October 12, 2004

KidTrade: A Design for an eBay-resistant Virtual Economy

A position paper for State of Play II Reloaded, for the
Virtual Property/Real World Markets: Making a Living in a Virtual World panel.

Updated October 20th, 2004

[PDF]

Preamble


Though many of the ideas presented in this article have been kicking around in my head for more than 20 years, and some of the features were tested here-and-there in various virtual economies that I’ve been fortunate enough to help create, the bulk of the work presented in this paper is part of an undeveloped children’s MMOG, designed for a Tantrum, Inc., and appears in this paper with permission. As always, I wish to thank the entire MUD/MMOG development community for constantly challenging and refining many of the ideas contained herein, and especially Chip Morningstar, who co-designed and  implemented most of the virtual economies that inspired this design. The latest draft of this article clarifies some design issues and makes a few minor fixes, all as the direct result of discussions on Habitat Chronicles and TerraNova. Thanks gang.

There are many external markets for virtual objects, including Gaming Open Market (GOM), TheGoods , and eBay to name a few. Not all use real currency to facilitate trades. For the sake of brevity, I will refer to all external trading markets as eBay, acknowledging any significant differences, where warranted.


An eBay compatible virtual economy is now a design choice.

 “For every person you see selling an [Ultima Online] account on eBay … there are a bunch of people bidding, too. And they are bidding on intangibles. They are offering up their hard-won real money in exchange for invisible bits and bytes because they see the intangibles of UO as being something worth having. A tower for a sense of pride. … I find it odd that people think this cheapens the whole thing. I think it validates it.” – Koster

 “ …[an eBay-able virtual] economy primarily indicates that the leveling grind is a design flaw…” – Lastowka, Castronova, and others on TerraNova

“…You may not buy, sell or auction (or host or facilitate the ability to allow others to buy, sell or auction) any Game characters, items, coin or copyrighted material.” – EverQuest EULA, Section 9

“As a player, I still prefer a subscription model with no eBaying.” – Ed Castronova

Among MMOG customers and developers, online debate rages about the unfairness of the time-investment vs. money-investment trade-off. Those who have an excess of one resource and a shortage of the other face off against those with the opposite resource imbalance. I will not retread that ground here, but instead offer an alternative approach to the entire idea of the virtual market.

An eBay compatible virtual economy is (now) a design choice. We may not have known that this would happen a decade ago (though, arguably, we should have), but now there’s no excuse for ignoring this effect when developing a new game. We can design our products, service rollout, Terms of Service and End User License Agreements with our eyes wide open.

We don’t have to do it the same –old way, especially if it doesn’t make sense for our game. There are other virtual market designs that do not have these same properties, and may be suited better to your property, especially if externalizing virtual object markets will be harmful to the health and/or profitability of your product.

I will present one such model in detail: KidTrade.

First I will describe the de facto-model of many large MMOG virtual economies and deconstruct and name the primary design decisions that lead it, seemingly inescapably, to items for sale for cash on eBay.

Next I will present a specific model for an eBay-resistant economy, designed for children to trade scarce virtual objects without fear of being cheated by smarter, craftier (adult) traders who are generating a lifestyle-supporting income from eBay-ing the kids’ poor trades.

Finally, I will review the tradeoffs proposed and the anticipated effects they will have on the game experience.

From Twinking to EBay:
The MMOG Virtual Economy Design “Slippery Slope”

Twinking[1] is a design choice. Muling[2] is a design choice. These are built on gifting, another design choice. Gifting is person-to-person transfer of virtual goods. Just add private messaging (email or IM) and some trust, and gifting becomes trading[3]. Most designers figure this out (eventually) and implement a trading machine interface to remove the trust requirement. Introducing object scarcity increases the play value sufficiently that, when combined with a large enough target audience, you only need to reintroduce trust to create the incentive for an external marketplace to thrive, like eBay. GOM even removes the trust requirement again by implementing deposit/withdrawal ATMs in Second Life.

So, the steps on the virtual economy slippery slope are:

  1. Gifting → Twinking
  2. Gifting + Multiple Chars/Server →  Muling
  3. Gifting + Messaging + Trust →  Trading
  4. Trading – Messaging – Trust + In World Machinery →  Robust Trading
  5. Robust Trading + Scarcity + Liquidity →  External Market (eBay)
  6. External Market – Trust + In World Machinery →  GOM

The items in bold face are the ones that designers have primary control over. The rest is up to the users. They decide on the economics of twinking, muling, eBay-ing, etc.

Some may think that this chain of design decisions is inevitable, and some have argued that, for good or ill, it is now a de facto standard and is expected by the customers. I have personally designed and/or implemented many products that have followed this path, but, like many other service operators, found this design unsatisfactory. Many play online games to escape the fact that they aren’t as successful (aka: rich) in the real world as other folks. Correct or not, a portion of our audience sees virtual worlds as a new level playing-field, where everyone starts fresh, without any particular advantage. For at least one audience, this is particularly true: children

 I took it as a personal challenge to someday build a virtual economy that did not rely on the slippery slope of the typical MMOG. In 2003, I was given that opportunity when I was the lead designer for a tiny self-funded startup working on a children’s virtual world. KidTrade is the name that I’ve given for the economic model I’ve extracted from that design and am now presenting here. I offer it as an alternate economic model with man
y interesting properties,
including resistance to the sale of game items and currency on eBay.

KidTrade: An eBay resistant economy[4]

Background & Goals

The KidTrade economy is a part of a kids MMOG design described as

“NeoPets meets Toontown: But the objects work!

Children have humanoid cartoon kid avatars and collect, trade, and play with virtual objects including pets, fun vehicles, combat contraptions, clothing, toys, decorations, furniture, and houses, all in a safe, shared virtual world with various locations and activities, each targeted at a different set of kids’ interests.”

The product has no treadmills: Being online for more hours a day does not increase your wealth or power. Items are generated at a time-release rate. Family play is one of the design goals, bringing the game within reach of a younger audience and was optimized for sparse, short sessions.

KidTrade a proposed economic model underlying a service that is a collection of children’s multiplayer games and activities, many of which may/must be augmented with the virtual items provided by the system. The market is not intended as a primary play-feature of the service.

Trading is specifically meant for optimizing the service’s play model: collecting the components of a vehicle, building and furnishing your house, or gathering the resources needed for a team-play game. Focus is placed on subjective value over objective (quantifiable) value.

KidTrade: Design Elements

A Thing Based Economy

The service is built almost entirely out of ‘game-objects’ which I will call things, for simplicity. Things are what the players collect and trade. Instead of a CCG (collectable card game), it is a CTG (collectable things game.)

Things are all active: Each thing does something when it is in the world. The vast majority of user activity is expected to be the using and trading of things. There are pets, vehicles, combat contraptions, clothing, toys, decorations, furniture, and more. They all wear out with use, so the kids learn to not abuse their things. This discourages antisocial hoarding behavior.

