ALifePets.info Blog

The economics of a massive multiplayer game are often amazing because they so closely mimic "real world" economic trends. I've often thought that an economics student who wanted a fun thesis topic should tackle Neopets.com.

There is a very interesting thread on the Showdog.com forums right now reflecting the fact that most players at some point say "Well, why don't you just give everyone more money? Wouldn't that solve the problems?" In the cases where this is tried, massive inflation (predictably) results.

Jeff Schreoder, the site admin, contributed "After watching the economy on SimulatedSports for two years, running Simsteer for three years, and now running Showdog and Showcattle, I can say that every basic economic law applies to these simulations. It’s not a system where you can set prices for various things and have the false belief that it will not have an impact on the highly dynamic interactions between users. If you add more money to the simulation the value of that money decreases. It’s not a debatable ‘theory’, it’s just plain old true."

There are many very interesting economic points to examine in any online artificial life game. Jeff himself uses several interesting features to level the playing field in his games; in Showcattle, there is a maximum balance to keep a single player from becoming too powerful, and on Showdog, the amount of money given to players each day is calculated from the amount of money spent the previous day.

One major point to examine with online games is whether players collect money automatically each week or earn it. In either case, wise administrators try to balance the amount of money "leaving" the game (being paid to the computer through automated processes like food bills) and the amount of money "entering" the game (being generated by the computer for player's "salaries" and cash game prizes). This is complicated by the fact that new players join the game and must be provided with starting cash, which is usually created out of thin air.

I only know of a few online games where players cannot get money for nothing (a salary and/or playing a simple game). One is Showcattle.com, mentioned above. The only way to get money from the computer after you've signed up is to send a cow to be slaughtered, for which you are paid per pound; to keep your ranch out of debt you must win prizes in the steer shows or sell livestock to other users. On Virtual Horse Ranch you must make money by entering or betting on horse competitions or by commerce.

When livestock is involved, the fluctuations are even more interesting. Pedigrees and purebred status give an animal additional value, as they do in real life. This is a major part of why purebred registries were founded and why pedigrees are kept. (An interesting aspect of this is that in automated sim games you cannot fake a pedigree or register your animal with a less-prestigious organization; only in Pure Felinity and Showcattle.com can you breed up to purebred status and register as purebred animals from non-purebred parents. All purebred animals are automatically and authentically registered.)

One economic incident that I experienced was the great Pure Felinity market crash; the game started out with only mixed-breed cats, and the goal was to breed purebreds. Once purebred cats were available, there was very little demand for mixed breeds... but thousands were still in the game, and hundreds more were born each day. The asking price for a cat dropped from over $100 game dollars to $50 to $1. Even purebreds of common breeds were soon available at low prices because there was no way to retire a young cat.

At this point a group of users tried to stabalize the market by establishing minimum prices for cats of each breed (for example, $50 instead of $1 for a mixed breed). However, the movement polarized the site into distinct political groups, and failed to gain enough support to really change the situation. I personally think that the largest failing was that the prices set for some purebreds put them out of the range of all but the richest players; most players were broke.

The game designer stepped in and made some changes to gameplay in an attempt to solve the problem. There is now a limit on how many cats players can own and how many cats players can breed. This has slowed down the production of new cats enough that the economy is slowly stabilizing.

I also remember when a loaf of bread on Neopets cost 5 NP. The game has had a lot of inflation, largely because players can win money from games. For quite a while there was no limit at all, and you could earn any amount that you wanted just by playing an inane game many times; now there is a limit on how much a single player can get from each game each day, but as far as I know there is no limit on the amount of money "created" on the site each day. Neopets also offers a bank with interest and a stock market game, but most players who want long-term investments buy in-game items in the hope that the item's value will increase.