Money Makes the (Virtual)
World Go ‘Round

By Shayalyn

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You log in to your MMOG of choice and you head to your favorite trading locale, perhaps a pawnbroker or bazaar where players trade items for in-game currency. You’re looking for the Lightforged Bastard Sword of Leetness; the item you’ve been saving your hard earned kaching to buy. You’ve seen it for sale time and again at a price that was just out of your reach, but finally you have the cash--the item is as good as yours!

There you are, browsing the wares of your fellow players. You find the coveted sword easily enough, but these players must be smoking something! They’ve priced the sword well out of your range, and you simply can’t afford it. You figure it’s just an off night, and vow to check again at another time, but each successive trip to the game’s player-to-player trading arena yields the same results--that sword you’ve worked long and hard for is no longer affordable. What happened?

MUDflation, that’s what. MUDflation is a morphing of the acronym MUD (for multi-user dungeon, the text-based games that preceded MMOGs) and inflation. The fact that the gaming world has found a term to apply specifically to in-game economies that are in a state of disarray speaks volumes; MMOG economies are notoriously unstable.

How do carefully designed MMOG economies go to hell in a hand basket? It’s really pretty simple--too much money floods the game’s market without actually leaving the game, creating a “rich get richer/poor get poorer” dichotomy. When a game launches, its economy is generally stable, but as players progress and new players join the game, more and more money enters the economy as coin loot is dropped and item loot is traded. Eventually, the game’s monetary unit (usually platinum or gold) decreases in value, causing item prices to rise. When that happens, new or “young” players find it more and more difficult to afford the low- to mid-level items they require to advance (like that Lightforged Bastard Sword of Leetness), while higher level players grow fat from the profits on the elite items they’re both high enough level to attain, and able to sell for much more than what they should be worth.

Another contributor to MUDflation is the secondary market. You’ve all seen the advertisements: Buy <Insert Name of Your Favorite MMOG Here> Gold! (You won’t see any such ads on Ten Ton Hammer’s network sites, by the way. Here’s the scoop on our official stance.) Secondary market sellers such as IGE and MySuperSales make a killing trading real world cash for virtual currency. The currency is usually collected by “farmers;” player characters who exploit the game mechanic and/or use macros to run “bots” that collect vast amounts of cash (or loot to trade for cash) in short amounts of time.

These are some of the problems plaguing game economies, but what are the potential solutions? It’s certain Turbine is giving this question plenty of consideration as they develop Lord of the Rings Online: Shadows of Angmar (LOTRO). While one could argue that there is no such thing as a perfect economy, in-game or in the real world, what will it take to at least create a stable economic environment?

The solution most MMOG developers try (with varying degrees of success) is the “money sink,” a way to permanently remove money from the virtual economy in order to help game currency hold its value. Games with player housing often require rent or upkeep fees. Sometimes guilds are required to pay maintenance, as well. Some games include elite items--prestige goodies that have no intrinsic value other than to say “I have arrived!”--which are sold by NPC vendors as a means to permanently remove money from both the game and some of its richest players.  Other games require equipment repairs as a money sink, and the more valuable the equipment, the more costly the repair. (Turbine’s recently launched Dungeons & Dragons Online is one such game.) I’ve seen the idea of scalable taxes bantered about on forums (the more you have, the more you pay), although I don’t know of a game that makes its players pay taxes...yet. I mean, c’mon! We play games to escape real world bummers like taxes, right?

Another way games have traditionally tried to stabilize their economies is the “no-drop” item; goods which bind to a player and cannot be sold or traded. No-drops are often parts of larger quests that result in an elite no-drop item. (EverQuest’s epic weapons would be an example of this system at work.)

What will happen with LOTRO? That’s anybody’s guess. It’s difficult to speculate because so little is known about the game in its pre-beta stages. A look at the strategies applied by Turbine for DDO might give us some clues as to how things will play out in LOTRO. However, it’s wise to remember that these are different games, with different goals and development teams. Whatever happens, it’s almost certain that the economy of Middle-earth will not be perfect. After all, what economy, real-world or otherwise, is?

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