View Full Version : D3 Economics 101
Should D3 have a "banking" system? All the talk about a currency, yet would it not be viable to also have a bank to hold that currency? Should this be included? Wouldn't a banking system also do away with certain fake gold sites (hmm, maybe a plus here)? All the talk of D3 economy and currency, yet wouldn't it be just as equally important to have a bank for the currency?
Discuss please.
touchy subject. The reason there is not a simple yes or no answer is because a huge component in the diablo franchise is trading items for items.
For a currency to work it has to be valuable in so many different ways. people will have to WANT to have it over the best items in the game. You cant just invent a bank and currency and expect people to use it when that currency has no value at all.
If blizzard can pull it off, it would be impressive
JonoLith
11-06-2009, 20:01
Should D3 have a "banking" system? All the talk about a currency, yet would it not be viable to also have a bank to hold that currency? Should this be included? Wouldn't a banking system also do away with certain fake gold sites (hmm, maybe a plus here)? All the talk of D3 economy and currency, yet wouldn't it be just as equally important to have a bank for the currency?
Discuss please.
I'm not sure I understand what you mean by "Banking System". Do you mean a place where people can store gold? If so, then that is just a stash isn't it?
Perhaps I'm missing something.
Starving_Poet
11-06-2009, 20:13
When you say a banking system, I hear:
"A system in which lenders can increase or decrease the size of the monetary supply through the process of lending money in accordance with the money multiplier."
A banks ONLY purpose is to lend money. I don't see why we would need to introduce fiat loans for a fiat currency for a fiat economy in a fiat world.
stillman
11-06-2009, 20:24
touchy subject. The reason there is not a simple yes or no answer is because a huge component in the diablo franchise is trading items for items.
For a currency to work it has to be valuable in so many different ways. people will have to WANT to have it over the best items in the game. You cant just invent a bank and currency and expect people to use it when that currency has no value at all.
If blizzard can pull it off, it would be impressive
I think they could do things like make def on armor go up with gold spent on it according to an exponential equaltion. It would cost ridiculous amounts of gold to get that one more little def point on your end game armor. But we all know people would do it. People would want to have the highest def number on their armor to show off.
So I figgure if they put in enough features where infinite gold can be spent, then a bank would work.
CCCenturion
11-06-2009, 20:47
I think they could do things like make def on armor go up with gold spent on it according to an exponential equaltion. It would cost ridiculous amounts of gold to get that one more little def point on your end game armor. But we all know people would do it. People would want to have the highest def number on their armor to show off.
So I figgure if they put in enough features where infinite gold can be spent, then a bank would work.
I think that's a great idea for how to give the currency some intrinsic value, but I still don't understand the need for a lending institution like bank, nor do I think it would work. But you do have a good idea for how to make the currency valuable.
The problem with gold in D2 is that there was never anything to spend it on. Sure, you need to stock up on potions and scrolls, and repair your weapons and armor and revive your merc, but that's it. There was never any reason to carry large sums of gold in your stash. The only items vendors ever sell that has any value are the Echoing weapons, or maybe a wand with charges of Life Tap or Lower Resist. The reason that runes have become the de facto currency in D2 today is that runes do have an intrinsic value within the game. Simply put, you can't build a godly character without using lots of runes.
So, the idea of being able to use gold to increase the stats or mods on your equipment (or hey, perhaps even be able to buy stuff that people want to use) is a surefire way to get people to want to keep it and trade with it.
Now a bank, on the other hand, wouldn't work in a game like this because there's no way to enforce people to repay their loans. There's nothing to stop you from building a new character, taking out a huge loan, and then just creating a new character (on a new account, if need be) and never repaying that loan.
What exactly did you have in mind with creating a D3 "bank", anyway?
So far so good. I think the whole aspect of "lending" is a concept we should just throw out completely.
But, another role of a bank for consumers is a central "safe" location to store currency. One reason gold in D2 was worthless was because it was easy to obtain, but also limited on what you could store.
Now I mention a certain fake gold site, that does have I will admit an interesting concept. Value is located in your account, not tied to a specific character. Thus, one character can find items to sell for currency held in a "bank", so to speak, while another character can withdraw to purchase an item. Currency can also be transfered in to different accounts.
CCCenturion
11-06-2009, 22:31
The problem with the fake gold (let's just shorten it to "fg" ;) ) site is that it's not directly tied to the game, making it a golden opportunity for scammers. (EDIT: awful pun not intended.)
I agree that it's an interesting concept, and it would be feasible to implement it in the game by
1: making gold valuable by either selling usable items at vendors, or including the possibility of using it to upgrade your equipment
2: allowing for a shared stash, so you can transfer items or gold between characters you own without needing to open a mule game
3: including some sort of safe method of doing trades without having to meet the person face-to-face, sort of like a mule trade but with a fraud prevention mechanism.
Chinese farmers will surely crash D3 market. The game will be so simple, it's like made for chinese gold farming bots.
I could be wrong tho
One way to prevent the farming would be to introduce some puzzle system to random locked doors in the dungeons that computers couldn't understand and memory wouldn't help to solve it.
Bind on pickup is a good way too.
Good way to give currency value is to require some of it for every manufacture, production, enchanting, socketing task there is. Thats like saying the worlds NPC:s are accepting it as a currency. Another way is to allow players to trade currency directly for a thing which value will never drop, like magic repair hammers. You allways get hit and die but manufactured items relative value may change when they add new dungeons and drops.
Chinese farmers will surely crash D3 market. The game will be so simple, it's like made for chinese gold farming bots.
I could be wrong tho
One way to prevent the farming would be to introduce some puzzle system to random locked doors in the dungeons that computers couldn't understand and memory wouldn't help to solve it.
Bind on pickup is a good way too.
Good way to give currency value is to require some of it for every manufacture, production, enchanting, socketing task there is. Thats like saying the worlds NPC:s are accepting it as a currency. Another way is to allow players to trade currency directly for a thing which value will never drop, like magic repair hammers. You allways get hit and die but manufactured items relative value may change when they add new dungeons and drops.
