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D3 Economics 101

Discussion in 'Diablo 3 General Discussion' started by sbn, Jun 11, 2009.

  1. sbn

    sbn Diabloii.Net Member

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    D3 Economics 101

    Should D3 have a "banking" system? All the talk about a currency, yet would it not be viable to also have a bank to hold that currency? Should this be included? Wouldn't a banking system also do away with certain fake gold sites (hmm, maybe a plus here)? All the talk of D3 economy and currency, yet wouldn't it be just as equally important to have a bank for the currency?

    Discuss please.
     
  2. Bad Ash

    Bad Ash Diabloii.Net Member

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    Re: D3 Economics 101

    touchy subject. The reason there is not a simple yes or no answer is because a huge component in the diablo franchise is trading items for items.

    For a currency to work it has to be valuable in so many different ways. people will have to WANT to have it over the best items in the game. You cant just invent a bank and currency and expect people to use it when that currency has no value at all.

    If blizzard can pull it off, it would be impressive
     
  3. JonoLith

    JonoLith Diabloii.Net Member

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    Re: D3 Economics 101

    I'm not sure I understand what you mean by "Banking System". Do you mean a place where people can store gold? If so, then that is just a stash isn't it?

    Perhaps I'm missing something.


     
  4. Starving_Poet

    Starving_Poet Diabloii.Net Member

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    Re: D3 Economics 101

    When you say a banking system, I hear:
    "A system in which lenders can increase or decrease the size of the monetary supply through the process of lending money in accordance with the money multiplier."

    A banks ONLY purpose is to lend money. I don't see why we would need to introduce fiat loans for a fiat currency for a fiat economy in a fiat world.
     
  5. stillman

    stillman Diabloii.Net Member

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    Re: D3 Economics 101

    I think they could do things like make def on armor go up with gold spent on it according to an exponential equaltion. It would cost ridiculous amounts of gold to get that one more little def point on your end game armor. But we all know people would do it. People would want to have the highest def number on their armor to show off.

    So I figgure if they put in enough features where infinite gold can be spent, then a bank would work.


     
  6. CCCenturion

    CCCenturion Diabloii.Net Member

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    Re: D3 Economics 101

    I think that's a great idea for how to give the currency some intrinsic value, but I still don't understand the need for a lending institution like bank, nor do I think it would work. But you do have a good idea for how to make the currency valuable.

    The problem with gold in D2 is that there was never anything to spend it on. Sure, you need to stock up on potions and scrolls, and repair your weapons and armor and revive your merc, but that's it. There was never any reason to carry large sums of gold in your stash. The only items vendors ever sell that has any value are the Echoing weapons, or maybe a wand with charges of Life Tap or Lower Resist. The reason that runes have become the de facto currency in D2 today is that runes do have an intrinsic value within the game. Simply put, you can't build a godly character without using lots of runes.

    So, the idea of being able to use gold to increase the stats or mods on your equipment (or hey, perhaps even be able to buy stuff that people want to use) is a surefire way to get people to want to keep it and trade with it.

    Now a bank, on the other hand, wouldn't work in a game like this because there's no way to enforce people to repay their loans. There's nothing to stop you from building a new character, taking out a huge loan, and then just creating a new character (on a new account, if need be) and never repaying that loan.

    What exactly did you have in mind with creating a D3 "bank", anyway?


     
  7. sbn

    sbn Diabloii.Net Member

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    Re: D3 Economics 101

    So far so good. I think the whole aspect of "lending" is a concept we should just throw out completely.

    But, another role of a bank for consumers is a central "safe" location to store currency. One reason gold in D2 was worthless was because it was easy to obtain, but also limited on what you could store.

    Now I mention a certain fake gold site, that does have I will admit an interesting concept. Value is located in your account, not tied to a specific character. Thus, one character can find items to sell for currency held in a "bank", so to speak, while another character can withdraw to purchase an item. Currency can also be transfered in to different accounts.
     
  8. CCCenturion

    CCCenturion Diabloii.Net Member

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    Re: D3 Economics 101

    The problem with the fake gold (let's just shorten it to "fg" ;) ) site is that it's not directly tied to the game, making it a golden opportunity for scammers. (EDIT: awful pun not intended.)

    I agree that it's an interesting concept, and it would be feasible to implement it in the game by

    1: making gold valuable by either selling usable items at vendors, or including the possibility of using it to upgrade your equipment
    2: allowing for a shared stash, so you can transfer items or gold between characters you own without needing to open a mule game
    3: including some sort of safe method of doing trades without having to meet the person face-to-face, sort of like a mule trade but with a fraud prevention mechanism.
     
  9. konnu

    konnu Diabloii.Net Member

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    Re: D3 Economics 101

    Chinese farmers will surely crash D3 market. The game will be so simple, it's like made for chinese gold farming bots.

