What would happen if an MMO had a fixed money supply?

Let's say that a game starts with X amount of gold that is given to players by the typical means: mobs, quests, npcs, etc. But once X reaches 0, those systems temporarily no longer give out gold rewards. The only way to get them to payout again is by cycling the gold through the game's gold sinks: taxes, fees, etc that would feedback into that initial pool of gold.

What does the game's economy end up looking like with a system like this?
Do you think this is sustainable through close control of the gold sinks?
Would market prices actually be stable? How would player greed influence the economy?
Do players just hoard money? does it become extremely difficult to gain wealth as a new player?
Do materials/items constantly lose value, since the total amount of materials is increasing?

I'm genuinely curious of people's thoughts on this, as I don't know of any game that has/had a system like this.

***EDIT***
Seems like the general consensus is that "players will just hoard money". So let's move beyond that point and assume there is an automatic tax system in place that prevents players from hoarding forever. This system would tax X% of every players total currency amount and put it back into circulation on a regular basis.

Does this solve the hoarding problem? do other gold sinks need to co-exist with this tax system? what other types of consequences does this tax system have?

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Azherae

Kesthely wrote: »

MrPockets wrote: »

Noaani wrote: »

While this is good in theory, the most recent game I can think of that had anything similar to this is Path of Exile.

The game sort of had currency, but only sort of, as the "currency" was consumable items.

What tended to happen in that game is about 65% of players just didnt bother trading at all.

It worked well enough for the remaining 35% or so. It was indeed more social for that percent that bothered with it - though an argument could be made that the 35% didn't need any assistance in socializing.

To me, this means that if your purpose for having a currency and trading system is to facilitate the easy and frequent trade between players, anything that removes basic currency from the picture is a negative.

If your reason for having currency and a trading system is different to that, then perhaps that outcome may change.

I think this brings up good questions about player psychology. For sake of argument, let's assume we want to try an avoid players using items as a currency. One option to accomplish that is to just make the main currency infinite, as almost all games do.

But what if another goal we have is to prevent infinite inflation of that currency? I think than then leads to the most common practice of "gold sinks" - remove currency from circulation to curb the infinite influx of money generated by the game itself.

I think the next line of thought is then: How easy is it to manage/design those gold sinks? Does a fixed money supply change this at all? I think the sinks just turn into "gold recycle systems"....and now that I'm thinking through this, if a game had perfect gold sinks, would that be equivalent to a fixed money supply?

inflation actually isn't caused by a surplus of money, its caused by a surplus of goods. Restricting money, or adding gold sinks only increases inflation, if you don't have enough good sinks. With node development causing a lot of goods to be consumed, and those nodes beeing destructible, inflations will be a lot less

I feel like one can spot economists and EVE players from 6 threads away sometimes.

Pretty sure this is a thread about currency inflation specifically, though, not 'labor-inflation' or whatever the correct term for what you described is? A fantasy MMO, even with an underlying trading system, probably shouldn't have to care about anything other than currency inflation since the production lines aren't static and don't have large startup costs.

MrPockets

Kesthely wrote: »

inflation actually isn't caused by a surplus of money, its caused by a surplus of goods.

According to all the literature I checked, this isn't true. Different things can cause inflation, but a surplus of goods would cause deflation.

Essentially, what inflation boils down to - is an increase in the price of goods. This could be caused by production costs or increase in demand/decrease in supply.

Depraved

Percimes wrote: »

Depraved wrote: »

MrPockets wrote: »

Percimes wrote: »

If no coins are minted anymore and only those in game are in circulation, players will find another currency for as many things as possible (aka when with other players). Trading items directly. Used to see a lot of that in EverQuest on my server: trading this item and this item plus X pp against that other item.

Hard currencies will be reserved for trading with NPCs.

Some drop items would probably become more valuable than their use would suggest if they were easy to trade to NPC merchants for gold.

Better start collecting sea shells folks.

I never thought of this, it is a good point. But would this really be a bad thing? would it drive away players? or would it be a unique selling point that brings in new players?

I know a lot of players want to bring the social aspect back to MMOs, and this helps in that endeavor, right?

how is trading an item for an item more social than trading an item for money?

It must be a in person trade, rather hard to implement in an automated player shop. And both parties can haggle for the exact term.

you can also do that with gold ?_?

tautau

@MrPockets is right, a shortage of goods raises the prices of the goods...inflation. Also, an excess of money makes each monetary unit less valuable...inflation.

To return to the OP's point, a fixed amount of money could have different impacts depending on two related other factors: number of players on the server and strength of the economy on the server.

If the server population grows then we need more money in the server economy or the economy lacks liquidity. If the server economy grows (more crafting as the population levels up to more complex gear, for example) then we need more money in the economy for the same reason. The population and the economy may both grow (need lots more money), may both shrink (need to take money out of the economy to prevent inflation) or move in opposite directions (need to manage money supply even more carefully).