Things come in three basic categories: collectibles, consumables, and customizers.

Collectibles

Collectable things are meant to be purchased by a player for personal use and sharing/displaying to others. These things are often quite utilitarian in nature, such as vehicles, clothing and toys. Just as often collectibles are aesthetic, such as decorations and furniture.

Sets (Crafting, Part 1)

Some collectibles are parts of sets. When all the things in a set are collected by a single player, the objects may be combined to produce a combination object, representing the whole set. For example, the individual things CAR TIRE x 4, LONG CAR BODY and HUGE CAR ENGINE could combine to create a LONG CAR WITH HUGE ENGINE vehicle. A collection of action-figures/dolls could be combined with a PLAYSET to produce a diorama scene for display in a kid’s house.

Uniques (non-tradable)

Some collectibles may be non-tradable unique things. These are usually given to kids for personal achievement, winning contests, or for participation. These objects are non-tradable as they represent personal achievement. When a set of things is combined into a new thing, it becomes a unique thing and may not be disassembled or traded. If the service supports Sharing (see below) things, unique things may be shared. Several games refer to this category of objects No-Drop.

Consumables

Things that are intended for immediate use are called consumables. These include things like repair kits, combat contraptions, fuels, medicines, and the like. Unlike collectibles, it is common for consumables to allow for a fixed number of uses and then are used up or destroyed.

Customizers (Crafting, Part 2)

An interesting subclass of consumables is customizers. Things that mutate the nature of other things are in this category: Cans of spray paint, texturizers, shape/size-changers, sound-changers, voice-distorters, etc. These are always consumables (limited use) and only work on appropriate customizable objects. For example, a user could use one to change the door-opening sound on their house, or change the pattern of wall paper in a room, etc. Neopets.com uses Paint Brushes in this way to great effect.

No Currency

Hoarding of objects and currency is a standard practice in many online games. So is hyper-inflation of the internal currency. These behaviors are do not provide an appropriate model for younger children: Parents want their kids to learn good citizenship and sharing skills, not caveat emptor.

The service is presently designed without a currency to discourage hoarding and other antisocial trading schemes.[5] This should help emphasize subjective/relative value: “I need x and I can trade y for it” over numeric objective value: “I need to convert objects y & z to currency to get enough cash to buy the hyper-inflated x that I want.”

Production and Consumption

The product implements a Faucet and Drains economic model, where things are carefully introduced into the world by the service operator (the Faucet), and they leave the system as a result of being either combined (collectibles), exhausted (consumables) or by being discarded by users because they have decayed to the state of being broken. This provides two points of leverage for managing the value of things in the world.

Faucet: Paid Membership → Thing Income

Users are given things purely based on being a paid member of the community. Each X day(s) a thing is added to the user’s inventory. It is randomly selected from the players approved set of things.[6] This model equalizes the playing field for all players, with each having roughly the same chance to get any subjectively desirable item. Since the Trader’s Market (described below) only allows anonymous trades with the community, players who can afford multiple accounts can not use them to create a disproportionately rich/powerful player via muling or making lopsided trades with themselves.

Another method for the introduction of new items into the game is for system staff to make them available in the world as prizes for contests (treasure hunts!) or list them in the Trader’s Market.

No tradable scarcity

By design there is no scarcity of tradable collectibles or consumables. The number of things of each type remains roughly constant across the active user base which is kept in balance by the faucet As noted above, only Uniques are scarce and are not tradable on the market at all.

Special Drain: Decay (Wear, Tear & Repair)[7]

Neopets.com suffers from irreparable runaway inflation of its currency: NeoPoints (NP). This is because currency and objects are introduced into the economy at a rate significantly higher than their consumption. As a result, needed items, such as medicines to cure pets of illnesses are priced in the range of 100,000NP, when the same item was at the system store (for about 2 seconds, before a bot bought it) at a price of 100NP.  New users are at such a disadvantage that if a pet gets sick it is better t

o abandon it rather than work to heal them.

We will avoid this problem and encourage responsible care of owned collectibles by having them decay.  Excessive use of items causes wear & tear, eventually leading to the object being broken.

There are consumable items that can repair damaged and broken items up to used status.

Consumables are not normally subject to wear & tear, as their use count is limited instead.

A thing does not decay if it is part of a standing offer that is currently unfulfilled in the market (see below.)

Trading

Of course, when a kid sees some thing that someone else has, they might want one of them. Since the only way for items to enter the world is via the daily award faucet, it is very unlikely that a user would get exactly the item they wanted just by waiting for it.

Instead of waiting, we encourage kids to trade their things for other people’s things, since this is the only way for them to get a specific item.

The Trader’s Market

Since there are so many kinds of things, with so many combinations of attributes, and not everyone is online at the same time, the service offers a special Trader’s Marketplace, available at all times on the user interface. All online trades happen here. Like the stock market, all trades are listed anonymously, best terms only. Since the identities of all traders are hidden, this market resists the establishment of an external money-for-things marketplace by preventing specific user to specific user trades: There is no way to make a guaranteed delivery. This also discourages adults buying multiple accounts just to raid them for their daily thing grants.

All trades may be completed asynchronously – while the offering party is offline. If a user’s offer is accepted while they are offline, they will be informed as soon as they connect.

Browsing

The market is presented as a series of pages, each displaying the things available for trade. Buttons on the page limit the search criteria by types, sets, and specific attribute values. Each line shows thumbnails of what is being traded for what. Each oldest, best trade with a particular set of terms (x for y) is the only one displayed for those terms (trades with duplicate trade terms are not displayed). This massively simplifies the display, removing duplicates and lower-value trades from consideration. No information is provided about the number of offers available at these terms, nor the age of any particular offer.

The first trades listed are those that the kid can fulfill immediately for items he’s otherwise already made offers for,  next are items that he can fulfill, third are items that he can fulfill with currently banked things (see below), next are trades that he can’t fulfill but contain items that he’s made offers on, and lastly the remaining items for trade. All of the sort buttons respect this ordering except the Sort By Thing button, which sorts in alphabetical order.

Completing a Trade or Making and Offer: “I want a big engine”

The kid can either accept any fulfill-able trade as displayed, or compose a new offer. Offers are constructed graphically and always one for one.[8]

When a thing is offered in trade, it is put in escrow or banked until the offer expires or is accepted. Banked things can not be used in any way or offered in another trade. Banked thing are not subject to decay If an object is removed from the bank, the corresponding offer is removed from the market.

When browsing, trades that the player could conclude with objects that are banked for other offers are listed second. If a player accepts a trade that includes items he has banked, the user is informed that completing the transaction will cancel their other offer.

Banking teaches children about committing resources to achieve a long-term goal.

A Word About Liquidity

In order for the market to have the property of masking the identity of the traders, there is a minimum liquidity level required for each trade type. Offers of each formulation (x for y) will not be displayed until this threshold is met. The liquidity threshold should be some fixed minimum value plus a random bonus to discourage gaming.[9] See the Appendix for a detailed defense of how this market is resistant to eBay.