    I could be wrong tho

    One way to prevent the farming would be to introduce some puzzle system to random locked doors in the dungeons that computers couldn't understand and memory wouldn't help to solve it.

    Bind on pickup is a good way too.

    Good way to give currency value is to require some of it for every manufacture, production, enchanting, socketing task there is. Thats like saying the worlds NPC:s are accepting it as a currency. Another way is to allow players to trade currency directly for a thing which value will never drop, like magic repair hammers. You allways get hit and die but manufactured items relative value may change when they add new dungeons and drops.
     
  10. sbn

    sbn Diabloii.Net Member

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    Re: D3 Economics 101

    Technically we already have bots that farm for items. But I wanted to mention that a currency need not be necessarily something like gold that is easily found in game. You could have an ingame currency that simply exists within your account/s. For example, selling an item you could chose either/or the currency or gold as payment. But the point of a currency is to be able to transfer to another player for an item, to which they can use this currency to purchase an item of their choice. When you think about it, we have already had that in the form of SOJs and now HRs. Not really an ideal currency I would say.

    Therefore having a banking system that uses a 'currency' to store and transfer would be similar to "fg", enough so that sites using "fg" need no longer exist.

    Here is one idea. Say I have several items I sell to an NPC, and instead of receiving 10k in gold, I chose 200 in the currency, let's call them credits for now. I take those credits and deposit to the bank. A little while later here I see someone has an item I want, and they ask 100 credits. I meet in game, in item transfer I select my credits of 100 to transfer. The other player can now of course either deposit or purchase from other players. One aspect of this is we can now just simply sell items instead of multiple mule accounts storing items that may never be traded.

    The point to having a bank is that it would not be character specific, but rather account specific. Gold in D2 had a storage limitation, as well as being a poor choice for currency. The bank could however manage a common currency with options not currently available such as the ability to transfer as well as store for all characters. Hence player one can collect items, and player two can then buy. Also, with currency located centrally, there would be no need to necessarily transfer or mule over to another character.



     
  11. Krugar

    Krugar Banned

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    Re: D3 Economics 101

    The whole idea behind a successful economic system based on a currency (as opposed to direct trade) is creating a structure of supply and demand for the currency chosen that is always slightly inflationary.

    This is no secret to gaming companies. Many games already implemented "successful" (mind the quotes) economies based on a currency without necessarily excluding direct trading. Some went so far as to hire economists to help come up with it.

    In few words, the basic idea is to give value to the chosen game currency. In Diablo 3, Gold Pieces should become valuable. The way to do this is to make sure two fundamental aspects to the game economy balance each other, with one being slightly more prevalent: Gold Fountains and Gold Sinks.

    Gold Fountains
    These are all the places where players will be able to acquire gold directly from the game. That is, where gold is actually produced. Monsters that drop gold or NPC shops that generate gold whenever a player sells them an item.

    Gold Sinks
    These are all the places that will void gold pieces (or remove gold pieces from the player and give it back to the game to hold). NPC shops and Gambling are two examples on D2.

    ...

    In an inflationary system (a system that consistently tries to remove value from money by increasing prices), gold sinks and gold fountains should balance in a way so that it is easier to spend than it is to gain money. Perhaps this is however not entirely correct. I'm not sure about this bit. But in essence what needs to be achieved is a desire for the player to hold on to their money. And this is easily achieved on a inflationary system that consistently tries to increase the price of goods.

    But how exactly can one nudge the player into holding on to their gold pieces?

    The answer is the sweet irony of economics: Make money a desirable item by trying to increase its intrinsic value. You do this by, for instance, forcing players to pay a fee to level up, or respec, or cube a recipe, or upgrade their weapon, etc... In short, you provide money sinks, some of which can't be avoided.

    So the game tries to remove value from money by being inflationary, and at the same time creates a desire for money which tends to give it more value. This combination, if done right and constantly tuned (see link above), gives birth to a currency, does not remove the possibility of players also trading directly when they feel like it, and generates an healthy economy.

    Of course, the problem is getting this right.
     
  12. MrZero

    MrZero Diabloii.Net Member

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    Re: D3 Economics 101

    You could always make certain items bind on pickup, but also give the player the option to pay a certain sum of cash to get rid of this bind. This way money really would be valuable.
     
