NEWSFLASH: All Econ Doomsayers Read

This is the reason LL needs to make these changes... Here is a perfect example elsewhere of what could happen to SL if Hiro and his Bandwagon of Protesters win this debate.


Inflation threatens EverQuest economy
http://news.bbc.co.uk/2/hi/technology/2345933.stm


The EverQuest economy is under attack

Real life and online fantasy worlds have at least one thing in common: economics.
The company behind the online fantasy game EverQuest has started punishing players who have found a way to bend the game's rules and almost literally make money.

The crackdown has happened because the huge amounts of virtual cash that people were pumping into the game world were threatening to bring the EverQuest economy to its knees.

If left unchecked the influx of cash could have prompted hyperinflation and made it impossible for beginning players to get on in the game world.

Cash pile

In most respects EverQuest is utterly unlike real life as it features warriors, spell-slinging sorcerors and magical beasts of every hue, temperament and size.

But like the real world many of the characters that inhabit the world pursue a profession at the same time as they venture out on heroic quests looking for riches, artefacts or monsters.

As the characters get better at their chosen profession, be it tailor, blacksmith or jeweller, they become capable of creating ever more intricate and powerful items that can be used or sold in the game world.

Typically the time needed by a player to substantially improve the professional expertise of their EverQuest character and to make these powerful items is so great, that it causes little problem in the markets of the game world.

But some people have discovered a very easy way to carry out these time-consuming tasks, and in the process, unbalance the EverQuest economy.


Use real money to buy fantasy cash

In EverQuest, as in many other programs it is possible to automate common or repetitive tasks using a small program called a macro.

In Microsoft's popular Word program many people create their own macros to search through documents and correct spelling mistakes or to add addresses to letters.

But some EverQuest players found a combination of profession, skill level and macro that turns small cash piles into slightly larger ones.

By running the macro countless times they found it was possible to generate large amounts of money.

Some people even set up computers that did nothing but run the macro time and time again.

Once a player created a large pile of cash they then sold it for real money on the many auction boards and marketplaces, such as PlayerAuctions, that have sprung up.

Recent estimates put the amount of platinum pieces available to buy on just one EverQuest server at more than 3million.

The exchange rate of game money to real money is not very good, 100,000 platinum pieces sells for about $350, but it was enough to tempt many people to try it.

Now Verant, the company behind EverQuest, has started cracking down on people that use the money-making macro and is suspending accounts and confiscating items from people it catches exploiting the loophole.

Alby, for the last time, no one's denying inflation isn't problem.

But much like Iraq, there's a right way and a wrong way to do things.

Giving 2 days notice on a major change in the economy without public discussion is NOT the right way.

But instead of killing monsters, in SL you collect Stipends. The same issue is true.. too much money is pumping in and not enough is pumping out. Causing Inflation..

Public Discussion? Jezzz... And if the public can't comprehend the economic issues and decide they are against it? Just leave everything as-is and do nothing about it?

Which, for the final time + 1, no one is denying

But, AGAIN, there's a right way to handle it and a wrong way.

So you're saying the public is stupid? That's awfully arrogant of you, Alby.

Considering the town hall meetings I've attended in the past and the platitude of posts I've read here, there are a lot of intelligent SLrs who will have a lot of valid questions and ideas that should be aired before a major economic change to SL is made.

Some times the right way is the quick way. The right way for a cop to defend against an attacker is shooting them cold. Not asking 20 times for the attacker to put their hands up.

Talk, Talk, Talk.... Thats all hippies wanna do.. Time for Action. Do, Do, Do.... You don't ask a heart attack victim where it hurts. You administer CPR and jolt them with a shock.

that was a beauty!

Oh for Christ's sake.

I think you should have learned from your idol Alan Greenspan that economic changes have to be careful and gradual. This patch seems to be neither.

Ohh brother... Yak, Yak, Yak. Talk is cheap and Action is money in the bank. SL adds about L$3.5/million + per week into SL. Talking and hammer out valid questions and wasting time on how to do what everybody knows needs to be done only makes the problem worse and the cure take longer to work.

Act first, discuss second.

