MUDflation, Legal Action To Hinder MMO Trading?

Thanks to Wired News for its article discussing the pitfalls which may face virtual item and currency trading in MMORPGs. The piece discusses previously covered sites such as the Gaming Open Market, whose founder ruminates on possible issues with TOS violations: "We're getting to the point where we're getting a reasonable amount of attention. I'm sort of afraid that the game companies are going to step in and terminate my accounts because we're violating the terms of service." Another commentator also worries about long-term dangers of virtual item/currency trading, "...because games like Ultima Online and EverQuest have flaws that allow cheaters to duplicate currency, and that ultimately leads to what Hunter calls 'MUDflation,' short for inflation in a multiple-user dimension."

Comments

Copying Currency?

[polyp2000]

Just like the real world, its called forgery. Surely someone needs to invent some rules how to check if a player obtained virtual currency legitimately.

Re:Copying Currency?

[mangino]

Unless the government does it, then it is called Seignorage and causes inflation.

Re:Copying Currency?

[JoeD]

It's not so much that people are duplicating currency all over the place as it is that currency tends to enter the world much much faster than it leaves it.

For example, in Everquest, this is how money enters the world: You kill a monster. That monster drops a junk item and a little bit of cash. You then take the junk item to an NPC merchant and sell that for more cash.

Money leaves the world when you buy things from NPC merchants. Food and water are so cheap that they might as well be free. The only things that really cost money are trade skill items and spell reagents.

The problem is that people kill stuff far far more than they buy things, so money enters the world at a faster rate than it leaves. Eventually, you wind up with tens or even hundreds of thousands of platinum pieces.

What really needs to happen is to somehow balance the game so that cash coming in is balanced by cash going out. If there's too much money in the world, monsters drop less cash, merchants raise prices to suck some out, and lower the prices they give for stuff. If there's too little, do the reverse.

Re:Copying Currency?

[polyp2000]

Well, cant it be done like it is in the real world?

It used to be the case that at any one time the amount of currency equalled that of the value of the gold reserves. I suppose times have changed since then but the system might just as well work. Throw in a stock market algorithm ala Elite (or perhaps more sophisticated one) and maybe people will get a bit more interested in the trade aspects of the game.

Re:Copying Currency?

[Anonymous Cow herd]

Actually, I doubt that copying currency is the major problem with these games. The problem is that the economy is fundamentally broken (one of the few things that Shadowbane apparently got right). Allow me to elaborate...

In online worlds, there are basically two categories of assets; currency and items. On a very broad scale, both currency and items enter the game at a fixed rate. Once an item has entered the economy, it will generally remain in the economy until such a time as its value drops below that of what an in-game NPC merchant will pay for it, at which point in time it is exchanged for currency. Likewise, currency enters the game at a fixed rate (NPC drops, quest rewards, duplication, etc..) and for the most part, it doesn't ever leave the game. Which means, that once everyone who wants a pair of Boots of Butt-kicking has them, prices for the Boots of Butt-kicking are going to fall rapidly with demand. Or, more commonly, the game company releases a new expansion, and a new item in the expansion is Boots of Butt-kicking+5, as people acquire those, the market for the old Boots of Butt Kicking is going to fall through the floor.

The long and short of the deal is, as long as there isn't a "money sink", as there is in the real world (upkeep, upgrades, consumables, rent, taxes, etc...) by which money leaves the economy at the same rate or slightly slower than it's coming in, money is just going to accumulate in bank accounts and/or in capital expenditures, and increase the total money supply, devaluating the currency. It's the exact same thing that happend in post-World War I Germany... the MMOG's keep printing more money, and it's getting worth less every day.

Re:Copying Currency?

[Violet Null]

The gold standard isn't a very good idea in the real world. It'd be a piss poor idea in the game world. Allow me to explain:

Let's suppose that there was a fixed amount of money, which is what the gold standard does. Well, it has to be distributed somewhere to begin with, so let's say it's in a vault, and everytime someone kills a monster, the money's taken out of that vault and given to the player.

