MMORPG economy problem solved?

Steve from 165.154.153.243 at Thu, 05 Jun 2008 07:49:32 +0000:
Ummm... I want to use your June 2nd post language here, but I can't because you are completely correct in that post.

Taxes inside a game is unnecessary for game balance and more importantly =Not Fun=. Being a fun game is the most important part of a MMORPG.

Take Warcraft for example, it's the most popular of it's kind and I play it. In warcraft the economy is handled well (very well!) as is.
Items are of 3 different types:
-Bind on Pickup (BoP) which means that char can only ever sell it (maybe) back to the computer and never to another char,
-Bind on Equip (BoE) which means that player can transfer it to another char with or without compensation if it has never been used. As soon as someone uses it, it effectively becomes the same as a BoP item above.
-Unbound item which means it is freely transferable or used. The vast majority of types of items of this kind are either consumed directly (such as a potion) or consumed indirectly (like a herb to make the potion, or a metal bar to make a weapon.)

Things that suck out money are:
-new skills must be purchased while leveling (for every char)
-getting hit repeatedly damages armor which must be repaired
-dying severely damages armor which much must be repaired
-changing specialties of your class (aka talents) costs exponential amounts.
-using consumables removes them from the game
-selling items to other players through the in game auction house takes a % cut of the final price
-The auction house takes a deposit % of the item to be listed that is lost if the item -does not- sell.
-some "fluff" items (like titles, pets etc) that do not give in game benefit but are desirable. (You mentioned this above, but it's a minor drain in WoW.)
-new content programmed into the game makes old equipment obsolete.

It all serves to drain cash from players. You may think of some of that as a tax, I do not. As is, many players cannot afford some of the purchasable skills and have to "save up" for them like flying. Do not underestimate the drain of consumables and repairs. After reaching max level it's very common to die because the game still has hard areas that you can only access by incremental upgrades in equipment. And because the game balances off of gear and player skill at max level, consumables become more of a necessity. Advancing in content after reaching max level is a significant drain on resources. Any increase in equipment at maximum level has indirectly cost you a lot of money and time to acquire.

I know people who have been playing Warcraft regularly for 3 years and devoting as much time weekly as an average person does to watching TV. They still can't afford the fastest flying skill for a single character and they have more than 1 character.

Lastly and most importantly World of Warcraft is a game. It's not life. People make WoW economy decisions motivated by entertainment, not by maximizing personal wealth. It's a pure capitalistic open market economy, but people do not act within it to maximize their personal wealth. They work within that system to maximize their personal *enjoyment*.

Before you invest a lot of time and energy into thinking up a workable tax system for a game, you should understand exactly how WoW's economy operates as a baseline. That economy *works* so a tax system would be to solve a non-existent problem.

Steve from 165.154.153.243 at Thu, 05 Jun 2008 07:56:17 +0000:
BTW I don't know why sometimes your old posts suddenly get downloaded by my RSS. This is one such example. I've not seen it before today and I got my feed for your site yesterday.

Matt from 129.97.79.144 at Thu, 05 Jun 2008 16:47:20 +0000:
Note that this isn't about WoW in particular, it's about game economies in general. I also think it's questionable whether WoW's system does work; lots of people think it's structured to reward the wrong behaviours. At the very least it's not stable: it requires constant intervention in terms of building of new areas and introduction of new things for players to spend money on. To some extent that's a problem with all economies (and we're running into it in real life now that the Earth is full). But it seems to be especially a problem with MMORPG economies.

As for the RSS feed: that's probably an effect of pages being moved to the new site design. RSS doesn't draw a distinction between "created" and "last updated" as nicely as we might like, so some pages may appear as new when I switch them to the new code. For this page in particular, it's especially an issue because I moved it to a new spot in the directory tree also - and it's because I wasn't paying as much attention when I did that as I should have, that I also lost the pre-existing comment thread on this page. Nothing really substantial in that, though; basically just a lot of WoW players saying that they hated the idea of in-game taxes.

One thing I think some commentators (maybe not you) missed is that I propose this as being *part of the game*. It's not that the server operators take away your money because they're pricks. It's that the king takes away your money to fund his lavish lifestyle. If you don't want to pay, you don't get booted off the server - you get the King sending his thugs after you. It is much more plausible that a real world would have taxes than not, and I think the storyline benefits alone would make it a worthwhile idea even if it didn't also benefit the in-game economy.

Steve from 165.154.153.250 at Mon, 09 Jun 2008 15:47:15 +0000:
I would be interested to read what wrong behaviours others believe it's structured to reward if you have a summary or link.

Matt from 129.97.79.144 at Mon, 09 Jun 2008 18:30:12 +0000:
The law review article mentioned in the intro is a good starting point; unfortunately the link there was a casualty of my ongoing site format update, but the article is at:
http://www.nyls.edu/pdfs/v49n1p147-184.pdf

Cyprus from 75.158.0.56 at Wed, 09 Jul 2008 14:32:57 +0000:
I can appreciate your desire to improve rpgs, but you can't see the forest for the trees. Bottom line, games deliver entertainment, and a tax system would diminish the fun.