Technically we already have bots that farm for items. But I wanted to mention that a currency need not be necessarily something like gold that is easily found in game. You could have an ingame currency that simply exists within your account/s. For example, selling an item you could chose either/or the currency or gold as payment. But the point of a currency is to be able to transfer to another player for an item, to which they can use this currency to purchase an item of their choice. When you think about it, we have already had that in the form of SOJs and now HRs. Not really an ideal currency I would say.
Therefore having a banking system that uses a 'currency' to store and transfer would be similar to "fg", enough so that sites using "fg" need no longer exist.
Here is one idea. Say I have several items I sell to an NPC, and instead of receiving 10k in gold, I chose 200 in the currency, let's call them credits for now. I take those credits and deposit to the bank. A little while later here I see someone has an item I want, and they ask 100 credits. I meet in game, in item transfer I select my credits of 100 to transfer. The other player can now of course either deposit or purchase from other players. One aspect of this is we can now just simply sell items instead of multiple mule accounts storing items that may never be traded.
The point to having a bank is that it would not be character specific, but rather account specific. Gold in D2 had a storage limitation, as well as being a poor choice for currency. The bank could however manage a common currency with options not currently available such as the ability to transfer as well as store for all characters. Hence player one can collect items, and player two can then buy. Also, with currency located centrally, there would be no need to necessarily transfer or mule over to another character.
The whole idea behind a successful economic system based on a currency (as opposed to direct trade) is creating a structure of supply and demand for the currency chosen that is always slightly inflationary.
This is no secret to gaming companies. Many games already implemented "successful" (mind the quotes) economies based on a currency without necessarily excluding direct trading. Some went so far as to hire economists (http://www.developmag.com/interviews/390/QA-EVE-Onlines-in-game-economist-Dr-Eyjlfur-Gumundsson) to help come up with it.
In few words, the basic idea is to give value to the chosen game currency. In Diablo 3, Gold Pieces should become valuable. The way to do this is to make sure two fundamental aspects to the game economy balance each other, with one being slightly more prevalent: Gold Fountains and Gold Sinks.
Gold Fountains
These are all the places where players will be able to acquire gold directly from the game. That is, where gold is actually produced. Monsters that drop gold or NPC shops that generate gold whenever a player sells them an item.
Gold Sinks
These are all the places that will void gold pieces (or remove gold pieces from the player and give it back to the game to hold). NPC shops and Gambling are two examples on D2.
...
In an inflationary system (a system that consistently tries to remove value from money by increasing prices), gold sinks and gold fountains should balance in a way so that it is easier to spend than it is to gain money. Perhaps this is however not entirely correct. I'm not sure about this bit. But in essence what needs to be achieved is a desire for the player to hold on to their money. And this is easily achieved on a inflationary system that consistently tries to increase the price of goods.
But how exactly can one nudge the player into holding on to their gold pieces?
The answer is the sweet irony of economics: Make money a desirable item by trying to increase its intrinsic value. You do this by, for instance, forcing players to pay a fee to level up, or respec, or cube a recipe, or upgrade their weapon, etc... In short, you provide money sinks, some of which can't be avoided.
So the game tries to remove value from money by being inflationary, and at the same time creates a desire for money which tends to give it more value. This combination, if done right and constantly tuned (see link above), gives birth to a currency, does not remove the possibility of players also trading directly when they feel like it, and generates an healthy economy.
Of course, the problem is getting this right.
You could always make certain items bind on pickup, but also give the player the option to pay a certain sum of cash to get rid of this bind. This way money really would be valuable.
Woot economics lol :crazyeyes:
Gold fountains: Create gold out of thin air and give it as a loan to players. when players pay it back with interest. Loaners then invest the gold to the NPC:s who then buy crappy loots off of you. NPC:s wont buy if they have no gold forcing you to take out a loan to pay for the necessities(that are sold by other NPC:s. Sometimes loaners would make bad desicions and here would be depression. Like they would give loans to alts who then go bankrupt and destroy the character giving cash to your other char hehe
Gold sinks: None, there is no sinks in real world either. Money pool just keep on growing, as do prices and paychecks
would this be healthy?
or traditional Monsters as fountains and services as sinks. Do you really need economist for that... He's just balancing ways to make gold thus setting a prize to peoples time and effort.
You could always make certain items bind on pickup, but also give the player the option to pay a certain sum of cash to get rid of this bind. This way money really would be valuable.
no thanks, but you made me think of an interesting point.
one of two things need to happen in the current Diablo universe. If "Gold" is going to be the currency of choice, then either A. It needs to drop WAAAAAAAAAAAAAAAAAAAAAAAAAAAAAY less frequently then it does. or B. prices to do anything with it need to go WAAAAAAAAAAAAY up.
At least we won't have to manually pick up gold anymore, so we won't even notice how much/little we're getting untill we get back to town and realize we need 1 billion more gold to level up my pet hampster. :P
So what exactly is the point of the bank? Stashing items? Hording "gold"? Do you want the "bank" to take invested money and invest it, providing a return to customers? Do you further want to bank to invest based on risk, and have the real-life possibility of negative returns or even loss of investment? Will the bank loan to players? Maybe even create a credit score (lol)? I really don't understand where you're going here or how a bank adds to the enjoyment of the game. I also find the title highly misleading. There's no economy 101 here. Just a single simple question.
Starving_Poet
12-06-2009, 21:52
Woot economics lol :crazyeyes:
Gold fountains: Create gold out of thin air and give it as a loan to players. when players pay it back with interest. Loaners then invest the gold to the NPC:s who then buy crappy loots off of you. NPC:s wont buy if they have no gold forcing you to take out a loan to pay for the necessities(that are sold by other NPC:s. Sometimes loaners would make bad desicions and here would be depression. Like they would give loans to alts who then go bankrupt and destroy the character giving cash to your other char hehe
Gold sinks: None, there is no sinks in real world either. Money pool just keep on growing, as do prices and paychecks
No, what happens here is what we have in Diablo 2. Everything drops gold, there are piles of it anywhere, but you don't NEED to spend it on anything. Once you have a few good twinking items, odds are you can play an entire character - A1 normal to A5 Hell and never spend a single piece of gold on anything but potions and townportals.