Fortunately for games, monitoring the situation is easier than in the real world since we know the population through live-player-hours, the money supply, the price changes for most basic goods, and anything else we need to know through queries. They can tweak drop rates of gold and materials to maintain healthy server economies (however they end up defining that). Incidentally, since prices should differ from server to server, this is another reason that server transfers should not be allowed.

Ideally IS will be able to hire someone with a PhD in Economics and experience in the Federal Reserve to do all this, but they may have to settle for someone with a MS Econ and some game experience.

Dezemi

A more material-based economy could prove interesting in a game that is going for crafting as primary way of gear acquisition (I do recall hearing that somewhere...).

It would also mean that the material lost upon death/caravan raids/node sieges would matter more. I had already commented before that if one can easily lose materials but gold remains save in the player wallet, then most players will convert materials to gold asap - but a limited coin system would make that much more difficult.

Double edged sword for sure. It would most certainly encourage/force more player interaction, but it might not necessarily always be in a good way. "Life-skillers" and casuals would suddenly be much more important to the game economy - but it would also increase the benefit of being a bandit (aka, red), if you get away with it.

Terrifying_Truth

I wonder if the NPCs would stop giving quests when they had no gold on them or if the rewards would be items only then

Elwendryll

Arya_Yeshe wrote: »

What if people who mine gold could mint more coin? Or bring that gold to the node so more coin is minted.

It is quite crazy that there are so many MMOs with people mining gold, but the option of minting more coin was never there.

edit: What if minting was a skill? You would bring your minerals to a player who can mint an he could make coins of many kinds. So, your node could actually have it's own coin, a guild could have it's own coin and so on.

There would be people making money by exchanging coins

That's a mechanic in Wakfu.

You can mint money from ores, early in the game economy it was actually a very important source. They had to change the amount you can mint to account from inflation from other sources at some point, because the price of the raw materials became higher than the amount you could mint with it.

WeGbored

I feel like this would just drive the RMT market to absolutely insane prices.

Gui10

"What would happen if an MMO had a fixed money supply?"

Fixed money supply with a growing player base = less and less money to go around per player, encouraging keeping the gold and not spending it, creating imbalances and other unwanted consequences like hoarding, and an economy more easily controlled by whales. Its also not possible to have a fixed money supply when you will most certainly have daily/weekly/monthly quests/tasks for gold.

On the other hand, infinite money supply also has its consequences like infinite inflation, thats why you have to have realistic money sinks that somehow try to balance the overall money supply. In the case of an mmorpg, the money just dissapears or gets transformed... or in our case with AoC, a money sink like node taxes will be used to generate buildings, which can also be destroyed in node wars, which is a much more interactive way to manage the gold lost from a gold sink!

Perfect balance is not possible in a game or in real life. But you do want to have active mechanisms to pursue somewhat of an imperfect balance.

Fun thing about a game is you actually have a closed system where you can test so much and try out things without necessarily the real world consequences of making mistakes

MrPockets

WeGbored wrote: »

I feel like this would just drive the RMT market to absolutely insane prices.

Would it? I guess if somehow the RMTers obtained a majority of the money supply...but I'm not sure how that happens in the first place? How would they maintain their supply of gold? Typically this is done via botting, since there is always gold to be made with it. But if bots eventually can't make money...does that dry up the RMTer's main source of income?

Either way, I think it is an interesting problem to think about.

Drachenpaladin

MrPockets wrote: »

Let's say that a game starts with X amount of gold that is given to players by the typical means: mobs, quests, npcs, etc. But once X reaches 0, those systems temporarily no longer give out gold rewards. The only way to get them to payout again is by cycling the gold through the game's gold sinks: taxes, fees, etc that would feedback into that initial pool of gold.

this would be a great idea, but i see a lot of problems:
that would probably kill the economic or that currency. Because merchants would have most of the money and sell it for real money on ebay.
also what if most of the player would save up money for bedder equipp? than someone have to burn his money or a merchant would be some kind of pawnshop/banking house and gain interest charges.
And if a wealthy player suddenly quits - all of his money is out of the economic circle and you have to replace this - so what to do if they return again after a while?

Gui10

@MrPockets Merchants wont be able to buy anything, quests wont give any gold.. in short, it doesnt make sense.

Do you agree, or do you think a fixed money supply can work?

Gui10

@MrPockets an alternative is a money supply fixed PER player. like each players gets 100k from quests, and thats it. Traders dont buy anything unless they sell their stuff to players and have gold in reserve.

This too doesnt work because we already know there will be an infinite supply or natural resources like wood, metals, plants, furs etc, so you just end having humongous stockpiles of low and high tier resources that sell for dirt cheap, and it forces players to make alt after alt after alt to grind out quests and cash, which I dont think is the game experience we are looking for.