  13. konnu

    konnu Diabloii.Net Member

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    Re: D3 Economics 101

    Woot economics lol :crazyeyes:

    Gold fountains: Create gold out of thin air and give it as a loan to players. when players pay it back with interest. Loaners then invest the gold to the NPC:s who then buy crappy loots off of you. NPC:s wont buy if they have no gold forcing you to take out a loan to pay for the necessities(that are sold by other NPC:s. Sometimes loaners would make bad desicions and here would be depression. Like they would give loans to alts who then go bankrupt and destroy the character giving cash to your other char hehe

    Gold sinks: None, there is no sinks in real world either. Money pool just keep on growing, as do prices and paychecks

    would this be healthy?

    or traditional Monsters as fountains and services as sinks. Do you really need economist for that... He's just balancing ways to make gold thus setting a prize to peoples time and effort.
     
  14. Bad Ash

    Bad Ash Diabloii.Net Member

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    Re: D3 Economics 101

    no thanks, but you made me think of an interesting point.

    one of two things need to happen in the current Diablo universe. If "Gold" is going to be the currency of choice, then either A. It needs to drop WAAAAAAAAAAAAAAAAAAAAAAAAAAAAAY less frequently then it does. or B. prices to do anything with it need to go WAAAAAAAAAAAAY up.



     
  15. crazybs

    crazybs Diabloii.Net Member

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    Re: D3 Economics 101

    At least we won't have to manually pick up gold anymore, so we won't even notice how much/little we're getting untill we get back to town and realize we need 1 billion more gold to level up my pet hampster. :p
     
  16. zaxxon

    zaxxon Banned

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    Re: D3 Economics 101

    So what exactly is the point of the bank? Stashing items? Hording "gold"? Do you want the "bank" to take invested money and invest it, providing a return to customers? Do you further want to bank to invest based on risk, and have the real-life possibility of negative returns or even loss of investment? Will the bank loan to players? Maybe even create a credit score (lol)? I really don't understand where you're going here or how a bank adds to the enjoyment of the game. I also find the title highly misleading. There's no economy 101 here. Just a single simple question.
     
  17. Starving_Poet

    Starving_Poet Diabloii.Net Member

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    Re: D3 Economics 101

    No, what happens here is what we have in Diablo 2. Everything drops gold, there are piles of it anywhere, but you don't NEED to spend it on anything. Once you have a few good twinking items, odds are you can play an entire character - A1 normal to A5 Hell and never spend a single piece of gold on anything but potions and townportals.

    Now, granted these things are gold sinks *tries heartily not to say isk-sink*. But in a healthy economy, for every 10 pieces of gold that drop, there needs to be 11 ways to spend it. The problem with Diablo is that all the good items drop from monsters - uniques, sets, rares. These items are double-gold-faucets because not only do they have intrinsic value if sold to an NPC, they also make it so that outside of rare occasions, you never ever ever need to buy an item from a vendor.

    How do you solve this without completely changing Diablo? I don't know. Maybe make it so that there is an NPC that can re-roll an item for gold.

    ANY item - even uniques with variable modifiers.

    Hrm, actually, I think that would work perfectly.



     
  18. Jephery

    Jephery Diabloii.Net Member

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    Re: D3 Economics 101

    There are real life money sinks - Treasury Bonds. The Fed sells Bonds when they want to take money out of the economy.


     
  19. stillman

    stillman Diabloii.Net Member

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    Re: D3 Economics 101

    One thing I'd like to not see is massive inflation. In d2, we have to use "k" to chop off 3 zeros. One gold is useless, 100 gold is useless, and 1000 gold is still seen as pretty small. 10,000 is still small. 100,000 is a mild start, but you're still considered in the poor house goldwise. It's just annoying that my chr is 'poor' with her 100k in gold. Shouldn't they be called copper pieces, lol?

    So taking Krugar's fountain/sink notion, I suppose the gold fountains would have to be small and/or the sinks would have to be massive to help deter inflation. So monsters would drop 1-3 gold in act1 normal and maybe 25-30 in act4 hell. But we all know how Blizzard likes to spam junk all over the screen and we'll be seeing piles of many hundred gold all over the place. Thus, gold will become inflated in d3 I fear because Blizzard just loves it's big flashy numbers.

    Another problem is if the gold sinks are too costly, some people find the game less fun, while others would accuse Blizzard of encouraging China-sweatshop-gold-grinding. So it seems like we can't win against inflation. Blizzard's not going to want to use tiny gold drops and costly gold sinks will mean players barely ever use them.

    Just a thought: suppose dying had a HUGE gold cost that can take your gold into the negative. Then, you owe the bank money. You cannot shop/repair anymore until you pay off your debt. If your uniques break, you have to stash them until you get the gold debt paid off. Well that's what you get for dying 10 times to squeeze past a boss.

    And you know what would be really cool? Loan sharking! Players who lend gold with interest rates! The interest rate could be built into the rules to ensure the loanshark gets paid back. For instance, if your gold is in the negative (whether you owe the bank or another player), any gold you pick up goes to the player or bank you owe insead of you! Just a fun idea. Like in real life!
     