Now, granted these things are gold sinks *tries heartily not to say isk-sink*. But in a healthy economy, for every 10 pieces of gold that drop, there needs to be 11 ways to spend it. The problem with Diablo is that all the good items drop from monsters - uniques, sets, rares. These items are double-gold-faucets because not only do they have intrinsic value if sold to an NPC, they also make it so that outside of rare occasions, you never ever ever need to buy an item from a vendor.
How do you solve this without completely changing Diablo? I don't know. Maybe make it so that there is an NPC that can re-roll an item for gold.
ANY item - even uniques with variable modifiers.
Hrm, actually, I think that would work perfectly.
Gold sinks: None, there is no sinks in real world either. Money pool just keep on growing, as do prices and paychecks
There are real life money sinks - Treasury Bonds. The Fed sells Bonds when they want to take money out of the economy.
stillman
13-06-2009, 01:31
One thing I'd like to not see is massive inflation. In d2, we have to use "k" to chop off 3 zeros. One gold is useless, 100 gold is useless, and 1000 gold is still seen as pretty small. 10,000 is still small. 100,000 is a mild start, but you're still considered in the poor house goldwise. It's just annoying that my chr is 'poor' with her 100k in gold. Shouldn't they be called copper pieces, lol?
So taking Krugar's fountain/sink notion, I suppose the gold fountains would have to be small and/or the sinks would have to be massive to help deter inflation. So monsters would drop 1-3 gold in act1 normal and maybe 25-30 in act4 hell. But we all know how Blizzard likes to spam junk all over the screen and we'll be seeing piles of many hundred gold all over the place. Thus, gold will become inflated in d3 I fear because Blizzard just loves it's big flashy numbers.
Another problem is if the gold sinks are too costly, some people find the game less fun, while others would accuse Blizzard of encouraging China-sweatshop-gold-grinding. So it seems like we can't win against inflation. Blizzard's not going to want to use tiny gold drops and costly gold sinks will mean players barely ever use them.
Just a thought: suppose dying had a HUGE gold cost that can take your gold into the negative. Then, you owe the bank money. You cannot shop/repair anymore until you pay off your debt. If your uniques break, you have to stash them until you get the gold debt paid off. Well that's what you get for dying 10 times to squeeze past a boss.
And you know what would be really cool? Loan sharking! Players who lend gold with interest rates! The interest rate could be built into the rules to ensure the loanshark gets paid back. For instance, if your gold is in the negative (whether you owe the bank or another player), any gold you pick up goes to the player or bank you owe insead of you! Just a fun idea. Like in real life!
One thing I'd like to not see is massive inflation.
Indeed. The problem with rampant inflation or (deflation) is that players will eventually revert back to direct trading and forget all about the game currency.
I don't pretend I have all the answers. I'm just an observer of similar games that established successful long-term economies in worlds counting thousands of players. Particularly MUDs where the interactions were way more complex than in Diablo and still they managed to sustain an economy based on game currency.
And in this context, here's a more detailed explanation...
The balance between Gold Fountains and Sinks is indeed paramount to a successful economy. They will be at the forefront of inflation/deflation battling.
But, as previously mentioned this isn't enough for gold to gain an intrinsic value. On a game environment items have an intrinsic value related to their power. Gold, on the other hand has no value to start with. This promotes direct trading. In order to promote trade based on currency it is of chief importance to give an intrinsic value to gold.
This is done by forcing players to spend gold. Diablo 2 had no such structure. The best it came up with was Item Repairs. And even then, not an ideal solution. Note that Gambling is not a way to force players to spend gold, neither is NPC shopping. These are optional tasks. I'm speaking here of schemes that make gold expenditure mandatory.
Once these are established, gold gains an intrinsic value. If players (and note these are just examples to illustrate the point) are forced to spend money in order to gain a new level, if cube recipes all include a cost in currency, if socketing an item demands also a cost in gold, etc, gold becomes a real game item with an intrinsic value.
These are the important money sinks. The ones that will help establish the economy, since they are the engine driving the need for gold. However, it can't be denied that indeed items available at NPC shops must be more interesting. This can be achieved even by making certain items only available at shops and never drop from monsters (like town portals or potions) and by forcing players to visit shops to perform certain actions, like upgrading an item or removing jewels from sockets...
Now, we are still not there. How exactly can the game establish a balance between these money sinks and money fountains?
On the case of Money fountains, as Starving_Poet and Bad Ash mentioned previously (and you too alluded in your post), definitely there is a need to massively reduce the amount of money in the game. In D3 money couldn't just drop of monsters in the quantities it did in D2, and any +Gold% mod needed to be strongly caped (something like <=5%), or even removed. Still, there must be enough for players to not be discouraged. A game economy shouldn't halt players progression, it should force them to make decisions. But can't be something that governs gameplay to the point it becomes a grief.
On the case of Money Sinks, these should be slightly more pervasive. The game engine should try and do its best to establish a slightly inflationary economy. This is important because, while money loses value to the economy, it gains more importance to the consumer. A slight inflation acts as fuel to an economy. It keeps it alive. It stimulates the currency. Deflation, on the other hand is a terrible monster, even worst than rampant inflation (which is not desirable either).
Now, once money sinks and money fountains are established, the game engine can give the game administrators all the tools they need to nudge the game economy into track every time it seems it is getting out of hand. By just doing minor adjustments to how much monsters drop, administrators can act as the equivalent of the Department of Treasury in the United States (who prints and mints all paper money coin). If the situation is getting out of hand, it can adopt more serious measures and change the charge on money sinks.
