A couple of weeks ago I wrote that World of Warcraft needed to make its currency fully convertable and control inflation by managing its money supply. At the time I thought this was a relatively easy problem – just treat the MMORPG like a bank and make sure the in-game assets are a reasonable multiple of the cash reserves to control inflation, create a sense of scarcity, and prevent a run on the bank. Non-player-characters (aka monsters or ‘mobs’) would no longer drop unlimited stuff. Although new to me, this isn’t a new idea – Ken Griffith wrote about the need for a ‘conservation engine‘ years ago.
While I’d love to see a World-of-Warcraft caliber game that could provide skilled players with an economic incentive to play (yet another strong article by Ken Griffith here – what happened to this guy?), it’d be difficult to introduce direct economic incentives to World of Warcraft thanks to its game mechanics. Mobs which respawn an infinite number of times drop persistent objects of value, leading to the unlimited accumulation of value. Unless the mobs were limited in number, items wore out and expired, or player death transfered wealth from the player to the monster, its hard to see anything but a gradual spiral upwards in the amount of stuff – but if these sort of changes were made, it’d drastically change World of Warcraft’s gameplay (and why mess with success – millions of subscribers at $15/month is nothing to shrug at).
There are MMORPGs that do provide direct economic opportunities for the players – the upcoming Roma Victor and the long-running Project Entropia both allow (or will allow) game-money to real-money transfer. I took a peek at Project Entropia without actually playing (sorry, I don’t do Windows) and discovered that a) while game play is free the game is a painful slog without depositing real money to get game cash and buy equipment, b) items degrade and break down, costing the character between $0.50 and $1.50 in real-money equivalent to play, c) the game allows for ‘jackpot’ style wins (hunting valuable monsters, mining valuable ore, etc.) which are constantly communicated to all players, but d) new players generally find that it costs more to kill a monster than the monster is worth thanks to their lack of hunting skill points. In other words, before you earn a dime in the game you’d better be prepared to put a lot of money into it – enough to make game play prohibitive for most. I’m still trying to discover whether top players – those who’ve invested extensive amounts of money and time improving their skills – can consistently make a profit, or whether Project Entropia is a cleverly-constructed money-suck for all involved.
Considering World of Warcraft, with its generally superior game play, costs its average player only $0.20 an hour, the economic incentive behind Project Entropia clearly draws players. But the economic model still needs work to be a breakout success. The Project Entropia dollar is pegged to the United States dollar at a rate of 10-to-1, does not seem to be convertable to cash anywhere outside of Project Entropia, and can take ages to convert from game cash to real money. Under such conditions I’d expect there to be a thriving grey market in Project Entropia dollars, as individuals who want their cash stat take worse exchange rates for the convenience. My inability to find a grey market with a search engine tells me that no players are actually making any significant money – the company’s obviously decided to exploit its players as much as possible. According to the parent company’s Nov. 2005 prospectus, the company projects that they’ll pay out 1.4 M Swedish krona to their users in 2005 – about $175K – which is just 5% of their 28 M projected operating income. (Ouch, guess I was right about the exploitation.) In addition, the currency peg also makes the company vulnerable to short sellers. The game isn’t huge – they’ve got under a million krona in the bank at any one time. How much additional currency would someone have to borrow from the game’s players and then sell all at once to break Project Entropia’s economy, forcing them to remove the peg and devalue the Project Entropia dollar? Anyone want to try and become a virtual world George Soros?
{ 18 comments… read them below or add one }
Maybe it’s just me, but GET A LIFE man!
This post is homogenously absurd across any given except:
“but d) new players generally find that it costs more to kill a monster than the monster is worth thanks to their lack of hunting skill points. In other words”
See…
Heh heh heh.
John, you’ve got to learn to skim and ignore my ramblings when they’re not suited to your tastes.
Yes, you are right, that’s exactly what I was thinking. My comment was tongue-in-cheek, of course.
MMORPGs (or whatever they are) is a big area of internet activity that makes my eyes glaze over whenever I read about it…
PS. it was supposed to say “excerpt”
I am also in the middle of experimenting with project-entropia. Do you have any data gathered already?
I have been a rookie player in Project Entropia since 09/06/2004.
BUT:
My first real encounter with online games was when Quake beta was released about -96. With only 3 levels or so.
Using a 64kb ISDN line in Sweden to play agains other people in US was a blast.
Imagine, playing games against other people on/thru something called internet!!!! That was a High Tech thing in those days to see a moving sprite/character that was commanded and moved from the other side of the planet in a very high paced game. And yet in a “3D” enviroment.
I was allready happy to play Quake/Doom/Descent against my mates on a local net. Ok, I used Kali software to fake a TCP protocol to play otherLAN games..
Well that is basically how old I am.
