It all began with a strange email
blogs.valvesoftware.com
It all began with a strange email
1–10 of 128 posts
Re: It all began with a strange email
#2Intensely interesting. I'm looking forward to more blog entries. Though not an economist, I've always lamented the way econometrics was starved of opportunities, and the way competing ideas could both thrive with no real hope of resolution.
Re: It all began with a strange email
#3Looking forward to these posts. I've remember being completely fascinated by Diablo 2's virtual economy, and saddened that I could find so little articles about it.
Re: It all began with a strange email
#4This is truly fascinating.
I remember hearing about virtual economies where money can be injected at any time through gold mining, etc, and that they were inherently unstable. Once you got the gold farming schemes that sold gold on e-bay, it created massive hyperinflation.
And it totally made sense that hyperinflation would occur since the creation of virtual gold was limitless and effortless, so the gold farmers didn't care how much gold they sold it for as long as they got real money. That rendered the price of gold worthless, and it drove up the prices of virtual goods across the board.
I would love to see how these problems are tackled in the virtual world.
Re: It all began with a strange email
#5I guess I would be interested in a truly economics oriented game that modeled nations without it being about wars, raids, guilds, spells etc. Not sure if something like that exists though.
Re: It all began with a strange email
#6I worked at CCP when they hired Eyjólfur. He came in without really knowing a lot about the game world and made it his first job to learn as much as he could about how the world actually worked.
Given that I was a foreigner who was working and living in Iceland, I didn't have much of an evening social life. I was also one of the relatively few employees (sadly) that were really active in the game in the advanced levels of play -- 0.0, empire wars, etc.
Eyjólfur spent a bunch of evenings sitting with me while I played internet spaceships. He asked tons of questions and really got to learn the universe, or at least my corner of it. It was really interesting to work with him and hear him talk about his thoughts as he was putting them together.
CCP used to publish the Quarterly Economic Newsletter, like this:
http://cdn1.eveonline.com/community/QEN/QEN_Q3-2010.pdf
They've since stopped doing that, but you can see from that example that it used to be a fantastic resource. If you wanted to know the nitty-gritty details about the universe of EVE Online, the QEN was hard to beat.
Re: It all began with a strange email
#7This is truly fascinating. I remember hearing about virtual economies where money can be injected at any time through gold mining, etc, and that they were inherently unstable. Once you got the gold farming schemes that sold gold on e-bay, it created massive hyperinflation. And it totally made sense that hyperinflation would occur since the creation of virtual gold was limitless and effortless, so the gold farmers did…
Valve's games put a cap on real prices by selling the items through Valve's store. You can buy a new gun for $2, so the price of the gun in "ebay gold" will never rise above $2.
(Big simplification for TF2 players follows) Also, in TeamFortress 2 (Valve's biggest virtual economy), it's difficult to farm gold. Logged in players receive 1 gold/hr, capped at a max of 10 gold/week. It's possible to create new accounts, and run all of them concurrently, but the expected gain is fairly low, and you have to pay Valve real money for the privilege of having extra accounts.
The exchange rates are also totally asymmetric. The exchange rate for money into gold is approximately $1 => 81 gold. The exchange rate for gold back into real money is ambiguous. There isn't a liquid market here. It involves finding rare in-game hats that aren't sold in the valve store, and selling them on e-bay for $100-$400.
The hypothetical gun might cost $2 on the valve store, but 1 gold in game (i.e less than 1% of the store price). This strongly incentivizes players to trade in-game.
It's possible to make a profit by trading with humans, but that's labor intensive (because you have to find the player and haggle), and probably seen as a positive for Valve, because the traders are providing liquidity.
Re: It all began with a strange email
#8This is truly fascinating. I remember hearing about virtual economies where money can be injected at any time through gold mining, etc, and that they were inherently unstable. Once you got the gold farming schemes that sold gold on e-bay, it created massive hyperinflation. And it totally made sense that hyperinflation would occur since the creation of virtual gold was limitless and effortless, so the gold farmers did…
Blizzard sure could use someone like him right about now.
Diablo 3 has crazy gold hyperinflation due to bots and the real money auction is causing further havoc. It is pretty obvious that this was not well thought out prior to release.
Re: It all began with a strange email
#9This is truly fascinating. I remember hearing about virtual economies where money can be injected at any time through gold mining, etc, and that they were inherently unstable. Once you got the gold farming schemes that sold gold on e-bay, it created massive hyperinflation. And it totally made sense that hyperinflation would occur since the creation of virtual gold was limitless and effortless, so the gold farmers did…
Many games add "Gold sinks" to tackle this. Just ways for players to use gold that completely removes it from the economy. I believe the trick of this is to scale it with the amount of gold in the system.
Complete conjecture, but I suspect this is related to things like the increased price to craft gems in Diablo II (bigger gems are more expensive) which was a stark contract to Diablo 2's simple method of "3 small gems make a big gem".
Diablo 2 felt like it had an economy that happened almost by accident whereas DiabloIII feels like they put a lot of effort into the economy and trying to have enough ways to remove gold from the economy.
Re: It all began with a strange email
#10This is truly fascinating. I remember hearing about virtual economies where money can be injected at any time through gold mining, etc, and that they were inherently unstable. Once you got the gold farming schemes that sold gold on e-bay, it created massive hyperinflation. And it totally made sense that hyperinflation would occur since the creation of virtual gold was limitless and effortless, so the gold farmers did…
Blizzard sure could use someone like him right about now. Diablo 3 has crazy gold hyperinflation due to bots and the real money auction is causing further havoc. It is pretty obvious that this was not well thought out prior to release.
I disagree. I think it was well thought out, I just think it's hard to know what will happen until afterward. As for some of the values of items in Diablo III currently... I think there will be a settling period before prices reflect their true value. Supply will increase until some equilibrium is reached. When we hit some equilibrium we'll know if Blizz needs to tweak things. The gold AH, for instance, has had the overall item price tank pretty quickly over the last few weeks reaching what is now much more sane numbers IMO.