How to create a successful server economy for your playeworld

[konidias]

I'm going to describe my ideas for how to make a successful economy on a Graal server below. This is just my spin on how an economy should operate and also what wrong turns have been taken by servers in the past.

Step One - Establish a "real" currency

What I mean by "real", is a currency which can base it's value on a real life currency for comparison. For example, on my server a gralat has the value of 10 cents US currency. This lets me better gauge my prices for items and values for things in the game as I can use real world prices for things such as rent, clothing, food, tools, etc. and convert them into my server's currency. So by using the 10 cents = 1 gralat standard, we can calculate something like this:

1 meal costs roughly $3.50 US for me. So since 10 cents = 1 gralat then:

1 gralat x 10 = 10 gralats = $1 US
10 gralats x 3 = 30 gralats or $3 US dollars
Since 10 gralats = $1 US then 5 gralats = 50 cents us.

So the cost of a meal on my server would be roughly 35 gralats.

Of course since I'm using such an easy ratio I can just say that whatever the US dollar amount is for an item, I can just move a decimal place over to the right to get my gralat amount for an item.

Example:

$1.00 = 10.0 gralats
$20.00 = 200.0 gralats
$32.50 = 325.0 gralats

Making this method very easy to use while also allowing for items to have realistic pricing in your game.

Many servers have made the mistake of pricing items based on whatever value the current currency holds. For example, if people have very few gralats on average, then items would be priced for less. But if the majority of players have accumulated thousands of gralats, then item prices would rise. This is an inefficient and crude form of pricing. It's like supply and demand in reverse.


Step Two - Establish shops with limits

A shop without limits equals a neverending supply of products. This might seem like a simple solution to making sure everyone gets the items they want, but the downside is that eventually your economy will collapse and items will have no value since everyone has many copies of the same thing. For example. If Barney's Tool Shop sells shovels to players and the shop never runs out or changes prices, then everyone will quickly own a shovel and there will be hundreds to thousands of shovels on the server and little need for Barney's Tool Shop.

Also with hundreds of thousands of shovels no longer in the shop, the value of the shovel will be next to worthless. Who needs a shovel when everyone already has one? One solution is to have shovels "break" so that players must continue to buy shovels if they use them. This is good for some things (though nobody enjoys having a tool break) such as tools, but what about clothing? Clothing can last for decades... so "breaking" them is not an option.

So how to stock permanent items like clothing? Several servers in the past have attempted the "rarity" method by stocking a limited supply of an item in a shop. The only way for the item to restock was via a staff update. This can work short term but it's not a long term solution. Eventually you will have so many items to stock that it will become a bother to update all the quantities and release the items. Not to mention that all past restocks have been done at completely random times, so that a lot of players hoping to get a certain item never got the chance, as they were not online to do so.

A better solution would be to create shops that base their items on demand and amount the store can spend. Each shop in your world that sells items such as clothing should start with a bankroll. Basically they start with an amount of money they can use to run their business. (buy items to stock the shelves) You simply give the shop an amount of money to start with and then script a way for the shop to use that money in a way that will make the business profit.

Each shop should have a "catalogue" of items it can select for it's shelves, each with a base price. (a price for which the shop owner must pay for the item) This way, shops don't just have an endless supply of items. They must make profit in order to have money to restock their shop.

After the npc shop owner has randomly selected items to stock, it must then price the items in a way which will make it some profit. If a "black hat" costs the shop owner $8 to buy, then the shop might sell it for $10, and thus a $2 profit.

When an item is out of stock, the store would then "order" more of that item. Giving a time span in which this item will be temporarily unavailable. This allows for rarity while not making an item permanently unavailable. The store would also note that since it ran out of the item, it must mean there is demand. Thus, the amount of items to order for the shop would be greater than it was initially. Also a small price increase would occur.

So if the shop stocked 20 "black hat" items for $10 initially and they sold out, the shop would then restock possibly 25-30 "black hat" items for $11-$12. The shop would need to check on a "daily" or "weekly" or "whatever you choose" basis to see how the item sales are doing. If the black hat stock hardly changes over the course of several checks, then this means nobody is buying this item and that it might be priced too high. The store would then lower the price from $11 or $12 dollars to $10 or $11 dollars, and so on. However since there was a base price of $8 per hat, the store will never go out of it's way to lose profit by selling it for less than $8.

