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A Chat with EVE's Economist

Zonk posted more than 7 years ago | from the all-about-the-isk dept.

Role Playing (Games) 94

Earlier this month Dr. Eyjólfur "Eyjo" Guðmundsson, the newly hired EVE Online economist, released his first market report looking at the mining and trade of minerals within CCP's massively multiplayer online game. I had a chance to speak to Dr. Guðmundsson at GDC Austin, to further understand why it is that an online game needs an econ professor on staff. We discussed his work on the mineral information, future plans, the reality of trust in an inherently hostile world and why that makes for a bad banking environment, and a few words on player communication from CCP CEO Hilmar Petursson. Read on for the full interview.Slashdot: Just so we can understand a little bit of the background here, how did you get hooked up with the CCP folks, and what is your interest in EVE Online?

Dr. Guðmundsson: Originally I was hooked up with the CCP group through a conference on experimental economics where we were looking at how to use experiments on how to improve natural resource management. What does that have to do with CCP? They showed up at the conference, and introduced the game to researchers as a potential platform for testing and tracking social trend. I fell for the concept. What I fell for was the single server concept. Everyone in the game world is participating in the same experience. As the game grows the complexity and the fun of it grows exponentially. You can actually see shortages of goods, scarcities of goods in the game world. If you want some material, you need to take steps to go out and get it; you can mine it, you can refine it, but there is a time element involved in obtaining it. There's an element of effort involved. You can also lose things, if you make poor decisions, if you go into an area where you can't defend yourself you can actually lose what you've been building. All of these components are build into the world, and when you make decisions in the game you're making many of the same decisions you make in your daily life. It looked to me like a perfect world to do research on.

Slashdot: I know your first blog report was on mineral prices; what other areas of the economy are you finding interesting? What elements of the economy are we likely to see written up in the future?

Dr. Guðmundsson: Well, the whole macroeconomics of EVE are very interesting. Trying to figure out inflation, trying to figure out the monetary supply, trying to figure out the overall trade patterns ... all of these macroeconomic trends are of interest and we'll be working on those over the next few months. I also find it interesting to look at these resources, to think about how corporations and alliances are run. We can see how different corporate cultures have helped in obtaining different goods.

Slashdot: In previous interviews you've spoken of economics as a source of entertainment. I'm wondering why you see people viewing economic information as amusement. Isn't this kind of dry stuff?

Dr. Guðmundsson: I think it's entertainment for people because it helps to put things into context, and it helps to put yourself in a place within that context. You can identify where you are economically. You need the information to make decisions about your own life, but you also want to know things on a broader scale. "Oh, this guy or that guy gained a billion dollars on the stock market, or he lost a billion dollars on the stock market." It's just news, and we can say that it will interest people who are generally curious, and also for personal gain.

Slashdot: Beyond the blog entries, you're going to be doing quarterly reports, correct?

Dr. Guðmundsson: We'll be doing quarterly reports, and we'll have annual synopsis. The first report is due out before fanfest, by late October. Fan Fest is in early November. That one will focus on the macro environment, try to set the stage for future computations. We see it happening that way; in the first one we give sort of general indicators, and in the ones to follow we update the information that we have and we imagine it has the potential to grow quite a bit over time.

Slashdot: Obviously you can't go into details, but are there already any surprising trends that you've found in your research? Anything you weren't expecting?

Dr. Guðmundsson: Well what I've been looking at in terms of the mineral market, what has been really interesting to see, is how efficient the market is at disseminating information. If something happens in the game you see in the market numbers very soon. We do not participate in that market, it's a completely player-driven market. That makes it even more interesting, to see how effective and efficient a market it is. It has all the same laws that any market has in real life. From what I've seen so far, I find it very interesting to see how effective the market is, and I'm looking forward to seeing how other markets compare to this one.

Slashdot: This may be a good question to include Hilmar in. What is it about EVE that makes those communications so efficient, that allows market information to travel as quickly as it does?

Hilmar Petursson: I would say there is a fundamental difference to the EVE economy, something you don't see in the economies of other games. People are making purchase decisions in a matter of life-and-death environment. You are trying to outsmart your competitor by making an informed logistics and market-based decision, and the more data you have the more efficient your decision-making is. Currently we have offered price trends for items, as well as volume and those sorts of statistics, people have been using this to make purchase decisions on items. As the economy has grown larger, though, there is more of a need for macro-level understanding of economic data. Just as when you have a relatively small country, you can get by with having the market provide the microeconomic data, when the scale increases you need to see the macroeconomic data so that people can see the overarching trends. Consumer confidence, interest rates, money supply, these factors become more and more important as EVE Online grows and the market becomes more efficient.

That's really what the game stands on, the whole thing is tied together by the market system. We have various disconnected systems like mining, manufacturing, corporations, and combat, but they all tie in at the bottom with the market system. We initially spent a lot of time when the game was first made, making sure that we had an abstract, efficient, accurate market system. We made many difficult decisions where we sacrificed 'correctness' for simplicity or ease of use. It is a fairly complex thing, but it has allowed us to evolve the game quite rapidly up to this point. That said, we have been seeing more and more of a need to get professional insight into what is happening on the macro level. We've seen immediately how responsive the player base is to it. They've been looking for these kinds of insights for some time now.

Dr. Guðmundsson: I would like to add that the fact that the information is distributed so quickly makes it a great model for other market systems. You have smart players trying to outsmart each other, which sort of means that as soon as information is available someone is using it to try to gain the upper hand. We can say it's also due to the smart play styles of the playerbase.

Slashdot: Has the response been fairly favorable to the first report?

Dr. Guðmundsson: It has been most favorable. Many people have thanked us, and like to see the trend data that we have. I think most of the players would like to see more in-depth analysis, and I think that's going to be the most beneficial work we can do. The only thing is, it will take time before we can provide them with the kind of analysis we'd like to see. Then there are all the people who would like to get advice about what they specifically should do. As with any other economic advice, though, if I knew what a specific player should do I would know everything. This isn't that kind of advice. This is for people to make their own smart decisions about what to do. We can't tell people what they should do, but we can say what happened and why it happened.

Slashdot: I have read that other research groups have an interest in the game along these lines, and I was wondering if you've had any contact with other groups about studying EVE for other subjects. If you have, what areas of study will these groups be looking into?

Dr. Guðmundsson: I think generally there's a number of academic groups interested in research inside of gaming worlds. I think this is a very new phenomenon, but the potential for research in many fields is very great. People have talked on the web about looking into EVE from political, sociological perspectives, science research, looking at the democratic elements of the game ... it all boils down to the point that within the game world, because of its design, people are behaving in a way that is interesting to the world we live in. Research done there could be used to better understand how people behave in the real world, within certain environments.

Slashdot: Earlier you spoke of how PvP is a driving force in the economy because of the requirement to make smart decisions, and the drain on resources from combat. What are some other effects on the game's economy that result from phenomenon?

Dr. Guðmundsson: Well, PvP is essentially the way that resources are consumed in EVE. In order to operate a fleet, to outsmart your opponent, you need a lot of resources. In order to get these resources you get them in the most intelligent, efficient way possible. You need to get people to mine for you, you need people to make the right weapons for you, in as short a period of time in the right quantities. Specialization among the players is almost a requirement in order to get the best use out of time and resources in games. We have whole corporations in game that focus on mining and shipping, and there are individual traders who think they know what demand will be for in the near future; they do arbitrage trading all over Alliance space to the alliances and corporations.

Slashdot: Another element you've spoken on previously is the lack of trust players have with each other, and the problems that presents when trying to form something like a bank. What's your opinion of setting up a trusted bank from the CCP side?

Dr. Guðmundsson: From my perspective a CCP-run bank doesn't really matter; what really matters is what does the playerbase think. What kind of services do they want? We see players trying to fulfill those services, within a limited framework in terms of the trust. Because they're doing it, there's obviously an interest there. If we were to do it we'd have to examine how to go about that the right way. That's really how the banking system was established in our world, and that took a couple hundred years to develop before we had a system people could trust. What we need to do is come up with a system that's supportive of gameplay, that can survive the problems of many users.

Slashdot: Since you began examining the economy, have there been any issues or problems you've discovered in the marketplace?

Dr. Guðmundsson: At this point we haven't come across any issues that are serious problems for the gameplay. As I said before, we want to have hands off on the economy as much as we can. When we look at the issues that are potential problems, any treatment we would do is very very slow, and very very light. Up to this time, since I've been with the company, there have been no issues that really impacted the gameplay. The market is incredibly player-driven. It's an incredible state of affairs to see.

Slashdot: Looking at the different styles of gameplay (trading, mining, PvP), which is most efficient in economic terms?

Dr. Guðmundsson: Well, you can never really say beforehand which type of playstyle is more profitable, because it changes all the time. In order for you to understand which is most profitable you'd have to make your own predictions as to what is going to happen in the future. Profitability of a certain industry is based on expectations of future performance. If you knew that there is an upcoming war between Alliances in a certain area of the galaxy, that would tell you that it would be profitable to become a trader in that sector for the near future. If they are in need of a lot of supplies for a short period of time, that will put a squeeze on resources in that particular area. Then you'd have to follow what's going on and keep track of what's happening on the internet very closely.