I dont want to get into the RMT discussion because I feel a game should do everything possible to eliminate it right out. RMT will always go up and down according to the games popularity and state of economy.

MrPockets

Gui10 wrote: »

@MrPockets an alternative is a money supply fixed PER player. like each players gets 100k from quests, and thats it. Traders dont buy anything unless they sell their stuff to players and have gold in reserve.

This too doesnt work because we already know there will be an infinite supply or natural resources like wood, metals, plants, furs etc, so you just end having humongous stockpiles of low and high tier resources that sell for dirt cheap, and it forces players to make alt after alt after alt to grind out quests and cash, which I dont think is the game experience we are looking for.

I dont want to get into the RMT discussion because I feel a game should do everything possible to eliminate it right out. RMT will always go up and down according to the games popularity and state of economy.

I agree, I'd rather not worry about the RMT in this discussion.

To get back to the main topic. I'm not claiming any of this would actually work, I just think it would be an interesting experiment, or something to think about.

As for more details on what's in my head: If designed properly, quests/npcs would very rarely (or never) stop giving gold, because various taxes would keep cycling the gold back into the system. To prevent players from hoarding, there can be universal taxes (think of property/sales taxes in RL) to prevent people from not providing gold back into circulation. So as an example: A player obtains a small fortune and quits. The tax system in place will automatically tax that player's money and put it back into circulation. (X% per day or something)

The only time the system would stop providing money is if the amount of players "grinding gold" is larger than what the taxes (or other sinks) are putting back in.

To reiterate, I have no clue if this would actually work or not, it is just an idea I find interesting.

Gui10

MrPockets wrote: »

To reiterate, I have no clue if this would actually work or not, it is just an idea I find interesting.

Yes it is interesting to think about

It would be great to test it out in some way.

bloodprophet

A couple of years ago there was a thread about RMT and ways to prevent it. There was mention of a game(don't remember which one) that doesn't allow players to trade in game currency. As a result players used other things as currency. The same would happen here.
If you read Tomas Sowell he talks about how at an internment camp in WW2 the prisoners had no money. They all got the same daily kits of rations. They all chocolate and cigarettes. Clearly some people don't want one of these things and barter began trading one for the other.
People will just find away and if the system is bad enough they will find a substitute. If a developer took complete control of the economy and stopped all player trading of in came currency and items. People would still find away or just not even bother playing.

MrPockets

bloodprophet wrote: »

A couple of years ago there was a thread about RMT and ways to prevent it. There was mention of a game(don't remember which one) that doesn't allow players to trade in game currency. As a result players used other things as currency. The same would happen here.
If you read Tomas Sowell he talks about how at an internment camp in WW2 the prisoners had no money. They all got the same daily kits of rations. They all chocolate and cigarettes. Clearly some people don't want one of these things and barter began trading one for the other.
People will just find away and if the system is bad enough they will find a substitute. If a developer took complete control of the economy and stopped all player trading of in came currency and items. People would still find away or just not even bother playing.

I don't see how this applies here? As long as the starting pool of money is large enough to support a whole server, currency is always there and trade-able. I feel like this is assuming an extreme case where all currency is out of circulation (which again, is prevented by various taxes/sinks) and for some reason people are not willing to use it.

Arya_Yeshe

Prices will go down, this is certain!

This is due to people won't be frivously spending their gold, item sellers will sell their goods for lower prices.

Along the months/years, when people start leaving the game, a portion of this gold will still be in their wallets, they will logoff and that gold could never circulate again. in games people leave no heirs and the government (npcs) won't absorv your gold either.

Arya_Yeshe

In EVE, when people have less ISK (EVE's credits), the prices always go down for 2 reasons:

sellers lwill ower their prices
people start selling out their stocks of all kinds of items, people just sell directly to buy orders (lower price than sell orders), so there's some market crashes sometimes

In 2019, I drove prices up for the Tritanium mineral, it is the most important mineral in the game, the prices went from +5 ISK to over 8 ISK. I did this in seconds, because I had too much ISK i simply bought the market, the price change was so significant that it made the news, people were talking about it in the Talking In Stations show.

That's what happens when some people have too much money in the game, they can force prices up. Or when someone can hoard way more gold than others.

Veeshan

If there was only ever gonna be say 1 million gold someone (Many) will have it as there goal to collect all the gold in the game and not spend it :P eventualy bartering would be the way people do trade.

That being said i think every year or so they should have a world event that promotes spending ingame currency to remove it from the server. Could use it to unlock cosmetics/titles and other things. (Could be a way to buy cosmetics from the cash shop via ingame gold that normally you could. aka trade gold to NPC for token, token then used to buy some items on cash shop this is just to remove excess gold potentially building on the server to keep economy from infinitely inflating

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