Sharing (No Gifting)

The Trader’s Market doesn’t allow you to give something to your friend. Given that I firmly believe that gift-giving is the foundation of community, the elimination of gifting in a children’s product seemed extreme. Fortunately, the answer came in the form of a feature from a competitor: There.com’s lending feature.

A user may choose to share a non-unique collectable with a friend for a fixed amount of time (20 minutes?) after which the thing automatically returns to the owner. The borrower cannot, in any way, be considered as the owner of the thing, but may use any type-specific behavior: he may ride the bike, spin the top, etc. Note that the object will still decay normally.[10]

Tradeoffs & Conclusions

The KidTrade virtual economy design avoids the slippery slope from Gifting to eBay by integrating the market directly into the game as well as making the identity of the traders anonymous. It effectively prevents muling, twinking, and eBay trading while trading off the features of a currency  (an audience driven design choice), some scarcity, and gifting (this is mitigated through sharing/loaning.)

Though this model has yet to be implemented and thus has not revealed its own particular weaknesses, I contend that it is rich enough to provide an entertaining and vital economy, especially for its target audience: kids.

I submit that this design is specified at a sufficient level to demonstrate my position for this panel: “An eBay compatible virtual economy is now a design choice.”

Be sure and let me know if you try any of this stuff before I can. Discussion of the KidTrade is taking place on Habitat Chronicles.



[1]  Twinking is the practice of experienced players gifting powerful virtual objects and/or large sums of currency to beginning players or low-power characters.

[2]  Muling is the practice of users transferring objects between their multiple characters on a game server. This is typically done to get around per-character item storage limitations.

[3]  The most primitive form of MMOG item trading was in the original Lucasfilm’s Habitat, in which Avatars gave objects to each other by dropping them on the ground at their feet and walking to the other party’s objects and picking it them up.

[4] Note: This model does nothing to address the sale of characters on eBay. The service’s position on character transfer was TBD but would have, most likely, followed Sony’s lead: Transfer is against the Terms Of Service, and the company will not offer customer service support for such transfers.

[5] Other designs are worth considering to meet this goal: A currency could be implemented with a limited-maximum wallet/purse for kids. To teach cash management and good saving skills, any cash allowance would have to be pre-allocated to the purchase of a specific thing. Als

o, the market could set the token price of all objects to a fixed value. This alternative was not explored in any depth and is left as an exercise to the reader.

[6] The base set may vary by user, based on play behavior: For example, if a user is hoarding collectables, they may receive more consumables to encourage other game play.To meet the no-scarcity requirement, the random selection will favor any things that are in non-equal supply.

[7] Decay complicates the trader’s market by adding wear status as a dimension, but seems like an important feature for a kid’s educational game. Stuff that lasts forever, even when you use it heavily, doesn’t match their real-world experience.

[8] Another exercise for the audience: How does the market change if you allow many-for-one offers? How about many-for-many?

[9] The system could also detect odd trading patterns and inject its own offers into the market to correct any imbalances.

[10] If this feature were implemented, it is equivalent to short-term twinking, but the benefit is so limited that I believe that there would be no significant eBay market for this effect.


Appendix

A walkthrough The Trader’s Market and eBay market resistance features.

 

Several questions have been raised about my claims about KidTrade’s features and how the market for Things is eBay resistant. In order to defend the claims, I will first lay out the requirements for a successful eBay trade, demonstrate how an established KidTrade Trader’s Market inhibits fulfillment of those requirements, and how liquidity limits effectively protect the market until it becomes established. Finally, I visit the sharing feature and demonstrate how to mitigate the risk of using eBay to ‘rent’ Things.

Requirements for an eBay transaction to succeed

There are several requirements for an external market transaction on a service like eBay to be possible for the transfer of virtual goods between characters on a service:

  • Requirement 1: The Seller must be able to guarantee delivery of the virtual goods to the correct buyer in a reasonable timeframe. Delivery to the wrong party is not acceptable.
  • Requirement 2: The Seller must also be able to confirm delivery of the virtual goods to the correct buyer, or be subject to potentially fraudulent buyer non-delivery claims.
  • Requirement 3: The universe of Buyers and Sellers must believe that Requirements 1 and 2 can be reliably met, or the market will not develop. This belief is only established through a history of successful transactions.
  • Requirement 4: The value of the Thing being sold is greater than transaction costs including: Transaction fees, market liquidity, delivery fees and delivery coordination. If the sale value drops to zero, this requirement can not be met.

KidTrade needs only prevent requirement 1 or 2 to make the market nonviable, but this design interferes fulfilling both requirements!

The properties of an established KidTrade Trader’s Market

To demonstrate the eBay resistant features of this market, we will first consider an established trader’s market. This is defined as the state where there are significant numbers of outstanding offers for each type of item on the market.

Since, from the point of view of an external observer, all offers are commutative (A for B is the same offer as B for A) the number of outstanding offer formulations will be the number of pair-wise combinations (C):

C = n * (n – 1) / 2

where n is the number of tradable thing types.

In an established market as defined, for any specific Thing type, there are(n – 1) offer formulations (one for each other Thing type), each with many offers for each.

Threat:

  • A seller lists a Thing for sale on eBay, promising to transfer it to the buyer using the Trader’s Market

Design givens:

  • All orders are anonymous:
    • No one knows which offer will be fulfilled.
    • No one knows the number of offers of a formulation that are pending.
    • No one knows when an offer will be fulfilled.
    • No one know which offer is their own.
  • When your order is fulfilled, you have no idea who you traded with.
  • Any attempt to formulate an offer will be fulfilled first and immediately with standing orders.
  • An established market contains many standing orders for all offer formulations

Conclusion:

  • The seller can not meet eBay Requirement 1, since it is not possible to guarantee delivery to a specific buyer due to anonymity and instant fulfillment.
  • The seller can not meet eBay Requirement 2, since there is no way to independently confirm that the delivery was made to the appropriate party.
  • Therefore, the eBay market is resisted.

[Auto]-Collusion attack against an unestablished Market

But, the definition of an established market is key. That won’t exist at all times, and most certainly won’t at the beginning of the service. If there isn’t sufficient liquidity (enough offers of a specific formulation available), it might be possible to find a way to almost-meet eBay Requirement 1. It has been suggested that the collusion of enough sellers (accounts) may be able to control a set of offer formulations for the transfer of goods.

Threat:

  • A seller creates many KidTrade accounts (or colludes with others),  collects several of a specific Thing type (CoolThing) on a subset of those accounts. He lists a Thing for sale on eBay, promising to transfer it to the buyer using the Trader’s Market, intending to have the buyer use an often-traded (statistically determined) item as placeholder-currency to complete the transaction. The seller will use as many accounts as it takes to fulfill the trade.