Slashdot: Do you have much of an interest in actually playing the game, or is the research side of things mostly what interests you? What is your preferred style of play?

Dr. Guðmundsson: Oh absolutely. By necessity I will always take a low profile, try to just understand the gameplay as much as I can. I greatly enjoy talking to people about the game a lot, listening to peoples experiences about how they perceive the game is quite interesting. We talk a lot about the gameplay at CCP too, of course, long into the night. It's sometimes said that in Iceland there are 300,000 people, and there are 300,001 opinions. From our EVE community of 200,000 people, it certainly seems like there are 200,001 opinions on exactly what is happening. That's really fun to be able to interact with.

Basically I'm just trying to understand all aspects of the game, but of course I find the trade and marketing aspects of the game most interesting. It's also fun to go out there and shoot at somebody, of course.

Slashdot: Is there anything in specific about your research that you'd like to share with EVE players?

Dr. Guðmundsson: Generally speaking I'd like to get the message to our playerbase that I really enjoy all comments that have been put forward. I come from an academic community, and criticism is really the driving energy behind doing something new. So, I'd say just let the comments flow. Let me know what you like and dislike about the research, what you'd like me to do in the future. We are still in the early stages of understanding the economy, though, so over the next couple of months we will be putting forward mostly historical information to set the stage for future projects. I really like them though; please keep them coming.

Dr. Guðmundsson: Thank you sir, very much, for your time.

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FRIST POST (-1, Offtopic)

Anonymous Coward | more than 7 years ago | (#20590153)

(nt)

Re:FRIST POST (-1, Offtopic)

ttapper04 (955370) | more than 7 years ago | (#20590251)

First reply!!!1

999,999,999 opinions, but ... (2, Funny)

Anonymous Coward | more than 7 years ago | (#20590315)

[It's sometimes said that in Iceland there are 300,000 people, and there are 300,001 opinions. From our EVE community of 200,000 people, it certainly seems like there are 200,001 opinions on exactly what is happening.]

And on Slashdot, there are 999,999,999 opinions that seem like 1,000,000,000 but all only under one user.

Q.E.D.

Oblig Futurama (1)

Dragonshed (206590) | more than 7 years ago | (#20590357)

Fascinating captain, and logical too.

Any conclusion? (2, Insightful)

TheLink (130905) | more than 7 years ago | (#20590381)

I RTFA'ed and the interview, and looked at the graphs etc.

Can anyone tell me whether he really said anything? I couldn't spot it.

"Overall trade quantity and volume has increased dramatically over the last 3 years and the price of minerals has fallen considerably due to increased mining efficiency through better tactics and improved technology"

I could get a program to pump out that stuff based on the stats. In fact I've seen such auto-generated drivel in some investment sites for stocks that no human is monitoring -profits have gone up due to management actions leading to increase in revenues and reduction in costs blahblahblah.

Did I miss some insight or analysis of his somewhere?

Re:Any conclusion? (4, Insightful)

spedrosa (44674) | more than 7 years ago | (#20591607)

The thing is that you are looking at the compiled data. Ordinary players have no way to gather all that information by themselves. Now that the graphs are published, most conclusions are obvious indeed.

As for the rest, the players will have to figure out for themselves.

Re:Any conclusion? (0)

Anonymous Coward | more than 7 years ago | (#20591729)

Heh! If you think this is a sign of his not being an effective or professional economist, I suggest you watch some videos of Alan Greenspan's various speeches sometime. ;)

Re:Any conclusion? (1)

TheLink (130905) | more than 7 years ago | (#20592655)

When Alan Greenspan makes a speech as Fed Reserve chairman he's not being an economist.

He's being like someone trying to move an entire herd 6 inches (and not much more) without causing a stampede.

Re:Any conclusion? (1)

SpiritGod21 (884402) | more than 7 years ago | (#20594875)

That was the primary criticism he received about his data presentation. Everything he said, we already knew. Those who engaged in such trade had, for quite some time, been compiling their own data and making their own graphs. And that was without direct database access.

It was shiny, but it wasn't anything new or exciting (or at least exciting to the right people). Hopefully, his quarterly or annual report will be more beneficial. People had several requests in the forum thread for what they'd like to see him reporting on and taking into account, and since he comes from an "academic background that is driven by criticism," hopefully we'll see some progress.

Single server concept (5, Insightful)

GroeFaZ (850443) | more than 7 years ago | (#20590431)

What I fell for was the single server concept. Everyone in the game world is participating in the same experience.

Uhm, wouldn't a multiple-server environment actually be more useful as far as science was concerned? For things like control groups and stuff? We have a "single server concept" in the real world. IMHO, that's why Economics is regarded by some as little more than fortune-telling, because you can hardly isolate a single variable and experiment on it in the real world. If there are multiple well-populated but otherwise identical servers representing the game, you could trivially and with mathematical precision change a certain variable on one server and actually draw conclusions from the developing differences (or lack thereof) with regard to other, unmodified servers that run in parallel.

Re:Single server concept (0)

Anonymous Coward | more than 7 years ago | (#20590541)

And then have a mutiny from your players. Because any change will create winners and losers.

And most server populations are small. WOW servers are damned small compared to EVE.

It could, but (2, Interesting)

everphilski (877346) | more than 7 years ago | (#20590617)

Uhm, wouldn't a multiple-server environment actually be more useful as far as science was concerned? For things like control groups and stuff?

It could. But looking at a game I'm familiar with (EQ), the price of platinum and items in-game is about constant across the board. Notable exception being (1) the PvP server and (2) the 'combine' server [which is a server that opened not long ago, starting with the first expansion. New expansions are unlocked as milestones are met. They are about 3/4 of the way through...]. The only way then to really get some interesting data is to start varying things - change drop rates, only try to enforce anti-farming and anti-platinum sales on certain servers, etc. People will figure this out and move. Which, I guess, could be research in itself (most of it being no-duh as to what people want) but would wreck your control groups.

Re:Single server concept (2, Insightful)

Notquitecajun (1073646) | more than 7 years ago | (#20590715)

Both are useful.

We can learn something from EVE's single-server system because it started from scratch...something that macroeconomics in the real world can't simulate. It's practically a true free-market economy with pure free-market hindrances (such as goldfarming) without the corruption/influence of past or failed economic styles (such as communism or mercantilism unless they develop in-game somehow).

You're right about multiple-server systems, though.

Using MMORPG's as a tool for economic study is near-genius by the way...it allows for some interesting tinkering and study without awful side-effects, and you can correct many problems practically overnight (such as kicking out goldfarmers or re-working accounts to give people more gold or something).

Re:Single server concept (1)

American Scum (1126015) | more than 7 years ago | (#20597819)

It would be genius if more of it wasn't fake.

My main disagreements with treating Eve Online's economy in such high regard is the level of 'fake-ness' imparted on it by forces that do not, and can not, exist in the real world.

For example, there are taxes in eve; yet, unlike the real world, this 'money' goes nowhere. It's just taken out of the system.

Another would be that the magical supply-demand economy isn't really 100% player driven. The demand-side is, of course, but the game is just about as fake as WoW (never played it, but... ) in that any item can be bought from the game, itself - though those items are all basic-versions of what the player-base could improve on.

So let's talk banking now... We're talking game-money invested for ... what reason? For interest? The whole reason banks offer interest is to make money off of the money they get to hold on to for a while that, in turn, they use to pay salaries, pay other investors, and use to buy whatever-it-is that banks buy.

Introducing a game-based bank wouldn't serve any useful function - or at least any useful function that would correlate into a real-world revelation.

Lastly, the good Dr. is right - the game's economy does revolve around loss. This too, though, puts a strange dynamic on real-life studies as the "losses," or at least parts of the losses, completely disappear from the game. It seems to me that, in the real world, one person's loss is usually another's gain (that is, unless each country experiences a Hurricane-Katrina every year...). Thus the miners go out to get minerals from their quasi-limited resources (limited to a certain amount, per area, per day) to hoist it back up again.

Personally, I believe that hiring such a high-level economist for the Eve economy is pretty misguided, and that the Dr., himself, is valuing the tool at more than its worth.

Re:Single server concept (2, Insightful)

Opportunist (166417) | more than 7 years ago | (#20591279)

Actually, no. Because people have nowhere to escape if economy goes bonkers.

If you have multiple servers, and people want to play, they can jump ship if the economy on their server goes bananas, be it because of farmers, because of mob monopolizing or because of guilds undercutting prices to the point where they can easily monopolize the market. Now, while all those problems are hard to achive in EvE due to its size, the problems exist.

EvE did have a farming problem not too long ago. Prices plummeted and life was pretty hard for miners. What would have happened in a multi server environment? Right. People would have moved. As any statistician can tell you, timeline analysis is very hard to do and rather unreliable if you change a key variable in the middle of your analysis (in this case, the number of players).

So yes, having a single server is actually a benefit.