If an item gets to the point where the store is selling it for as much as it paid, then the item will be temporarily "discontinued" for an X amount of time. This means that the public shows no interest in buying this item for it's base price and that it's possible there are too many in circulation. By discontinuing the item it allows time for demand to increase again. Eventually the item will be recontinued and by then, the rarity of the item will have risen enough to where people will gladly pay more than base price for it.


Step Three - Establish ways to remove excess money

Unlike real life, players who earn money in the game do not have to spend that money to live, such as renting a home, eating food, healthcare, education, bills, etc. I believe that this was never factored in to any economy on Graal to date. Which is a large reason why most if not all of Graal's economies fail.

In order to factor this in, you need to figure out the cost of "living expenses" for a character in the game. Then work out a formula that will subtract these expenses from the amount of money earned by players. This would mean players would make significantly less money than they do now. You need to make sure that the living expenses you are subtracting are not part of your game. So if your player does indeed need to buy food to not die in your game, then you should not factor this in as a living expense to subtract.

But since most Graal servers are fantasy based, players do not need to worry about a lot of everday expenses. Because of this, players accumulate wealth very quickly and money and items lose their value. If any of you work a real job and live on your own currently, you'd understand that a lot of the money you make goes towards keeping you alive and sheltered.

If nobody in the world had to worry about paying for food or rent or bills than we would all have millions of dollars. As you can see, this can be quite troublesome for a playerworld. But it's exactly what happens in the majority of cases.

With all this being stated, it still does not resolve the issue of "more money coming in than going out". You need to fix this by creating things that will take money from players without giving them back something in which they can sell. Things such as paying for a ticket to enter an area, renting a house or building, buying perishable items such as food or items that break or can be destroyed, paying to enter an event... all of these things will take money from players while not giving them back money or items, but instead providing a service or entertainment.


Step Four - Pay attention to where the money is coming from

Make sure you're monitoring your staff so that there is no corruption and nobody giving out tons of free money or items. Also make sure you check for bugs and ban anyone who abuses them while also removing any items or money they may have created from the bug abuse, and of course fix the bugs! Make sure there is no way for people to easily cheat using a 3rd party program to add money or items to their account. Log all transactions having to do with money or items so that you can always know where the money and items are going and coming from.

[konidias]

Conclusion

In the end, you just need to make sure that you keep things consistent. The value of your currency shouldn't increase or decrease over time. The value of items sold in stores and items sold by players might increase and decrease, but this is based entirely on the rarity of the item. You should also consider having a cap on items however, so that eventually no more are ever sold in a store. A real life example of this are things such as limited edition collectibles which only have a few thousand or hundred produced.

Players should earn less than they would in a real world job per hour of Graal work (since you're calculating in living expenses). Try to balance the jobs so that they mostly pay out the same amount per hour. This will prevent players from flocking to the "highest paying" job from the start. Of course, there is nothing wrong with having a few jobs that pay more but which require expensive tools or more work per hour. So long as the effort/expense equals the amount of money earned.


Summary

So to sum this up for people who do not have the patience to read (though if you don't have patience you shouldn't even bother managing a playerworld), here is a quick overview:

1. base your game currency on real world currency to keep things accurate and to scale
2. shops need to work on supply and demand and also strive to make profit. shops that don't make profit will not supply more items.
3. make sure that you take into account the living expenses your players would have but aren't accounted for directly in the game.
4. create plenty of ways to remove money from the economy without it entering back in.
5. keep corruption, bug abuse, and cheating in check and make sure you log anything that involves money or items, and try to limit the amount of "staff created" money or items.

I hope this article helps some managers with their playerworld projects, even if you don't use all of the steps. Good luck with your playerworld!