Design givens:

  • All orders are anonymous
    • No one knows which offer will be fulfilled.
    • No one knows the number of offers of a formulation that are pending.
    • No one knows when an offer will be fulfilled.
    • No one knows which offer is their own.
    • When your order is fulfilled, you have no idea who you traded with.
  • Any attempt to formulate an offer will be fulfilled first and immediately with standing orders.
  • The liquidity for the PlaceholderCurrency-for-CoolThing is low enough to manipulate.

Conclusion:

  • The seller may be able probabilistically meet eBay Requirement 1, with a large number of accounts, each with their own CoolThing. This reduces the US$-value to a crap shoot: The seller can’t know how many offers he will have to fulfill to deliver the goods to the correct buyer. Along the way, any mis-delivered items were given to unexpected (presumably very happy) recipients.
  • The seller can not meet eBay Requirement 2, since there is no way to independently confirm the delivery was made to the appropriate party. In the end, the seller has given away all of his CoolThings and doesn’t even know if the buyer has been ripped off or, worse, taken him for a ride by collecting all of them for the price of one, while demanding a refund.
  • Therefore, the eBay market is resisted. Though not
    quite as effectively as in a fully liquid market.

Bootstrapping an established market (liquidity control)

What little potential the collusion attack may have can further be weakened by increasing the liquidity in the market to approach the goal of an established market. What level of liquidity is required to resist the probabilistic market manipulation proposed in that attack?

An interesting baseline calculation is the expected number of offers-per-formulation (o) in the market based on the current number of tradable Things (t), percentage of things banked (b%) and the number of thing types:

o = t * b% * 2 / n * (n – 1)

So, with 1,000,000 tradable things, 10% listed for trade, and 100 tradable thing types you get an average of  o = 20 trades for each formulation. Any minimum liquidity threshold should be less than o, perhaps .5*o or 0.75*o. It may well be reasonable to have a different (or even changing) liquidity threshold for specific things/formulations based on trading patterns.

Use Case: The HotNewThing

This design explicitly does not claim that 1:1 trade means that the value of all things is equal. On the contrary. Some things will be more desirable than others, or more desired by many players.

Consider the case of the HotNewThing. These services are content-consumption dependent, and new items are desired most strongly by the core community. Many will want the newest thing and would this increases pressure to consider alternate delivery methods (such as eBay), if technically possible.

What would a HotNewThing most likely trade for? A CruddyOldThing? Probably not as fast as for AnotherPopularThing. There will almost certainly be many CruddyOldThing-for-HotNewThing offers pending in the market, as people would have no reason not to try that trade, given that it may eventually succeed. Given the proof in this appendix, it should be clear that the trade that is most likely to complete in the shortest time will be AnotherPopularThing-for-HotNewThing, confirming the perceived value of both objects.

This should be the final nail in the coffin of the thing-transfer-by-eBay argument: There won’t even be a junk thing for eBay-traders to use for placeholder currency as the largest number of outstanding offers for each widely most-valued object will be in exchange for CruddyOldThings, because they are less-valued and it is no burden to offer them in exchange for any desired item.

Sharing and eBay: The Question of Market Friction

The sharing feature of KidTrade is optional, but desirable for social-education reasons. Here we consider the so-called “Blockbuster” threat:

Threat:

  • A seller rents the right to use a CoolThing for 20 minutes using eBay for the cash transaction and fulfilling it in the system using the Sharing feature.

Design givens:

  • Sharing allows a specific user to lend a thing to another user for 20 minutes.
  • Shared items have limited functionality.
  • Some number of CoolThings are available for trade on the market.
  • There are as many CoolThings in the economy as any other Thing.

Conclusion:

  • The seller can meet eBay Requirement 1.
  • The seller can meet eBay Requirement 2.
  • The seller can meet eBay Requirement 3.
  • The seller may be able to meet eBay Requirement 4, if:
    • The selling price is greater than the listing costs (and other overhead.)
    • Many potential renters don’t already have a CoolThing and the limited-use value of the CoolThing is greater than the selling price.
    • Many potential renters can’t (or won’t) easily trade one of their Things for a CoolThing.
    • Many potential renters can’t simply borrow a CoolThing for free from anyone they know/see, which is it very reason for the Sharing feature.
  • The eBay/Thing rental market may or may/not be resisted depending on the temporary-use value of things and transaction costs. I contend that the frictions described above are considerable and sufficient to, at least, severely limit the effect any external market.
  • If an external rental market appears, the service provider may implement one or more of several mitigation options:
    • Enable users to borrow one of each Thing type from the system once, for evaluation. (This should kick the teeth out of Requirement 4)
    • Limit the number of times a thing may be shared per owner per unit time.
    • Reduce the lending time.
    • Disable sharing, disabling the threat.
    • Use standard hunt-the-TOS violator techniques (not recommended.)
    • If it represents a small amount of the total sharing transactions, just ignore the external market. The kids don’t have credit cards. It isn’t hurting anyone. :-)

This appendix reinforces the main point of this article: The eBaying virtual items is not a necessary-evil of MMOG design.

2 Comments

The comment thread included here was recovered from the Internet Archive on August 1st, 2008 and is included here for completeness.

You say “There is no way to make a guaranteed delivery. This also discourages adults buying multiple accounts just to raid them for their daily thing grants.”

What is to stop the user from using more complex handshakes?

Imagine we have two accounts, GiftedA and DonatingA

1) Collect large list of items over a period on DonatingA to later be gifted to GiftedA.

2) On GiftedA pick 1 item (junk) and offer to trade it for the long list of items held in trust by DonatingA (and of course prior to listing this trade offer ensure there isn’t already an offer in the system matching this.)

3) quickly locate and accept the offer made by GiftedA (which then transfers the items.)

A similar handshake could be used for ebay transactions. It may be a slight discouragement, but I certainly don’t think it defeats this sort of trading (even by kids with their classmates.)

Posted by: Jeff Peil at October 15, 2004 04:03 PM

I think the Big Idea I take away from this is to consider the leverage a designer might get by supporting an anonymous barter exchange while blocking the ability for players to directly transfer objects from one character to another. This is something I’m definitely going to have to think about.

I do have some concerns about whether the basic scheme will actually work as described:

>They all wear out with use, so the kids learn to not abuse their things. This discourages antisocial hoarding behavior.

Is this true? Wouldn’t the fact that things get consumed with use *encourage* hoarding (e.g., I better store some of these so I have backups handy in case the main one gets used up). I have a close relative who has a pathological (real world) hoarding problem, and I see this sort of reasoning acted out all the time.

>The service is presently designed without a currency to discourage hoarding

Wouldn’t the absence of a currency again *encourage* hoarding? In the absence of a medium of exchange, other kinds of goods become de facto currencies and thus get hoarded in order to bank wealth. As a general principle, a fungible asset such as money reduces the need to hold a wide variety of objects because the holder of such an asset can afford to make fewer provisions for unknown future wants or needs.