Reducing a player's wealth by an arbitrary amount because its tax time? That is a very base and unimaginative concept for controlling wealth, and will only serve to drive players away to a game where they don't file tax returns. Instead of wasting time on a tax system, why not tweak the rewards system and not give out so much wealth.

Matt from 129.97.79.144 at Wed, 09 Jul 2008 15:02:15 +0000:
I think that for your part, you can't see what I actually suggested for your anger at the abstract concept of taxation.

I'm not suggesting just "reducing a player's wealth by an arbitrary amount." You're right, that would indeed harm the game by imposing an external, non-game constraint on in-game interactions.

But what I said was that tax should be part of the game. Not something external, but really included in the role-playing. You're a knight or a peasant or a wandering minstrel in a medieval kingdom. There's a King. He spends a lot of money. Where does the King get his money? You bet the King doesn't pay his daily expenses by going out in the forest and killing slimes 15 hours a day. No... the King gets his money by sending armed men to extort it from YOU. Here they are at your door now. What are you going to do about it? Hint: telling the King's men "This is unrealistic and poor entertainment!" isn't going to make them go away.

I think that for a game to *not* have taxes is unrealistic and arbitrary - especially in the fantasy genre, where the game is nearly always set in some kind of feudal society. Feudal societies are all about rents and taxation. That's pretty much the definition. A game set in such a world, but just magically without any taxes, is nonsense.

Blair Stewart from 70.64.82.83 at Mon, 18 Aug 2008 11:43:58 +0000:
Hmm interesting.

I was also thinking that you could also use this in a social relationship system and keep it mostly in character. Where

The player currently controlling the keep in this province whom is considered to be lord and protector taxes his subjects at a rate he chooses(based on what his lord taxes him and so on and so on), then maybe players who refused to pay might be PvP or something similarly flagged so that if he or his guild ran into that person in their territory they might have an altercation.

Sounds similar (not completely) but similar to the system in EVE Online. Corporations tax the income of their members at a rate that the CEO decides. Then that money stays in the Corp's bank account for spending on whatever the officers decide.

Mr. Obvious from 204.132.48.189 at Fri, 26 Sep 2008 20:01:47 +0000:
A tax system in an MMO would only work if there were obvious benefits to those contributing to the system. No one WANTS to pay taxes in real life unless they feel it's going to something useful. In the real world, this translates into government provided services such as roads, police, military and education.

In a video game, and I am going to use WoW as an example here, these governmental "rewards" would have to be something fairly tangible. And do a degree, they already did this once.

When they had the Ahn 'Quiraj world event, both the Horde and Alliance had "war drives" where people playing on the server could donate various supplies to the effort, and once enough of the supplies were obtained, a new instance area was opened. This area had new gear for players, new adventures and quests to explore, and even some super rare items that at this point are truly legendary items as they could only be obtained once. So there was plenty of incentive for everyone to support this "war drive".

In effect, an MMO tax system would function similarly to this event. It's optional, but it would provide services that would be very useful for players to have, rather than punish them for not paying for gains they do not get.

Rewards like all of the guards that appear in various faction cities. Paying for taxes spent on the military budget provides more guards in areas and higher level guards in locations that have plenty, protecting faction resources and towns in contested zones, and opening up new territories or instances that allow for new raiding (military costs), lowering training costs faction wide (education), providing summonable emergency healers in certain towns and areas (health care), increased movement speed on designated roads (infastructure).

You would also fairly minor personal bonuses to those that contribute to the tax system, in order to encourage support of the system and provide a desire for those who willingly ignore it to stop doing so. Things like specific titles, improved mounts, and access to minor bonus areas or if in another type of game entirely, the right to vote in in-game elections for certain decisions.

As long as this type of positive tax system was implemented in the first place, any sort of negative systems could also be implemented as well, but shouldn't be done first, in order to keep the game fun.

Almo! from 216.98.57.37 at Tue, 14 Oct 2008 21:42:17 +0000:
Eve has a sales tax and broker tax, which files off about 1% of everything I trade (I run a manufacturing corp).

I think a sales tax makes more sense than an income or asset tax.

Tri from 12.193.96.162 at Thu, 23 Oct 2008 16:44:53 +0000:
Let me just get into some psychology here for a moment...

The word "tax" is horrible to most people (just ask the people struggling to pay them in real life), and most things that look like taxes aren't going to be so popular. The trick would be, for example, to make it look like payment for "services". Nobody minds paying for a service. You want to live in a safe home town? Well, the guards don't work for peanuts. You could pay for the "service", yes.

The other option is that you could make your "home town" some other place that isn't guarded by NPC guards. The trick is to provide the players with options. Those who want to deal with taxes can deal with them. Those who don't, don't have to - but they don't get the "services" either.

