Tuesday, 11 April 2017

Reflecting on Economic Ideas to Understand Games

Hello everyone,

The last few weeks I have been reflecting more and more about the usage of economic concepts and ideas in understanding games. Among the benefits of using economics within game development - we can use it to help guide design decisions - should we add a new quest to the game that will reward player a sizeable amount of currency? Should we instead give the player an item reward? These may sound as questions linked to balancing - however economic ideas help with other design decisions such as how many types of currencies do we have? 

When talking about a MMORPG [I will be speaking of MMORPGs primarily but realistically - this counts for most games that have a persistent world / economy with large numbers of players] - the concepts of economics seem to be more apparent and clear. Whilst developers often are able to control an economy of a non-MMORPG - the same is more difficult and intricate within an MMORPG setting. For the sake of ease when discussing contrasts - I will also be thinking of single player RPG games when I refer to single-player games.

I decided to reflect broadly on these ideas within this post - I may decide later on to explore more specific ideas and situations - however I have yet to decide on this. I will also be speaking in more simplified definitions and terminology - and should I choose to explore the topic more, might delve into the more specific definitions and terminologies. These are simply reflections so of course, do not take these to be facts or necessarily true, they are simply a few thoughts that came to mind when reflecting on economics and game economies. So look at this post as a simple sharing of thoughts so to speak.

Demand and Supply

As one of the fundamental concepts in economics - Demand and Supply are elements we can likely envision the most in a game setting. If a player demands an item - health potions, equipment, cosmetic items and so on - then they may be willing to attempt to acquire it. In a single player game - these often involve finding them in the world - or simply purchasing it from a Trader using the in-game currency. In an MMORPG - the situation becomes more a bit more interesting - at least in my point of view. 

Demand in an MMORPG - especially where a Trading Post, Auction House or similar is available that allow players to place purchase orders and so on - is often influenced by a lot of factors beyond the usage of the item. In games such as Guild Wars 2 - players purchase skins, mini pets and tonics that have little functional purpose in the game outside of aesthetics. The same can be said in single player games - however in a single player setting - the developer can balance out items to attempt to ensure different types of players have what they want. Which brings us to the concept of supply.

Supply refers to the amount of a particular item available within a market. In a Trading Post - these are offered up by other players - who choose how much to charge for the item itself. This shift from developers having control of prices within single player games to often having to alleviate at least a little control to players begins to show us a better picture as to why economics is useful to game developers. 

Influencing Price or Introducing New Content

As a developer in an MMORPG who is about to introduce new content to the game - it is worth noting at least what the effects of the new content will be on the game itself in terms of it's economy. Player demand and supply will shift and change as the game goes on - and a lot of new content is often a major driver towards this change. If one were to look at a number of items in games such as Runescape before and after the introduction of Raids - one can see how players would demand more of a specific item they believe will be valuable - often driving up the price of the item. Another consideration is when you add too many quest and rewards - but not enough ways for players to spend their rewards if it is currency. 

When there is too much currency within a game economy - what is likely to occur is that the general price level of goods will rise - in a general way of speaking, each gold coin is worth less in terms of purchasing power. The implications here mean that older quests become meaningless in terms of currency rewards unless adjusted to the inflation. This means that in the early game - we can't count on players to interact as much in the player economy - and may have to settle for NPC traders; or as it sometimes may be the case - the players may decide to skip the quest and content entirely. 


Realistically - it is difficult to keep in mind all the concepts and effects a particular decision of piece of content may have. Sometimes - players will simply surprise you or act in ways you didn't even consider. Regardless - Economics is something I believe could be beneficial to look into for developing games - perhaps more so for games with persistent economies rather than others. Understanding a few of the fundamental concepts so to speak could be enough to prove beneficial; then perhaps looking into other concepts if you feel like they may be more useful or insightful or simply interesting!

Until next time,

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