Thats very true.. But LL never listened to me and never made gradual changes overtime. Now somebody's econ report forecasted doom and gloom and LL is moving heaven and earth to avert distruction... Just like Greenspan would do in time of emergency.

Except that your examples are completely unrelated. See, we don't have a loaded gun pointed at the system, and we don't ave a heart attack putting things in immediate risk of falling apart in the next week if something isn't taken care of Wednesday.

So, to take your own examples...
The cop just shot somebody who was saying "I'm really upset you gave me this ticket" because that person will probably attack them 20 minutes from now if the situation doesn't get fixed.

And... "The doctor says that my heart is starting to have some congestion, and I'll be having a major heart attack in two years if I don't do something about it." Your response: "OMG!!! CPR!! SHOCK SHOCK!!!"

There is no immediate danger warranting drastic action that you have advocated.

Yea and thats why you end up with all the crap thats going on in RL.

You areseriously fucked in the head...i sooo dont want to say this, but with the way you keep shooting your mouth off with the hippe slang, STFU.

Thank you and carry on

Think before you act.

Alby -

I'm not totally settled on whether the LL actions are the "best" way to handle this; but I do agree that controls must be in place.

I think the biggest argument you can make, though, is that dropping the amount of money in people's pockets will force Vendors & Land-Owners to lower their prices.

THAT is what many of these protestors are not realizing. SL is NOT like any other MMORPG where the "vendors" are AI and prices are fixed. The players set the prices. If people still want to sell a decent amount of goods & services, their prices are going to have to come down some.

Now, those people may say "but if I lower my prices, I'll be making less money!" - and they're right, in terms of absolute dollars. HOWEVER, since prices will be coming down, your earned dollars will end up buying more things, per L$1. Its all about RELATIVE VALUES - just like in RL $10 will buy more groceries in Iowa than it will in downtown LA/NY.

This is indisputably a tricky and rocky-road for LL to have to travel, in terms of customer-service; but they HAVE to do it, somehow. Their goal is not to get more USD$ from the GOM (hell, the GOM is buying and selling from other players, remember?). I mean, think about it: 1 person's $10.00/month fee adds up to $120/year. That equates to around L$30,000. Its a heck of a lot easier to get 100 users to pay subscription fees than it is to try to sell Millions and millions of L$ to a smaller and smaller group of users.


Also, have they claimed that base stipends will be cut in half, or only bonuses from ratings and such?

Lastly, the event-payouts are nice, sure... But this is one area where SL is totally backwards from RL, economically. In RL, you PAY a Host/Location to have an event - as compensation for their time and efforts. In return, you are entertained and have social/emotional experiences that are worth something to you. Right now, in SL, people go to events to Make Money!

If SL is truly a place for people to have interesting experiences online, people need to start going to events for the experiences, not the cash. It will be a "weaning" process; but you can only get a free lunch for so long. The longer you wait and the bigger the user-base, the more momentum & psychological patterns you have to shift. I know - at WON.net we tried to give away our Multiplayer Networking API for a few years, in order to build up a clientelle base that would become paying customers later on. Sadly, our sister company, Sierra (and some external clients), got so used to "having" our stuff for free that trying to get them to pay for later versions was impossible!

The biggest thing is to remember that LL is trying to build a sustainable product. This is not some "get rich quick" scheme on their part - or an attempt to cheat players in any way. I hope once people get past their knee-jerk reactions and "entitlement" emotions, they'll remember this and give LL a chance before condemning them.

Take care,

--Noel "HB" Wade
(Tread Whiplash)

There's no indication that LL had an econ report that forecasted doom.

And even if it did, Greenspan would NEVER admit it - fear would drop market prices. So, Greenspan would still act gradually.

The US economy has been described as steering a giant oil transport ship - very subtle changes in steering cause huge course corrections that take a long time to occur.

We all know that there is a change needed to some things in SL - particularly economy issues. But, with THESE changes, it seems that the Lindens are content to watch the rich get richer and the poor get poorer.