EVE still has a 'farming problem' (0)

Anonymous Coward | more than 7 years ago | (#20592269)

They're out their by the arseload. You can't swing a dead n00b around in high-sec space without seeing hundreds of them.

The shocking thing is the economy is still functional and inflation/deflation/whatever hasn't gone absolutely mad, in spite of farmers being everywhere

Why?

Because on a single server with 25-30k people online 23/7, farmers can't even dent the amount of resources consumed by alliances. I'm sure it's had an effect, but it hasn't caused the absolute collapse of economies like it has with every traditional MMOG.

And that too - multiple servers might be nice, but what are the options? No other game has a more real-world approach to wealth. EQ, EQ2, WoW, DAoC, pretty much everything other than EVE - there's no limited supply. Granted, even EVE has an infinite supply of minerals via asteroids/spawned loot... The difference is, in EVE, things can and do get blown up all the time - they're removed from gameplay.

There's no, "It's been three months, and *everyone* has their Shiny Orc Bullcrap +20, and prices on them are dropping like a rock because the market is flooded!" The market can't really be flooded, because there's *always* demand, if only for replacement ships/equipment.

Re:EVE still has a 'farming problem' (1)

Atreusmonk (741599) | more than 7 years ago | (#20595353)

Yeah, I'd say that's probably the most important way that EVE simulates a real economy: things enter and leave the system through use and destruction. The only thing it's missing is truly limited resources (not just limited for the week/day/hour/minute).

Re:EVE still has a 'farming problem' (1)

Odin_Tiger (585113) | more than 7 years ago | (#20596195)

There's also the fact that you simply cannot get the more valuable ores in high sec, and you can't profitably macro-mine in low sec. Those valuable ores are required to make most of the stuff in Eve, so it has to be mined...but significant resources have to be invested in defense and cooperation (via corporations and alliances) to get it done profitably. There's also the point that a player can generate large amounts of money - comparable to low-sec mining to some extent - by doing high-end missions in high-security (safe) space, but it requires a competent, attentive player with a significant investment in equipment. It doesn't lend itself to macro-ing at all, so it's not attractive to the stereotypical Chinese-sweatshop-farmers, but it's very effective for a normal player.

Eve just isn't a very good platform for farming for profit...most of the farming that you see is done with alt characters to supplement the income of a main character, rather than large-scale for-profit-in-real-world-money type operations you see in other games.

Re:Single server concept (0)

Anonymous Coward | more than 7 years ago | (#20594941)

People COULD jump to the other servers if the economy screwed them over. But since they'd be starting over on that server, I don't see how that would help them. Even without multiple servers they could still just jump to a different game.

Re:Single server concept (2, Insightful)

cowscows (103644) | more than 7 years ago | (#20592195)

There's pluses and minuses to both methods. Multiple servers allow you to test in the ways that you mentioned, but having just one game universe makes it more "real" in some ways. Basically the players are stuck with that one model, much like the real world is stuck with the one global economy. Plus you'll get some long term growth data that you wouldn't get otherwise. If another 20k people join, instead of putting them all off on their own server with its own economy, you see the effects they have on an already existing economy, and how it grows and adapts. And also how new players find their way into a well established economy where many players are already far ahead of them.

There's plenty to be learned from both setups, no doubt.

Re:Single server concept (2, Interesting)

jd (1658) | more than 7 years ago | (#20593405)

Well, single servers with varying rates of intra-server communication should be nearly identical to multiple servers with varying rates of inter-server communication, except the modeling will be much more complex on the multiple servers. If you're unsure if the tools you are using are even going to work at all, of course you are going to want to validate them against the simpler case.

Anyone can produce graphs, but what do you produce graphs OF? If there are N variables in the system, you can produce N(N+1)/2 graphs to describe the system. Do you go for something obvious, or by examining what is modeled, can you infer more promising areas to dig?

In the graphs, the curve defining the number of subscribers roughly mirrored the curve defining the value of the trade, except for some scaling which allowed the ratio between the two to approach 1:1. Knowing how those two interact is going to be important in understanding inflation, supply/demand, etc. Knowing the graphs alone doesn't tell you any of this, it is in knowing why the graphs are the way they are and what will happen next that is important. The raw numbers are vital to knowing what is next, the same way you need a rising agent when baking a cake, but the rising agent alone will never give you a cake, no matter how you cook the numbers.

The other thing to consider is that "economics" is not a single, unified field. You have people worshiping the god of Adam Smith, there are equally feverent devotees of Econophysics and Thermoeconomics. Game theorists tend to listen more to John Nash's work and are likely to have encyclopedic knowledge of John von Neumann, and so on. There is no Grand Unified Theory, there is no real attempt at producing one, and most economists you will read about or hear will assume that theirs is the One True Discipline, the rest being products of the infidels who must be destroyed by corporate jihad.

Well, economics is the study of money, right? Wrong. To quote Wikipedia: "Biophysical economics is a system of economic thought based not on money but on laws of energy and material transformations and empirical assessments of these and their relation to money." It tells you about money, sure, but it makes money the dependent variable of the equation, reversing the conventional line of thinking entirely.

Herein lies the problem with an economic study of EVE. It would be quite impossible for a single economist to study the system using the multitude of theories and models that exist. Most are "good enough" to get better-than-chance results a better-than-chance number of times under any system which has bounded resources and bounded latencies, or nobody would bother with them. Nobody is going to waste time using a system that is inferior to tossing a coin. Coins are cheap, degrees are expensive.

Not only, then, does this economist not know whether the real-world tools will work, but he doesn't even know how the tools will differ in quality when placed in a virtual environment. What is "good enough" in the real world may be a disaster in a virtual one, or vice versa. All we know for certain is that his conclusions can be no more correct than the methodology he applies.

Re:Single server concept (1)

prionic6 (858109) | more than 7 years ago | (#20600297)

Actually, a system that is worse than chance is actually better than chance: You just do the opposite the system tells you. The worst systems are those equal to chance.

Re:Single server concept (1)

Gorlash (957166) | more than 7 years ago | (#20597963)

IMHO, that's why Economics is regarded by some as little more than fortune-telling, because you can hardly isolate a single variable and experiment on it in the real world.
Economics is distinctly worse than fortune-telling! Fortune-tellers will generally agree on what to tell a chump, or at least converge on a few alternatives...economists seem far more likely to generate a minimum of one opinion per economist.

Re:Single server concept (1)

AP31R0N (723649) | more than 7 years ago | (#20601985)

i think he is talking about his experience as a player, not economics.

And you're still right about having multiple servers would allow for control groups and comparisons. Your statement and his are unrelated.

Personally, i DESPISE MMORPG economies and trade. It brings the plagues of gold farming, twinking and short cuts. One of the things i love about PlanetSide is that everyone can have the same stuff and abilities (maybe not all at once, but in general). That makes the game more about skill, tactics, cooperation/leadership and strategery. In WoW and other MMORPGs you don't have to earn anything, you can buy a character with your real world money, buy all the best items. Then you can mop the floor with a player who earned everything they have, even if you're the same level. The right equipment can compensate for levels (and poor skill).

i'd like to see some Soulbound servers. Then i would see your epic item and KNOW that you EARNED it (or that you bought a character from someone who earned it). Buying characters is tricky because the original owner can get it back by saying you stole their account. i know not everyone is into earning their way through life and/or games, so i'm not saying they should all be soulbound servers... but it would keep me in the game. No, i don't want to play a single player game. i want to play MMORPG with players that have a sense of fair play. Don't try to sell me some BS about "trading is a part of all MMORPGs", it is true statement, but it isn't necessary. i'm not asking to end trading, i just want to play in a game where i can think about how much fun i had playing instead of thinking about how to turn a profit so i can keep up with the 12 year olds who bought money from chinese sweatshops.

Awesome sig. i've added it to my collection

Re:Single server concept (1)

cyber-vandal (148830) | more than 6 years ago | (#20708813)

Gold buying in WoW is mainly for raiding guild members who don't have the time to farm. Most high end epics are soulbound AFAIK - it's the twink items that need to be soulbound I reckon.

mo3 up (-1, Flamebait)

Anonymous Coward | more than 7 years ago | (#20590509)

platfoRm for the

Traditional Macro won't be much good... (0)

TheNarrator (200498) | more than 7 years ago | (#20590605)

Traditional Macroeconomics is designed around the strange institution called the federal reserve. Therefore, for any synthetic economy it is kind of useless. Let me give you some examples:

MMO: Game Owners Create money and distribute to players at a fixed rate.
Real Life: Federal Reserve creates money and distributes it by buying government debt which pays interest.

MMO: Game Owners tax citizens in Non-MMO money
Real Life: Government taxes citizens in order to repay federal reserve and decrease inflation for goods and services that they need in their government function (otherwise they'd just borrow even more money from the fed).

MMO: No Lending/Credit
Real Life: Almost all economic activity is tied indirectly to lending and/or credit in one form or another.