[killerogue]

Wow, konidias. Wow. I found this to be a very helpful and intelligent way to help the Graal Playerworld community and I commend you on your efforts in typing this up. Personally, to show my appreciation I plan to take in all accounts of this little "essay" in my own playerworld. I was also planning to have catalogues for mail order items and the suck. But anyway, Good Job.

[xXziroXx]

*applauds* Well said Konidias! Im sure this well help alot of new servers, it might even help some old ones too! You've deserved to be repped!

[Devil]

Fantastic, some actual real information people can use, if I were to make a playerworld, I would go by this.

[zokemon]

We will make sure to cover topics like this in the Reform meeting

[Googi]

The third and fourth suggestions make sense. The first one does not. How do you scale for items like spellbooks, which have no real-world equivalent? How do things like how the item affects that players stats (on servers with stats) factor into the scaling? Even when you can find a real-world equivalent, it doesn't protect you from having huge initial/"official" value vs. market value gaps because the supply of and demand for an item in the server's economy is probably going to be radically different from what it is in the real-world economy.

The second suggestion has very little to do with having a "successful" economy and has a whole lot to do with keeping players dependent on NPC shops. It seems to be centered around some kind of belief that players buying from shops is "good" and players buying from other players is "bad" (or at least, the system you're suggesting is one that would discourage players from buying items from other players.)

Overall, it isn't really a guide to having a successful economy, it's a guide to fighting inflation/deflation, which can be an important aspect of managing a server's economy but isn't the ultimate measure of success. The ultimate measure of success is the economy's ability to attract and keep players (for example, you wouldn't want to introduce some kind of anti-inflation measure if introducing it would cause you to lose more players or potential players than the inflation that would result from not introducing it would.)

[konidias]

Originally Posted by Googi

The third and fourth suggestions make sense. The first one does not. How do you scale for items like spellbooks, which have no real-world equivalent? How do things like how the item affects that players stats (on servers with stats) factor into the scaling? Even when you can find a real-world equivalent, it doesn't protect you from having huge initial/"official" value vs. market value gaps because the supply of and demand for an item in the server's economy is probably going to be radically different from what it is in the real-world economy.

I've taken this into account. I just forgot to include it. But thanks for bringing it up. Like you said, you can scale fantasy items properly but most items do have a real-world equivalent. If they don't, then you determine a cost based on the strength or ability of the item in comparison to the weakest/strongest possible items in your game. So if you have a "magical sword of great justice" you would first include the cost of a normal real world sword of decent to great value, and then you would add more cost based on it's strength in comparison to that of the weakest and strongest sword.

The huge initial/"official" value vs. market value gaps can be at least partially less "huge" by estimating the market value beforehand. Shops shouldn't start selling items slightly higher than base price. You can always include an initial higher starting price for items that you think will be purchased more or have greater use or whatever.

I don't see how you can say the first suggestion makes "no sense" though, based on your reasons. It still makes sense, it just fails to mention the things you brought up.

The second suggestion has very little to do with having a "successful" economy and has a whole lot to do with keeping players dependent on NPC shops. It seems to be centered around some kind of belief that players buying from shops is "good" and players buying from other players is "bad" (or at least, the system you're suggesting is one that would discourage players from buying items from other players.)

This system is really only aimed towards servers that use item shops. If you have a server with no shops then obviously you're not going to use that advice. But that doesn't mean it would be less successful. I think you're just reading into things too deep. I don't believe that it's not possible to have a successful economy without shops. But I do believe it would be a lot harder to attempt a server where players didn't buy things from shops... such as letting the players craft the items or winning everything from quests or events.

Overall, it isn't really a guide to having a successful economy, it's a guide to fighting inflation/deflation, which can be an important aspect of managing a server's economy but isn't the ultimate measure of success. The ultimate measure of success is the economy's ability to attract and keep players (for example, you wouldn't want to introduce some kind of anti-inflation measure if introducing it would cause you to lose more players or potential players than the inflation that would result from not introducing it would.)

