BinaryMan
Young
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- Oct 29, 2009
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I am trying to get a picture of the economic structure in EU. From what I've read, here's how I think it works (correct me if wrong):
(1) Broadly, there are money sources and sinks between players and the game. The sources appear to be monster loot drops, random drops (fruit, etc), mining drops, craft results, and proceeds from sales to TT. The sinks are ammo used, degredation of most goods, lost materials during crafting, money spent on TT, auction/misc transaction costs, and buying of land or liscenses. Transactions between players are zero-sum (except if a game-imposed fee is involved).
(2) TT represents a base value the game is willing to pay for an item. All activities appear to generate a net TT loss on average, although high level players can achieve around 90% returns on some activities and potentially profit when margin is included (though this is due to shifting the losses to other players in essence). I assume sweating creates negligable value since sweat cannot be sold for any significant amount to the game (it's purely player-to-player). After converting upward and considering decay and loss, is it possible with high skill to sell the products of it to the game for profit? I figure not that much, and most of the psy products are consumed for effects in the game like teleport and have more value for those purposes in terms of reducing costs of hunting or improving other activities.
(3) Due to decay and other factors, profit seems impossible on average from player-game interactions. A good analogy for this is poker or the stock market; the house or broker takes a cut, but it is possible for some players to profit, only when other players lose. Given that almost all the raw resources of the game that are convertible to something more valuable require tools to gather (which degrade), the simple proof is found (probably) that no matter what the skill level, a net TT loss occurs from each step of crafting and from hunting (on average). Therefore, profits cannot occur except from player-given markups or below-TT losses (you bought it at discount).
(4) Durable goods are rare in EU. Things degrade. Land is perhaps the soundest investment (depending on ROI) because it doesn't degrade and the owner can extract taxes from player activities.
(5) My general conclusion to profit is thus: invest a large amount into land (which the creator encourages) to achieve decent returns, collect sweat (for very small returns per time used; no significant financial risk to the game), or trade intelligently for large returns (which the creator discourages, unless crafting is involved [net TT loss] so you need to invest in high skill levels).
(6) It should be obvious that not everyone can make money. It should also be obvious that it takes money to make money, and we are talking about a much larger investment than what you will get sweating (unless you are also a master at trading). The game therefore rewards an investment beyond a certain amount (I suspect there is a core group of players with a lot of money and time invested into the game that make money regularly).
(7) I believe the value of fruit and stone spawns depends on how much money you have sunk (for example, ammo cost). I tend to think that part of your decay is returned to you personally through this mechanism while the rest goes into the pool. If you think about it, this rewards players who are using higher level items and generating more decay value. This may explain the discrepency between people's drops.
(8) Has anyone mapped out craft trees/model of the EU economy?
(9) Finally, I would like to apply a real-world economics concept to EU. This is in relation to the observation that drops may have decreased from 70-90% return to 40-60% return (I don't know exact numbers, just people claim they are lower; other evidence from MA financial statements appears to confirm this). This may be a reaction to the declining new players and deposits to boost revenue (note negative cashflow overall; the only reason for positive net profit is "capitalized expenditures" which means they put more money into the platform, note: "Investment in the Technical Platform" ~11 million SEK). The effect of reducing return to players is similar to a government increasing taxes: activity declines and total revenue will most likey decrease. What actually needs to happen for MA to be successful is to attract and *maintain* players since as we see from other online games a large player base tends to attract more players (their friends or simply popularity of the game). EU has not attained sufficient mass to afford to reduce drop rates and reduce the size of the playerbase; in fact, the only long-term sustainable solution I think is to return most or all of the value of decay into the game world and take a small cut of certain transactions (like 1-3% of trading activity). You want to promote long-term play and prevent burnout so that the number of players can increase; at a certain size of regularly depositing players, this small fee will sustain operations costs and generate a profit. The loss ratio of activities is directly related to loss of players (this is not only people running out of money directly! It also causes everyone else to feel that they have little chance of making profit, so those people go too!); there is a reason why casino games (like many slot machines) have a payout ratio of 90-95% and not 50%. Why do people return to casinos (to use the often-used metaphor for EU)? It is because of the entertainment experience (which in this case means higher drop rates, less decay, more trading/activities, and being able to get deeper into the EU economy on whatever they spend per month on deposits). Stretching out the funds and playtime will actually increase the growth of the playerbase over time I think.