MMO: No banks with fractional reserve lending ability
Real Life: Fractional reserve lending multiplies the money supply 10x and creates debtor/lender relationships that structure economic activity

Re:Traditional Macro won't be much good... (2, Insightful)

Xonstantine (947614) | more than 7 years ago | (#20590735)

Huh? Traditional macro-economics has nothing to do with the Federal Reserve. Wave a magic wand and make the Fed disappear, and macro-economics would be just as valid (or invalid if you are a cynic).

Yes, but no. (1)

khasim (1285) | more than 7 years ago | (#20590807)

Yes, macro-economics would still exist.

No, it would not have any relevance to anything other than a fairy tale.

Governments control their economies. That's part of what they do. And right now, most of that is accomplished through managing the money and the banks.

Otherwise, the government would not have much in the way of revenue. Which is where this scenario fails. It's based upon individuals (or small groups) working to earn money themselves to accomplish their goals. With the only influence being other individuals (or groups) trying to get the resources first.

Re:Yes, but no. (1)

khallow (566160) | more than 7 years ago | (#20591015)

Yes, macro-economics would still exist.

No, it would not have any relevance to anything other than a fairy tale.

Well, at least, I see now where you come from. However, if you participate in this economy, then macroeconomic information is useful to you. For example, if it is known that there's an increase or decrease in the collective value of luxury goods sold, then that would be useful information for someone thinking of starting a luxury good business. If you're a large investment bank, then information about the current costs of bulk material transportation is a leading indicator for future investments by companies. You can say it's a "fairy tale", but this is information about an economy. And that information will always have value in that economy.

Re:Yes, but no. (4, Insightful)

Xonstantine (947614) | more than 7 years ago | (#20591537)

No, it would not have any relevance to anything other than a fairy tale.
Some skeptics would say that it's a fairy tale anyway.

Governments control their economies.
No, with a few notable exceptions, governments excercise influence over economies. They do this through a whole host of factors, of which monetary policy is only one of many. And governments exercised control before there were central banks based on fiat currencies. The idea that macroeconomics, or it's validity, hinges on a central bank and government debt is absurd. It's not unlike saying the laws of physics depends on the existence of rocket ships (and please, no reference to the Copenhagen school). My point: the validty of macroeconomics doesn't depend on a central bank. Central banks use macroeconomics to plan policy, not the other way around (e.g., rocket ships use physics, physics isn't dependent on rocket ships).

Otherwise, the government would not have much in the way of revenue.
Again, this is nonsensical. Governments tax productivity. Income doesn't suddenly appear out of the quantum foam. Manipulation of credit markets and central banks allows them to spend beyond their ability to raise tax revenue, in much the same way that debasing currency did in the past (and why debasing / counterfeiting has been dealt with harshly...only the government is allowed to destroy the value of money or currency), but it does not remove the need for taxation.

Re:Yes, but no. (1)

Nizer (946398) | more than 7 years ago | (#20598779)

...governments excercise influence over economies. They do this through a whole host of factors, of which monetary policy is only one of many.

And let's not forget that in most developed economies (the US included) the central bank acts independently of the government. In fact, it's not unusual for government wishes and monetary policy to be at odds. A number of elected representatives are currently pushing for the Fed to cut the policy rate The government may wish to control monetary policy - the current urges of many representatives for the Fed to cut the Fed Funds rate being a

Re:Yes, but no. (1)

Nizer (946398) | more than 7 years ago | (#20598843)

Apologies for the above. What I wanted to say was:

And let's not forget that in most developed economies (the US included) the central bank acts independently of the government. In fact, it's not unusual for government wishes and monetary policy to be at odds. A number of elected representatives are currently pushing for the Fed to cut the policy rate by 50bps or more, when arguably it's not yet clear that such a cut can be justified on monetary policy grounds alone. And on the flipside, expansionary fiscal policy tends to be inflationary (depending on current capacity constraints) and at odds with the central bank's goal of managing inflation.

Re:Yes, but no. (0)

Anonymous Coward | about 7 years ago | (#20741153)

The idea that macroeconomics, or it's validity, hinges on a central bank and government debt is absurd

It's not absurd at all to say that current macroeconomic theories would be invalidated if major components of the macroeconomic system were altered or removed. There may be fundamental economic theorems which remain, but the systemic behaviour would be altered so any theories about that behaviour would be invalidated.

That banks use macroeconomic theory proves nothing, since the macroeconomic theory relies on certain aspects of the status quo not being radically different, and this axiom holds in reality at this point in time, so the macroeconomic theory which arises is currently valid.

Indeed, that banks use macroeconomic theory might create a positive feedback loop in which the banks must conform to what the macroeconomic theory predicts they should do, which bolsters the validity (and, possibly, the accuracy) of the theory itself.

IMHO there is no better quantum-free example of the entanglement of observer and the observed, than macroeconomics. It's a huge mess in that respect. Your analogy with the laws of physics and rocket ships is classical where a classical view is demonstrably inadequate.

Re:Traditional Macro won't be much good... (1)

The One and Only (691315) | more than 7 years ago | (#20599369)

Much of macroeconomics does study the effects of a central banking system, however. Without a central banking system it's just as valid, it just refers to nothing.

Re:Traditional Macro won't be much good... (5, Informative)

khallow (566160) | more than 7 years ago | (#20590769)

That's incorrect. Macroeconomics is just the study of large scale features of an economy. You don't need a central bank or even banks to have a economy or discuss features of that economy.

Re:Traditional Macro won't be much good... (1)

timjdot (638909) | more than 7 years ago | (#20590989)


The big idea is to start your own game community. Then you can print money too. (OK, Fed doesn't actually print but just updates database rows. The US Government prints. Fed gets fractional banking ponzi credits (10x) and again do their banking buddies (10x more).) So, a three-level ponzi scheme seems optimal. So, your game company prints money by making virtual assets (read "Second Life" and gold coin games) and then maybe you have some governing scheme (central "bank") and distributors (member banks/banks who can access the fiat). Thus your players might trust you. Americans do in the game of dollar deflation (aka "theft from savers", "Central Banking System", and "Fiat currency"). Maybe EBAY and other outlets are the distributors as they get a cut on the trade of fiat. Not a 10x multiplier but something.

Re:Traditional Macro won't be much good... (1)

khallow (566160) | more than 7 years ago | (#20592629)

Did you mean to reply to someone else?

Re:Traditional Macro won't be much good... (1)

The One and Only (691315) | more than 7 years ago | (#20599389)

True, but the body of macroeconomic work largely discusses economies that do exist, and have central banks. Macroeconomics as a field of study would still be relevant, but the body of work already done in it wouldn't.

Re:Traditional Macro won't be much good... (1)

khallow (566160) | more than 7 years ago | (#20605019)

Do you have a reason why you believe this to be the case? As I see it, economies with central banks behave much like economies without central banks.

Re:Traditional Macro won't be much good... (1)

The One and Only (691315) | more than 7 years ago | (#20608361)

Largely, they do behave the same, but most of this is on the micro scale. Macroeconomics includes things like monetary policy by definition, and most studies of monetary policy study how the policy works in the context of a central banking system. If we had a different monetary system all of that work would be irrelevant.

Re:Traditional Macro won't be much good... (2, Insightful)

jdigriz (676802) | more than 7 years ago | (#20591007)

Sorry, while your observations may be true for other games, they are invalid for EVE. A point-by-point refutation:

>MMO: "Game Owners Create Money and distribute it to players at a fixed rate"
In Eve there are isk (the unit of currency) spigots. Bounties are paid to pilots for killing npc pirates, completing missions and/or selling items to NPCs. This money is create ab initio and is distributed at a rate determined by the players. Killing more pirates creates more money.

>MMO: "Game Owners tax citizens in Non-MMO Money"
While players do pay a monthly fee to play, they are also taxed in-game in isk. Every time I sell an item in Eve, I pay sales tax in ISK to the SSC. Players who are members of corporations which choose to tax their members take a percentage of bounties earned, in isk. Smugglers in EVE pay ISK penalties if caught. When your ship is destroyed in Eve, it doesn't respawn, so breaking the law in Eve effectively fines you for the cost of your ship, in Empire-controlled space anyway. People who have effective control over outlying star systems often charge tolls in ISK to pass unmolested.

>MMO: "No Lending/Credit"
In Eve there are player-created banks. These are generally viewed as shady/untrustworthy institutions as they are not regulated in-game but some players do patronize them. See http://news.softpedia.com/news/Eve-Online-Economy-Suffers-700-billion-ISK-Scam-33737.shtml [softpedia.com]
> MMO: No banks with fractional reserve lending ability
This seems to be true, due to the lack of faith in the player banks in eve. From this we can see that the main difference between Eve's synthetic economy and the real one is regulation.

Re:Traditional Macro won't be much good... (0)

Anonymous Coward | more than 7 years ago | (#20592275)

You can buy eve online game time with ingame currency from other players. Some player organizations have lending/credit activity it all comes down to trust between the lender and the borower.

Re:Traditional Macro won't be much good... (1)

the_raptor (652941) | more than 7 years ago | (#20592991)

MMO: Game Owners Create money and distribute to players at a fixed rate.
Real Life: Federal Reserve creates money and distributes it by buying government debt which pays interest.