  20. Krugar

    Krugar Banned

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    Re: D3 Economics 101

    Indeed. The problem with rampant inflation or (deflation) is that players will eventually revert back to direct trading and forget all about the game currency.

    I don't pretend I have all the answers. I'm just an observer of similar games that established successful long-term economies in worlds counting thousands of players. Particularly MUDs where the interactions were way more complex than in Diablo and still they managed to sustain an economy based on game currency.

    And in this context, here's a more detailed explanation...

    The balance between Gold Fountains and Sinks is indeed paramount to a successful economy. They will be at the forefront of inflation/deflation battling.

    But, as previously mentioned this isn't enough for gold to gain an intrinsic value. On a game environment items have an intrinsic value related to their power. Gold, on the other hand has no value to start with. This promotes direct trading. In order to promote trade based on currency it is of chief importance to give an intrinsic value to gold.

    This is done by forcing players to spend gold. Diablo 2 had no such structure. The best it came up with was Item Repairs. And even then, not an ideal solution. Note that Gambling is not a way to force players to spend gold, neither is NPC shopping. These are optional tasks. I'm speaking here of schemes that make gold expenditure mandatory.

    Once these are established, gold gains an intrinsic value. If players (and note these are just examples to illustrate the point) are forced to spend money in order to gain a new level, if cube recipes all include a cost in currency, if socketing an item demands also a cost in gold, etc, gold becomes a real game item with an intrinsic value.

    These are the important money sinks. The ones that will help establish the economy, since they are the engine driving the need for gold. However, it can't be denied that indeed items available at NPC shops must be more interesting. This can be achieved even by making certain items only available at shops and never drop from monsters (like town portals or potions) and by forcing players to visit shops to perform certain actions, like upgrading an item or removing jewels from sockets...

    Now, we are still not there. How exactly can the game establish a balance between these money sinks and money fountains?

    On the case of Money fountains, as Starving_Poet and Bad Ash mentioned previously (and you too alluded in your post), definitely there is a need to massively reduce the amount of money in the game. In D3 money couldn't just drop of monsters in the quantities it did in D2, and any +Gold% mod needed to be strongly caped (something like <=5%), or even removed. Still, there must be enough for players to not be discouraged. A game economy shouldn't halt players progression, it should force them to make decisions. But can't be something that governs gameplay to the point it becomes a grief.

    On the case of Money Sinks, these should be slightly more pervasive. The game engine should try and do its best to establish a slightly inflationary economy. This is important because, while money loses value to the economy, it gains more importance to the consumer. A slight inflation acts as fuel to an economy. It keeps it alive. It stimulates the currency. Deflation, on the other hand is a terrible monster, even worst than rampant inflation (which is not desirable either).

    Now, once money sinks and money fountains are established, the game engine can give the game administrators all the tools they need to nudge the game economy into track every time it seems it is getting out of hand. By just doing minor adjustments to how much monsters drop, administrators can act as the equivalent of the Department of Treasury in the United States (who prints and mints all paper money coin). If the situation is getting out of hand, it can adopt more serious measures and change the charge on money sinks.

    Another important and final concept is that of the Money Pool, or Money Supply (the real-life term). Every country keeps a record of all the money circulating. This is usually the task of the country's Central Bank. This information is paramount to determine Inflation. Many games adopt a strategy of having a money pool from where monsters draw money to drop on death, and that also works to give money to NPC shopkeepers. Money then "gets printed" if the Money Supply (this hidden money pool) becomes too short due to an increase in number of players, or destroyed if there is too much in the Money Supply due to a shortage of players. In this system there's no real money sinks. Just perceived ones. The money circulates between the players and the Money pool through the money sinks and money fountains.

    On this system it is very easy to determine and control the economy inflationary level. But it's only really needed if the game mechanics are more complex and allow such things as player owned shops (see the game Puzzle Pirates, for instance). Diablo is simpler on this regard. And it demands less analytical tools for the game administrators to control the game economy.


    This may become a problem. I'm yet to see a game successfully implement a banking system ("banking" here meaning loans and payments, since that is really what a bank is for). The issue is that, contrary to real life, there aren't many mechanisms that can be implemented to force players to do their financing. It's very easy for a player to go overboard and go bankrupt. They just ruined their character. I'd rather have players ruin their characters because they ddon't equip them properly or didn't do a wise skill distribution.

    On the other hand, player-controlled loans are a fertile ground for grieving. Not just harassment, but also the simple possibility someone will just quit and forget to pay.

    Meanwhile, both player-controlled and game-controlled loans suffer from another problem relating to players not paying the debt before quitting. If the retired character didn't have enough money on it to honor the debt, money would need to be drawn from the game engine to cover for it. This could rapidly become an area of exploitation.


     

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