That's fine, until the vault runs out. After that point, killing a monster gets you no gold. Well, where else are you going to get gold? You could sell items to storekeepers, but eventually they'd run out of money, too. So, you'd have to get it from other players.

But, the supply of gold is fixed. The supply of items is not; more are still created all the time. What's that mean? It means that the value of gold goes up, and the value of items go down (deflation). The longer you hold onto your gold, the more it'll buy.

And don't forget, of course, that this gold would be piling up in the hands of the experienced players and guilds, who could've gotten the money when it was "free". New players who never had that chance would be left out.

Re:Copying Currency?

[Quill_28]

Bad username good post.

Why don't MMOG have more money sinks?

I am thinking ever time you need to raise a level, you have to pay to be "trained".

You own a house or castle there is normal upkeep costs, etc...??

btw I never paly MMOG's but finding the economics of them quite interesting.

Re:Copying Currency?

[DrDoombender]

I Agree with you on that 100%. If people are playing, but they don't have to pay for anything than the gold situation gets out of hand. The one thing I can't understand is why monsters have to give you gold in the first place?

logically, where does it say that monsters just happen to go around carrying the very thing that is spent in towns? It would seem to me, that MMORPGs would use something based off of reality. Say you have a creature called, "the Giant mammoth of Tarverac", and its strong, but if you kill it you can forage it for its tusks (very valuable), skin, good for shields or armor, and its meat for food. From which you turn around and sell it. However, the monster itself doesn't leave gold, unless it just happens to eat gold for food. Does this make sense?

Re:Copying Currency?

[KDan]

There's a simple solution that worked fine in a MUD called Arctic: rent. In this MUD, you had to pay (in game currency) while you were away. You got back to the "reception", signed it in, and when you came back in you paid a certain amount of money which depended on what? On what items you have on you (and how long you were away for).

Crappy items cost a couple of steel coins a day. Decent stuff cost a few tens of steel coins. And then there were great and uber items, which could cost in the thousands of coins per day to keep. Earning coin in arctic was not any harder than in any other game - kill monsters, sell their items, collect their gold if they have any, etc. There were even a number of 'cash cow' monsters which could be harvested for a pretty good profit...

But the rent was a killer that sucked money out of your hands very fast if you had good items. This solved a lot of problems. It solved the problem of mule characters - if you have a mule, well, you have to keep giving it lots and lots of money - it costs you a lot to keep all these items, especially if they're really good. It was part of the solution to item scarcity - if you run out of money while in rent, you lose all your equipment, including that amazing sword of whatevah of which there can only be 3 copies in the game world at any time. And of course it keeps you going back to the game in order to at the very least kill things and make money to keep your character clothed...

But, on the topic, it most importantly solved the inflation problem. I played this MUD for years and coin was worth pretty much the same at the end as at the beginning.

Daniel

Re:Copying Currency?

[Anonymous Coward]

The easy solution is to distibute items currency and experience equally for each kill. Lets say killing monster x is worth 100 exp then monster x should drop 100 worth of items and money.

Now gaining a level needs 1000 exp. At that point you should have 1000 value in items and money. A % is left for the accumulation of wealth say 10%.
So leveling up should cost 900 worth of money. The extra 10% is spent by the player how he sees fit. (Equipment, land, guilds ect.)

As you level up monsters drop more exp/money but it costs proportionally more to level. Making an qradratic or exponential scale will set a natural limit to player advancement.

Now vary the ratio of exp/money a little so some monsters drop less money and are worth more exp and vice versa. This forces the player to decide on what his priorities are. Do you level, or focus on equ. Maybe you dont buy some lesser skills so you can level quicker or spend that money on better equ or player housing.

Its just a little sad that a major company cant figure out this simple formula.
The only difficulty is measring how much equ is worth. The key is to set a resonable base worth and monitor trades to adjust drop%'s. It is always safe to underestimate the value of items as well as items should be less common then money thus making money the default "currency". (If this doent make sence to you think diablo where items were worth way more then cash so rings became the default high level currency.)