What do you mean fixed rate? ISK (EvE's currency) just doesn't appear in your eve-mail. You have several ways of earning, only one of which (killing NPC's) generates new money. And there are taxes on nearly every thing to make sure that the increase in new money is in scale with new players. But different trends can majorly effect the amount of NPCing that people do (eg mission rewards get nerfed or increased, difficulty gets changed).

MMO: Game Owners tax citizens in Non-MMO money
Real Life: Government taxes citizens in order to repay federal reserve and decrease inflation for goods and services that they need in their government function (otherwise they'd just borrow even more money from the fed).
Wrong, most MMO's have taxes and money sinks. EvE has a lot of them because it has a nearly 100% player run economy.

MMO: No Lending/Credit
Real Life: Almost all economic activity is tied indirectly to lending and/or credit in one form or another.

That is only because most people are not the elite cream of society who can be fully economically self-sufficient, unlike EvE pod pilots (you can honestly go build a space station out in deep space and never need to interact with an NPC ever again). The economy of EvE favours the small guy building himself up, it is easy to get the initial capital to be a trader. But there have been several large business ventures that depended on IPO's, and player to player lending and credit is fairly common (but "unseen").

MMO: No banks with fractional reserve lending ability
Real Life: Fractional reserve lending multiplies the money supply 10x and creates debtor/lender relationships that structure economic activity
Nope, because there are no real policemen in EvE. There is no real way to force an individual debtor to pay, or persecute a bank CEO that runs off with the money. Such things happen person to person.

Re:Traditional Macro won't be much good... (1)

rossifer (581396) | more than 7 years ago | (#20595083)

You have several ways of earning, only one of which (killing NPC's) generates new money.
Actually, collecting on insurance also generates new money (at least, that's my understanding of the current insurance system, which seems deliberately designed to be a significant money source in the game). PvP ship destruction is a resource sink but a money source for most players.

Not to dispute any your other arguments, but I did want to make sure that one more money source got mentioned.

Regards,
ross

Re:Traditional Macro won't be much good... (1)

Dunbal (464142) | more than 7 years ago | (#20597727)

PvP ship destruction is a resource sink but a money source for most players.


      Actually, the premiums are around 1/4 or 1/5 of the insurance payout. The payout also does NOT scale completely with your ship's value. A raven which will cost you around 110M isk will cost around 30M to insure and pays out around 80M. So really all you're getting back for your 110M ship is 50M - half the ship value. Try seeing what a capital ship pays out - much less than what you paid for it.

      Also remember that this does NOT include the cost of the modifications. When you buy a ship, you just have a vessel that can go from A to B, but has no offensive/defensive capabilities. These mods cost a LOT of money - and a decent set up will cost you MUCH more than the ship. Getting killed will destroy some of these mods, and the person who killed you will usually sell the rest off at a discount (in order to get his money faster), so this is another sink.

Re:Traditional Macro won't be much good... (1)

rossifer (581396) | more than 7 years ago | (#20598133)

You're thinking of insurance in terms of value to the player, not the economic event. Sure, the player has to use the isk (along with other isk) to secure a new ship, find new equipment, etc. But that isk never existed before. The isk spent on the destroyed ship is still in circulation.

Now, clearly the insurance doesn't completely compensate the player for their loss of resources. That's what most players have to work against to keep playing.

As an economic event, insurance converts existing resources into new isk. So ship destruction is an important resource sink and is also an important money source.

should look at hidden aspects (3, Interesting)

khallow (566160) | more than 7 years ago | (#20590695)

The bit near the end about trading opportunities between regions was interesting. The rest wasn't that interesting due to the lack of context. We weren't given many details about what major changes occured that could have triggered the changes in mineral prices. In all, I didn't find it that helpful or engaging.

In the future, I think there's one area worthy of interest that this economist can cover. Namely, with the resources of CCP at his disposal, he can collect economic information that is difficult or impossible for players in the game to collect. For example, GDP of regions (there are somewhere around 50-60 regions in the Eve universe). Even a large network of players couldn't calculate that. What regions create economic value and what regions destroy it (in wars usually)? What regions generate the most insurance claims? That sort of thing. Look at the sort of economic figures a real country generates.

Many players spend all their time in a single type of region (eg, "high security" where killing other players is harshly punished versus "0.0" where anything goes). The economic differences between regions (market data like prices, volatility, volume, etc) can be figured out by players, but it's usually a lot of hard work (unless Eve's API helps out here, I don't know). In any case, tell us stuff we can't figure out easily for ourselves.

Re:should look at hidden aspects (1)

Dunbal (464142) | more than 7 years ago | (#20597641)

What regions create economic value and what regions destroy it (in wars usually)?

      I think it's a safe bet that hisec generally has a positive GDP while 0.0 is probably lucrative for a select few (BoB? Goon Squad?) but generally negative overall. After all, how many corps move to 0.0 only to get wtfpwned after a few weeks, losing everything? Still, it would be nice to see it in writing with actual figures and graphs.

Re:should look at hidden aspects (1)

DeadChobi (740395) | about 7 years ago | (#20725213)

0.0 is lucrative for anyone who has the balls and the commitment to take and hold a system long enough to rat.

Simulation based on... (1)

Algorithmnast (1105517) | more than 7 years ago | (#20590727)

factors become more and more important as EVE Online grows and the market becomes more efficient. That's really what the game stands on, the whole thing is tied together by the market system. We have various disconnected systems like mining, manufacturing, corporations, and combat, but they all tie in at the bottom with the market system. We initially spent a lot of time when the game was first made, making sure that we had an abstract, efficient, accurate market system. We made many difficult decisions where we sacrificed 'correctness' for simplicity or ease of use. It is a fairly complex thing, but it has allowed us to evolve the game quite rapidly up to this point. That said, we have been seeing more and more of a need to get professional insight into what is happening on the macro level. We've seen immediately how responsive the player base is to it. They've been looking for these kinds of insights for some time now.
So his simulation is based on the presumption that everything is "market-based" and "tied together by markets". Since he can learn from his model only insofar as it is accurate, and since the Real World has other factors... .. why should we care about this?

Say we get a whole generation of SimuloEconomists into decision-making positions. And then we have any of:

  1. Natural distaster
  2. Social Upheaval
  3. Technological Breakthrough
  4. War
... then doesn't this approach get completely blind-sided? What kind of useful model would it be, then?

Even if I have two groups of people and only tweak a single variable on each group, it may not matter. After all, these are two different groups of people - their behavior may change without any correlation to the tweaked variable!

Even if it's the same group of people on two servers, there's no guarantee that they'll behave the same in both tests, especially as they've gone through one test....

There are three sorts of lies. Lies, Damn Lies, and Statistics.

Re:Simulation based on... (1)

Notquitecajun (1073646) | more than 7 years ago | (#20590821)

So his simulation is based on the presumption that everything is "market-based" and "tied together by markets". Since he can learn from his model only insofar as it is accurate, and since the Real World has other factors... .. why should we care about this?

Because it's how our own system started, even many thousands of years ago. If you can create a pure economic system without the other factors added in yet, you can use it as a base model to see what REALLY causes certain outcomes in the real world. It's an interesting study because a raw economic model has never really existed, at least not for long. Something good can and will come of studying MMO economics, simply because they haven't truly been seen so well on a scale worth studying.

Immortality (2, Interesting)

khasim (1285) | more than 7 years ago | (#20590919)

Don't forget the other key feature.

You are, effectively, immortal. You can keep coming back. That changes the economics. Instead of a single run (life), you can have multiple runs. Without the tedious childhood and learning parts.

Don't forget:
http://video-games.listings.ebay.com/Internet-Games_Eve-Online_W0QQsacatZ85809QQsocmdZListingItemList [ebay.com]

Re:Immortality (1)

Saib0t (204692) | more than 7 years ago | (#20591677)

You are, effectively, immortal. You can keep coming back. That changes the economics. Instead of a single run (life), you can have multiple runs. Without the tedious childhood and learning parts.

But death has a real cost. You lose your ship, your equipment on the ship (typically worth several times the value of the ship itself) you may lose your investment in yourself if your "escape pod" gets destroyed. So while you're immortal, the losses can be very big.

The choices you make thus have a very real impact on your financial situation...

Re:Immortality (1)

garo5 (895321) | more than 7 years ago | (#20591727)

No, you are not immortal. You can insure your ship but not the equipment you buy to your ship (which usually are much more valuable than your ship). You can get killed: You'll lose your head implants, which are not cheap. Even if you have the money to buy new ones, you need to fly around the galaxy to find the replace parts (which takes time). Yes, you will be reborn to a new body (clone) and retain the skills you have learned, but if you run out of your clone, you will lose your skills (yes, that could happend).

So, you could get beated up so badly that you lose everything you have ever gained in the game. I don't know about you, but if I would have played for a year or two and I would lose everything, I propably would just leave the game alone and go out to get some fresh air ;)

Re:Simulation based on... (3, Insightful)

porpnorber (851345) | more than 7 years ago | (#20591005)

"Since he can learn from his model only insofar as it is accurate, and since the Real World has other factors... .. why should we care about this?"