Another important and final concept is that of the Money Pool, or Money Supply (the real-life term). Every country keeps a record of all the money circulating. This is usually the task of the country's Central Bank. This information is paramount to determine Inflation (http://en.wikipedia.org/wiki/Money_supply#Link_with_inflation). Many games adopt a strategy of having a money pool from where monsters draw money to drop on death, and that also works to give money to NPC shopkeepers. Money then "gets printed" if the Money Supply (this hidden money pool) becomes too short due to an increase in number of players, or destroyed if there is too much in the Money Supply due to a shortage of players. In this system there's no real money sinks. Just perceived ones. The money circulates between the players and the Money pool through the money sinks and money fountains.
On this system it is very easy to determine and control the economy inflationary level. But it's only really needed if the game mechanics are more complex and allow such things as player owned shops (see the game Puzzle Pirates (http://www.puzzlepirates.com/), for instance). Diablo is simpler on this regard. And it demands less analytical tools for the game administrators to control the game economy.
And you know what would be really cool? Loan sharking! Players who lend gold with interest rates! The interest rate could be built into the rules to ensure the loanshark gets paid back. For instance, if your gold is in the negative (whether you owe the bank or another player), any gold you pick up goes to the player or bank you owe insead of you! Just a fun idea. Like in real life!
This may become a problem. I'm yet to see a game successfully implement a banking system ("banking" here meaning loans and payments, since that is really what a bank is for). The issue is that, contrary to real life, there aren't many mechanisms that can be implemented to force players to do their financing. It's very easy for a player to go overboard and go bankrupt. They just ruined their character. I'd rather have players ruin their characters because they ddon't equip them properly or didn't do a wise skill distribution.
On the other hand, player-controlled loans are a fertile ground for grieving. Not just harassment, but also the simple possibility someone will just quit and forget to pay.
Meanwhile, both player-controlled and game-controlled loans suffer from another problem relating to players not paying the debt before quitting. If the retired character didn't have enough money on it to honor the debt, money would need to be drawn from the game engine to cover for it. This could rapidly become an area of exploitation.
I like bartering personally. So many games I've played use a currency. It's not as exciting.
Ok. since were taling about fountains and sinks. What about item sinks? Items get never destroyed in Diablo 2 except HC. So say in a year with a gold currency with fountains and sinks, there will be approximately same average amount of gold per player... but the amount of items continues to rise. Thus increasing the gold value.
Example: Say, day 1 of game release chestpiece repair would be 1 gold at NPC.. sametime low end item would cost 10 gold at player markets and high end 100 gold... all is fine. New item costs 10 times more than repairing your old one. But then after 2 years, game would be so full of items, they wouldn't have so much value. Top end items would cost 9 gold and low end 0.9 gold at player markets. 0.9 gold is lower than the NPC repair cost!! At that time you'd have to ask youself, do i repair this item 10 times over or use crappy item instead and use the gold to buy a top end version of the itemtype after a while.
Thats why i'd like to see people lose their gear when they enter pvp. So you'd have to wear slightly worse gear in pvp. Itemsinks!
To keep goldvalue same, you need to keep the ratio between items and gold the same. Offcourse this all would balance automatically if players could choose the currency by themselves. Bartering!
There really isn't a need for item sinks.
The way Diablo is played, people are always making new characters, trying new builds. The demand will always be there as long as people keep making new characters. And Diablo gets incredibly boring just playing a single character for a long time, so people are always trying out new builds.
Personally, I'd rather the trade system stay the same as D2. I think its more interesting if there isn't a designated currency.
There really isn't a need for item sinks.
The way Diablo is played, people are always making new characters, trying new builds. The demand will always be there as long as people keep making new characters. And Diablo gets incredibly boring just playing a single character for a long time, so people are always trying out new builds.
Personally, I'd rather the trade system stay the same as D2. I think its more interesting if there isn't a designated currency.
Not when you can respec, you only need 5 chars. Blizzard seems to want to deicide for us what kind of items we need for our builds so i doupt theres many possibilities for different gear either. but i'm speculating here.
If there was item sinks, it wouldn't necessarily be off of you. You might even have more with item sink system than without. I just assumed you were worried of this.
Not when you can respec, you only need 5 chars. Blizzard seems to want to deicide for us what kind of items we need for our builds so i doupt theres many possibilities for different gear either. but i'm speculating here.
Are there going to be respecs? Either way, if good Unique and Set items (or their equivilents) continue to be as rare in normal play as they are now, there really won't be any sense in item sinks or a currency. The items themselves are so rare that there is no point in selling them to someone else for gold, unless they make the availability of them much higher.
But it would take all the fun out of Diablo if Uniques and Set items are made common enough that gold would be fair trade for them.
Jedouard
14-06-2009, 22:19
Hmmm, I don't see the need for a bank, but maybe a federal reserve. (Bad joke.) What I mean to say is: first, gold needs to be made valuable; second, gold needs to be difficult to get; and, third, gold needs to safe from inflation. That is what a federal reserve does.
Making gold valuable is easy: have certain aspects of the game require gold and gold alone and a fair amount of it in comparison to what is available. Buying, repairing or modifying items could cost a good amount of gold in comparison to what is out there. (This would also be a way to make dying a much more scary thing - if you damage your equipment and lose gold upon death, then have to pay a hefty repair cost to fix it, then you won't want to die.)
As far as making it difficult to get and protecting it from inflation, limit the amount of gold in players hands by some formula that takes into account how many characters are are actively being played and what the character levels are. (Limiting it to active characters based on their level prevents people from spamming the game with new accounts or characters to increase the potential gold avaliabl.) On the flip side, make the costs of items/services fluctuate accordingly. You'd probably need to figure out the in-game demand for the aforementioned in order to determine how much they are effected by the (potential) gold available, but that ought not be too difficult with a formula that adjust prices itself based on the above statistics, i.e., more people getting repairs and more gold available means the price goes up and vice versa.
What I mean to say is: first, gold needs to be made valuable; second, gold needs to be difficult to get; and, third, gold needs to safe from inflation. That is what a federal reserve does.