The fact that customizers can modify things in ways that make them unique and interesting also has the effect of undermining liquidity since the variety of goods on offer is multiplied but the total quantity of goods offered is not. Such unique items could also serve as markers to facilitate transactions that were negotiated and paid externally (e.g., via eBay), albeit at the risk of interference by third parties while the goods pass through the marketplace.

>Each oldest, best trade with a particular set of terms (x for y) is the only one displayed for those terms (trades with duplicate trade terms are not displayed). This massively simplifies the display, removing duplicates and lower-value trades from consideration.

It is unclear to me what phrases like “best trade” or “lower-value” mean in this context. Since all trades are one for one and there is no currency, there would seem to be no basis for comparison of value. For similar reasons, the idea of injecting liquidity into the market by having the system engage in transactions seems problematic, as it is hard to see what grounds the system would use for determining what trading behavior it should engage in.

Good stuff, Randy!

Posted by: Chip at October 17, 2004 12:43 AM

Randy: “The conspirators are just as likely to give their subjectively good thing away for some other kid’s less good thing as to a fellow conspirator.”

Interesting. Am I correct in thinking that one party posts a trade on the market and others respond to that particular trade? If so, I was imagining a way to try to work around this limitation.

Party A offers to trade a “junk” item for a “good” item.

Party B takes Party A up on this trade.

To ensure that B’s good item goes to A, I presume A could choose to offer a trade which is distinct from all other trades available at the moment. If the two parties were keeping a close eye on the state of the market while communicating by telephone, IM, or similar technology, such a plan might enjoy high reliability.

I see this failing only if A created a nondistinct trade by mistake or if someone else coincidentally posted a similar trade at the same time. B could then respond to the wrong trade, giving up the “good” item. Now, if another party were to respond to the trade instead of B, then the pair of A and B are actually up by a good item in exchange for the poor item offered.

Perhaps I fail to understand some feature of the market which would undermine such attempts. Furthermore, I apologize if I have failed to notice a part of the discussion which addresses this issue.

——————–

Do all items eventually decay while in player possession, even if they remain unused? In that case, hoarding might be difficult indeed. Otherwise, one could probably try to hoard a class of items that do not decay unless used.

One probably could not corner the market, especially since one can hardly snap up a super hoardable item by offering one-to-one trades with other items. However, through a combination of some intrinsic appeal of a “cool” item and a social response to its apparent value, would players be more inclined to hoard the item and less inclined to use it? I don’t know. After all, the “coolness” of a usable item would presumably stem from being able to use it. Furthermore, this might not be considered a danger if one could use a manual or automatic economic intervention to restore a reasonable supply to circulation.

I think the prevention of currency by one-to-one trades may inhibit the motivation for an Ebay economy. This might be especially true if the game economy had some response to excessive hoarding of an item, but I don’t know whether such behaviour would be considered desirable. I’m less confident that one can prevent player-to-player trading within the proposed system, but prevention may not even be necessary if hoarding just isn’t practical or profitable.

Posted by: Wayne Grey at October 18, 2004 12:50 AM

I’ve updated the paper and added an appendix to address the primary threats outlined here and on TerraNova. Have a gander.

Randy

Posted by: Randy Farmer at October 20, 2004 01:15 AM

I’m puzzled by the one-to-one transactions. I’m interested to see how this would work.

Aren’t markets are an expression of value? One to one transactions don’t allow for that. The items will certainly have unequal value to the players and I can’t see the Trader’s Market being used very much except as a way to satisfy corresponding temporary valuations such as:

Player A wants to play GameX and needs ThingX for it.

Player B wants to play GameY and needs ThingY for it.

Player A and B exchange ThingX and ThingY. However unless games all have the same utlization of Things there is going to be a great deal of frustration where players are waiting for a Thing they want to play a certain game. New players get the most frustrated. Not a good design.

Why would anyone trade any newly added Thing? Once they have played with it then they might trade it – if it hasn’t already decayed. If the Thing can be combined then it will most likely never be traded and instead turned into a Unique.

Basically your economy comes down to a distributed sorting problem where you are trying to give each item to every player but you hand out the pieces randomly over time and let the players sort it out. You are assuming it will be fun for players to do the sorting themselves. I can see where this type of thinking could lead to fun cooperative gameplay but the current implementation fails by concentrating on anti-eBaying instead of the how to make every player satisfied through cooperation, trading, and sharing.

Mr. Castronova can probably correct me, but I thought that on a certain level economies are designed to distribute scarce goods efficiently. Making things into property that can be traded in a market and having a currency are just ways to improve the efficiency of the distribution. You can think of currency as a mechanism for “time-shifting” and “trade-shifting” bartered goods. So while all the constraints you’ve added may help prevent eBaying they actually just make the distribution of goods more difficult, frustrating and possibly less equal (although some pseudo-random distribution of Things could take care of that – for example – you don’t get copies of things you already have).

Imagine the game world rules shifted to the real world. The government hands out goods randomly to the populace who can then trade them between themselves. The items have varied valuations but can only be traded one-to-one. So while someone may end up with a sports car (even though they already have one) another might get a pair of glasses (even if they didn’t need them). People would riot in the streets – mainly because they would perceive the system as grossly inefficient and unfair. Having an accessible, gobal, electronic market place certainly helps, but it is reduction of transaction costs solution to a fundamentally systematic problem.

What I don’t understand is why no one approaches an anti-eBay approach by accepting the virtuality of the world. Virtual worlds do not suffer from scarcity in the same ways as physical goods and any attempt to create artificial scarcity can be gamed for financial gain. Virtual worlds suffer from the opposite effect – anything can be copied for practically no cost but it’s existence is a continual drain on the resources of the world.

Thus my advice would be to ditch the anti-eBay concept but keep the cooperative distributed sorting problem. Stop trying to create false scarcity and then preventing people from abusing it. That being said, I think it would be an interesting experiment – but perhaps better for an academic study or artwork.

Cheers,

Ryan

Posted by: Ryan Kelln at October 20, 2004 07:46 PM

Cross posted from TN:

Jim> It works for me, but we’ll see what holes Cory can kick in it.

This is great work Randy and significantly tougher to attack. However, I’d feel bad if I let Jim down, so let me try:

Appologies for mentioning this again, but solving the typist problem by deciding not to solve it still feels fishy to me. It would be pretty easy to have a site called “AuctionMyKidTradeKid.com” where accounts with desirable collectables can trade accounts with low friction. By eliminating every other option, the accounts themselves become the coin of the realm.

Now, on to bigger ones. The eBay sale threat:

Randy> What would a HotNewThing most likely trade for? A CruddyOldThing? Probably not as fast as for AnotherPopularThing.

This is exactly the vulernability of the market in the HotNewThing case, right? Given that you can combine stuff, it’s almost certain that you can combine them into pathetically bad combinations, which provide a signalling device for the buyer. Also, by colluding with the buyer using out of band communications, the seller can help to create the rarest possible bad thing for trade.