Yes, of course, this is why laboratory science has long since been abandoned as useless in physics, chemistry and biology. It's just amazing that economics has taken so long to catch up!

Re:Simulation based on... (2, Insightful)

Llywelyn (531070) | more than 7 years ago | (#20591365)

First: all models are wrong, some are useful.

Second: About the only item that Eve doesn't have on that list is "natural disaster." Social Upheaval? Alliances falling apart. Technological Breakthrough? Release of new tech (e.g., not that long ago when rigs or thermodynamics came out). War? A fundamental factor in Eve.

Sure, its not a perfect "true-to-life" model, but I can see why an economist--most economists focusing on theory instead of application or simulation anyways--would be thrilled at the prospect of a testbed that is basically a perfectly efficient economy, even if it is a reduced subset of the "real world."

Re:Simulation based on... (3, Funny)

kailoran (887304) | more than 7 years ago | (#20591521)

Admins using their admin powers to their advantage is sort-of a natural disaster in a MMOG (for the non-admin players, at least)

Re:Simulation based on... (1)

AceJohnny (253840) | more than 7 years ago | (#20600971)

Actually, in this context I think it is more appropriate to call them "Acts of god".

Re:Simulation based on... (1)

Xveers (1003463) | more than 7 years ago | (#20596955)

Well, one thing that CCP (the guys making EVE) have been ever-so-slowly grinding towards is a good and proper war. No, not an alliance vs. alliance or corporation vs. corporation, but actual in-game Government vs. Government warfare. Of course, this is something that's been promised for over a year, but it will eventually come. As far as social upheaval, give CCP enough time... We may yet see that and more...

Re:Simulation based on... (0)

Anonymous Coward | more than 7 years ago | (#20594211)

Okay, but have any games really been able to simulate "natural disaster" in an MMOG?

Re:Simulation based on... (1)

Nizer (946398) | more than 7 years ago | (#20598973)

Those criticising the analysis of the EVE economy on the basis that it's not a 'real' representation of a 'real' economy miss the point that, in this respect, EVE is no different from any other economic model. That is, all economic models are abstractions from reality, by definition, whether they be econometric, general equilibrium, game theoretical, or whatever. As somebody has pointed out, that doesn't render them - or EVE - useless as an analytical tool.

That's, Dr. Eyjólfur to you (4, Informative)

incripshin (580256) | more than 7 years ago | (#20590943)

As he's Icelandic, it's probably more proper to call him Dr. Eyjólfur. In Iceland, they still have the Scandinavian tradition of having your last name be that of your father. So my children in Iceland would have last names Marksson and my sister Marksdóttir. Thus it is not a family name in the same sense as usual European last names are family names. In fact, Icelandic phone books list people by their first name, then last name.

Eve Online, though. Interesting.

Re:That's, Dr. Eyj & # 2 4 3 ; lfur to you (0)

Anonymous Coward | more than 7 years ago | (#20591305)

My first thought was Dr. Eyj-whatthehell?

Yeah yeah, Unicode is great and all, but must we put every funny letter out there in a frigging /. summary? I'm guessing half of the guys here weren't sure how to render those for pronouncing... (I'm a Finn and don't miss our two or three peculiarities when I'm hanging out on English-speaking fora.)

I also guess the good Doctor has an understanding of this *and* a sense of humor, presenting himself as just "Eyjo" ;-)

Re:That's, Dr. Eyjólfur to you (1)

incripshin (580256) | more than 7 years ago | (#20591413)

I mean that my daughter would be Marksdóttir. Certainly not sister and daughter.

Re:That's, Dr. Eyjólfur to you (1)

C10H14N2 (640033) | more than 7 years ago | (#20591483)

...coming from Icelandic stock myself, I wouldn't necessarily rule that out either...

Re:That's, Dr. Eyjólfur to you (1)

ZayJay (609601) | more than 7 years ago | (#20592755)

BTW, Your children would more likely use the More formalized version of your name so it probably would be Markusson and Markusdottir I happen to have one of those Icelandic names.

Re:That's, Dr. Eyjólfur to you (1)

ZayJay (609601) | more than 7 years ago | (#20592867)

I correct myself. There is a name "Marksson". News to me.

Of course they need an economist (4, Informative)

Animats (122034) | more than 7 years ago | (#20590975)

Several games have run into severe problems with the internal economy. One early MMORPG had resources which could be mined and converted into items. Abandoned items deteriorated into basic resources. This was envisioned as a closed system with a fixed set of resources. But it broke down when people kept making stuff and hoarding it, resulting in resource exhaustion and runaway inflation.

Another game ran into trouble when NPCs authorized to trade offered prices that allowed arbitrage. Players exploited this by buying from one NPC and selling to another elsewhere. Because the NPCs could create resources, this resulted in a huge increase in M1.

Then there's the relationship with the real world economy. What are the gold farmers doing, and how much are players paying them? Can players still play effectively without dealing with gold farmers?

These issues drive players away, so it's a real issue in game operations.

The article didn't say much about these kinds of issues. Either their economist is clueless or doesn't want to talk about such things. It's surprising to see an article about EvE's economy that doesn't mention gold farming.

Re:Of course they need an economist (5, Informative)

Diss Champ (934796) | more than 7 years ago | (#20591659)

Many of the issues you are talking about are not mentioned in the article because they were solved in Eve well before the person interviewed came on board. Which was pretty recently. As a player who has been around longer, I will address some of your Examples:

Not a closed system on minerals. Asteroid belts respawn, so with player time and effort, more minerals are created. When ships are destroyed, resources are destroyed, so there is a sink as well. I could go into more detail, but it would be at great length, and anyway his first Blog was about the initial steps of looking at mineral pricing.

NPC trade- There is a limited amount of NPC arbitrage available. NPC prices adjust with buys and sells however, and over time (generally at downtime) go back toward where they started. Thus, there is some money to be made there, but the more people who try to do it, and the more frequently, the less to be made, leading to a relatively harmless PVE sideline.

Gold farmers: They are annoying. People blow them up when possible. They are unnecessary for effective play. CCP's most effective step against them was the controversial decision to allow people to buy game time with ingame money and provide a secure system for these transactions- this undercut the gold farmer prices, and the gold farmers have more trouble nowadays converting resources. This is actually a matter which will be interesting for him to explore in the future, but again he's done one blog so far.

Basically, what your objections boil down to appears to be "An online economy can't work. Why isn't he talking about why it isn't working?". Yet it is working, unlike in most other games that use a lot more central management of the economy. So he's intersted in talking about what is happening in the economy, not why other games don't work.

Re:Of course they need an economist (1)

Edie O'Teditor (805662) | more than 7 years ago | (#20593913)

Asteroid belts respawn
Just like in real life - given a sufficiently long timescale.

Re:Of course they need an economist (1)

blahplusplus (757119) | more than 7 years ago | (#20595599)

"Yet it is working, unlike in most other games that use a lot more central management of the economy. So he's intersted in talking about what is happening in the economy, not why other games don't work."

While the economy may be working, there are other things that need to be measured. i.e. how much fun are the players in the economy having? Like "Gross national happyness"? Economics is intimately linked with how people feel and percieve the world in the real world.

I'd be interested in knowing how much fun really are people in eve having or are many of them simply just addicted to a boring game out of habit? I'd really like to know.

Re:Of course they need an economist (1)

Diss Champ (934796) | more than 7 years ago | (#20596297)

Well, there are two attitudes toward the game (and this is a simplification, but probably useful here). One is that the cool thing in the game is the PVP with real consequences ingame. The other is the cool economy. The PVP focused people gripe a bit about the economy, but the pain of economic loss is one of the things that gives the PVP spice, so when they are not so drunk they realize it's importance, but still look down on the second group. For them, the economy is only the means to an end, whether the end being killboard stats, control of space, diplomatic manuvring, etc. I am a member of an alliance of predominantly this philosophy, though the second was what hooked me in the game initially.
The second group are those for whom the economy is really cool- doing well economically is the game, and the PVP stuff is just one means of economic competition for resources. I have had some good fun making ISK on mineral arbitrage and blueprints, but don't have the stamina for thinks like mining that suck up a lot of RL time.

Both groups seem by my observation to have both people who are only addicted and those who are still having fun. The percentage that are still having fun seems higher than I have observed with high level play in other MMO.

Myself, I've achieved enough economically to keep me in Battleship and smaller class ships for a long time. I've got a capital ship. I burned out on the game for a while, but still log in enough to keep some of my basic economic gears turning. Interest in now picking back up again, and so when I finish the content in LOTRO I'll probably be pretty active over in Eve again.

Measuring "fun" is hard- they can measure retention (which for those who make it through the first few weeks is extremely high for Eve), but as you point out, that doesn't tell us how much of that is addiction, and how much is fun. Eve is certainly different than the grind games like Everquest or WoW, but whether it's different in being more fun or more addictive is something you really need a psychologist rather than an economist to look into.

Hope this all helps, despite that it's all just my subjective viewpoint rather than measured data of happyness:).

