Tobold's Blog
Thursday, August 09, 2012
Levels and economy

Azuriel reports from the Diablo III auction house that 1 million gold can be bought for $3.10. He also tells about farming 140,000 gold in 40 minutes, which calculates to 210,000 gold per hour, at an hourly wage of about 60 cents. I just checked the EU Diablo III RMAH, and gold is €2.90 per million. My character, who is still on normal, only has 30,000 gold, and with 1 million gold I could probably play through the game on normal up to the end and always wear only the best in slot equipment. For 3 bucks. In short: Gold in Diablo 3 is "too cheap" for me.

In the Facebook game Castleville from Zynga, I recently bought a land expansion for 1.2 million coins. The biggest bundle of coins you can buy for cash is 75,000 coins for $100. If I had wanted to pay for that land expansion with cash, I would have had to pay $1,600. In short: Gold in Castleville is "too expensive" for me.

While these games are very different, and the problems appear to be diametrically opposed, the core problem is in fact the same: Game economies in games with levels tend to inflate with level. An hour spent in the game farming gold will net you a very small amount at level 1; but at whatever counts as high level in the same game, you will earn several orders of magnitude more per hour.

As long as you just play those games without any form of exchange or trade, that works okay: At low levels you earn low amounts of currency, but also have low expenses. At higher levels you earn a lot more, but also spend a lot more. Where the system breaks down is when currency can be transferred between low-level and high-level character, or there is a common auction house. Suddenly your level 5 character in World of Warcraft can sell a stack of copper ore for 20 gold, while doing a quest only earns him 1 silver.

Adding a real-money option makes the problem worse, because the price of virtual gold is set by factors that don't depend on your level, while your virtual gold needs depend on your level. Thus my "low level" Diablo 3 character needs relatively little gold, which is extremely cheap, due to the price being set by the lowest hourly wage a high-level character is willing to accept for gold-farming. My "high level" Castleville character needs relatively large amounts of gold, which is expensive, because Zynga has fixed a price at a level where they think low-level characters might still buy it. In EVE Online people tell me that "pay to win" isn't an option, because it would be too expensive at the high levels; but exchanging a single PLEX for ISK totally floods a new character with more virtual currency than he could otherwise earn in a month.

The solution would be games in which the earning power of characters doesn't change with level or time. If every character in the game would earn about 100 units of virtual currency per hour in the most profitable form of "farming" for him, the value of that virtual currency would remain the same for him however far he is in the game. And then exchanging that virtual currency between players in trade for virtual items or real cash would not cause any inflationary problems. A sword which would take a level 1 character about 1 hour to achieve would be worth about 100 virtual currency, and an epic sword that would take a high-level character about 1 hour to achieve would be worth the same. As items tend to have level-restrictions, the time-to-money exchange rate remains the same without causing  trouble in the player-run economy. If the low-level sword costs 1 virtual currency and the high-level sword costs 10,000, the economy is getting weird. And if you can buy 100 virtual currency for $1, the low-level character can buy his 1-hour-sword for 1 cent, while the high-level player would have to pay $100 for a sword that takes the same amount of time to get.

Or just remove levels. Then it's just economy.
The level system makes it impossible as it assumes you gain power over time. So if a lvl 1 WoW char can make 1000 gold/hour farming lvl 1 wolves, a lvl 85 makes the same 1000 gold/hour farming lvl 85 volves, then the lvl85 will come to the lowbie zone to AoE grind lvl 1 wolves for 10000 gold/hour.

You must remove levels to do that, remove the ability to significantly gain power simply by being a veteran. EVE is pretty good in that, my trading alts are literally 1-month old characters and they earn much-much more than any of the 8 years veterans in nullsec.
@Tobold: That's actually... genius. SELL IT. Or rather, get professionals to sell it and credit you. Monetization is A Thing that consulants get paid for. Just today I read an article about SWOTR from a monetization angle by Ramin Shokrizade, who deals with that stuff for the industry.

@1000damage: Enh, then economy BECOMES the levels, and we end up with EVE Online again. Don't want that. Well. I don't. You might.
I believe there is another important problem related to changes in prices in a virtual world - it is updates and patches which change the game balance, and therefore affect value of virtual items. I understand that this may be a separate issue, but nevertheless related to the topic. There was already a thread in Diablo 3 forums about nerfing attack speed after the real-money auction hosue was launched.
Yeah, Gevlon seems to be quite right. It's not that simple. I mean you can still do what you describe, but there's much more to change. Not every game allows you to move your advanced char to the newbie zones, but most AAA titles do and you'd have to prevent that and other such interactions between characters of different level for this to make actual sense. Removing levels or significant gains of power seems a better option, as it's actually changing the game in its roots (storywise), and not applying a fix to a system (mechanic-wise). EVE is a good example of how this could be done (but we all know you consider it a bad example for anything else), but i think that Morrowind could also be one. Excluding the enchanting/alchemy buffs that can make you 4000% powerful in 3 minutes since beginning the game, te system only allows you to reach 100/100 level in all skills, and you may as well create a character that starts with some skills 85/100, meaning, that if you decide to rely on those, your gain of power throughout the whole game would be barely visible. This renders the process of items static. Once other players pop in with crafting, you'd be left with economy only, and that would provide market-controlled prices for all goods, be it in gold or RM.
Or just remove the economy. Then its back to being just a game.
The existence of levelling will always make low-level items worth orders of magnitude less than high-level items, because you can always just level up to use a better item.

