One of the things I've been doing while not posting to this blog is playing City of Heroes, a superhero MMOG. As part of that process, I'll occasionally visit the official message boards hosted by the game company.
While there, one of my guilty pleasures is trolling the Market board, looking over the kinds of posts people put there. The regulars in that forum...well, they seem to get along with one another, but they're just odd folks to me. The biggest reason I find them odd is that they seem to think that the 'economy' in City of Heroes is an analog of a real-world economy, and thus that they're understanding of that economy makes them smart, savvy people.
I can't say I agree. To explain why, a bit of a primer on the City of Heroes 'economy'.
City of Heroes models the world of superheroes and superhero comic books. The developers of the game nail a number of the tropes and traditions of the superhero world. One way they did this, when the game was new, was in their model of the game's 'currency'; instead of money, superheroes gained Influence when they successfully defeated bad guys, completed missions, and occasionally did other things in-game. There were other commodities that heroes could acquire by doing missions -- bad guys occasionally 'dropped' Inspirations and Enhancements that could be used to increase a hero's effectiveness, but these drops were random to some degree. (For Inspirations, the drop rate was largely random. For Enhancements, the level of the Enhancement was determined by the level of the defeated opponent, while the type of Enhancement was largely random. There's also an Origin factor that is partially controllable -- each hero has a particular Origin and certain types of opponents dropped Enhancements usable by particular Origins -- more on this later.) The use of Influence in-game was largely to balance out the random chance in the game; if you needed more damage Inspirations than you were getting as random drops, you could visit an in-game trainer and trade Influence for them. Likewise, if you had a Mutant Origin and were running missions against the Circle of Thorns, a cabal of evil wizards who tend to drop Magic Origin Enhancements, you could go to a 'store' and 'sell' the dropped Enhancements for Influence, then use that Influence to 'buy' the Mutant Enhancements you could actually use.
Influence, thus, was an in-game currency; however, the existence of a currency is not sufficient to establish an economy, and nobody I know of really considered early City of Heroes as having an economic system.
This changed with the release of 'Issue 6', where the developers introduced two new features side-by-side:
A crafting system: In addition to dropping Inspirations and Enhancements, defeated foes would now sometimes also (or instead) drop Salvage and Recipes. Salvage is basically the ingredients used in Recipes to create things in-game. The most common thing created in-game is Crafted Enhancements, which aren't restricted by Origin the way 'normal' Enhancements are, though it's also possible to craft costume pieces, temporary powers, and other things.
An auction house/consignment system: Rather than create a series of NPC vendors where players could purchase Salvage and Recipes (as players can still do with 'normal' Enhancements), the developers provided an 'auction house' where players can put the Salvage and Recipes (and even Enhancements and Inspirations) they don't want up for sale, allowing other players to bid on those items.
As Influence was already the in-game currency, Influence became the medium of exchange used to negotiate these consignment bids -- the more popular an item, the more Influence people were willing to bid for it and thus the more 'valuable' that item is.
There's nothing particularly wrong with this system; characters have a limited number of 'slots' in the Consignment House that can be used either to place bids on desired items, post items for sale, or simply act as extra storage for items that won't fit in the character's personal or base inventories. If you want an item, you can see what other winning bids for those items are and you can choose to bid that amount (or larger) if you want the item right away, or you can bid lower if you would rather take the time and try to get the item for a lower Influence cost.
Then the Market People moved in.
The Market People really enjoy playing the market in City of Heroes. They like trying to predict the bounces in bidding in the Consignment House system, buying low and selling high. They like being able to get more Influence out of other players then they otherwise would get by selling their items to in-game vendors. None of this is, in itself, a bad thing.
But then they post about it...
They'll post about the first time they sold an Enhancement for 100 million Influence, as if they were posting about defeating one of the game's signature villains, and they'll get congratulatory messages just as if they'd accomplished that far more significant milestone. They'll alternate posts where they try to explain how their activities in the market don't hurt or even help casual players with posts where they decry casual players as lazy and stupid for not following the principles of market 'domination'. And they love, absolutely LOVE, presenting themselves as experts, or at least teachers of concepts in real-world economics and how they apply to City of Heroes.
In short, they're more than a little bit creepy, especially with their insistence that they are smart people who understand 'real economies'. I'd feel a bit less concerned if City of Heroes actually had a real economy, then I could at least allow them their belief and simply say my own is different. The problem is that City of Heroes isn't a real economy -- it's a Cookie Monster Economy.