Re:Of course they need an economist (1, Informative)

Anonymous Coward | more than 7 years ago | (#20591773)

Well gold farmers have a hard time in EvE:
1. They are preyed upon by other players, as soon as a gold farming operation is noticed, poeple will flock and steal from them until they have to flee.
2. Their services aren't needed: you can buy isk if you want, by buying timecards from CCP and selling them for isk to players that make enough in game so they can pay their game time in isk. This is accoeted by CCP.

Re:Of course they need an economist (2, Insightful)

Etrias (1121031) | more than 7 years ago | (#20591931)

I don't think you've even played EVE, and that said, you need to play it to understand that this isn't just some regular MMO economy. It's not like the economy on WoW which is different server to server but largely predictable, especially with certain plugins to track some transactions during the day.

EVE has a very, very different player economy. It is almost entirely player driven. No NPCs to sell to, no standard items that you get for "questing".

Notice that this first report was on mining only. Mining and the minerals that are bought and sold are the ground base of a player economy. Without those materials, you can't build anything from the simplest frigate to the massive quantities you need for carriers. Not to mention individual components you need to equip on these ships as well.

Just because he didn't mention any "ISK farmers" (to use the correct terminology) doesn't mean they don't exist, but because EVE's skill system is so radically different from other MMOs, players can't really power-level anyway because all skills take time, not resources to develop. Because he focused on one vital component of the economy and showed a number of trends, showing the supply and demand needs of various areas of space, that was a huge step. You treat this as an "end-all/be-all" economic report. He's just scratching the surface.

The reason that this is such a focused report is because of the immense complexity of EVE as a single world economy, stretching dozens of systems with tens of thousands of players, all interacting, all selling, all buying...no help from an NPC that you can dump unwanted items somewhere.

Talk about clueless.

Re:Of course they need an economist (1)

WuphonsReach (684551) | more than 7 years ago | (#20603817)

The big reasons that EVE's economy is the best working economy that I've seen so far:

1) Location matters. There's no magical transportation of goods like there is in WoW or EQ2. As a result, goods acquire value by moving closer to the buyer. That keeps the market from becoming "flat" where everyone charges the exact same price regardless of location. It also allows younger players to participate by buying low-priced goods in one system and moving them elsewhere where people are willing to pay more.

2) Server size. Having one big server with 20k to 35k active players at any point in time means that nobody can monopolize trade. (With a few very rare exceptions such as Tech2 blueprints, but Invention is cutting heavily into those margins.) You may manage to monopolize trade on a particular item in 3-5 regions, but as the profit margin rises, it becomes increasingly likely that other traders will smell profit and move in to compete.

3) Destruction. Ships get destroyed all the time in PvP. That takes resources out of the economy and keeps players in the market for new ships. Unlike a lot of traditional, fantasy, MMOs, ships are very much replaceable with very few "epic" ships. In EQ1, if you caused someone's epic weapon to permanently break when they died, there would be a riot. But in EVE, destruction and loss of ships is part of the game (hence the adage "only fly what you can afford to lose").

4) Items can be reprocessed into basic minerals. Which means that if you're sitting on a stack of Small Shield Booster I inventory, and prices fall too low, you have the option to reprocess them into basic minerals. In fact, it can be lucrative to be a "junk" trader who buys up low-end modules and reprocesses them for the minerals.

5) Lots of regions = lots of markets. The more markets there are, the more niches. When an economy has lots of niches, it becomes easier for newer traders to enter the market and gain a foothold. You can easily compete in EVE's economy (economic PvP) with only a small bankroll at the start. Over time, you reinvest your profits, allowing you to take larger and larger risks for larger profits. There are at least a dozen distinct ways to earn ISK in EVE (ratting, mission running, mining, moving goods, buying low / selling high, low-ball buy orders, piracy, loot drops, manufacture, exploration, selling information, etc.).

6) Buying and selling are easy. And you can put up buy / sell orders that last for 3 months and you can adjust prices every 5 minutes. The limit is that you can only have X number of buy/sell orders active at the same time unless you train up some skills.

It's a very complex system. And it self corrects constantly.

Interesting? Maybe... but overly simple. (2, Interesting)

juuri (7678) | more than 7 years ago | (#20592391)

After reading the report it is surprising that this would be interesting to someone who specialized in economics. In fact EVE's single universe is what contributes to the simplicity of their market. The report makes a great deal of todo about the information spreading extremely rapidly and causing price effect changes over the vast universe in near synergy... uh duh? It's a game universe with instant communications that has very little barriers to trading across loyalities or "factions". EVE's market is simple and the macro report provided backs this up easily.

As bad as the typical WoW market is, it's much more interesting. There are two factions who have limited ability to share things between each other without extra cost and time investment. In addition these faction markets are often vastly different in size/resources so one has a huge trade advantage (think US/China). The markets have "peaks" that are broken with major patches or content, think of them as a revolutionary tech or invention that shatters current markets (50 new points of skills or what have you == automobile/electricity). Each server can have a very distinct economy somewhat based on the overall player progression and server creation date (intelligence/connectedness of the average player). Finally many servers have economies that are driven largely by two or three individuals... while some are missing these power players. The vast difference in each server's economy seems to me, like it would be much more interesting and have much more information/knowledge to impart.

Re:Interesting? Maybe... but overly simple. (1)

mmalove (919245) | more than 7 years ago | (#20593483)

Having played both, and in fact WOW much more than EVE, I will say that WOW's market has nothing on EVE's. As stated in the article EVE's PVP results in the destruction of items, which gives crafting and finding new items some point - where in most mature WOW servers you'll find 90+% of the items that can drop find themselves recycled via enchanting into essences/dusts, or sold to a vendor for raw currency. In addtion, EVE puts a lot more focus on WHERE a commodity is. In WOW, a shared auction house functions as the basic market, players can teleport themselves between major trade hubs with relative ease, your goods carried are completely safe, and on most servers trade between enemies is minimal and not a big aspect of the game. In EVE the dangerous act of transporting a commodity from one point to another, and potentially through hostile territory, creates an entire career in the game.

Re:Interesting? Maybe... but overly simple. (1)

juuri (7678) | more than 7 years ago | (#20595209)

EVE's PVP results in the destruction of items, which gives crafting and finding new items some point - where in most mature WOW servers you'll find 90+% of the items that can drop find themselves recycled via enchanting into essences/dusts, or sold to a vendor for raw currency.

Exactly. Which system results in the removal of resources more? One where people have to be willing to risk their own hard fought resources, or one where if something is of no use to the owner is destroyed or sold for a trivial amount? The WoW system (and any game which has a BoP concept) is far more like real world depreciation.

Re:Interesting? Maybe... but overly simple. (2, Interesting)

I Like Pudding (323363) | more than 7 years ago | (#20594321)

Having played both WoW and EVE, I can say with 100% certainty that you're full of shit.

> uh duh? It's a game universe with instant communications that has very little barriers to trading across loyalities or "factions".

Are you high? You DO NOT SHARE INFORMATION outside of your own corp or alliance. Sometimes you don't even share it with them, because it can kill your profits. I don't know where you get your idea that there are no trading barriers either - the game is one enormous trading barrier.

> There are two factions who have limited ability to share things between each other without extra cost and time investment. In addition these faction markets are often vastly different in size/resources so one has a huge trade advantage (think US/China).

There are 2 markets in WoW. There is a market in every station in every solar system in EVE, and where you decide to sell will make or break you. I can make millions off buying cheap skills from a nearby university, transporting them 4 jumps to a trade or mission-running hub, and marking them up 1000%. People will buy them just to avoid spending time on the 8 jump round trip because shit does not magically end up in your mailbox.

> In addition these faction markets are often vastly different in size/resources so one has a huge trade advantage

It's the same way in EVE except, again, you have thousands of markets to choose from with varying levels of accessibility.

> The markets have "peaks" that are broken with major patches or content, think of them as a revolutionary tech or invention that shatters current markets (50 new points of skills or what have you == automobile/electricity)

Eve introduced advanced Tech II items that require player-run multi-billion ISK moon harvesting stations to be set up in PVP space. These bases require resources to run, are PVP targets, and will become defenseless when they run out of fuel. Wow bumps up the max skill level and requires you to harvest 6 dastardly vorpal leather of the kings over the course of 3 hours by repeatedly farming the same mob and use the Awl of Madness located conveniently at the bottom of Dark Thundercrotch Citadel to actually construct an item. Eve can get repetitive and stupid as well, but it's got metagame out the ass.

> Finally many servers have economies that are driven largely by two or three individuals... while some are missing these power players

Individuals can do a lot in EVE, but the world is just too dangerous and HUGE for this sort of thing to happen. You might be a bigshot in your home town, but nobody's ever heard of you in Lichtenstein.

Re:Interesting? Maybe... but overly simple. (0, Flamebait)

juuri (7678) | more than 7 years ago | (#20595275)

Having played both WoW and EVE, I can say with 100% certainty that you're full of shit.

Having played both, and many other online games, I can say with 100% certainty that you're the reason I avoid such games.