I'd have to disagree with you. The economy has little to do with attracting and keeping players. That falls on gameplay, content, overall design... But if you want your point to be valid, then wouldn't a controlled and balanced economy attract players? Is that not then, a successful economy?

edit: As an example, no servers on Graal have ever had a successful economy yet they still had high playercounts. UN hardly has an economy at all (last I checked) and it maintains a high playercount. However I think that following these tips can at least save a few servers from having to go down the old "reset road". Some servers have been reset like half a dozen times just because the economy turns into a beast and consumes everything. How can you release new items when old items are worthless and everyone has far too much money? Nothing at that point can save the server except for doing as you said... taking severe anti-inflation measures or nerfing items or lowering money made from jobs... which is not where you want to end up.

[killerogue]

Ai, Konidias. It may sound odd but I think you should consider posting some formulas with this and make it a downloadable text file. Just saying....

[Googi]

Originally Posted by konidias

The huge initial/"official" value vs. market value gaps can be at least partially less "huge" by estimating the market value beforehand. Shops shouldn't start selling items slightly higher than base price. You can always include an initial higher starting price for items that you think will be purchased more or have greater use or whatever.

Yeah, but you base estimations of market value on how much effective demand you think there will be for an item, not by trying to make a real-world currency conversion.

Originally Posted by konidias

I don't see how you can say the first suggestion makes "no sense" though, based on your reasons. It still makes sense, it just fails to mention the things you brought up.

It doesn't make sense because scaling is an arbitrary way of setting prices. There's no reason to believe that the market value of an item will correspond with the scaled, real-world-based value.

Originally Posted by konidias

This system is really only aimed towards servers that use item shops. If you have a server with no shops then obviously you're not going to use that advice. But that doesn't mean it would be less successful. I think you're just reading into things too deep. I don't believe that it's not possible to have a successful economy without shops. But I do believe it would be a lot harder to attempt a server where players didn't buy things from shops... such as letting the players craft the items or winning everything from quests or events.

And my criticism only applies to items that are sold in shops. The system you're suggesting heavily discourages players from buying items from other players if they are sold in shops.

Originally Posted by konidias

I'd have to disagree with you. The economy has little to do with attracting and keeping players. That falls on gameplay, content, overall design...

It's true that it has little to do with attracting players, but it has a lot to do with keeping players.

Originally Posted by konidias

But if you want your point to be valid, then wouldn't a controlled and balanced economy attract players? Is that not then, a successful economy?

Yes, a balanced economy is best, but that doesn't necessarily mean "fighting inflation no matter what."

Originally Posted by konidias

edit: As an example, no servers on Graal have ever had a successful economy yet they still had high playercounts.

Explain why 2K2's economy is not successful (certainly it's not perfect but I would still describe it as successful).

Originally Posted by konidias

UN hardly has an economy at all (last I checked) and it maintains a high playercount. However I think that following these tips can at least save a few servers from having to go down the old "reset road". Some servers have been reset like half a dozen times just because the economy turns into a beast and consumes everything. How can you release new items when old items are worthless and everyone has far too much money? Nothing at that point can save the server except for doing as you said... taking severe anti-inflation measures or nerfing items or lowering money made from jobs... which is not where you want to end up.

Which is why (like you said), it's important to keep an eye on the money supply and have ways to remove money from the economy, but things like keeping items fixed at shop prices by discouraging the trade in "shop items" (which would be the consequence of what you're suggesting) sacrifice gameplay for the purpose of fighting inflation.

[konidias]

Originally Posted by Googi

Yeah, but you base estimations of market value on how much effective demand you think there will be for an item, not by trying to make a real-world currency conversion.

Obviously. But it's better to start somewhere than nowhere. At least basing your currency on something more concrete than "well a gralat/plat/gold coin/dollar is worth less now because players have thousands of them each". Since this is killing new players who have a grand total of 0.

It doesn't make sense because scaling is an arbitrary way of setting prices. There's no reason to believe that the market value of an item will correspond with the scaled, real-world-based value.

So what do you suggest? Coming up with something off the top of one's head?

And my criticism only applies to items that are sold in shops. The system you're suggesting heavily discourages players from buying items from other players if they are sold in shops.

It does no such thing. In fact, with limited releases and days between restocks, it is encouraging people who really want a particular item to seek it out from players, instead of having to wait/possibly miss getting the item from the restock if they cannot be online when it happens. Time = money and most people do not like having to wait for the item to restock in the store so they will get it from players if possible.

