Game Economy. Why is it like this and what does Crafting have to do with it?

What is it: a popular science article
The purpose of the article:To entertain your brain


The article was translated using neural networks, so don't be in charge if something looks weird.

Dear readers, I will not use the word "in my opinion", you will just remember it, ok?


When talking about the economy, it is important to understand that we are talking about a real economy. The postscript "Game" does not detract from its essence at all. This is a real economy, and it has all the laws, properties and concepts such as demand, supply, good, need, fair price, inflation and many others. You just need to take into account the differences between the game and real life.

What do we have?

The player is trying to satisfy their need for an item. To do this, he has only one opportunity - to get an item by chance: buy it from a vendor, craft it, but most importantly knock it out of monsters and chests.

But then there is a problem – there is a lot of content in the game, so much of it that it is almost impossible to knock out the desired item. The situation gets even worse as the level increases, as there are more options for items (at the beginning you can get an item from 1 to 5 lvl, and at the end from 1 to 100 – can you feel the difference?). Therefore, the difficulty of the game increases.

Here we will stop in a little more detail. Yes, the difficulty is increasing. But why, and can this be avoided? Of course you can! To do this, you need to keep the probability of dropping an item of your level the same throughout the game: you know how many people say (maybe you too): "Yes, I went to the map on what I picked up from the floor!" This is because the chance to get an item is higher at low levels (other factors also affect, but we are talking about the economy, right?). But why not do it? Because the author of the game obviously wants the complexity of the game to be uneven, so that each next step is more difficult, and only the best ones would be ahead. Otherwise, the only measure would not be the ability to close the content, but the time it takes (this is what happens for those who close the content after all, they compete for how long it takes). But the most important thing is that you would get items from the floor, the market would not be needed. But we also see that the game is complex, and that there is a market, that is, the authors want a game built on the market, since it cannot exist otherwise.

So what should We do with that?

The answer is simple: you will never be able to get the right item yourself, but 100 000 people will be able to do it for you! But where are they? They are on the market! And what is the market full of? Items that players find, and which, as we have already understood, they never need. But someone else needs them. Just because the supply and demand of 1 person and 100 000 people are not comparable!

Great, how about barter?

- No way, because of the huge amount of content, you will never find a match: he needs your item and you need his item. So you have a monetary system! And now you start receiving a salary in the form of currency in the game, and it even depends on how good an employee you are-whether you do 100 tasks per hour, or are able to solve tasks 24 hours a day.
In this way, you are guaranteed to be able to get funds to get the item you need, you just need to work hard (greetings from real life; how is it: hard work brought millions?)

But it doesn't work that way!

Yeah, it doesn't work. Prices are rising faster than you earn, or your product is not on the market. Why is this happening? And these are the laws of the market and the economy. After all, it's not about how much money you have, but how much it is compared to others. Everyone will earn about the same amount, which means they will always remain at the same level where they were, at the level where you can't afford a particular item. The only thing that saves you is that sellers are too lazy to raise prices for items that are already displayed, but not particularly.

But why? After all, I save up, I don't buy anything, and the rest of them spend, I should be put richer in comparison with them, right?

You should... but only if the goods and money disappear. In the real world, there are services – you pay money for nothing, in the real world, there is the destruction of objects, obsolescence, losses. But this is not the case in the game. You spend money and get its equivalent - an item that won't disappear, never, and will be sold for the same or even more money. Therefore, those who have already become rich will remain so, and those who are poor will probably never buy what they cannot afford.

So, wait, why it will be sold for more money?

So this is because there is more money on the market, but they also do not disappear. You can offer more money, but everyone else can, and demand is growing, so prices are rising.

What about crafting?

Are you spending divine orbs or are the Exalted orbs faster than you get? And Is it paying off?? No, this is not happening. But let's focus on crafting in more detail

When do we use crafting? When we don't have the right item and can't get it on the market, it's either not there or the price is too high. That is, you have a need that the market is not meeting. And then you use Crafting. Anyone can use it, it does not depend on prices. And this is the definition of the concept of "public good". In fact, craft acts as a kind of ration for the unemployed, a benefit. And of course, you can't expect that the quality of such soldering will be comparable to what is on the market. So crafting will never compare to the market, ever. As with knocking out monsters, crafting is a game of huge randomness, and gives you only slightly more control than a normal search. If we could get what we want through crafting – the market would be destroyed, and the game would become linear in its difficulty.
Yes, we, unemployed homeless people, can criticize the government, GGG, that it is impossible to live on such a benefit, and that its quality should be improved. But don't expect it to match the market.