Re:Copying Currency?

[Carnildo]

Say you have a creature called, "the Giant mammoth of Tarverac", and its strong, but if you kill it you can forage it for its tusks (very valuable), skin, good for shields or armor, and its meat for food. From which you turn around and sell it. However, the monster itself doesn't leave gold, unless it just happens to eat gold for food. Does this make sense?

Who do you sell the stuff to? If the stuff is consumed at a reasonable rate (food, arrows, spell reagents), you might be able to sell to the player market. For durable goods, like armor, the player market will saturate rapidly, and the only place to sell the stuff is to NPC shopkeepers -- who pay you in gold! The only thing your scheme does is slow the entrance of gold into the economy slightly, because of the need to go hiking off to the nearest shop.

Re:Copying Currency?

[UnknownSoldier]

IMAGD & IMAGP (I am a game designer & programmer)

I'm so tired of people bitching about a "broken" game economy, when they don't have a clue what a game designer is all about.

They speak of game balance, as if the game is a zero sum function, when it is not, no matter how hard you try. All MMORPGs, are *designed*, either directly, or indirectly, so that player's wealth gradually increase. How? Because players put their TIME into the game, and the game allows for players to convert their time into game wealth. This is a reason MMORPG tend to follow the instant gratification, and the materialism of "No Risk, No Reward"

So nerf the reward? If there is no reward, what is the incentive to play? It no longer becomes a game in the tradional sense, because what is the goal then? You can't have a game without a goal! True, you can make a game out of ANY situation, but MMORPGs players don't just want a gloried chat sessions -- they want to experience things together with others.

ANY game will have 1 or more of these core principles:

- Creation / Nurture
- Destruction
- Cooperation
- Competition
- Communication
- Exploratin
- Navigation
- Pattern Recognition
- Problem Solving / Strategy
- Organization
- Acquisition
- Trade
- Simulation / Complexity

What does EQ (mainly) focus on?
- Acquisition
- Cooperation
- Communication
- Strategy
- Destruction

By mistakingly thinking "money" is the problem, you're missed the whole point of the "goal" of the game: Acquisition

As I said, you can remove the goal of Acquisition, but you need another goal to take it's place.

Peace

Re:Copying Currency?

[Colazar]

Exactly. Shadowbane was designed with *lots* of money sinks:

Training skills

Upkeep on city assets

Salary for NPC crafters

Repair on items (use leads to mild repairs, death leads to major repairs)

If it hadn't been for all the duped gold from the first six months, the economy would pretty amazing.

Of course, that leads to the opposite problem, where the players feel like they have to spend too much time farming for gold. You really can't win for losing, sometimes.

Re:Copying Currency?

[MMaestro]

The problem with this is the new players and non-hardcore players. This is an obvious problem, new players won't/can't kill as much as the older players, so you'll might reach level 10 but still be using a rusty sword and have less than 100 gold in your pocket.

Same thing with non-hardcore players, (lets say you've played for a LONG time) you could have a level 50 hero with 30000 gold and you look at some badass item for 10000 gold but you decide to wait because its late. You log off for the week and come back and find the item has jumped to 15000 gold, not a fun thing.

Theres other problems as well. High numbers of players starting the game/leaving the game, holidays/vacation time, and new areas being opened/expansions. All these have typically caused a large number of players to log on at any given period of time.

Re:Copying Currency?

[servognome]

Actually Everquest is one game that kinda got things right. Yes there is inflation, but there also is a high rate obsolescence (which most people ignore).
This infact drives prices for a specific item DOWN over time. For example an "Executioner's Axe" sold 4 years ago for 5000 gold to a player, today the same item sells for 500 gold. Why? Because there are better items out there.
What does this do? It gives new players purchasing power and helps them get into the game faster. While old time players have had enough time to accumulate enough gold to buy the brand new 300k uber swords.
And for anybody who thinks credit duping isn't a problem heres a patch note from SWG: January 16th Update Notes 01/22/2004 08:48 AM Fixed a credit dupe. We banned several accounts as a result of this fix. SOE works to maintain a fun, fair game for everyone and cheating will not be tolerated.