Ok I am a Swede, but I don’t live in Sweden anymore. I live in Thailand and having my 1024/256 line in Bangkok is very good enough to play the game. I started to play the game on a modem.
SO:
I agree that there is a few quality faults in the game. But comparing to “MANY” other games that I have tried and played in the past, I can only tell you that this game appeals at least to me.
You can start and play the game with virtually nothing.
But if you are lucky and talk to someone nicely maybe you can get a knife, scarred armour or something..
Be nice and you probably can get something.
But for me I am not so much of a talkative/nagging guy, so far I have spent about 50 USD on the game, just to get a jump/step into the game. Wich I see as a reasonable price to pay for an otherwise “free” BIG game.
Otherwise I am a download and try a game before buy type. I suspect we are plenty..
So in the beginning I spent some money on basic armour, a little better energy blade. And then went on some basic hunting.
Whooosh… And in an instant I was killed and teleported back to a revival station.
Hmm, that was not fun.
Well that tought me a lesson..?
Try to go hunting with friends..
After a few hours of trying this and that, I thought, hey – this is fun but it takes some dedication to play and maybe make a buck or 2.
Same as becoming a World “Quake/Warcraft” Champ, and win big money? Nope, not in my lifetime..
As after 1 year of absense and finally have some spare time to play again. I can only say that the idea of running around in Quake or Warcraft and compete against other people in the hopes to become the top dog…. I will not be the one.
So if I can continue play PE, then maybe I can at least pay my internet bills every 3 month from trading, hunting, learning new craftmanships, etc.
And at the same time have a chance to kill time that would have otherwise gone to sleeping or watching some couch movie on the UBC.
too funny I see you dont play the game as you lose hundreds and hundreds of US dollars in that game I know many that have.
Most MMO’s charge about £8 per month to play.
Project Entropia costs nothing.
The £8 will probly get u about 250 game Dollars and that will be ok for a starter weapon, some armor, some mining equipment and a few blueprints for crafting.
Just keep paying the £8 per month u would normally pay a MMO and u will be breaking even and maybe making a profit in the game after about 6 months or so.
The game company does rip u off quite a bit. Its like a Casion and the “House Edge” but u dont honestly expect to be able to grind like crazy and get rich do u? if that was possible then EVERYONE would be doing it and the company and game would be Bankrupt right away.
Just think of this like a Casino game where u might win something and get lucky and just pay ur usual Monthly fee for a MMO.
I’m an enthusiast on the economic model in Project Entropia.
My investment in the game has been purely for escapism. My other interests led to the development of tracking models to try and quantify specific areas of the complex economy, and to get to a point where we can start making predictions.
At the moment my site is used (as one of three) resources for the prices of in game commodities.
It may be revealing to people interested in seeing what our (PE) economy is doing.
It’s perfectly possible to make money in PE, there are many ways to do so some are easy, some aren’t.
The easy ones generally require a big money investment to buy for instance a land area (can easily costs 10 000$)
The hards ones don’t require big investments, but do require time and intelligence.
There are many examples of people (older and recent) that never deposited, or very little and are now profiting on a continual base.
That’s one of the main attractions of this game to me, that you decide yourself how much you are willing to pay for it, there are people that deposit 1000′s of $ to buy all the top gear from the start, and there are people that set themself a limit of 10-15$ a month and try to slowly work they way up.
Yo
Project Entropia, or Entropia Universe as it is now known ( as of today i think) is a great game but again, be aware, your points, or views are valid john k, trading though, not hunting is a way to offset your exuberant hunting bill, also the way the skills are now faster at the start, it rewards you more. Still trading, if done correctly, wsith th emultitude of stock market style info is a valid way to play and socialise and make cash.
My positives on Project Entropia are that theyre are more adults online as opposed to world of warcraft, which is very kid orientated probably because of the real economy, as well there aren’t nearly as many beggars, lik WOW.
My negatives are the decay and ammo cost if you hunt, and the withdrawal from ped back into USD takes 90 days. Apartments cost me a lot of money, they very rarely hold there value.
I have not deposited a dime into PE and have a good weapon, some armor, ammo, and have some PEDs stored up for a rainy day. What you got to learn to do is be patient for your first weak and try to drain sweat from animals, by doing this they will of course attack you (which builds up your defenses) but will eventually give you sweat that you can sell to others. I “sweat” while I hunt, helps me break even, on every hunt now. I have been playing for about a week and have not spent a dime.
After playing entropia for 8 months, the latest VU (version update) has really kiled the game …. allow me to explain. The first thing a player does in Entropia is collect sweat from animals and sell it to other players and indeed is how I started the game. The latest VU has taken the cap off this activity – resulting in nobody buying the players sweat. I have seen new players trying to sell for 3-4 hours, logging off and never returning. Result new players leaving very quickly and the starting town “Port Atlantis” looking like a ghost town.