That approach defeats this problem:

Randy> Any attempt to formulate an offer will be fulfilled first and immediately with standing orders

This allows you break anonymity, right?

Randy> All orders are anonymous

* No one knows which offer will be fulfilled.

* No one knows the number of offers of a formulation that are pending.

* No one knows when an offer will be fulfilled.

* No one knows which offer is their own.

* When your order is fulfilled, you have no idea who you traded with.

The zero deals pending is the weak case. It allows you to know solve all of the above unknowns, because the seller and buyer control the timing of the offer. All of these fall apart if you can add in a unique offer that isn’t currently present. After all, if you could already trade crap for gold, you wouldn’t be on eBay in the first place.

Obviously, if the buyer already had something worth trading for the HotNewThing, she wouldn’t be on eBay, she’d be trading, so the fact that other HotNewThings are up for trade doesn’t actually seem to be a problem to sellers. They won’t collide by only placing items for sale for the crappy things.

So I don’t this statement is completely defensible:

Randy>The seller can not meet eBay Requirement 2, since there is no way to independently confirm the delivery was made to the appropriate party.

Plus, they’ll be on the phone, right? So confirmation is quite possible.

Also, I’m not sure that liquidity control defeats this. After all, if I’m the buyer and I offer my StinkyPileOfBadThings for a ShinyGlobOfCoolness and the eBay-ers, by offering to complete this deal, cause the system to create that deal, the buyer doesn’t care (she still has hers) and the eBay-er gets to sell another one.

Unfortunately, you have a comment later on the page that might be more powerful than all of the other defenses. Since it contradicts the previous “What would a HotNewThing most likely trade for?” line, I want to dig into it a bit.

Now, I think that what this line is saying . . .

Randy> There won�t even be a junk thing for eBay-traders to use for placeholder currency as the largest number of outstanding offers for each widely most-valued object will be in exchange for CruddyOldThings

. . . is that people will just alway offer their junk for everything cool. If every offer is always in place within the trading market, that certainly defeats my attack, however, I wonder if this is realistic or fun? If everything is always listed, the search mechanism will be flooded by the combinatorial explosion — not of A for B but for the many different A’s and B’s that your system allows players to make. Also, it may be frustrating to never be able to put up the interesting, new offer that wasn’t in the market before. However, much like Jim’s “anonymous loaning”, if you’re willing to accept the downsides of the choice then this pretty much kills the exploit.

The Blockbuster attack:

I agree with Jim and Randy that you could break lending in order to save it. However, making it so that you either a) get less fun from sharing (the anonymous market) or b) strongly limit it (share only once) actually applies more pressure to the eBay market attacks above.

The friction argument does depend on how cool the “cool things” are, although I would contend that if they aren’t cool enough to make kids throw temper tantrums if they don’t get them, then this whole discussion is moot anyway, right?

Also, the complexity of your design also incents both the blockbuster and collusion attacks, since the power gamers are likely to find the best combinations before other folks do.

So, the flooded market and broken sharing block my exploits, but I’m not sure that the cure isn’t worse than the desease for both of those options.

Posted by: Cory Ondrejka at October 20, 2004 09:53 PM

What a great article. It’s very interesting to think about how one might disrupt the presumed-to-be-inevitable nature of ending up with an e-bay marketplace where real-life money is traded for virtaul things and prestige.

In reading through the text, appendix and follow up comments I had some ideas that might possibly strengthen the “non-e-bay-ness” of the economy. I’ll be posting them to my personal blog, along with a track back, later today (http://strawberryjamm.blogspot.com/) I’d love to know if you think they’d help, hinder, or have a neutral effect.

Posted by: Jenni Merrifield at October 23, 2004 10:32 AM

This is my last set of responses on this paper for a few weeks, as I am headed to New York for the State of Play conference and a long-overdue vacation.

I continue to be impressed with the feedback on TerraNova and Habitat Chronicles to this paper. It has been unexpectedly popular and is already cross-linked on the web more than 100 blogs and pages. I guess I touched the nerve I’d hoped to. :-)

Cory [TN]>The zero deals pending is the weak case. It allows you to know solve all of the above unknowns, because the seller and buyer control the timing of the offer. All of these fall apart if you can add in a unique offer that isn’t currently present.

The minimum liquidity requirement prevents knowing when there are zero-deals. A formulation is not displayed on the market, or available for fulfillment until it reaches minimum liquidity.

bruce boston [TN]>No reason the system couldn’t include code that gives the ‘House’ first right of refusal on any trade offer.

After preparing the appendix, I’m not sure if this market-maker is required. Let’s keep this idea as an optional mitigation technique, and use it only if needed.

There was a lot of discussion about how a market-maker can complicate things, which I won’t respond to, since I don’t think that feature is required.

magicback [TN]>”Randy what’s your system for being a perfect market maker in providing liquidity? … I’m just trying to understand the method of maintaining perfect faucet-drain, item-distribution, one-to-one trading economy.”

Perfect? No one but a fool claims perfection. Is perfection required?

The design describes the functions you ask for in some detail: Items are randomly distributed so that the total number of instances of each type is relatively equal. The drains are combination and wear-and-tear.

Cory [TN]>…[A] buyer has paid money to get what she wanted. She doesn’t care if the item came from the house or the seller (and if the system doesn’t tell you, the you have no way of knowing).

This “who-cares-who-delivers scenario” is a non-starter. See the appendix for detailed rationale, but I’ll summarize again here: Since neither party can, nor is can be compelled to, guarantee/confirm delivery there are way too many avenues for real-$ scams to support this market.

There are at least two big problems with this scenarios: First – The supposed-seller never even has to put an item in the traders market – he simply guesses that a trade will be fulfilled in a reasonable window and lists that on Ebay gambling that the market will do the work for him. Second – The buyer, even if they receive an item can claim that they didn’t, ruining the eBay reputation of a seller for spite. No one will eBay under conditions like these.

There’s no eBay market if you cant verify delivery at both ends.

magicback [TN]>are open, unfulfilled orders like stock trading limit orders? The item is placed in a virtual warehouse where the decay timer is suspended? Do you plan on adding a mechanism that fulfill kid’s order that have been open too long?

In the design: Banked items do not decay. I have not considered forcing liquidity after a fixed amount of time. That sounds interesting and might increase the number of banked items.

Richard Bartle [TN]>I have X, I want Y, so I go to this black box and insert X. Later, out pops Y. The black box can be a trading system or a simple replicator. What’s it to me either way? I no longer have X, I have Y instead, I’m satisfied. What purpose does requiring that the Y come from another person have? Why can’t I just remodel my X into Y (well, get the software to destroy X and create Y instead)? It costs nothing, it hurts no-one and it gives me what I want.

The machine you describe (I’ll call it the transform-o-matic) could also be the Stock Market: I put in Y dollars bid for X-shares-of-FOO, and eventually X-shares-of-FOO pop out (or I get impatient and decide to bid those Y$ elsewhere.)