I have Timothy Burke of Terra Nova to thank for the analogy:
Recently, I happened to catch a segment of Sesame Street that my daughter was watching. In it, Cookie Monster was trying to hire a human assistant to help him sell six cookies. Cookie Monster explained helpfully, “Cookie Monster sell cookies in order to have money to buy cookies”.
Cookie Monster, of course, sells cookies because cookies are the only thing in the world he values. But the City of Heroes Market People sell Enhancements, primarily, in order to...buy Enhancements? Yep, that's pretty much it in a nutshell. (The presence of Salvage and Recipes could be seen as making the City of Heroes market a bit more complex, but the Salvage and Recipes, while they have a certain value, only have value to the degree they're used to make Enhancements -- so it's as if the Cookie Monster, realizing that selling cookies to make money to buy cookies seems a bit silly, decided instead to sell cookies to buy flour, eggs, and sugar to make cookies...to sell to make money to buy cookies. It's a wonderfully circular analogy that perfectly matches the actual City of Heroes economy.)
Of course, there is another option -- that, instead of using their humongous amounts of Influence to buy pricey Enhancements, the Market People are instead simply using their Influence totals as a score pad to measure how well they're playing their version of the game. Ultimately, that is a valid goal to set for oneself in a game environment -- only problem is, how many people do you know in the real world who measure their value (and thus other peoples' value) as people by the size of their bank accounts? Do you really enjoy spending time with those people? Or do you find that their strange interpretation of economics, in which everything has a monetary value if one just decides to do the math, makes them...well, creepy?
In one final attempt to understand these Market People, I decided to try to emulate them -- to play the game they seem to be enjoying so much and try to find out why they enjoy it. I created a character, adventured around until I was high enough level to have a reasonable number of slots in the Consignment House (level 7), and then began following their guides to economic mastery.
First, I began by performing what real-world economists and traders would refer to as arbitrage: I bid on and purchased 'stacks' of Salvage (you can buy up to 10 items of a particular type at one time in a single 'stack') from the Consignment House, took them across the street to an NPC who acts as a 'store', and sold the Salvage for Influence. This is a perfect example of arbitrage, since the two 'markets' are entirely disconnected; the 'store' pays a fixed amount for salvage of a particular rarity, while the Consignment House prices are set by sellers when they enter the amount they're willing to accept in payment for the item they're putting up for sale. I very quickly found that I was able to purchase half a dozen different Uncommon Salvage items (including Sapphires, Chaos Theorems, and Psionic Threat Reports) for 10 Influence each; I'd grab a stack of 10, take them over to the 'store', and sell them to the vendor for 1000 Influence each.
To borrow Market People Speak for a moment, this works because casual players are either stupid (they don't realize that there are places to sell their salvage where they'd receive far more than 10 Influence for each piece) or lazy (they know of the 'stores', but don't want to take the time to run to the stores when they're already at the Consignment House trying to sell other items), or both.
At times I could sell Salvage this way as quickly as I could run between the Consignment House and the vendor; by the time I returned to 'Wentworth's' (the name of the Consignment House in-game), there'd be another stack or two waiting for me to grab and sell. At other times, I'd have to wait a while, but in those cases I'd log out of that 'toon', play a different character, then log back in after three or four hours and sell the stacks that accumulated while I was gone.
Once I got up to about 250,000 Influence, I decided to try my first 'flip'. 'Flipping', in the game, is the term for purchasing an item at a low price and then selling it for a higher price. The Market People like to describe this in terms of cyclical pricing and the principle of supply and demand: when there is a lot of supply on the market, sellers price their items lower to be able to make the sale rather than have the item sit in the Wentworth's inventory slot unsold. As these cheaply-priced items leave the market as the number of buyers grows, only the higher-priced items are left, and thus when demand exceeds supply, price goes up.