Also, if the game is playable with not buying items (which 99% of games are), then the low-level items will face a glut in supply and increase the problem.

I suppose one way you could sorta do what you prescribe is heavily fixed prices everywhere. Same prices for all items being sold. Same prices for all upgrades. Etc. It would definitely need a huge overhaul in mechanics to pull off.
It's not that big a problem IMO. Nobody is forced to twink their alts. In WoW I always sent mine a few big bags and a couple of gold, and then they could fend for themselves except for special cases.

Level restrictions on items limit twinking also.

There are other possibilities such as multiple currencies. Maybe peasants under L20 are only pemitted to have copper and silver coins, while the best items cost gold or platinum.

Or the high value stuff may not be available to low levels. It is the way crafting is trained in WoW that maskes copper valuable.

All this is by the way: we are only discussing it because it's a problem in Diablo III. Probably most of the posters here either liked playing the AH in WoW or couldn't care less about it. Broken game <> broken concept.
If you make the currency earning same for all levels so you have to do with expenses. 1.000.000 gold in Diablo 3 for a low level is too much but keep in mind that low level players cannot buy something that will keep it...

If I buy a gear on my level 10 char, in level 15 I need to buy other gear, at 20 other , and so on...But someone that will buy something on his max level character might be keep it for months...

so in my opinion, is like a low level character "rent" a car every day while a high level character "buy" that car. Cannot give the same money both
Economic theory is one thing (finding sustainable levels of supply and demand), but the problem with most online games is not the economy per se, it's exploits, cheats, and duping.

Remember that for more than a month, Diablo 3' AH had a duping exploit that led to thousands of accounts being banned as a late response from Blizzard. Some with as much as 4 billion gold!

Why did it happen? Because some developer thought it's OK to use your system's clock to manage your auction listings. This isn't something that just happened because of server load or whatever. It's Blizzard's desktop game developers being tasked with a atypical tasks.

You should also read the confessions of a botter who makes $150 per day running a dozen Diablo 3 bots. He says he sold his WoW accounts and moved to Diablo as "Diablo 2 was the most botted game of all time". So he feels Diablo 3 will follow suit. Blizzard ban accounts en masse but rarely make it difficult for botters. After all, botters do buy a lot of new accounts.
"The solution would be games in which the earning power of characters doesn't change with level or time."


What we need is a game where everyone's character is EQUAL!

That way this whole collectivism idea will really catch on in the real world.

Virtual Workers of the World Unite!
If your theory is right then Settlers Online would never work.

Why it works: costs raise dramatically by level. This means while 100 gold for a low level player is riches for high level player its drop on a hot stone.

Also we allow free trade: it auto balances the economy by supply and demand.

So I don't think the "100 coins should be identical for players for all levels" is a correct option.
but exchanging a single PLEX for ISK totally floods a new character with more virtual currency than he could otherwise earn in a month

This is incorrect, on a single pilot with as little as 7-10 million SP I could make more than a billion isk per month, while a plex sells for 400-500 million right now. An account that had 2 of its 3 pilot slots occupied by isk making pilots could easily pull in several billion a month, leaving the 3rd pilot slot for a PvP/nulsec pilot, and the entire thing can pay for itself, meaning the person doesn't need to pay a subscription fee.

Because the real money price of a Plex is set by CCP the only wiggle room you get is in how much you can sell it for on the market, I've seen it go from 300 mil to 500 mil, and the price can change quite a bit depending on many factors (just like a real economy!). Also, EVE has no levels, so the amount of money you need to spend doesn't depend on how long you've been playing the game, but in what you want to do in the game. If your'e a nulsec pilot flying capital ships that get blown up a lot then you need a very large amount of isk, and you'd go broke in real life trying to fund it though selling plex that you bought with real money (unless you're rich). On the other hand if your'e a small gang warfare kind of guy, especially one that flies small hulls like frigates and cruisers, you can get buy on just a few hundred mil a month for expenditures.
Error. Error. Does not compute.

"New character" not equal "7-10 million skill points". Nor would a new player have the knowledge required to make billions of ISK.
Simplest solution is to remove gold and all other forms of money. Everything is then just a barter between items (and NPCs will only trade crappier stuff than what you are offering), but I've yet to come across a game designer with the balls to do so.
I think @Angrygamer is joking, but I also think it's an excellent idea and something we should be agitating towards. Socialist Australia is an awesome place to live.
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