Sorry to burst your bubble, but in the US the Federal Reserve does none of those things. Money needs to be made valuable: The fed can only print money, lowering the value of the money already in the economy. The money needs to be difficult to get: The federal reserve sells the money it prints to the government who then makes it hard for you to get (because they give billions away to failed big business lol). Money needs to be safe from inflation: Every dollar printed by the Federal Reserve in the US is created with debt on it. This only increases the US debt and, in hopes of covering that debt, causes more money to be printed... leading to inflation and even more debt. A very vicious cycle indeed. This is a big part of the reason the US is in an economic depression right now :( Get rid of the Federal Reserve and the US might have a fighting chance.:thumbup:
As for the D3 economy its been stated before and its true, we need gold sinks. It could be a crafting system that costs money for materials, high priced repairs and death penalties, or possibly something much more fun and interesting. The fact of the matter is, if they want a D3 economy based on gold there needs to be one or more gold sinks that every player will want. That would ensure the desire for gold, giving it value.
Funkopotamus
15-06-2009, 00:27
One thing I thought hellgate did right was having things to spend money on. You could pay to upgrade your items or have a stat added to them. You could also trade in components for addons for your weapons. These components were made by breaking down items, so if you found an item that's not quite good enough you had to make the choice of trying to get some of the better components from it or selling it for money.
Jedouard
15-06-2009, 01:02
Sorry, by "does", I meant "is responsible for the success of". As for the debt on the dollar, it does not come from printing money per se; rather, it comes from "interest", i.e., the creation of debt on the part of both domestic and multinational financial institutions. One man's debt (the loan-taker, for example) is another man's fortune (the banker). If one $100 total are printed and the bank lends you $100 for $120 ($100 for $20 interest), then the $20 needs to come from somewhere. Either what you were lent has to have gone into some investment that has become valuable enough to match this interest and thus back new currency to cover the $20 that will need to be printed, or the economy becomes debtor since there is more debt than money, or money is printed to cover the debt without backing and you get inflation. Whether the fed prints or does not print money only comes into play when it tries to meet this debtor economy by printing money, devaluing the currency, but covering the debt. On the international level, because currency value is now based now based on comparative value with other currency (Bretton Woods), when we print money to cover what governmental revenue cannot, we devalue our currency. This does not put us further into debt, though, unless 1) our debts are in a foreign currency which did not equally devalue and 2) GDP or revenue (for private and public cases, respectively) did not inflate at the same rate as the currency. As governmental revenue is a function of GDP and economic development (i.e., increasing revenue thanks to development), if development does not meet or debt then we take to the option of printing money and thus devaluing our currency and usually endebting ourselves further as conditions 1 and 2 above are usually not met. Don't blame the fed; blame Bretton Woods, blame currency speculators, blame banking institutions that required such a hideous concoction as the Fed, blame the fact that interest, income based on currency itself is legal, blame the fact that lending is not a public institution designed solely to further development, not condense it in the hands of a few at the cost of the many.
If you want to stop inflation, then stop debt. If you want to stop debt then stop interest. South Korea did this to some degree a while back (1960s-1980s) and it was quite successful,, increasing governmental revenue by taxing a highly developing economy and giving interest-free loans to those projects that would further develop the economy. If your currency inflates at 8-10% a year, like S. Korea's did, and your per capita GDP increases at 18-24%, also like S. Korea's did, then even if you loaned out 100% of governmental revenue, you would still come out with a surplus of 8-16% for future lending, investments or what have you. Proof: the average citizen went from making $200 a year to $20k in a period of 20 years. (Now the IMF has ruined that.) This is why I have nothing in particular against the federal reserves, as it was S. Korea's equivalent of the federal reserves that did so well for the country; the other institutions are the ones that messed things up.
To go back on topic: "No" to banks in D3; "Yes" to necessary gold sinks and to some automated balance of potential availability, actual supply and necessitate demand for gold. The latter will offer gold value making it worth trading.
I agree that barter works just fine, but gold is far more convenient at times, allowing you to avoid making multiple trades or keeping an inventory stocked with stuff you don't ever equip, but just keep around for its just value to get a single item.
Also, have a central auction house. Let the players have a comparative market to fairly determine the value of items - either in terms of bartering or in terms of monetary value - in a well-informed way.
When I said that every dollar created has debt attached to it, I wasn't speaking of the interest on bank loans. I was talking about the fact that every $1.00 the Federal Reserve produces is sold to the US government for roughly $1.10. This creates an impossibility of ever paying back the debt of $0.10 on each new dollar produced since there will never be that much money in the system. They are only producing $1.00, so to pay the $1.10 you need to borrow the extra $0.10 from other countries (China and India mainly). This is an endless cycle of debt generation. Impossible to escape especially because the US is already trillions of dollars in debt and that number is only increasing with every new dollar produced.
Back to D3, I think an auction house is a great idea. It works well in game economies cause it allows prices to be set and adjusted by the community. I would like an option to specify which items you would accept as a fair trade. So instead of selling your item for gold, then buying the item you want with that gold, you could just state the item you want and do a straight item for item trade. Not sure on all the mechanics since a bid in gold could be worth more than an item bid since the items don't have any set value in gold.
Another good gold sink could be skill respecs. Skill respecs aren't "necessary" per se, but they are desireable later on in the game.
To go back on topic: "No" to banks in D3;
I'll have to agree. While an appealing concept it really only seems to work on a game economy where the players are real agents and allowed to run shops and participate on a economy also based on production.
Diablo 3 economy is a simple "economy" based almost exclusively on selling items to other players.
I agree that barter works just fine, but gold is far more convenient at times,
It's really not a matter of convenience, although I do understand where you are coming from. The main reason is that an economy without a currency has a few problems. Some that directly affect the game, others the so-called economy, and others yet the players themselves:
- Barter suffers from the indivisibility of items. There's not a real notion of exchange. Without exchange, an item value is constrained. The tendency of a barter economy is for prices to stall and have an harder time evolving according to the economy normal supply and demand rules. And without an exchange, items values, when they do change, tend to do so in amounts that don't directly reflect the new rules, and often late in the process.