By the way, all of the above applies to vendors too.

But why can't the right item be on the market? And why is it so expensive?

All because of the costs. What are the game's costs? Time and room in the chest. These are real costs, so don't underestimate them. What would you choose to knock out if you could - a Hand of Wisdom that will go away in an hour, or a two-handed hammer that will lie in the chest for a month? Maybe a hammer, but then you will set it for 100 DO, because there are no other offers anyway.

Lack of demand reduces supply, and raises prices. But why is there no demand for some items? All because of metagame. You've seen the stats – 7% play as warriors, and 20% as Monks. Obviously, the monk equipment market will be more active. And the warriors to sit on the dole. Therefore, improve the balance in the game, fighting fraudsters and counterfeiters (dupers), so that all areas of the market are developed, is an important task of the GGG, if of course they care about the welfare of citizens-players.


And how to make everyone feel good?

1. Well, we have already named the balance – you just don't need to craft if the balance and market are fine.
2. To avoid price increases, you need to withdraw goods and money from the market. It is necessary that they "spoil", but this will make the life of the poor even more difficult. There is of course a natural decline, with the departure of players, but the main tool of GGG-new leagues, they just reset everything.
3. You can try to even out social inequality through a progressive wealth tax. But how to do it? You are rich, if you buy luxury goods, then the tax will be included in the price of expensive goods, in the form of a commission.
4. Funds from these taxes can be "spent" on increasing benefits. Benefits are crafting. But how do you know what the person who needs the allowance is crafting?

Lots of questions, lots of opportunities. Above all the economy in the game has become what it is for a number of objective reasons. Some of these reasons are in the GGGS themselves, some in the nature of the economy. Some can and should be influenced, but changing others will destroy the very foundations of this game.

I hope you were interested. I am waiting for Doctors of Economic Sciences in the comments.

Thank you for your reading, interest, and comments.

P.S.
And I'm not a fan of this, I don't like playing the market, but I have to ask myself: why then, if the game naturally takes you to the market – why is it so complex, why don't you introduce impersonal trading through an "auction"? (although no one uses a real auction with bids)

Its simpler than all of this, the game is just littered with bots i mean ABSOLUTELY packed to the gills, the currency markets are flooded in the first 2 days of a league and everything thats worth anything is bought out by RMT.

This then raises the minimum entry level for even the crappiest gear as there is a lot of botted currency in circulation similar to your country's treasury printing money.

So inflation kicks in and here we are. They are trying to combat it with gold but the facts are the best stuff can still be traded therefore has the most real world value making these things target items for flippers scammers and RMT.

What needs to happen is Bind on account for certain things, the only stuff that should be tradable is services, maps, event/league tagged loot, Bind on equip items. Once you craft on or equip something thats it make it bound. Its the only way to stop RMT en mass, gold wont do it.

Items themselves need to be bound to account, make currency be a 0 sum game using exchanges only this way people can still exchange for currency for crafting items, but they have to give currency in exchange.

"

stormyknight#7628 wrote:

This then raises the minimum entry level for even the crappiest gear as there is a lot of botted currency in circulation similar to your country's treasury printing money.

Yeah, nice сomparison

"

stormyknight#7628 wrote:

What needs to happen is Bind on account for certain things, the only stuff that should be tradable is services, maps, event/league tagged loot, Bind on equip items. Once you craft on or equip something thats it make it bound. Its the only way to stop RMT en mass, gold wont do it.

This, of course, will have a huge impact. We will move from the market of goods to the market of services. Your savings will become much more valuable. The situation when the product does not lose value will be immediately resolved. The gap between the poor and the rich will be reduced. But will this be enough? The currency will still not leave the market. Products for weak builds will still be unavailable.

Adam Smith's answer to the Feldstein-Horioka Paradox: The invisible hand revisited
https://www.sciencedirect.com/science/article/abs/pii/S0165176510003307

Feldstein–Horioka puzzle

Short summary
How do we promote the "good(s)" in a society ? (what is the "value" ?)

"

finisterre#5659 wrote:

Adam Smith's answer to the Feldstein-Horioka Paradox: The invisible hand revisited
https://www.sciencedirect.com/science/article/abs/pii/S0165176510003307

Feldstein–Horioka puzzle

Short summary
How do we promote the "good(s)" in a society ? (what is the "value" ?)