Re:Copying Currency?

[DrDoombender]

My assumption is that weapons and armor wear out unless they have magical properties. Even then, magical items should have a shelf-life if they are not kept. However, your average creature isn't going to leave weapons and armor. You have to sell those to people with the skills to make them into useable items. So trading posts or what not. At the same time, certain creatures have body parts that are components to make magical items. However, not all the components are known to make a powerful item, that requires experimentation.

perhaps your right though, maybe my idea only slows the rate. However, I don't see the need for NPCs to be santa Claus to every player. If the market gets saturated, NPCs won't want to pay much for that item. So really, they do need to put Supply and demand into the mechanics of the game.

Re:Copying Currency?

[atomicdragon]

A while back I played Asheron's Call and they did find a few ways to rebalance things. I don't remember all of the details since it has been a while, but they did have various economy problems. Some were just slight design mistakes, like being able to buy something at a beginner's town cheap and sell it at a profit in a far away town which became quite serious when money was made weightless (a friend filled almost his entire inventory with money in a short time). Changing prices fixed this. At one point the game raised the prices of spell components, which I imagine even a small increase would result in a huge change in outward cash flow of players (and a bunch of complaints). The last fix I heard was to open "casinos" creating a huge drain on money that seemed to stabilize things. This was around the time I left, so I don't know the long term effects of that.

It would seem any balancing could be done by small changes in the prices of the consumables (seems to apply only to magic stuff in most games), the amount of money dropped by critters, or an increase in the rate things wear out (probably affects fighters more). Since some of this stuff is involves such large volumes, only small changes would be needed, and it can be done on higher quality stuff in order to not screw over newer players.

How much the game is balanced depends on what the designers want. A very well balanced economy would mean that most players would not have much spare money since they spend what they make, which may or may not be a good thing. This would probably make the exchange of game money for real money a lot more difficult.

Re:Copying Currency?

[will_die]

rent has been around in MUDs for a long time; however thier are few problems which is why most designers dropped it. However it also has the benifit of keep high level items out of hte reach of low level characters since they could not keep up the rent.
Main problems are
1) Made it a requirment that you log on just to kill, no just chatting around with friends or not earning money.
2) Made it impossible for casual players to get any of the good stuff, because they could not kill enough to keep items.

Re:Copying Currency?

[robnauta]

The solution would be if shopkeepers had a fixed amount of money and would run out. This is not possible because they would run out of money soon and all trading would stall. So you must have merchants that have infinite money and will gladly buy 20 leather armors that were left by respawning low level characters, even if he has 9900 of those in his inventory already. Games like this need respawning monsters. If they leave loot, items with value keep entering the economy. So the gold supply keeps on growing.

Like Diablo money maker

[superpulpsicle]

Back in the days I remember playing diablo online and someone at a very very high level just started tossing cash at my direction to trade for some weapon he lost battling someone.

The only reason why I figured out he cheated was because the amount of money offered just couldn't fit into my slots.

So watchout, there are as many cheaters online as there are offline.

Re:Like Diablo money maker

[mcmonkey]

The only reason why I figured out he cheated was because the amount of money offered just couldn't fit into my slots.

In Diablo II the size of your purse goes with your level, so as you advance you can carry more gold. I don't remember if this was true for the original, but that fellow may not have been cheating.

Multiple-User "Dimension"?

[Anonymous Coward]

When I used them, they called them "Multiple User Dungeons"

Re:Multiple-User "Dimension"?

[Anonymous Coward]

"When I used them, they called them 'Multiple User Dungeons'"

Geeeeez! Are you still stuck in 2004?? ;)

Re:Multiple-User "Dimension"?

[Stray7Xi]

Both are correct.. but there's also Multi-User Domain. Which is actually the one I heard most often.