It's true that it has little to do with attracting players, but it has a lot to do with keeping players.

Only when the economy crumbles to the point where it needs reset. Then people get annoyed and leave. People aren't usually going to notice in the first few weeks that an economy is going to fall apart. I doubt many people log on a server for the first time and are thinking "hmm pretty nice, but how will the economy hold up?" Most don't even realize until the staff announce a reset. Then they are scratching their heads wondering why the third, fourth, fifth etc reset is happening.

Yes, a balanced economy is best, but that doesn't necessarily mean "fighting inflation no matter what."

It does if you want to give new players a fair chance. Six months in with inflation and new players are royally boned.

Explain why 2K2's economy is not successful (certainly it's not perfect but I would still describe it as successful).

I haven't really been actively playing 2k2 but it's safe to assume that it's anything but successful. You have events team who were giving out high value items to a select few. Where'd those come from? The sky? You have items that are completely worthless. Far too many to even name. (not like I'd remember the names anyway) The shop was a disaster... People would intentionally buy stuff they didn't even want just so the shop would instantly replace it with another item that they do want.

I think after hearing you state that 2k2's economy is successful and your other various points that you've made... I think it seems more like you're just trying to find ways to pick apart my guide. You might as well throw in "Well what if your playerworld is in some alternate dimension where you swim in outerspace and eat toad sandwiches??? How are you supposed to balance that economy using your guide!?" It's kind of obvious then, that the guide is not for your playerworld... Which is probably why I didn't mention magical/fantasy items and playerworlds with no shops. Because I think people can figure out that they need to set their own prices for those items and if they don't have shops then they shouldn't be reading about how shops should be run.

Which is why (like you said), it's important to keep an eye on the money supply and have ways to remove money from the economy, but things like keeping items fixed at shop prices by discouraging the trade in "shop items" (which would be the consequence of what you're suggesting) sacrifice gameplay for the purpose of fighting inflation.

Items aren't fixed at shop prices. The item price will rise in value the more in demand that it is. If you buy a "flaming sword" for 300 coins or something and the shop runs out, the stock is gone... and anyone wanting a flaming sword would have to either wait for the item to be restocked, or buy the item from another player. Even when it restocks, the flaming sword will have gone up in price. After a few price raises, your initial flaming sword purchase of 300 coins will be cheap compared to the 350 coins it costs in the store. Then you could sell YOUR flaming sword to a player for 340 coins and they will gladly take yours and save 10 coins.

I really don't see how you think this is discouraging player to player commerce. You're either reading this wrong or you're just looking for a reason to debate something.

[Chandler]

Very good document!

Myself and WDM was going for something similar with V$:C.

[Draenin]

Originally Posted by Googi

The third and fourth suggestions make sense. The first one does not. How do you scale for items like spellbooks, which have no real-world equivalent? How do things like how the item affects that players stats (on servers with stats) factor into the scaling?

I would just suggest rewriting the prices and stats for things across servers.

[Googi]

Originally Posted by konidias

Obviously. But it's better to start somewhere than nowhere. At least basing your currency on something more concrete than "well a gralat/plat/gold coin/dollar is worth less now because players have thousands of them each". Since this is killing new players who have a grand total of 0.

This problem has everything to do with inflation and nothing to do scaling because scaling provides zero protection from inflation.

Originally Posted by konidias

So what do you suggest? Coming up with something off the top of one's head?

That would be a lot easier than scaling and would do just as much (nothing) to help the economy, but it's not what I would suggest. Prices should be based

Originally Posted by konidias

It does no such thing. In fact, with limited releases and days between restocks, it is encouraging people who really want a particular item to seek it out from players, instead of having to wait/possibly miss getting the item from the restock if they cannot be online when it happens. Time = money and most people do not like having to wait for the item to restock in the store so they will get it from players if possible.

