a situation where newer players are at a severe purchasing disadvantage. To use a real-world example, they're still making minimum wage, but everything they need or want to buy from other players costs too much. Unlike the real world, they don't have to stick around and try to put up with this in a game.
Taxes are a bad way to solve the issue. The proper way to solve the issue is for the money supply to be self-correcting.

In full generality, the issue becomes self correcting when new sinks for money turn on as the marginal utility of a unit of currency decreases (i.e., as the currency inflates). Taxes don't have these properties - you always have to pay them whether the economy needs fewer or more coins in circulation.

Example of "responsive" monkey sinks:

- When there are few gold coins, their exchange value for other player's items is their best use. No sinks are employed.
- The next highest-marginal-utility use for gold coins could be as components of crafting. If you have excess coins, you can always gains some value by expending them to have a chance of crafting something.
- As prices inflate more, you may have so many coins that it makes sense to spend them on other things, like paying an NPC to enchant your next dungeon run so that the mobs are harder but give more EXP.

Basically, as long as there are sinks for money that "turn on" and become reasonable purchases when prices inflate, and then "turn off" again once prices deflate, a player-driven economy can correct inflation and deflation. The important thing about sinks is that they're player decisions, so players can respond to fluctuating currency values by opting in or out of the sink. Good sinks also enhance player opportunities to make wise or poor decisions, deepening gameplay.

As a concrete example from Path of Exile (I will never stop talking about POE's crafting and economy), all money is also an expendable component of crafting. So you could trade them to other players, but sometimes it's more cost-effective to use your chaos orbs (basically, these are the $1 dollar bills of POE) in order to randomize the mods on an item. If chaos orbs get too cheap, this is exactly what people start doing. They start crafting more items, trying to make better gear.

A really interesitng fact about POE is that all trades happen using an API which has been made publicly accessible by the devs. Thus fans of the game have been websites that track the market prices of items, and we have many years of historical data. Chaos orbs follow the same pattern every league: they start off very valuable, but within a week they stabilize to around 100c-200c per ex and stay within that range for the rest of the league.

You can see how the economy has been working well for many years by looking at these charts: https://poe-antiquary.xyz/.
 
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