The difference between the market and a transform-o-matic machine is the method for determining fulfillment. The Trader’s Market will only fulfill trades that it can. Presumably, the transform-o-matic would do it reliably. I consider those scenarios a significantly different.

Ola Fosheim Gr�stad chimes in> It is also fun to look at trends and finally get that uber-cool item that almost nobody wants to trade. Believing that you are trading on a market is more fun than interacting with a vending machine even if the outcome is the same.

Jeff Cole>Having thought bout it off and on, I think Randy’s approach to ‘subjectively’ value items and restrict 1:1 trading is wrong.

That may well be true, at least for adults. But, I’m interested in the rationale for this statement.

Jeff Cole>How about … more objectively to value items in the game currency… through auctions globally seachable … minimum time period (e.g. three days), … [allow] “loan” [of] items for a period …Ultimately, to solve the e-Bay problem and maintain a game economy, it’s less about whether the value is subjective or objective…

This is an interesting model and exactly the sort of thinking I was hoping to encourage in the community. I’d love to see it fleshed out.

bruce boston [TN]>Cory> If the liquidity maker causes users to not get trades fulfilled, then you’re going to have pissed off players in general, right?

>Kids? Oh yeah…

>Personally, I think, in general, the main reason eBay markets formulate is because some markets lack liquidity.

Umm. Kids don’t seem to be pissed that they can’t trade in ToonTown.

Are we arguing both sides of the coin here? It looks like people are trying to back into a statement that an eBay external market is required to keep the customers happy: Kids will be pissed if they can’t use eBay to deal with low liquidity. I don’t buy it for a minute.

>To this point, I think the biggest question that Kids will have is, “How do I get X?” if market penetration is at 40%, even if you have a very good trading system with high liquidity, you still only have 40% market penetration and the kids at 41%-99% will all be bummed…

Dude! You just shot down every MMOG in existence (including ToonTown): It is interesting to consider how long the wait is in the standard MMOG to get that really cool no-drop rare-spawn item.

As for KidTrade – it is an trade economy design ripped out of it’s game design, where most of the issues you commented on are addressed (and I’m not at liberty to disclose.) I will ask you to consider whether 100% penetration is really in the best interests of any game or the goal of a kids game.

>Unfortunately, I think the design may actually encourage hording of [perceived more valuable] items.

The number of things a user owns is exactly their membership-period times the drop-rate minus consumption/composition and decay. How much hording can you really do? Decay tends to push items into the market if they aren’t being used. This is a time-value tradeoff.

>without … currency, and with trades being limited to 1:1, I think we’ll see a fair lack of liquidity, and a fairly low velocity in trading high-end items.

I’d love to find out if this is true.

Estariel proposes an alternative AI-driven market [TN]>

>o removal of player-to-player gifts of money/items

>o inclusion of an anonymous bazaar, which only allows money-for-item and item-for-money trades (no item to item trades)

>o introduction of AI-driven “market-makers” who will buy low and sell high for every item; the limit prices to be continually adjusted to reflect current value as documented by executed trades.

Another taker! It’s working!

Please consider writing this design up in detail and publishing it so that TerraNova picks it up and you’ll get lots of feedback. :-)

Paul “Phinehas” Schwanz [TN]>Perhaps I’m just not understanding the way that decay works, but I can’t figure out how you can have 1:1 trading values if one item can be at 90% while the other is at 10% … I suppose that you could just have every item that goes onto the market get reset to 100% durability, but I’d think that would give you problems with your sink.

Yep. The design acknowledges that decay interacts with the market. There are several solutions, including a modified version of the one you propose: Things may not be traded unless they are in new or good condition, and reset to new when traded. Another option is to require objects to be in new condition and make repair consumables able to restore an item to new condition.

Richard [TN]>If resource-gathering is the game, but you can’t affect the gathering of resources, where’s the game?

Resource-gathering isn’t the primary point of the game at all, just a means to optimize some of the game’s ends. How is this any different than a MMOG?

Ryan Kelln [HC}>Basically your economy comes down to a distributed sorting problem where you are trying to give each item to every player but you hand out the pieces randomly over time and let the players sort it out.

The full game was not described, only the trading economy. It is not at all true that every kid needs every item. Perhaps everyone is thinking that items are given out stingily. This thinking is a hold over from other MMOGs. If critical item liquidity is a significant problem, the faucet production rate can be increased. Closed account items can be reaped, etc.

>So while all the constraints you've added may help prevent eBaying they actually just make the distribution of goods more difficult, frustrating and possibly less equal.

Compared to what? Rare-spawns? Level-based-distribution of opportunity? I'd love to compare this system, up and running, to any MMOG for equal distribution of goods.

>Imagine the game world rules shifted to the real world.

Why on earth would I do that? :-)

>Stop trying to create false scarcity and then preventing people from abusing it.

False scarcity??? Dude. No scarcity. Constantly increasing equalized supply is NOT scarcity.

>That being said, I think it would be an interesting experiment...

Me too.

Cory [HC]> Given that you can combine stuff, it’s almost certain that you can combine them into pathetically bad combinations, which provide a signalling device for the buyer.

Combined items can not be traded, per 1.1.

>The Blockbuster attack:

>So, the flooded market and broken sharing block my exploits, but I’m not sure that the cure isn’t worse than the disease for both of those options.

This is why I listed the mitigation strategies separately. I want to implement the minimum limits. There is only so far such a radical design can go without implementing and testing.

So, that’s it. I’ve produced 15 pages of design and more than 15 pages of argumentation rebuttal. This has been an incredibly successful exchange, far surpassing my goals to engage the developer community, even if KidTrade never gets turned into code.

Posted by: Randy Farmer at October 23, 2004 05:14 PM

Randy: Just in case you actually tried to take a look at my blog earlier, I wanted to let you know I finally got my comments up (took me longer to get up than I’d expected)

Posted by: Jenni Merrifield at October 24, 2004 04:30 AM

Basically my argument is the same as Richard Bartle’s. You seem to want a system for transmuting one item to another – why make it a player driven market? If the point of the items are to enhance the mini-games or provide or customize “collectables” then I would make this comparison:

You are asking the kids to paint a picture but giving out the paints randomly and forcing them to trade for the colors they want to paint with. It costs nothing to give every child all the paints why restrict it? The nice thing about digital painting software is that you can have any color you want. This is the “treadmill” issue all over again. Perhaps the game requires that sort of withholding of content to motivate gameplay.

I’m not saying that you couldn’t make some sort of restricted ownership or collaborative trading entertaining, but that suggests to me something like this:

Every kid has an aquarium that can only support so much life. The kids trade and breed the things living in their aquarium to try and preserve diversity and personalize their aquarium.

It is not at all true that every kid needs every item.