Having seen the market in action, I can say that there are items in the game that do follow this cyclical pattern. However, for about 90% of the items in the game, this cyclical pricing behavior means absolutely nothing, and in fact if you graphed the price over time for those items you wouldn't find a cyclical, sine-wave plot, but rather a random scatter-plot. The reason is that, for about 90% of the items in game (but a significantly smaller percentage of the top-level items in-game), there are significant periods of time when those items have no buyers and no sellers -- nobody has an item up for bid, and nobody has a bid in trying to grab an item when it finally appears. In these situations, an item can sell for just about any price. There's a history of what the last five items of that type sold for, along with the dates on which the sales took place, and sellers do appear to allow that history to guide them when posting the minimum acceptable bid for their own items on the Consignment House. However, sellers are also required to pay a fee in Influence equal to 5% of the amount they wish to use as their minimum acceptable bid, so if a player gets a 'drop' of an item that normally sells for 5 million Influence, but only has enough Influence to pay the fee for a 300,000 Influence minimum bid, in many situations the player will post the item for that minimum bid and hope for the best -- the buyer can't actually see the seller's minimum bid, just the history, and it's possible that a buyer will simply post the history price and not bother to check to see if the item may have been posted at a lower price to save posting fees.
Again, if I may borrow Market People Speak, this is because sometimes buyers and sellers are lazy; if you don't have enough Influence to pay the fee for the minimum price you want, you're supposed to hold onto the item and grind out the Influence required to make the fee payment. Alternately, a Market Person will explain that this is because buyers and sellers are stupid; a competent market player will always have some amount of 'liquid Influence' they can use to make these kinds of fee payments, and a competent market player will always start bidding incrementally up from an extremely low bid until he reaches the level he's comfortable with, just in case such a bargain is there to be had.
By searching specifically for auctions with no buyers or sellers, I was able to fairly quickly turn my 250K Influence into 3 million Influence by posting a lowball bid, winning that bid from a poster who posted a lower-than history bid, then re-posting the item for slightly higher than the highest history bid. Every point of that Influence was 'earned', if such a word can be used to describe what I was doing, by taking advantage of inefficiencies in the Consignment House market system -- Michael Lewis would have been proud of me.
Once I had my 3 million 'seed money', the rest was easy: identify a top-level Enhancement with a cyclical price structure. My first such item was an Enhancement that moved between 2 million and 8 million in price depending on circumstances. Post a bid for just over 2 million, but not so much that I couldn't pay the fee for my eventual seller's minimum bid. Buy the item. Post the item back to the market with a minimum bid of 8 million or just below. Sell the item.
Lather, rinse, repeat.
At this point, I simply lost interest in the entire process. The Market People had led me to believe that this was a challenging part of the game -- one poster described the consignment system as 'market PvP', or the equivalent of player-versus-player combat. But all I was doing was the traditional 'buy low, sell high' that traders have been doing since the dawn of time, and identifying the places to do that in the consignment market wasn't anywhere near as challenging as the Market People had led me to believe. I didn't feel smart or hard-working playing the market; I just felt bored.
What made the situation even worse was that I was buying and selling items I'd likely never use. The most Influence is available to be made dealing in high-level items, and to use a high-level Enhancement you have to yourself be a high-level character. But my marketer is level 7, and it takes a long time to go from level 7 to level 50 when you generally only play a few hours on the weekend (and have nearly a dozen different characters to choose from on any given day). I could check my marketing in about ten to fifteen minutes after I got home from work during the week; by the time I got to the weekend, I wanted to do something, anything else other than mess around on the market. Even more ironic is that most of the Influence I've 'earned' would likely be wasted if I did try to play the character in the traditional way; while I could completely trick myself out with level 10 crafted Enhancements -- the lowest level crafted enhancement in the game, and the only crafted Enhancements a level 7 character can equip -- the level 10 crafted Enhancements also have the lowest bonuses among crafted Enhancements (the bonuses increase as the level goes up), and the crafted Enhancements, unlike the 'dropped' Enhancements, can't be 'combined' to become more effective as the character gains levels. In effect, I'd have to choose at what level to throw out nearly all of my existing Enhancements and replace them with new Enhancements, and while there are ways to do that without completely losing all the value in your existing Enhancements, there's no way to do it and preserve all of the value in your existing Enhancements, meaning some amount of my 'hard earned' Influence would be spiraling down the toilet every time I wanted to upgrade.
And sure, I could just get back on the treadmill and grind out a few tens of millions of Influence all over again, but why? I'd already demonstrated that I don't find that fun.
The Market People are welcome to play their game and enjoy it. I just feel the need to respond when they try to tell me how much fun I'm missing by not playing their game -- because I've tried it, and I'm not missing anything.
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