GOM is a great idea

[jafuser]

So far, Second Life seems to be their most popular market. I've played with it a little bit; it's kind of fun, and taught me a little about how the bigger commodities markets work.

I think Second Life is doing especially well on OGM because the company that runs the game (Linden Labs) has not only allowed it to be used, but has encouraged SL residents to use it.

One of the things that really turned me on to SL was how open-minded the company is that runs it. It's too bad the other bigger MMO companies are afraid to let their users own the fruits of their "labors", including their currency.

Not like the real world

[cgenman]

The real world has a fixed amount of money (reserve banking not withstanding). For doing what someone with money wants you to do, you recieve a certain reward. The amount of money in circulation is gradually tipped upwards as the population increases, productivity goes up, and old money is accidentally destroyed.

In a standard videogame, closed monetary arrangements are impossible. The players give money to the merchants, who then pay the players to kill monsters? What is the value of an item when nobody wants it? How is the loop closed if items are being generated? At that point you just have massive deflation. Likewise, as players enter or leave the world you have inflation / deflation.

Ok, so you have a closed-loop financial system, a closed-loop item generation and consumption system (that will encourage hording, of course), both of which are keyed to the number of subscribers. Yet special items must still be won, quests must be rewarded. The leveling treadmill will be in effect, but there must be the special blue blade of Nozerath for the adventuring players...

I agree that there needs to be various controls in place, and that developers need to better understand basic economics, but a model of the real world this is not.

Re:Not like the real world

[Carnildo]

The real world has a fixed amount of money (reserve banking not withstanding).

Dead wrong.

The real world has a fixed number of dollar bills and equivalents. The amount of money fluctuates rapidly.

Take a stock certificate. If one share of the stock sells for $25 right now, you would probably accept one share of that stock in payment for something that costs $20. The gap between the worth of the share and the price of the item will cover any broker's fees for selling, and the risk that the stock will go down before you can sell.

How about loans? If I loan you $100,000, with the agreement that, over the life of the loan, the total you'll pay back is $200,000, I could sell that loan to someone else for $200,000. After all, that loan is a promise they'll be paid $200,000 eventually, but until the loan is paid off, that's additional money in circulation that the government didn't print. A credit card is just a variation on a loan, but it also increases the effective amount of money in circulation.

How about playing with time delays in the banking system? Say I write you a check for $100, but I don't have the money in my account to cover it. If, by the time you get around to cashing it, I've been paid, nothing will go wrong, but until then, that's an additional $100 in circulation!

Re:Not like the real world

[Anonymous Coward]

People seem to have a poor understanding of wealth. The accumulation of global wealth is the difference between what is produced through your labor and what is consumed.

Lets take a simple example. You are substinance farmer. Each year you produce exactly enough food for you to live on, cloth for you keep clothed and wood to fix your house. At the end of the year you have exactly as much as you started out with. You have produced no net wealth.

Now lets say you invent the plow and sundenly you can plant 2x as much with the same amount of labor. You now have an economy which is producing wealth.

Now it gets more complicated. You see the grain you produce has an expected value. The less grain you have the more its expected value is so when you are a substance farmer extra grain is worth a lot (for those lean years) but as you horde more it becomes less and less likley that you will find a use for it hence its value decreases (lets assume no rot for simplicity).

Now what happens is you cut back on production since it is pointless to keep stockpiling something you never use. This leads to an increase in the standard of living (more free time). So over the centuries we have, as a race, not become much wealthier (since wealth is self regulating on an exponential expectation scale) but by increasing the amount of work that can be done by a certain amount of labor we have raised the standards of living.

Re:Not like the real world

[Anonymous Coward]

Someone never took economics.

No legal threats

[cgenman]

I'd like to point out the fact that nowhere in the article are legal threats mentioned. Just because an assistant director of legal studies makes an economic argument, doesn't mean that the invisible hand is now under the court's jurisdiction.