(1) Broadly, there are money sources and sinks between players and the game. The sources appear to be monster loot drops, random drops (fruit, etc), mining drops, craft results, and proceeds from sales to TT. The sinks are ammo used, degredation of most goods, lost materials during crafting, money spent on TT, auction/misc transaction costs, and buying of land or liscenses. Transactions between players are zero-sum (except if a game-imposed fee is involved).
(2) TT represents a base value the game is willing to pay for an item. All activities appear to generate a net TT loss on average, although high level players can achieve around 90% returns on some activities and potentially profit when margin is included (though this is due to shifting the losses to other players in essence). I assume sweating creates negligable value since sweat cannot be sold for any significant amount to the game (it's purely player-to-player). After converting upward and considering decay and loss, is it possible with high skill to sell the products of it to the game for profit? I figure not that much, and most of the psy products are consumed for effects in the game like teleport and have more value for those purposes in terms of reducing costs of hunting or improving other activities.
(3) Due to decay and other factors, profit seems impossible on average from player-game interactions. A good analogy for this is poker or the stock market; the house or broker takes a cut, but it is possible for some players to profit, only when other players lose. Given that almost all the raw resources of the game that are convertible to something more valuable require tools to gather (which degrade), the simple proof is found (probably) that no matter what the skill level, a net TT loss occurs from each step of crafting and from hunting (on average). Therefore, profits cannot occur except from player-given markups or below-TT losses (you bought it at discount).
(4) Durable goods are rare in EU. Things degrade. Land is perhaps the soundest investment (depending on ROI) because it doesn't degrade and the owner can extract taxes from player activities.
(5) My general conclusion to profit is thus: invest a large amount into land (which the creator encourages) to achieve decent returns, collect sweat (for very small returns per time used; no significant financial risk to the game), or trade intelligently for large returns (which the creator discourages, unless crafting is involved [net TT loss] so you need to invest in high skill levels).
(6) It should be obvious that not everyone can make money. It should also be obvious that it takes money to make money, and we are talking about a much larger investment than what you will get sweating (unless you are also a master at trading). The game therefore rewards an investment beyond a certain amount (I suspect there is a core group of players with a lot of money and time invested into the game that make money regularly).
(7) I believe the value of fruit and stone spawns depends on how much money you have sunk (for example, ammo cost). I tend to think that part of your decay is returned to you personally through this mechanism while the rest goes into the pool. If you think about it, this rewards players who are using higher level items and generating more decay value. This may explain the discrepency between people's drops.
(8) Has anyone mapped out craft trees/model of the EU economy?
(9) Finally, I would like to apply a real-world economics concept to EU. This is in relation to the observation that drops may have decreased from 70-90% return to 40-60% return (I don't know exact numbers, just people claim they are lower; other evidence from MA financial statements appears to confirm this). This may be a reaction to the declining new players and deposits to boost revenue (note negative cashflow overall; the only reason for positive net profit is "capitalized expenditures" which means they put more money into the platform, note: "Investment in the Technical Platform" ~11 million SEK). The effect of reducing return to players is similar to a government increasing taxes: activity declines and total revenue will most likey decrease. What actually needs to happen for MA to be successful is to attract and *maintain* players since as we see from other online games a large player base tends to attract more players (their friends or simply popularity of the game). EU has not attained sufficient mass to afford to reduce drop rates and reduce the size of the playerbase; in fact, the only long-term sustainable solution I think is to return most or all of the value of decay into the game world and take a small cut of certain transactions (like 1-3% of trading activity). You want to promote long-term play and prevent burnout so that the number of players can increase; at a certain size of regularly depositing players, this small fee will sustain operations costs and generate a profit. The loss ratio of activities is directly related to loss of players (this is not only people running out of money directly! It also causes everyone else to feel that they have little chance of making profit, so those people go too!); there is a reason why casino games (like many slot machines) have a payout ratio of 90-95% and not 50%. Why do people return to casinos (to use the often-used metaphor for EU)? It is because of the entertainment experience (which in this case means higher drop rates, less decay, more trading/activities, and being able to get deeper into the EU economy on whatever they spend per month on deposits). Stretching out the funds and playtime will actually increase the growth of the playerbase over time I think.
mostly. Sorry to say this, mate.
