Serious Gaming - textbook text

=Introduction= Serious Gaming as a term is often used by mainstream to describe professional gaming community, which is in fact incorrect. There is very clear distinction between playing games professionally to make money and looking on games as a learning tool. That could be packed together with simulation – army is using simulation for years to prepare its soldiers for specific combat situation. Do you want to learn how to play guitar or drive a truck? -There is simulation even for that. Well with serious gaming we don’t mean only playing simulations or playing the game at all. You can learn – derive a deeper meaning from the game by looking at it, by maintaining it or by creating it.

=Economy= So, in this topic I would like to choose this bird perspective and try to look at MMO’s and its ties with real world economy. MMO – Massive Multiplayer Online – that means a lot of people are playing at once in a shared world (for our purposes economic market) and it is connected at 24/7 basis. Every game in this genre has to deal with its economic challenges in a specific world and now it has become the best practice to use methods from the real world and its economy. The biggest a scariest challenge yet is inflation.

Let's start by defining "inflation" - when the buying power of a given amount of currency drops, we call that "inflation". So, for example, a nickel buys a lot less in the United states today than it did in 1850. As you probably know, whenever you print money in a real-world economy, you inflate the currency. Print too much money and you hit hyperinflation - an economic state where the currency effectively becomes worthless.

=Hyperinflation=

MMOs suffer from a strange problem, at least in a real world economic sense. Everybody is printing money all the time. For years, every massive multiplayer game has struggled with this. And as any old school MMO player will tell you, the results were as devastating as they often were hilarious. But of late, games have stolen a very real world economic solution.

Economic balance in MMOs is one of the most complex things you can wrestle with as a designer. And it offers a fascinating view into where real-world economic theory and the inherent strangeness of running an MMO collide. But today, we're gonna dive into one of the most important issues that MMO economies face: The tendency toward hyperinflation. Pretty much any of you who have played an MMO for any length of time have seen this tendency in effect. The value of a Gold piece in the game drops and drops as time passes. In the first month after launch, you could buy great items for 20 gold pieces. Fast forward to three years later, and those same items are costing ten thousand gold pieces in the auction house.

Imagine what this would do to a real world economy. Imagine if rather than your central bank having the exclusive right to print money and keeping careful tabs on how much money is out there, everybody was just printing money all the time. You would hit hyperinflation pretty fast The value of the currency would plummet and the loaf of bread that costs five dollars one day would cost 50 the next week. And then 5,000. And then people would just stop accepting money for bread altogether. Your currency would be effectively worthless. And that is exactly what happens in most MMOs. In Asheron's Call, the in-game currency became so inflated that shards were used as money. In Diablo 2, stones of Jordan rapidly replaced gold. And in Gaia Online, the currency became so worthless that the company started offering to donate two hundred and fifty dollars to charity every time the players threw away 15 trillion gold. Players just abandoned the designated currency and chose a different, more restricted currency because they could no longer trust the initial game currency to retain any value at all. And this has a devastating impact on these games. When you paid for any of those items or services, the money you paid with simply vanished, which theoretically would have a deflationary effect

But why does this hyperinflation happen in the first place, and how can we prevent it?

=Sinks=

In the real world, governments control how much money is printed in a given amount of time so that they can regulate how much currency enters the economy. And thus control the rate of inflation to some degree. But where does currency come from in an MMO? Well, monsters. Every time a monster spawns, you're effectively printing money. Every time you kill a mob in an MMO, you either get money directly or you get loot that can be exchanged for money. But to keep the game engaging for the players, these monsters have to respawn in a timely fashion with an amount of loot and currency similar to what they had last time they spawned. If they didn't, you just end up with big empty zones with nothing to fight. Or people feeling cheated when the first players to get to his own swipe all the good loot. It would be a great way to kill your MMO in a hurry. So over time, more and more currency is being added to the world as, in aggregate, the player base is killing and looting huge amounts of mobs. This effectively devalues the currency and leads to runaway inflation creating the worthless currency scenario that I described before. So what options do we have to regulate this virtual economy? -The standard answer is to find currency sinks. Places where you can use game mechanics to take currency out of the world.

Vendors
The obvious go-to is your death mechanic. Every time you die in World of Warcraft, your equipment takes damage. Eventually you have to repair it, which costs money. And that money goes to a vendor, and not another player. So you're giving money to an NPC without getting any resellable goods in return. Effectively taking the full value of that repair out of the world economy. It's a great design idea, but it's not gonna single-handedly solve your problem. The trouble with death sinks is that it's almost impossible to make them effective enough by themselves without feeling onerous.

The only devs it seems come close to controlling inflation solely through death mechanics are the folks at CCP with Eve Online. In that game, the economic cost of dying is so staggering, it becomes a strong tool to rein in inflation. They also encourage large-scale player wars as a key element of the game. These wars destroy so many goods, which then must be replaced, which helps to keep inflation in check. But since death penalties alone usually aren't enough to prevent the hyperinflation incurred by player farming, what else do games do?