The main thing to keep in mind is that you want to attract people to you MMORPG. So yes, you can incorporate it into the game and maybe roleplay it out, but if it isn't fun to roleplay, people just won't play the game, and that is what's different about taxation in real life and taxation in a game. Real life is mandatory. Games are not. No players = no game. So while, yes, the concept of taxation is an interesting one, unless it's carefully disguised, or made fun somehow, or people are blatantly shown the advantages while always having other options, you might just find people in real life exercising the other option and finding another mmorpg to play - unless of course, your target players are accounting students ;)

foxjazz from 71.196.203.176 at Sat, 04 Apr 2009 19:39:03 +0000:
EVE already implements a tax system.

The problem is more of one of inflation. When npc's can pay for goods at a certain flat rate, inflation doesn't happen for those goods. And therefor wealth is evenly accumulated. The hard part about eve is it's risk/award system. And discourages me from playing it further.

nonarKitten from 67.226.129.49 at Thu, 23 Jul 2009 21:20:30 +0000:
There are better ways of introducing entropy into a game's mechanics than through something as artifical as a tax system.

What we need is a law-of-thermodynamics for MMOs - that is, nothing can be destroyed or created, it can only be changed from one form to another. Thus, you cannot create wealth, you can only take money from someone else (either in trade for goods or services, or perhaps by force). You cannot mine a mountain forever and not have it collapse (or at least, run out of the valuable stuff).

Chris from 24.126.2.87 at Sat, 25 Jul 2009 15:22:52 +0000:
Here is my solution to the MMORPG economics problem. I would type them out here but the presentation is as much visual as it is text.

http://www.slideshare.net/talin/mmo-economics-concept-v-10

Daniel from 98.210.199.129 at Thu, 26 Nov 2009 04:30:23 +0000:
The taxation idea works if there is a benefit derived from the collection of them. A corollary idea would be to include scarcity of resources as a fact of game play. Too many games have valuable items: land, swords, potions, food simply appear when needed in exchange for experience. But in a working economy experience only gives wisdom not money which represents wealth that has been extracted from the environment.

Phillip from 58.106.143.165 at Sat, 19 Dec 2009 10:36:20 +0000:
Planet Calypso has a game economy that is well structured. The game economy is linked to real life currency, and it is the first virtual reality to be granted a US banking license.
The game has corporations, banking organizations, manufacturing, wild game hunting, hunting loot and PvP zones too.
It is rather more of a cash 'Sink' than a cash generator, but it is possible to play for free and profit from your game play.
Loot items and player manufactured items are for sale via a auction house controlled system that includes taxes.

You won't find a better way to make a few real world bucks while having hours of fun.

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G-Money from 66.76.183.26 at Sun, 20 Dec 2009 04:22:05 +0000:
Good comments everyone. I'm glad to see a nice debate over an intricate topic, and I appreciate the opportunity to be involved in one.

The example of the King taxing his subjects is a nice parallel to the real world. Unfortunantly, in using it as the justification for your tax system, Mat, I believe it harmed your argument. What I believe you to mean is that, by implementing a tax system, the administrators would have more control over the economy. They would be able, at that point, to control inflation, and therefore, prices and other factors. That is all you need to say.

It's an interesting point, but rationalizing it with the example of the King is uneccesary. The point of the taxation is simply to help control the economy. However, I like the idea of utilizing other means for economic control. For instance, the cost to level up abilities, etc. This provides some control, and the player receives an award (that makes the feel good), at no cost to the economy. Additionally, once this ability is purchased and the gold is moved back to the administrative server, the decision makers can determine whether or not to allow that sum of money to go back into the economy, or perhaps they will decide to let only a portion of it back into the game. The natural flow of capital from player to administrator (through the purchase of level ups or the commission for making a sale in an auction house) gives the host the only control they need.

Furthermore, taxing trade will encourage players to make RMT (Real Money Transfers/Trades) in unauthorized venues.

NonarKitty, hits the nail on the head with her July 23 post. The money that is farmed is not really "created", it is merely allowed into the game. Imagine, you kill a monster and he drops gold, it would seem as though that money is created from thin air, but it is not. "Where did it come from", you ask. Well three minutes before your kill, I traded an item in an auction and the administrator got a percentage of that trade. Their commission sits in a 'bank account' and when you made your kill, that account was credited by the amount it gives to you. The administrators have control over how much money can be given out by these creatures, and if they feel the need to do so, they can cut back on the amount that is dropped by monsters.

The effect of this is much like the tax system, without having the players pay a tax. The effects of taxation are already in the game. It's a novel idea though, and as a business major (and business owner) I would appreciate the opportunity to engage in a virtual economy that is similar to the one we have in real life. A bit like SimEconomy lol. In any event, good posts guys (and girls). I look forward to the rest of our debate.

P.S. Wait a moment, I'VE GOT IT! The solution to our woes! It's Socialist WoW!!! When you make a kill, the money you pick up is divided up and distributed equally with every other player in the game! Then no one will have any more than anyone else!! HAHA Problem solved!