I have a lot of friends in SL who are planning on tiering down as of tomorrow - whether it means releasing the land (hey, that works for the Lindens, right? lol) or selling it for a pittance - in either case they are tiering down FAST. So, there goes some of your REAL WORLD income, LL, b/c if they tier down... they pay less to you per month.

Of course, if you turn around and change your minds about this, LL, AFTER the fact, then they were just screwed out of land, but hey, again, that's good for you guys, right?

I'm a relatively new player ... I don't sell items, I don't script, I don't do a lot of things in SL (yet, but someday I may - well, that is if I choose to stick around) but I can and did host events to earn some extra money. Oh well, there went that! So, I guess maybe I just have to deal with my stipend... oh wait. You're yanking that out from under my feet, too. I'm NEW and don't have many ratings to begin with - but now it costs me an arm and a leg to rate .. but if I do it, it only helps me a tiny tiny amount now. Makes perfect sense there.

So help along the people that already know the ropes and are already well-established, but screw the rest of us. Screw those of us who aren't great designers or scripters. Wow. Nice of you - and to give us so much warning about it, too!

I am not stupid, trust me, I understand that a game with an econonmy needs to find a balance. I watched prices for items in Lineage II soar b/c you could buy (even if it was against TOS) currency on IGE and so there was too much money in the market, and the "salesmen" knew it, and knew they could overcharge. My concern is that the rich getting richer and the poor getting poorer isn't exactly a balance that is going to stabalize the economy in the way you want.

And to the person that brought up the point about stipends being lower should lower prices, all I can say is: I wouldn't count on it. Lots of people in the real world exist below the poverty line - their income is small, but the cost of a t-shirt is still $10-$15. Why? Because the people who sell those t-shirts know that even if the poor are out there and would love to own that really great t-shirt, they, the manufacturer of said shirt will still be ok - b/c the wealthy will still buy it, even if the poor can't afford it.

---Edited to add:---
I just want to reiterate that yes, I feel a change is in order, and I understand that the current economic situation in SL needs to be taken care of. I understand all of this, and would really rather not see SL go under because of an instable economy. I only wish to point out that from the perspective of a player who does not design clothes or script for extra income, this is a huge, difficult pill to swallow.

let's remember, land prices are tied directly to the USD.

if L$ goes up, land prices in L$ go down. and vice versa. land value doesn't move a lot against the USD unless there is a shift in the supply and demand for land.

this is the model i use to conduct my business.

Excellent post.

Tory boy trolling is getting very boring - please put a sock in it.

Of course - if the police shot an attacker here they would probably go to prison - and quite rightly so as it would be murder. We don't have your wild west armed police, and we don't want your wild west economics.

You make a decent point - but there's one MAJOR difference in your "T-Shirt" example, Nikki.

In the Real World, there are supply chains, labor costs, and Materials costs. Many of these have strict lower limits.

If the manufacturers could still make a PROFIT while selling another 2 million T-Shirts to all the homeless bums in the USA, they WOULD!

More business is always better, as long as its profitable - that's the American Way (ugly or not).

In SL, the only "costs" of doing business are your labor (in the form of time spent developing the initial object - like R&D costs in the real world). But manufacturing costs & labor costs are nil.

Therefore, even selling items for L$2 - L$5 can be profitable for savvy business-people in SL. The "poverty level" is much much much lower, too - since in SL you don't really NEED food, clothing, or shelter.

Let's face it - one of the oddities of the SL economy is that its almost ENTIRELY a "luxury commodities" market!

I for one am a little trepidatious about all of the changes being implemented here in rapid-fire fashion by LL..... BUT, the silver lining here is that hopefully people with more time and a little less money will be encouraged to do more exploring, crafting, and focus on social & creative experiences - more than simply shopping & collecting tons of clothes.

Take care,

--Noel "HB" Wade
(Tread Whiplash)

You must be from a Blue State..

I guess that's a positive as it's nearly 2 US Dollars to the Pound now. The weak dollar may make it cheaper for us! ha ha ha

You're just racking up the "report bad posts" tonight, Alby.

Ohh , I'm sure that happens to me every night Lianne.. Conservative Republicans aren't welcomed in Second Life. The Liberals do everything they can to ruin me.. hehehehe