Well, first off, they use the buy and sell prices of vendors. Note how most NPC vendors in these games only give you a very small percentage of an item's value when you try to sell it to them. Where does that value difference go? Nowhere. It falls out of the economy, effectively reducing the amount of currency in circulation. Unfortunately, this technique isn't a cure-all for the problem either. Because our NPC merchants aren't all that discriminating about what they'll buy. In real life, a shopkeep would tell you, "No. Stop trying to sell me rusty knives." "You've sold me thirty of them now. I don't want any more. Get out of here." But nope, our NPCs are happy to pick up those tattered rat pelts all day long! Rag, weeds, a handful of rocks... Doesn't matter if they're worthless at the auction house; that NPC will buy as many as you can bring them. This means that items which otherwise would have zero economic value now have some economic value due to our NPC vendors. Which, in the end, often results in the sell function actually adding more currency to the economy than it removes. This is doubly true when you introduce the concept of soulbound items. Sure, it creates scarcity for those specific items, but it also means the only place you can eventually offload them is with a vendor. Which just floods more and more money into the economy. If it were a regular item, it could at least get circulated among the playerbase forever as players kept selling it to each other, which is a currency neutral activity.

Other means to regulate the economy
But okay, what other options do we have? Well, there's also consumables. Potions, ammo, food and drink. All of these serve as ways to remove currency from the economy. And games which make these systems crucial parts of play tend to do so that the designers can have a big lever to pull to stop runaway inflation when they need to. Is inflation growing too fast? Well, create an expensive high-end consumable that all your players are gonna wanna burn through and you can level out that problem real quick. Auction house fees are another common system. Besides simply deterring players from putting up junk auctions all the time these fees serve to remove a small percentage of the cost of an item from the economy every time it circulates through the playerbase. There's also services. Have you ever wondered why you have to pay for fast travel, or why that griffin ride costs you money? It's because it's another economic sink. This can be anything from transportation, to fees for sending letters, to money paid to open up new bank slots. All of these services take money from the player without returning a tangible good, thus effectively deleting that money from circulation.

Let's talk about some of the more inventive solutions that could be used. First off, let's talk about this idea of tying currency to a consumable necessity. Let's say, for example, that you put a high-end potion into your game for ten thousand gold that every raid player is gonna want every time they go raiding. Now let's say that it's only purchasable from vendors. And not only does this remove ten thousand gold from your economy every time a player swings one of these things but it also sets a baseline for the value of money. Your currency may inflate, but by essentially backing it with another good - by saying that at any point, you can trade in ten thousand gold for this potion... Your currency will never become worthless. Or you could tie it to real-world currency. If players can trade your in-game currency for something with real-world value... It'll inflate, but it'll always retain value. In Eve Online, Plex serve this function. Plex are game codes that can be used to pay the monthly subscription fee for the game, but they're also tradable on the in-game market. And this means that the in-game currency will always have value, because it's tied directly to something with a real-world dollar value. There are also taxation systems in games, which help to keep things regulated. You wanna keep your guild for another month? Well, you better pay x amount of gold. You wanna keep that farmland you bought? I guess you better pay the NPC lord a few hundred guilders before the week is out. It's an effective option, although it's really hard to manage without making it feel burdensome to the player. Lastly, there's the idea of permanent purchasable upgrades for a character. We do already use this to a limited degree. Have you ever wondered why this trainer who wants to guide you through life or prepare you to save the world isn't gonna teach you that new kick until you fork over four platinum? It's to get that money out of the game. The problem is that this often stops at the level cap, when you run out of stuff to learn. Which is unfortunate, because that's the place where it would actually be most effective. There is an alternative, though: premium endgame trainers. Have you already maxed out your level? Well, here's a special trainer who will increase any stat you want by one point, for 40,000 experience points and 10,000 gold. The great thing about this is that it can be an exponential system, which causes the high-end players to just drain money out of the economy. Which is good, because those players are usually the biggest generators of inflationary influxes of cash.

=Reserve currency=

It seems like designers have discovered another solution. A reserve currency. In the real world, almost every nation holds onto a bunch of currency from other countries to serve as a reserve currency. This reserve currency is used for international transactions, but far more importantly to us, it's used to anchor the local currency. Because, after all, if you have 500 billion dollars in the bank and you tell everybody that they can trade 50 of your currency for one u.s. dollar well then the least your currency is worth is 2 cents. It can't go below that so long as you've got some of your reserve currency left. If your currency starts to inflate, then people start to trade in your local money for the reserve currency, effectively creating a floor for what your currency is worth so long as you still have a supply of the reserve currency. So how does this work in MMOs? Well of late, many MMOs have started to allow players to buy things of real-world value with in-game currency, like Plex in EVE Online. Many of the free-to-play MMOs have gone one step even further and let players buy their microtransaction currency -- the currency that has to be bought with real money -- from other players for currency earned in game. By tying the in-game currency to real world currency, which has real value, the in-game currency now can't lose all of its value. But that alone didn't end up being enough to prevent hyperinflation in a lot of these games, so two other aspects, somewhat lifted from how real world reserve currencies work, were put into place in order to overcome the infinite money printing that MMOs naturally engage in. The first is illiquidity. In the real world, reserve currencies can't really be traded among the local populace. Like if you go to China, even though the Chinese keep huge amounts of US dollars as reserve currency, you can't really simply trade US dollars for things on the street. You usually need to convert your money into yuan first. And while clearly this is not a hundred percent true in the real world because the real world basically breaks every rule at some point, you can make it a hundred percent true in games because you set the rules of that world. You can prevent players from trading the purchased currency. Players can convert their earned currency to purchased currency.