Healthy Mmo Economy

August 20, 2021 See All Posts

I'll start with a physical metaphor: a kitchen sink. A kitchen sink has three parts: a faucet, a basin, and a drain. The faucet pours water in the basin where it can pool up. The drain removes water from the basin. If the faucet is outpacing the drain, the basin will overflow. If the drain outpaces the faucet, then the only water available is the stuff coming out of the faucet right now.

In an MMO, the world is the faucet, the auction house is the basin, the activities are the drain. Take, for example, games with potion-type consumables. Players gather herbs and oils (or whatever else) by gathering them from the world. Then, they craft these herbs into potions and place those on the market. Other players purchase those potions for in-game benefit (maybe they're raiders), and consume them, essentially draining the system of those materials and potions.

If the rate of supply of potions is roughly equal to the rate of demand of potions, then the market availability of potions will remain constant. We call the amount of outstanding availability of potions (or any asset) at any one point in time liquidity, in finance. The more liquidity a market has (analogous to the steady-state amount of water in the basin), the more stable the price is. The more stable the price is, the easier it is for average players to accurately estimate the value of goods, participate in the market, and avoid scams.

MMO faucets and sinks can also be self-adjusting. If there's a bunch of demand for potions, then the price will go up. As the price goes up, players will switch to gathering the associated materials and increase supply until stability is reached.

For reasons unfathomable to me, huge MMOs do not design their markets and crafting systems around these basic concepts.

Instead, they might

Here's how we fix these, in order:

create assets that have exceedingly high variance, leading to extremely low liquidity like edgemaster's handguards

This one is the easiest: just don't include extremely-rare, extremely powerful items that randomly drop from ordinary mobs.

create markets with a finite sink, like crafted equipment in World of Warcraft

This one is a little harder, and needs to be attacked from a couple of angles. The first is that demand for crafted items dries up as soon as players can get better items from other sources. Demand also dries up as soon as the players already have these items since they are last forever. To fix this, first make it so that Quests and NPCs never award completed items, and instead reward either rare or unique components and patterns used to craft completed items. Something like the onyxia scale cloak, which requires a Scale of Onyxia, dropped by the dragon Onyxia. If you want to make sure that players are unable to equip the best gear without defeating the hardest content, then only let them wear that gear if they've defeated all of the content that drops all of the materials (or lock access to gear behind achivements for defeating content).

Second, make that gear eventually break through use, and require more of the same sort of gear to repair it. In order to repair your onlyxia scale cloak, you need to dismantle another onyxia scale cloak to patch it up. This creates a gear-sink that scales with player activity.

create inflationary currency systems where the amount of currency minted by the game (dropped by monsters, rewarded by quests) outpaces the amount of currency burned by the game (auction fees, repair costs)

This one can be solved via dynamically adjusted fee rates, similar to how the fed controls inflation by adjusting the interest rates of bank-to-bank loans. Measure the amount of currency changing hands per day per player. If that number is too high, increase the auction house fee. If that number is too low, decrease the fee. This can be done algorithmically using whatever peroidicity you prefer!

Boom, now you have functional markets, stable liquidity, and meaningful crafting.

After that, supply your players with the tools they need to have proper price discovery. Either implement a full order book (buys, sells, buy orders, sell orders), Or, even simpler, have liquidity pools like uniswap.

Modern wow only has half of the order book - they lack buy orders. Sellers have to do price discovery by listing items for random prices to see if people will buy it or not. Much better is if buyers can directly list which prices they're willing to pay (buy orders).