- Another problem, probably much worse, is the problem known as Double Coincidence of Wants. In a barter economy, for any trade to occur, it is necessary for both needs of the seller and buyer to co-exist at the same time. Someone selling an Arm of King Leoric for a Arkaine Valor needs to find someone with an Arkaine Valor wanting to sell it for the AoKL. This has serious limitations of time and availability. It is for this reason that even on games without a currency, players eventually try to create a currency themselves. On Diablo 2 this became Runes and Gems.
- The third problem was quite real in D2. In real Life, barter economy suffers also from the increased costs of storage. Goods take space, and without a currency you will have to store what you buy and hose goods you want to use to buy something else. This creates too immediate problems in a game. In Diablo 2 this lead to huge player investment in mules (often much more than what would be necessary for normal gameplay) and to a considerable increase in supply not matched with demand. Quickly items on the game became cheap.
But...
A Barter Economy has its place. Ironically (or maybe not) a barter economy is extremely successful inside currency driven economies. It's estimated that the so-called Natural Economy is currently worth 8 billion dollars annually (I lack the quote for this. My apologies).
So a game like Diablo 3 -- and this much was recently said by Bashiok on the official forums -- will not want to discourage entirely direct trading. Instead, to create a successful currency based economy with all the necessary hooks to encourage players to use it, but still allow for the direct trade of items.
When I first read this post, I thought the question was if D3 should have a barking system. Should D3 have a barking system?
... making an effort to not allow this thread to go down on a nonsensical off-topic travesty.
Back to D3, I think an auction house is a great idea. It works well in game economies cause it allows prices to be set and adjusted by the community.
Absolutely! And it also has the advantage of stimulating currency based trading. The game code can simply stipulate gold currency for the Auction House(s). With a supposedly good currency system going on in D3, which player wouldn't like to expose their items for sale to a whole community instead of just the ones entering their game?
This is such an amazing idea, and I don't know if the OP was thinking of it this way but a diablo central bank would give blizzard the power to neuter goldsellers.
Very few people would buy gold, if they could simply borrow gold against say the value of their character and then have some of the gold they find to go towards paying off whatever debt they incur.
Additionally this would give all sorts of interesting economic things. People could 'invest' in different things like gems, runes, or different types of armors.
The way it would have to work is that say a small % (5% for example) of everything sold in the AH will go toward the bank. You could buy commodity 'shares' where you would get a smaller % of what the profits from a commodity are. Or, maybe more interesting would be to allow pull or put options for sale of commodities, where you could buy the option (that would last for say 3 days) and then you can have the price locked in for that time, and anything you buy in the ah would be that price, where the bank would pay the difference to the seller if it's short, or the bank would make a profit if it's over.
The only thing this would really not work to curb is item selling, but perhaps there could be a way for them to control the item market as well, that I am simply not looking at.
putting in a central bank would prob be too complicated tho.
You could have an auction house without currency. Want to buy Ring x, offer Amulet x and Boots x. Just implement good search functions. Like if you right click your item from inventory you'd immediately see if anyone would like to buy it at AH. Item database with search functions and categories that you could use to make buy orders or find items you'd like in return for sell order. But it's quite complicated with all the random modifiers.
You could have an auction house without currency. Want to buy Ring x, offer Amulet x and Boots x. Just implement good search functions. Like if you right click your item from inventory you'd immediately see if anyone would like to buy it at AH. Item database with search functions and categories that you could use to make buy orders or find items you'd like in return for sell order. But it's quite complicated with all the random modifiers.
This is actually a good idea.
This is such an amazing idea, and I don't know if the OP was thinking of it this way but a diablo central bank would give blizzard the power to neuter goldsellers.
Actually what I was originally thinking was just some central 'storage' for currency to be held, so that each character could make deposits, transfers, withdraws, etc. The idea popped in my head with the talk of currency being used, it would make sense for some storage outside of just having a "stash" that is limited, with no abilities to transfer to other characters or accounts. Character X could sell items, deposit, then character Y could withdraw to purchase. Character Z could also transfer to another player to purchase. I'll admit the concept of this, currency, etc.. might do away with fake gold sites, but is that really a bad thing?
I certainly do like to see where this has gone.
Jedouard
16-06-2009, 22:06
For reasons stated above, I am against the idea of banks. To be more precise, I am against the idea of making interest-based loans because they cause inflation. I still stick with the supply of gold and the cost of gold sinks being some sort of statistically determined in-game ratio. On the other hand, a central place to store and, more importantly, transfer money would be great... as would be the case for items.
Loans without interest might work, though. Loans could be based on character worth, i.e., the more you borrow in comparison to your character's net worth (owned items' value as determined by auction house averages + gold), the larger the percent of the “found gold” goes to repayment. (The percent should be determined at the time of your taking out the loan, because low-level items with loans on them will quickly shrink to a fraction of a percent of your net worth, such that there is no incentive to repay a loan.) Eventually, you won't be able to afford to both maintain your loans and sustain the necessary purchases at gold sinks (e.g. scrolls, potions, repairs, etc.). This would limit players from borrowing too much gold and encourage them to pay back their loans.
You could make loan-taking part of the auction house or even player-to-player trading, wherein if you can't cover your purchase, you have the ability to buy on partial or full credit. Therein the item become locked (not "bound") to your character's loan: any gold received from trading a locked item will immediately go towards repaying the loan and any item received in trade for a locked item will become locked itself. Within this system, you have good incentive to pay back your loan (loss of revenue), you are forced to do so, and the economy does not inflate.
I can think of at least one downside: if players are able to buy better gear earlier, then the game might become an easy walk-through. Even if Blizzard has surgical precision on setting item requirement, if you can get all the level 24 gear at level 24, you will be as good as invincible for that area of play. Not such a good idea in game terms.
To combat this, you could make the worth-to-credit ratio pretty strict, such that the maximum you could borrow is, say, 10% of your worth, and your payment is five times that (50%) in terms of “found gold”. Something similar to such high ratios might limit it so that players can only buy that one item they need for their character to quit being so fragile, enabling the to have fun again, or for them to get that purchase that is a once in a life time chance and they just can't cover while also preventing them from having half their equipment on credit.