Any MMORPG has a meta-game, it's which one appeals to you. Obviously EVE's appeals to you, probably it's your need and desire to be combative and ignore viewpoints which don't mirror your own exactly by attacking the person, rather than simply expressing which you disagree with. A game where it is respected to cheat your friends sometimes (oh but the corp world is so dangerous and true to life!) fills some basic need you can't get in the real world.

Tis a shame. *hugs*.

Re:Interesting? Maybe... but overly simple. (1)

I Like Pudding (323363) | more than 7 years ago | (#20605221)

I wasn't even talking about which market model I prefer - I was debating the ridiculous assertion that Eve's market is overly-simple, especially when compared to WoW.

PROTIP: The point where you shout "Everything is subjective!" is the point at which you negate your own opinions.

Re:Interesting? Maybe... but even more complex (1)

WillAffleckUW (858324) | more than 7 years ago | (#20597213)

There are 2 markets in WoW. There is a market in every station in every solar system in EVE, and where you decide to sell will make or break you. I can make millions off buying cheap skills from a nearby university, transporting them 4 jumps to a trade or mission-running hub, and marking them up 1000%. People will buy them just to avoid spending time on the 8 jump round trip because shit does not magically end up in your mailbox.


No. There are more than 2 markets in WoW.

There is a large Alliance market at the AH - with participants at each major city.

There is a large Horde market at the AH - with participants at each major city.

There is a small Neutral market at the AH for those greedy guys ... goblins.

There is the retail market at each vendor (which is static and not impacted by the AH system, although it acts as an artificial limit to both top and bottom (for example, if the vendor will buy my necklace for 12s 50c and the AH price costs 2s deposit for a likely 10s payout, I sell to vendor).

There is the guild market (mostly free, some traded) where players say what loot they got they can't use and give guild members first shot.

There is the raid/dungeon market (mostly traded, some free) where players sometimes say what loot they got they can't use and barter.

There is the resource market for enchantments (many enchanters give out starting enchants free, as the skill reward is a higher payout than selling to a small market of potential customers, whereas the enchants for glowing weapons (high skill) have high payouts).

There is the resource market for mining/etc where people shout they have stuff and sometimes trade directly - I have a number of "friends" who are really just trading partners. I could auction 20 copper myself, but it's faster and I get a higher return if I just sell it to my JC friend who mines it for gems. Especially since I can do that anywhere with a mailbox, and there are only Auction Houses in the big cities.

Re:Interesting? Maybe... but even more complex (1)

I Like Pudding (323363) | more than 7 years ago | (#20604261)

You don't understand the scale and logistical differences. It's like comparing a guy selling stuff out of his trunk to the entirety of eBay.

Eve map, each point of which is a solar system [steamreview.org] The glow intensity indicates population density

Eve market screen for 1 item showing all buy/sell prices in the region [wikimedia.org]

Re:Interesting? Maybe... but even more complex (0)

Anonymous Coward | more than 7 years ago | (#20605265)

That map is rather out of date. To cope with increased number of players, it's about double that size now.

For non-players of Eve, some real-life scope comparion may be needed. It would take well over 2 hours to fly a hauler from one end of the universe to the other if there were no other people around. To do it safely, you need to take it slower and have a scout ahead, reroute around ambushes and it would take most of a working day.

Re:Interesting? Maybe... but overly simple. (1)

crabpeople (720852) | more than 7 years ago | (#20594823)

"[the eve game universe] has very little barriers to trading across loyalities or "factions"."
I assume you are just ignorant to the fact that much of space is off limits to most would be traders specifically because of different "factions" and there Kill On Site or NBSI (not blue shoot it), policies. There is plenty of money to be made getting into an alliance and doing supply runs from empire. People will gladly, or (begrudgingly depending on markup), pay for these services. There are also social barriers to trade such as pirates, which can quite quickly turn a routine supply run into a costly disaster. Things like pirate activity, current wars, etc all manifest themselves in the prices of things. This doesnt even count the huge barrier to entry which is the t2 BPO bullshit, basically entitling early adopters of eve to a license to perpetually print money in the form of tech2 equipment.

Re:Interesting? Maybe... but overly simple. (1)

Xveers (1003463) | more than 7 years ago | (#20596853)

There are substantial upheavals that occur in the EVE universe, when (as in WOW) new technologies and items are introduced. Older technology bombs out in price, new hardware sells like hotcakes and for a whole set of limbs. As well, as new methods are introduced to manufacture items, prices also substantially adjust as well.

The best example of the latter was the introduction of Invention. Previously, Tech 2 items were only available at exorbitant prices due to A) the rarity of blueprints used to produce them and B) the high demand. The blueprints were given out in a weird lottery system that would take too long to accurately explain, but suffice to say that some blueprints were literally money machines. Invention allowed players, with some reusable hardware and some resources, create tech 2 blueprint copies (blueprints with limited amounts of use). The needed resources are all available relatively easily, so a large number of additional sources of the blueprints entered the market, thus introducing more supply of certain items, leading prices of said items to drop out. While the hardware needed for Invention was also hard to come by, it was several orders of magnitude easier to obtain than a Tech 2 blueprint.

Additionally, while there are no major factional barriers as in WOW, there is the matter of distance. Hauling resources across the EVE universe can take a substantial amount of time, sometimes days in real time.

Lastly, the use of EVE as a market study exists precisely due to its size. Smaller markets are more vulnerable to sudden changes due to a few market changes. As you pointed out, in some WOW servers a few people effectively make the economy. What happens to your model when they leave? You get to see something like Germany in the 1930's. Economic meltdown (though somewhat different in actual mechanics). You'd get the same rough effect if suddenly Saudi Arabia discovered it couldn't sell oil. For ten years. The entire market takes a major crap. EVE's market is multi-leveled and is not reliant on any one industry, person, or activity.

All in all, I suspect the quarterly report at the end of October will be far more interesting, as it will delve into more usable macroeconomic markers.

Re:Interesting? Maybe... but overly simple. (0)

Anonymous Coward | about 7 years ago | (#20764253)

Playing Eve as I do, I find fault with one of your main points. The idea that there is no barrier to cross-factional trading is preposterous. Even if it's only the half hour flight from one faction space to another, there are many things that make it difficult to trade cross-faction. In Empire or high security space, it can be impossible for me as a member, let's say, of the Minmatar navy to carry trade to an Amarr controlled area of space. (Since each act of PvP brings with it different effects on your status and standing with various governments and the "UN with Teeth" of Concord.) In the low-sec, player controlled environments of the majority of the Eve universe, those factions multiply geometrically. There are more than "5" Empire factions; to include NPC factions only raises that number easily to 10. If you include different corporations and alliances (each of which prosecute war against each other) the number of potential faction dangers rises incredibly. A simple trader in a corporation tied by regional interests to an alliance can not just carry his goods through space unhindered. Depending on his own actions and those of the corporation/alliance, he may be set upon at any time. Even if he does not, many pilots have to deal with "ransom" requests from PC pirates and thieves or find themselves destroyed.
Eve Online has a very complex system of interaction that impacts the economy of Eve subtly in many different ways.

The best argument regarding Eve is it's single universe system. Comparing multiple servers of 2k-3k concurrent people playing does not have the same sample size or sheer volume of economy for comparison as one server holding upwards of 30k concurrent users. Oh, and lastly... World of Warcraft's economy is NOT primarily driven by the players. It is possible to go from 1-70 and beyond without ever buying or selling any items to a player. The NPCs control the common item markets.

Podcast with interview (1)

MattW (97290) | more than 7 years ago | (#20593389)

I was listening to the most recent virgin worlds [virginworlds.com] podcast this morning (first from GDC) and it had an interview with him on it.

Re:Podcast with interview (1)

AndrewStephens (815287) | more than 7 years ago | (#20624725)

I was listening to the most recent virgin worlds podcast this morning (first from GDC) and it had an interview with him on it.
Never in the history of The Internet has a domain name suited a web site better.

You Fail It (-1, Offtopic)

Anonymous Coward | more than 7 years ago | (#20594335)

those obligations. but now they're create, manufacture A DEAD MAN WALKING. [theos.com] on his Raymond in his for the state of a child knows on baby...don't the system clean with THOUSANDS of recent Sys Admin troubled OS. Now private sex party Reaper Nor do the nned to join the the mundane chores

Ummm....why all the EVE Online stories? (1)

Alcyoneus (1107533) | more than 7 years ago | (#20598009)

Is the slashdot crew on the CCP payroll?

wow (0)

Anonymous Coward | more than 7 years ago | (#20598339)

They almost make EVE sound like a fun game.

economies (1)

cavebison (1107959) | more than 7 years ago | (#20600707)

"All of these components are build into the world, and when you make decisions in the game you're making many of the same decisions you make in your daily life."

..Except you're too busy playing the game all day to make any real life decisions.

But joking aside, if playing the same was actually LINKED to "soft" products in the real-world economy (e.g. buying/selling shares) and profit/loss from these reflected in online gold etc as well as your real bank account, we may get more kids interested in participating that that sort of thing.

Or we may get a lot of bankrupted kids... still, the merging of real and virtual economies will happen more and more I think.
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