A good reason

[TheRealMindChild]

There is a good reason that these companies frown upon trading of virtual goods. First and foremost, they can become both directly and indirectly liable for these goods... they technically are the manufacturer, and retailer of these goods, so in many countries, they would be bound to consumer protection laws. If they eliminate these virtual goods from actually being identified as transferable propertly, then there will be a lot less to worry about.

The term "MUDFlation"

[jbensley]

You know, I don't remember ever hearing the term 'MUDflation' being used as "inflation in a MUD environment", or for that matter having anything to do with the economics of a particular game.

I was always under the impression that "MUDflation" was the propensity for the items / players / mobs to get more powerful over time in order to keep people interested. "MUDflation" was the reason the level limit in EQ was raised from 50 to 60, and then to 65, and the weapons got significantly more powerful over time as well. Perhaps a side effect is a change in the economy, but the term doesn't describe that.

As far as basing any kind of real economy on a gaming economy, I think it is fundamentally flawed. After all, none of these systems are closed economies in the slightest, currency is simply created at a whim. Do you ever wonder where that orc pawn got his cash from?

Inevitibly the value of currency is going to go down the more is in circulation, whether it be legitimately or through dupes. I don't feel that this guy has a firm grasp on what's really going on, although the article suggests that he expects currency valuations to change.

Re:The term "MUDFlation"

[will_die]

However what is happening in MMORPGS is NOT inflation, it is simple supply and demand and greed.
Under inflation the price to produce items increase, no MMORPG has this. Even in SWG where everything is player made all the things like raw materials,travel, cost to run housing and factories all are constant.
Now if any game started to raise or lower thoses costs based on the total amounts of in game money they you would start to see inflation.

Virtual income?

[HTH NE1]

I'd hate to have to figure out how to report virtual income on my tax return.

Medievia

[spudwiser]

I don't know how much of the /. userbase plays the MUD Medievia (www.shamelessplugs.com) but just about every time they implement a major change (which isn't hard on a mud that has an average online base of (a frickan huge) 400 or so users at any given off-hour) that somehow involves money, be it a new zone opening (NEW EQ!!!) or a change to a fundamental portion of the game, people get richer and things cost more.
There is no huge international online market for goods other than the Auction Channel, and everything about the game is controlled on-server. Inflation is a direct result of people making more money. It happens. Any MMORPG (God, I hate that term) is subject to the rules of Supply & Demand, Inflation, and unfortunately sometimes acts on the level of theft and embezlement. Deal with it, or stop playing.
If you're paying to play a game, you should especially expect someone to try to get more out of it than they put in. It's life, virtual or not.

Re:Medievia

[Gustov]

I think you put up a very valid point, if these MMORPG's try to simulate a real world, then be prepared for them to be just like it, fair or not (usually not fair).

And also...

[anvilmark]

consider the situation where a bright geek gets an idea for a new and wonderful gadget. He picks up $50 in parts from Radio Shack and assembles them in a few hours into an item that people will gladly pay $200 for.

Where did that extra $150 come from? His labor (ala Marx)? No, his creativity.

The above scenario is brought to you by - Capitalism - "making money out of nothing one idea at a time"

Re:And also...

[Carnildo]

consider the situation where a bright geek gets an idea for a new and wonderful gadget. He picks up $50 in parts from Radio Shack and assembles them in a few hours into an item that people will gladly pay $200 for.

Where did that extra $150 come from? His labor (ala Marx)? No, his creativity.

In that situation, he isn't creating money, he's just encouraging people to move it around in his direction. Now, if he then did an IPO of his new company, that would be creating money.

So if I bribe some senators using Fake Money

[Anonymous Coward]

10,000 Dollar's worth of Simoleons(Current Market Value) for each vote twords pushing property and speech rights in games, is that against the law?

Bzzzt. wrong. dunjon.

[Anonymous Coward]

the first MUD was literally, Multi-User Dunjon. Dunjon being the original release name for Zork. making the first MUD, literally, multi-user Zork.