As far as auction houses go, I do believe they should allow for bartering and such, but I think gold should also be a means for purchase, if not the principal one, especially as it would be a good way to keep statistics on item value.
I can think of at least one downside: if players are able to buy better gear earlier, then the game might become an easy walk-through. Even if Blizzard has surgical precision on setting item requirement, if you can get all the level 24 gear at level 24, you will be as good as invincible for that area of play. Not such a good idea in game terms.
Well, I think one implicit aspect in that is that when you buy all the level 24 gear at level 24, you are spending a lot of money upfront. Say, for example you level to 30. Your gear will probably not be carrying you, it probably is not worth as much in sale as purchase (unless you got a good deal in auction, for example, but that kind of player interaction should be encouraged IMO.) And thus, unless you've made enough money to cover your expenses AND pay off the loan (plus interest), you might be in worse shape at level 30 than you were at level 24 when you bought all the items.
It may break continuity for some people though, to institute 20th century financial inventions into a 'gothic/medival' fantasy game. But on the bright side I think if done correctly it would teach people about finances and loans. (if done incorrectly it would teach people bad things about loans, like you can borrow borrow and it will just go away as you level up.)
I think also implicit in this is the idea that there are compelling things to do with gold in the game, either as things people will want to do or goldsinks in the form of things people MUST do. The only use for gold in D2 was shopping and gambling, and shopping was incredibly tedious, gambling was expensive and what most people do. D3 will need much much more compelling things to do with gold, perhaps temporary buffs for the player or gear (think the opposite of repairs), perhaps a way to spend a lot of gold to have an item "custom made" (i.e. you choose the stats on it, but it costs a lot of money) or being able to spend some large amounts of money to improve the stats on an item (i.e. you spend x gold (a large amount) to increase the enhanced defense on something from 50% to 51%).
But for any of it to work, gold will have to be very desireable, which would in turn turn it into the preferred currency for the game, which would in turn make the whole banking thing possibly worthwhile.
I think these ideas of a D3 central bank are waaaay too complicated for a hack 'n slash game. Trading is a big part of the franchise and I think a stronger trading interface is all we will need in D3. If you are able to show the entire community what you have for trade and what you are looking for in return it would serve us all well.
Worrying about your loans and when you need to make your payments doesn't sound like a fun game, its sounds like real life lol. I'd much rather be slashing my way through mobs of monsters and get a message that I have received an offer on an item I had up for trade. When I get back to town I check the offer, and make the trade if it suits my terms of trade. Say thanks, good luck, and get back to killing demons. :thumbup:
Jedouard
17-06-2009, 12:54
Word.
Even with what I think is an acceptable idea for a loan system (mentioned above), I still think it is out of place here in Sanctuary. An auction house and a way to transfer gold and items about is good, especially with management of gold resources/valuation.
Leave loans to something like WoW, where it fits the whole schematic much better. I have enough loans as it is. *crying*
User Name
17-06-2009, 18:14
Here are my thoughts
Gold should be more rare than it was in D2. No more 5k+ gold drops by wearing massive gold drop gear.
An idea I think would be a good idea would be to use gold to upgrade the gear you have. For example, lets say you found your first unique sword in the game that is a level 10 item. When you are, say, level 20, you could visit a special vendor in the middle of nowhere (maybe even have to fight a boss to get to) that for large sums of gold will allow you to upgrade your unique sword to a different unique sword up to your current level. Maye upgrading a level 10 unique item to the best same type item in the game would cost 10,000,000 gold or something, and everyone would want gold for this purpose. But 10 million gold needs to be a very time consuming amount to achieve, that way so that people would still want to trade items for items, or items for gold, because 90% of the times it's more convenient.
Also if Blizzard scanned account for gold transfers like they do in WoW, it will keep gold from overrunning the economy due to gold farming bots.
Starving_Poet
17-06-2009, 18:46
I always thought that it if you get a bad roll on a unique, you should be able to pay to get it 'tempered'. However it should be VERY expensive - almost exponential in its cost.
Risingred
17-06-2009, 19:09
Many of you are describing the (admittedly awesome) upgrade system in Hellgate: London. It wasn't perfect but it did cost a snot-load of money to upgrade a weapon that is actually worth upgrading (or armor, etc) and the min-maxers went absolutely nuts over it.
In the trade chat, people were actually selling items for gold, or else trading for other specific items. It was fantastic.
Starving_Poet
17-06-2009, 19:11
Yup, that's exactly what I was referring to. That game had some damn good ideas. It was just released too soon and should never have been p2p.
Technically we already have bots that farm for items. But I wanted to mention that a currency need not be necessarily something like gold that is easily found in game. You could have an ingame currency that simply exists within your account/s. For example, selling an item you could chose either/or the currency or gold as payment. But the point of a currency is to be able to transfer to another player for an item, to which they can use this currency to purchase an item of their choice. When you think about it, we have already had that in the form of SOJs and now HRs. Not really an ideal currency I would say.
Therefore having a banking system that uses a 'currency' to store and transfer would be similar to "fg", enough so that sites using "fg" need no longer exist.
Here is one idea. Say I have several items I sell to an NPC, and instead of receiving 10k in gold, I chose 200 in the currency, let's call them credits for now. I take those credits and deposit to the bank. A little while later here I see someone has an item I want, and they ask 100 credits. I meet in game, in item transfer I select my credits of 100 to transfer. The other player can now of course either deposit or purchase from other players. One aspect of this is we can now just simply sell items instead of multiple mule accounts storing items that may never be traded.
The point to having a bank is that it would not be character specific, but rather account specific. Gold in D2 had a storage limitation, as well as being a poor choice for currency. The bank could however manage a common currency with options not currently available such as the ability to transfer as well as store for all characters. Hence player one can collect items, and player two can then buy. Also, with currency located centrally, there would be no need to necessarily transfer or mule over to another character.To me, it looks like we are describing WoW Auction House and Banking System. Indeed, Blizzard has already created an 'economy' in that other game. If and to what extent the WoW model will be implemented in D3 remains to be seen.