Spoiler

In a micro-term, it's about the settlement.
The minimum definition of the "trade" is the creation of good between two parties(entities), by sharing something that doesn't need justification.

"

What is it: a popular science article
The purpose of the article:To entertain your brain

Sure, why not :D

YES, that's exactly what we're talking about

By the way, about crafting and currency.
I think in GGG at one time there was such a dialogue:
- So, we have a ton of things, and no one will ever find the right one, what to do?
- Yes, let them change, the market will distribute them.
- Yes, exactly, but not by barter. Let them trade for gold. But inflation will kill us, if only the gold disappears somewhere ...
- Let them eat it? Heat the fireplace with it? Decorate items?
- Stop what? That is, you can throw out gold to make the item better?
- Yes, but you do understand how many different properties...
- Exactly! Let it be a random effect!
- One random effect? It's kind of stupid..
- Yes, you're right, let it be 10! And let's call it an " innovative crafting system." and forget gold. All in the release!
- But the players will never be able to get what they want! maybe we will give them...
- Are you sick? If they got what they wanted, why the hell would we be making this up right now? Launch it.

You can make that items can be traded only limited amount of times. 1-2 maybe, then it becomes bound.
( prob should make that "fresh" dropped item, i.e. either until it leaves the map it was dropped in/some time elapsed if crafted/boss item can be "traded" between party/guild members freely)

I had an interesting conversation with a neural network. I thought about the fact that the role of crafting in this system does not suit players, but it can not give high results either. The neural network did not agree that this is a "benefit", because the result is still not guaranteed, but agreed that if the result was guaranteed it would kill the economy.

Well, I asked about various issues of the economy, then translated it to PoE2 and we had the following dialogue (excerpt)



I think this is a very interesting compilation of people's knowledge. And can really be considered. Indeed, you can encourage crafting in different ways - give experience, give a progressive bonus. And the system of "mentors" is generally something, although the neural network could not clearly answer what it meant, but it's worth thinking about it.

"

Radonegsky#6656 wrote:

I had an interesting conversation with a neural network. I thought about the fact that the role of crafting in this system does not suit players, but it can not give high results either. The neural network did not agree that this is a "benefit", because the result is still not guaranteed, but agreed that if the result was guaranteed it would kill the economy.

"

I think this is a very interesting compilation of people's knowledge. And can really be considered. Indeed, you can encourage crafting in different ways - give experience, give a progressive bonus. And the system of "mentors" is generally something, although the neural network could not clearly answer what it meant, but it's worth thinking about it.

I agree.

"

Well, I asked about various issues of the economy, then translated it to PoE2 and we had the following dialogue (excerpt)

Spoiler

Мe: Okay, but if players were highly likely to get the right item through crafting , it would destroy the market, don't you agree?

NN: Yes, you're right. If crafting gave a high probability of getting the right items, it could really damage the game's economy. Here's why:
1. Reduced market demand:
* Players would buy items less frequently
* Would you rather craft things yourself
* This would lead to a drop in prices
2. Price destabilization:
* Reduced value of rare items
* Devaluation of unique mods
* Disruption of the balance of the economy
3. Loss of diversity:
* Reduction of the number of trading players
* Reduction of the product range on the market
* Reduced activity in the trading system
However, the game balances this in several ways:
4. Crafting Limitations:
* Difficulty of getting perfect combinations
* Need for rare materials
* Risks of unsuccessful crafting
5. Economic incentives:
* High cost of some materials
* The need for rare catalysts
* Time spent on experiments
6. Control mechanisms:
* Limit the number of attempts
* Risks of damage to items
* Unpredictable results

This creates a healthy balance:
* Players can influence their equipment through crafting
* The active trading market remains
* Economic stability is maintained
* A diverse gaming ecosystem is emerging
Thus, the uncertainty of crafting results is not just a disadvantage, but an important element of the game's design that supports its economic stability.

Me: Yes, but players are not happy with how often you can craft the right item. How can I improve the quality of crafting and not harm the market?