Items aren't fixed at shop prices. The item price will rise in value the more in demand that it is. If you buy a "flaming sword" for 300 coins or something and the shop runs out, the stock is gone... and anyone wanting a flaming sword would have to either wait for the item to be restocked, or buy the item from another player. Even when it restocks, the flaming sword will have gone up in price. After a few price raises, your initial flaming sword purchase of 300 coins will be cheap compared to the 350 coins it costs in the store. Then you could sell YOUR flaming sword to a player for 340 coins and they will gladly take yours and save 10 coins.

Rethinking it, it would probably discourage player-to-player trade a lot less than I originally thought. The real problem is that it "dehumanizes" the economy by making the shops, rather than the collective playerbase, the "last word" on pricing. I know that you're big on dehumanization (i.e. NPC kings) but I don't think many playerworld managers/players like it quite so much, and given the choice would probably opt for an economic system that gives more power to them and less to the staff/NPCs.

Originally Posted by konidias

Only when the economy crumbles to the point where it needs reset. Then people get annoyed and leave.

Which makes the economy an important aspect of keeping players.

Originally Posted by konidias

It does if you want to give new players a fair chance. Six months in with inflation and new players are royally boned.

This is what happened on 2K1, but that's because the 2K1 economy was structured in such a way that inflation resulted in players being "locked out" of the marketplace, because in order to "enter" the marketplace you needed to be able to buy things. You had to enter as a buyer before you could become a seller. On 2K2 you can enter as a seller because a new player can get items like brutal maps and gold keys, which other players will pay serious money for, without having to spend a lot of money. Securing entry to the marketplace for new players (which protects them from inflation) is far more important than the fighting of inflation itself.

Originally Posted by konidias

I haven't really been actively playing 2k2 but it's safe to assume that it's anything but successful. You have events team who were giving out high value items to a select few.

An imperfection, to be sure, but ultimately something that has very little effect on the average player of 2K2.

Originally Posted by konidias

Where'd those come from? The sky?

I'm not sure what the basis of this criticism is. It sounds like you're complaining about there being no RP explanation for the item's existence (but I would expect that you realize that that has nothing to do with the server's economy).

Originally Posted by konidias

You have items that are completely worthless. Far too many to even name. (not like I'd remember the names anyway)

This isn't a bad thing. What can be a bad thing is an item that once had value becoming worthless, but an item that started out worthless remaining worthless is often neither good nor bad for an economy. Keeping basic tools cheap/free can even be a good thing because it can help secure the ability of new players to enter the marketplace (which I mentioned above).

Originally Posted by konidias

The shop was a disaster... People would intentionally buy stuff they didn't even want just so the shop would instantly replace it with another item that they do want.

This is a good thing that results in huge amounts of platinum coins being removed from the economy. You have to keep in mind that when a player does this, what they're usually really trying to do is make a currency conversion (albeit a profitable one). They aren't trying to get an item to sell for more platinum coins than they spent getting it, but an item to sell for diamonds.

Originally Posted by konidias

I think after hearing you state that 2k2's economy is successful and your other various points that you've made... I think it seems more like you're just trying to find ways to pick apart my guide.

That's not what I'm doing. I have serious problems with suggestions 1 and 2 and I think that playerworlds can do things in a better way. At least I'm giving your guide serious consideration as opposed to someone who sees it and goes "This guide is long, therefore it must be good."

Originally Posted by konidias

You might as well throw in "Well what if your playerworld is in some alternate dimension where you swim in outerspace and eat toad sandwiches??? How are you supposed to balance that economy using your guide!?" It's kind of obvious then, that the guide is not for your playerworld... Which is probably why I didn't mention magical/fantasy items and playerworlds with no shops. Because I think people can figure out that they need to set their own prices for those items and if they don't have shops then they shouldn't be reading about how shops should be run.

Because it's not really a guide for how to structure an economy, it's a "What 2K1 should have done" guide. Most playerworlds with economies nowadays also have magical/fantasy items and/or items with stats.

[Torankusu]

I'm sorry Konidias, but the only way to have a successful server-economy is to not have one that is DEPENDED on at all.

Economics and video games do not mix.
Heed this advice just like everyone should have prior to 2k1's demise...and 2k2's demise...and...you get the point.