I am one among many complaining about having as currency items of impossible rarity, even though in one of my last ladders I definitely enjoyed the use of high-end equipment (excluding Infinity, which was still out of reach), so I definitely look forward to a better designed system.
Designed how ?
Tough question, because if D3 is going to be more than 1/10 as gear-based as LoD was, items will exist that most player will seek and those, if anything, will become currency, maybe in a somewhat 'tiered' way (think of PGems->PUL/UM->IST->SoJ->HR).
I feel I am still missing the big picture, but still...plenty of time to release date :)
Back to lurk
Starving_Poet
18-06-2009, 17:44
One of the keys to prevent the duping of the currency is to not have the currency drop. When you kill something, you get the gold automatically; it doesn't drop on the floor. One of the most consistent ways to dupe an item in any game is to take advantage of network lag when an item is in the process of changing hands.
Risingred
18-06-2009, 17:50
One of the keys to prevent the duping of the currency is to not have the currency drop. When you kill something, you get the gold automatically; it doesn't drop on the floor. One of the most consistent ways to dupe an item in any game is to take advantage of network lag when an item is in the process of changing hands.
I was under the belief that it did drop, and you just picked it up automatically (by walking over it)?
SlechtWeerBeer
18-06-2009, 19:11
I was under the belief that it did drop, and you just picked it up automatically (by walking over it)?
Correct. You can see it laying about a few times in the trailers.
Yes. But that wasn't Starving_Poet point.
Risingred
18-06-2009, 19:13
Yes. But that wasn't Starving_Poet point.
I know, and he does have a great point. I just wanted to clarify.
i think the main problem with gold in D2 is not that there's too much of it dropping, it's that there's no meaningful way of spending it. in D1, we hoarded gold like crazy and made many agonizingly slow walks between Wirt, Griswold and Adria between every dungeon run, just in case they had something awesome on sale. sometimes just doing a quick pop down/up the stairs to reset the inventory and repeat until something good came up. we didn't want to be caught without enough gold to buy an awesome item with great modifiers, or one of those rare potions that increased one of your stats max by +1. i remember many times, finding an awesome item on sale and not having enough gold to buy it, then having to get one of my party members to lend me some gold or buy it and trade with something i had.
in D2, there is no feeling that gold is necessary. it's like it's just in the game for the sake of it being in the game, because it would feel weird to be playing a medieval fantasy game with no gold. since better items drop from monsters, it feels like you are above the in-game "economy" and have no need to take part in it. whereas in D1, you could often buy items that were just a little better than what you had on and improve your char slightly until the next awesome item drops down in hell or somewhere.
to me, in a game, the whole point of having a currency is like in real life - to pay for goods or services. what i feel we need in D3 are better goods to spend our gold on than just pots and scrolls, and a more meaningful item repair/upgrade system. then gold will start to have value as a currency, when you can actually use it to better your character meaningfully. coming up with contrived ways of forcing players to spend their gold that one would not normally use gold for is a silly game mechanic that i think should be avoided, imho.
Konditor
20-06-2009, 17:59
touchy subject. The reason there is not a simple yes or no answer is because a huge component in the diablo franchise is trading items for items.
For a currency to work it has to be valuable in so many different ways. people will have to WANT to have it over the best items in the game. You cant just invent a bank and currency and expect people to use it when that currency has no value at all.
If blizzard can pull it off, it would be impressive
If you want to make gold worth something, simply disable item trading and allow for item-gold trading only.
I know this is a touchy subject because people like to trade items directly but I think this would be the easiest and most reliable way to make the currency worth collecting after battles.
The problem with gold is that you can't buy godly items from vendors. But why should people trade in gold with each other when it is possible to trade in items? The only purpose of gold in D2 was buying stuff from vendors.
And as long as that stays its only purpose in D3 I don't see it becoming very important.
However, if you make it feasible for people to use their gold to buy stuff off of other peeps by disabling item trading, people will want gold.
What I don't get is why blizzard wants to make it a currency-based economy...I was fine with an item-based economy.
People say the thing that's wrong with an item-based economy is that you can dupe items. But presumably you can dupe gold as well?
What are your opinions on making it an item-gold trading system between players?
x
You need to read the whole thread, Konditor. That has been debated already.
Konditor
20-06-2009, 18:04
oops, sorry.
No worries.
We can go through it in more detail if you still have questions after that. But it beats having to repeat the same arguments all over again :)
I think the major points of this discussion should be rolled into the DIII wiki page on Trading (could be more aptly named "Game Economy," since trading is actually a part of that larger idea). There are some good things there, but it lacks some major information found in this thread. For instance, mudflation has its own page, but it is not linked from there.
http://www.diablowiki.net/Trading
Any takers?
Zarniwoop
13-07-2009, 09:30
No reason to believe the economy will be as rich in D3 as it is in D2.
Twoflower
13-07-2009, 15:46
touchy subject. The reason there is not a simple yes or no answer is because a huge component in the diablo franchise is trading items for items.
Diablo2 also had a currency based economy. First it ways Soj's, then it became runes.
99 % of the items traded in LoD were traded for pgems or even gold for gambling ( 99 % is of course my estimation ). If you want a good item, you have to shell out runes for it.
I would be in favor of a currency based economy.
Deckard Cain
13-07-2009, 17:09
Diablo2 also had a currency based economy. First it ways Soj's, then it became runes.
I agree with this. People seem to think that D2 didn't have a currency just because they didn't trade items for gold. In reality D2 nearly always used a currency. You trade X item for a high rune / soj then you trade those sojs / high runes for Y item.... Since Sojs and HR's are extremely rare it would make sense to make the currency a standard gold. It will be easier to find (hopefully much much harder to farm than in D2 nonetheless) and make trading easier.
Just because Blizzard might try to make a currency like gold work in D3 does not at all mean people should not be able to trade item for item. This would also make it easier to trade item for item imo. If one item has less value than the other the trader can throw in some extra gold to sweeten the deal.
For the "banking" matter, i think it is far too complex for a diablo game to have lending etc. It just doesn't seem to fit in Sanctuary.
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