Yes, from your description Things are not needed, only desired. To generalize though, every player will want at least one copy of every item if each item adds in some unique way to the game experience. Only lesser versions of redundant items (such as Sword +1, Sword +2, Sword +3) will not be desirable.

Side note:

If the majority of the items are redundant then you will get an economy that is mainly about finding the way to “trade up” – what series of trades will get you from Sword +1 to Sword +3. In that sort of serial “trading-up” game you would want the players to be “middle-men” where the gameplay involves making the right deals (in real life often involving traveling, shmoozing, having the best contacts/info, etc). The highly automated global market you suggest replaces much of that – you want to focus on replacing the parts that make a bad game and keeping the parts that make a good game. Be careful that eBay-proofing doesn’t remove the parts that make a good game.

Item “decay” and breadth of content will mean that players may have a rotating inventory which I think will help make trading work in your proposed system. What causes decay, changes the rate and how it is handled in trades will be critical to making the system successful. It is possible to make decay into a mini-game itself rather than “use something enough and it breaks” – at the expense of “realism”.

False scarcity??? Dude. No scarcity. Constantly increasing equalized supply is NOT scarcity.

I’m not totally sure what “constantly increasing equalized supply” means. If that means that there are enough items for players to trade for what they want at all times immediately then why have trading? If it means that sometimes they will not be able to get what they want then you have some level scarcity. If the idea is that you want players to try to figure out a small number of sequential one-for-one trades to go from ThingA to ThingB to ThingC, using a player driven market seems unnecessarily complex and uncontrolled. The same challenge could be easily generated by NPC merchants with the guarantee that there would always be a sequence of trades A through to X.

At a more basic level, since players cannot freely copy each others items, even though it is feasible and easy to do so, you have created scarcity. Since players cannot instantiate any item they want, even though that is also feasible, you have created scarcity. Yes, I realize other MMOGs rely on similar unneccessary restrictions of virtual goods often in a much more frustrating and unenjoyable manner.

I’m just pointing out that if you want to eBay-proof your game the simplest way is to acknowledge that the true costs of (creating, copying, etc) virtual goods are so low that even the low transaction costs of eBay are much higher. Only if you artificially inflate the costs (through imposing a scarcity model) will people eBay.

Sorry to go so far offtopic, my comments are more about the underlying design and not this particular implementations abiltity to prevent eBaying. For me the solution is increased freedom (to copy and distribute virtual items) not further restrictions.

Cheers,

Ryan

Posted by: Ryan Kelln at October 25, 2004 12:54 AM

How much effort would a test-drive require? I don’t know a thing about programming; would it be reasonable to make a web-page-based mockup? Maybe a quick and dirty wiki adaptation? We could fiddle with the coolness factor and see if the mockup reveals any emergent behavior.

Posted by: Nick Douglas at October 28, 2004 01:00 PM

“if you want to eBay-proof your game the simplest way is to acknowledge that the true costs of (creating, copying, etc) virtual goods are so low that even the low transaction costs of eBay are much higher. “

The problem with that is, that you make the transactions worthless in game. The only way to make the item’s cost less is to have someway to bypass the time factor. Lets say you had one of these big companys sell there own currency, they would have to undercut to compete with the other virtual seller companys. To do this it makes the currency worthless. If they raise the price’s of the things you buy with that currency, then you are back to the original problem, just with differnt numbers.

Even with NeoPets you could have multiple accounts to gain neopoints. Thus it wouldn’t be hard to run several accounts, and transfer all the money to one charicter. The limitation of time played would have to be universal, which even in theory couldn’t work. There is no way that could stop someone from playing on more then one account. So it’s back to time.

If the aspect of time didn’t exist, then these companys wouldn’t exist. All games are based on time and the model of working for something gains a reward. Even if you play “Pong” it still takes X amount of time to hit the ball. The players just don’t want to play pong for the first few levels. If you take away levels from the game, then you they don’t want to hit the ball back and forth for the first ten times. If you take away the first ten times, Pong doesn’t exist.

The only avenue and the last avenue that i could see changing the sales of items, especially on ebay, is to have the same rewards, but to make the design on the game to be based on skill rather then luck and time. The problem with that, is that then the game itself becomes unbalanced. The best skill not only rules the playingfield, but rules the items and economy. At that point, then you just change the suppliers to the people with the most skill instead of time.

Posted by: Lazlow at December 17, 2004 02:36 PM

Interesting in principle. I’m still not convinced that any game can make itself immune from commerce yet remain fun at the same time. As long as individual players can have non-uniform numbers of “assets” there will always be a market for trading those assets. In this case, it sounds like non-uniformity would occur due to the different amounts of time people spend in the game (I get more items the more time I spend, am I right?), or because I manage to smartly arbitrage “crossed trades” – those exchanges that sell things above or below market rates (or perhaps I’ve misunderstood the trading mechanism). In fact, I’d go one step further and suggest that because you’re tried to build “equality” into this system, any non-uniformity within it is actually _more_ valuable and desirable. That is, if the average person (say this is 98% of people) amasses 10 things , if I manage to acquire 20 things then perhaps my account is not worth twice as much but maybe 10x or 100x as much as average. To exploit the commercial value of this account, all I have to do is auction it to the highest bidder and hand it over to someone else. While certainly you can make real life conversion/trade more difficult, it’s nearly impossible to eliminate it completely. And just like any black market, when you do, the trades that actually do take place will probably drive up the value.

Posted by: Alan Majer at January 27, 2005 01:55 PM

In your notes, you wrote:

“The most primitive form of MMOG item trading was in the original Lucasfilm�s Habitat, in which Avatars gave objects to each other by dropping them on the ground at their feet and walking to the other party�s objects and picking it them up.”

Very early forms of item trading were in the PLATO system’s game Mines Of Moria, in 1980 or earlier. I definitely remember muling and twinking in that game. I don’t recall if the earlier versions of SpaSim also had trading, though Jim Bowery, it’s author, could tell you. Perhaps these would not be classified as MMOG games because they only allowed a few dozen players at once.

Posted by: Mike Huben at January 30, 2005 05:08 AM

Your design for an eBay-immune (resistant) market may work for your specific case, a kid’s game. For any kind of larger game you’ll need more open trading systems. At the very basic level, any normal MMORPG where Player A can’t give player B item X will suffer from it at least as much as it gains from resisting eBay. Trading DOES serve an important function, and is social too. Say I play with two other players – why should I not give them healing potions I have and do not need if it increases the survivability of the group?

You cannot prevent outside sale of in-game items without crippling your game, period. You can just try to reduce the worst consequences (in-game spam and the like).

Posted by: Nils at March 6, 2007 02:11 PM

Given the trouble you intend to go to to preserve anonymity.

And the mention of modifying the user market in the future anyway.

My question is why bother with the “real” market at all?

Just fake it, thats probably where its going to end up anyhow, right?

At which point you have just removed trade…

:)

The lending thing sounds like a much better primary solution to focus on anyway.

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