NN: Here are some solutions that can improve the situation:
1. Progressive bonus system:
* The more failed attempts, the higher the chance of success of the next one.
* After a certain number of attempts, the chance of success gradually increases
* This saves risk, but gives you hope for success
2. Improvement of the specialization system :
* More substantial bonuses for specialization in certain types of subjects
* Ability to choose specialization for specific mods
* Progress in specialization should be more visible
3. "Crafting experience" system:
* Gain experience for each attempt
* Leveling up the "crafting level"
* Bonuses to the chance of success at high levels
4. Additional quality control mechanics:
* Ability to preview the success rate
* "Critical success" system
* Special conditions for increasing the chance (time of day, location)
5. Improved material system:
* More predictable impact of material quality
* Ability to" concentrate " rare materials
* Material "reinforcement" system
6. Social Mechanics:
* Ability to collaborate on crafting
* Mentoring system
* Group bonuses to the chance of success
7. Economic incentives:
* Ability to "save" failed attempts
* "Return on investment" system
* Special rewards for long series of attempts
8. "Prediction" system:
* Ability to predict the approximate result
* Indicators of potential value
* Warnings about extremely low chances

All these changes should be introduced gradually and with careful testing, so as not to disrupt the balance of the game's economy. It is important to remember that the element of randomness is part of the gameplay, and eliminating it completely can make the game less interesting.

A few characteristics of this session that I've noticed so far.
1. This seems a linear (straight forward) simulation, or a modular approach or a piecemeal approach, based on the supply-demand model.
2. Almost all of those suggestions imply "zero sum" model, where the outcome will or should be balanced.

Zero-sum as the result is described as a simple "input -> outcome" model. This model as a whole shows equilibrium. It does not necessarily mean "input -> outcomes (proper results and wastes)" because it's basically "the whole = A + non-A" model, not necessarily represents "A + non-A = the whole" model.

Why/How ? To define "A + non-A = the whole" model going from left to right, we need to define the whole "A" or the whole "non-A", which means "A + non-A = the whole" model is actually "a whole + another whole = the whole" (∞ + ∞ = ∞) model. In this assumption, "non-A" is the "deal breaker" (and it should be removed somehow to result in "zero-sum", ∞ = ∞).
The AI simply listed the possible "deal breakers" and showed how to remove them, then added the reasons afterwards. (Some might notice there are some AI's suggestions without reason. We can keep digging a hole by asking questions on these.)

An instruction model of the "Paradox detector"
If the cost of dealing with a particular assumption exceeds a certain range, the system will try to avoid that outcome.

This is "how" (not necessarily "why") LLM based AIs sound like reasonable. ("if it sounds less paradoxical, it should sound reasonable" model.)

Now back to the topic, the inflation. The correlation between crafting (bases and orbs comes from drops -> crafted items) and trading (non-limit series of zero-sum's) in the current system can be described as "a zero-sum model with the excess".
For example, the less supply (less "the excess"), the more demands (more zero-sum base, the inflation).

It's basically a standard deviation model, the shape of RNG :P (The inflation curve rises for a period of time, and then stays within a certain range as the "burnout" rate continues to increase over time, unless someone evaporates orbs on the server.)
If we deny the RNG, there is no choice. We got to go for a deterministic model. There is no exception. (It's "dumb" simple. It's dumb and reasonable.)

I assume GGG simply decided to maintain both. Because why not let the players play their game ?

"

In a micro-term, it's about the settlement.
The minimum definition of the "trade" is the creation of good between two parties(entities), by sharing something that doesn't need justification.

"

What is it: a popular science article
The purpose of the article:To entertain your brain

Sure, why not :D

What a bloated post .....

here

Nobody wants to play a game where nothing drops
Nobody wants to play virtual stock trader.

If you describe a session in terms of currency, the game sucks.
When currency acquisition is the game , its a job.

A complex crafting system that made it inaccessible to 90% of the players is what
gave crafting its value, nobody wants to do it .. but being good at it was worthwhile.

Relying on rng to cover up design flaws is lazy, its rampant in the game and the game is going down hill.

"

Jitter912#4278 wrote:

Nobody wants to play a game where nothing drops
Nobody wants to play virtual stock trader.

If you describe a session in terms of currency, the game sucks.
When currency acquisition is the game , its a job.

A complex crafting system that made it inaccessible to 90% of the players is what
gave crafting its value, nobody wants to do it .. but being good at it was worthwhile.

Relying on rng to cover up design flaws is lazy, its rampant in the game and the game is going down hill.

Yes, probably.

The point of the article is not to justify but to explain. Understanding why the game is in this state will help you adjust your expectations. It also lets you know which changes are more important.

It seems that it is possible and not very difficult to make crafting convenient and predictable, but in fact it is a matter of the basics of the game.

Of course, if you agree with what is described in the article... If not, then let's discuss,the forum is for that. Even the neural network did not agree with me everywhere and gave arguments)