Monday, January 19, 2009

MMOGconomics 3: Player Interdependency

In this installment, we'll discuss how different players and play styles effect others in an economic sense.

First lets start where it all begins: Gatherers
Miners/Scavengers/Researchers gather materials that are the building blocks of the major items. Miners and scavengers gather raw components and Researchers create the blueprints for the final product.

Next is the creators of the products: Builders
Ship Builders/Module Builders/Riggers use the raw materials to create the final products used by all pilots.

And our final group of players: Consumers
Combat Pilots use the Builders items to earn money and in turn buy better items.

So, how do these groups interconnect?

Gatherers and Builders
The most obvious connection. Gatherers sell raw materials to Builders and Builders sell gathering items to Gatherers (making gatherers Consumers as well)

Builders and Consumers
Again very obvious. Builders sell completed materials to Consumers and Consumers give Builders ISK for more raw materials.

Simple, right? Now lets look at the last connection within this web.

Consumers and Gatherers
Depending on the Consumer, this group will either protect or attack gatherers. This will cause the worth of the materials either go up (harder to get because of combat) or lower (easier to get because of protection).

So let's go through a few scenarios to get a feel as to how these connections effect the market.

Scenario Base
- Several miners find some prime real estate to mine Zydrine. An item needed for many items to be made.
- The price dictates how many can be bought by the Builder that will be used to make a line of Thoraxes.
- The builder prices his Thoraxes to earn money back from expenses for the raw materials and to make some profit for himself.

Basic, right? Let's start the first chain of events:

Scenario #1
- The Thoraxes are bought by pirates (Consumer), and begins to terrorize Zydrine miners.
- The miners increase the price of Zydrine to pay for mercenaries (Consumer).
- The price for Thoraxes goes up to compensate for the rise in Zydrine.
- The pirates fight the mercenaries.
- The pirates and the mercenaries have to pay more for new Thoraxes.

So, because pirates attacked miners all consumers inevitably had to pay more for their new Thoraxes.

Let's change who buys the Thoraxes and see the results.

Scenario #2
The Thoraxes are bought by a NulSec Corporation (Consumer), and begins a NulSec war creating more demand because of ship losses.
- The price of Thoraxes goes up as demand does to afford more Zydrine.
- The price of Zydrine goes up as demand does.
- More miners try to mine Zydrine causing supply to increase and decreasing the price of Zydrine.
- The price of Thoraxes drops with the price of Zydrine.

Here is a basic example of economic rebound caused by an increase in demand. Obviously, a drop in demand (the NulSec War ends) would rebound the opposite way with a drop in price and less miners mining. How about the recent "Eve Economic crisis" regarding dupe* raw materials?

Scenario #3
- Several miners learn how to dupe* Zydrine.
- An increase of Zydrine enters the market dropping the price dramatically.
- Because people who do not exploit Zydrine are not getting a fair price they mine other materials, increasing the price slightly.
- As more Thoraxes can be made cheaper, the price drops as well.
- CCP discovers the dupe* process and begins banning and cleaning up the exploit.
- The excess Zydrine is removed from the market leaving very little supply (all the miners left remember) exponentially increasing the price.
- The price of Thoraxes jumps in line with Zydrine.
- More miners move in to mine Zydrine. This reestablishes the Zydrine market and lowers the price.
- Thoraxes drop in relation to the Zydrine.

In Closing
Markets are, by default, a reestablishing system. External forces can destroy a market, but markets will reestablish themselves as long as the basic economic rules remain. Also, events caused by any member of the system, including pirates and CCP, effect the economy. The economy also inevitably creates a chain of events that will effect every player.

So remember, regardless of your position in the game, the economics of your actions will effect you.


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