Secondly the new VU has made everything — harder— crafting,hunting,mining— resulting in older players leaving daily. The ones who are stll playing have raised their prices on tools, weapons, etc, that are bought by players of lower lvl coming into the game, to keep their costs covered. The result is that prices are becoming untennable – MA hve priced them out the market.
The other reasons people are leaving (including myself), are the following….
a) – Over the last 6 months prices for raw materials have increased on average 10%-15%.
b)- With increased raw material costs and lower crafting success rates, this has resulted in items within the game increasing to incredulous prices.
c)- Auction rigging, reseller madness, and scamming are becoming common place now- as unseeing players try to cope with the increasing costs within the game.
Currently no new players are staying around, prices are constantly going up, older players are leaving daily. The main increase I noticed was for space flights to the asteroid. at first the price was 16 PED(1.60US one way), then 20 PED, and now advertised at 25 PED…. all witin 6 months.
RIP Entropia — The Gamers Lost- Beggerman ;-(
I have currently been playing PE for about 2 months and although luck isn’t always on my side, I love it and will not be considering leaving.
The price increase in items sounds true to real life with prices constantly rising in the ‘real world’. I think the reason people are tending to leave as soon as tehy’ve started is because they aren’t getting any assistance from other players. I have to say that was one of my biggest problems when I first started, but then I got a mentor who has helped me out immensely.
Perhaps if you are wanting more new players to stick to the game, then think about becoming a mentor and giving them a break as there is a hell of a lot to learn when you first start playing.
I have been playing for about 3 months now and have put $30 into the game. I will continue to deposit $10 every month for about a year, this would cost the same as WOW or Second Life.
I view this as buying time rather than spending money, because all the deposited money is still there to be withdrawn should I choose.
$10 = 100PED and it takes really really long to obtain 100PED from sweating, for it takes about 1 hour to earn 1-2PED.
http://news.com.com/2061-10797_3-6124572.html
Read the article from the above URL, this guy earns a lot money, but Entropia is a just like real life very competitive and a fight to the top.
This Entropia Universe is much like a casino, to the point Swedish gaming authorities should look harder at its mechanisms. It is quite like a casino in that the only money available to players, is money from other players after MA has taken their Rake. So there is a constant need for new customers/depositers to put more money into the system.
The churn rate is about the same as most games, but their retention is mostly due to economic reasons of the players. In too deep to quit, as selling your skills off can be cost-prohibitive also. So it’s Pyramid Scheme combined with Casino, a dangerous mix for addictive personalities who enjoy the feedback of global achievement. In other words, those who like to see their name broadcast via Globals/HoF’s/unlikely ATH’s, are the ones staying.
There’s of course the smart ones who buy minerals and energy matters for low prices, and resell in bulk to Crafters for higher amounts. These folk can bring in a lot of money in a day with the assistance of online resources which track the selling price of every item going through the auction in game. So yes, there are ways to make money, but only if your the lucky type or willing to not play just sit and buy/sell.
I haven’t played the game, but I can see some real flaws in this guy’s thinking. It’s a game where you can go in and look around for free. It’s a huge world and takes a lot of resources to operate, so the money for service has to come from somewhere.
I really don’t like his definition of exploitation:
According to the parent company’s Nov. 2005 prospectus, the company projects that they’ll pay out 1.4 M Swedish krona to their users in 2005 – about $175K – which is just 5% of their 28 M projected operating income. (Ouch, guess I was right about the exploitation.)
Most games you don’t have the option of cashing in on your in game credit, so even creating a conversion process is a gratuity, even if it might be difficult to amass any large portions of wealth.
Josh, i think the exploitation is that the game advertises to the players that they can make serious profits from the game, when this is true it is on a very small scale. Few players will make money, and the ones that do won’t make much at all. I’ve been doing research on the game and the way i see it the 2 ways to make a profit are painfully slow for a very small profit without spending much or any money or painfully slow for a small-medium profit with a huge investment into the game. The mainstream game supposedly is built so you will almost always be spending more money than you’ll make.
I’m 6 months old in Entropia Universe, spent like lots of real cash, earnt back just a small %, the fact is I enjoy the game, and I will look at it as a game, all the time. It means, I gave myself a rule…
To spend on the game only the 10% of my real-work cash earnt that month. So, if I need “more cash” in game
I just try to “work hard” in real life 
so for example, last month I earnt 2000$ in my real life work and I spent just 200$ in Entropia. That’s all 
Entropia it’s an entertainment, nothing more.
PS.: if you want my autograph just for study purpose
find me at Port Atlantis, hanging around… pretending to be a newcomer sometime 
or in the welcome area 