Greedy Goblin

Thursday, May 22, 2014

Mudflation in EVE and real life

"Mudflation, from MUD and inflation, is an economic issue that exists only in massively multiplayer online games. Mudflation occurs when future additions to (or even just continued operation of) a game causes previously acquired resources to decline in value. This can take many forms and have many causes, including new items introduced by an expansion pack, fundamental imbalances in the in-game economy, or even spread of information that allows a previously rare resource to be acquired more easily."

Mudflation is not inflation. Inflation is the same in both games and real life: the increase of item price in currency. It's the devaluing of the currency. EVE does not suffer from inflation, the price (in ISK) of minerals, ships, modules isn't skyrocketing. Mudflation means that the wealth in the hands of players increase, regardless how do we measure this. Typically the measurement is in the game currency, but we can measure it in tritanium and get the same thing.

Where the wikipedia article is wrong is that mudflation exists in real life! What is "increase of wealth in the total people-base" in real life? GDP growth! In real life it's a good thing. The average person gets bigger homes, better health care, better work conditions and so on. Real life isn't a zero-sum game, we can always make the pie bigger for the betterment of the average citizen.

However games are necessarily zero sum. The pixel items have no real value and give no happiness by themselves. If they would, the game developers would just give them to everybody, since they can create game items with a click. Everything in a game is either a "game score" or a tool for competition. A piece of high level gear in a typical MMO is valuable only because others don't have it. If everyone has it, it's baseline gear, by definition. The textbook definition of mudflation mentions this event, when new items devalue the previous "awesome" gear.

This means that the "GDP growth" which is the very purpose of every non-symbolic government decisions in real life, is an bad thing in a game. It's bad, because it makes game performance ("winning") incomparable with previous performance. Most MMOs exploit this, purposefully mudflating their game, creating the illusion of progress in the average player. Of course it won't work for long, hence the short lifespan of WoW clones, and the constant decline of subscribers of the #1 MMO: WoW.

EVE Online claims to be an MMO where player actions matter. Hence purposeful mudflation has no place in EVE. Yet it is there, and it is very easy to measure it: the PLEX price. This connects real life time to in-game wealth. It means "how much ISK do I have to give someone to make him pay my subscription?" And the answer is: much more than a year ago. The reason for it is the same as in WoW: devs are constantly buffing item creation options (like mining barges, tractor units, marauders) and constantly nerfing item destruction options (suicide gank nerfs, buffing cheap ships compared to expensive ones). These all create the illusion of power growth for players. It's an illusion, because the other guy also mines more and also loses cheaper ships, so the ranking of the player doesn't change.

If CCP wants a really player-driven, competitive game, they must stop giving out welfare-wealth. The average wealth/active account (measured in ISK) should be kept constant by increasing value sinks (ISK sinks, item destruction) and decreasing faucets (ratting, mining, missioning outputs). Of course these are unpopular among players, since their illusion of progress is taken from them. If the average wealth is fixed, the increase of wealth of one player could only happen by the decrease of wealth of another. Of course wealth decrease can happen in less painful ways, like letting players give up wealth for badges, or encouraging bringing expensive ships to battles.

Finally, why is mudflation bad in a sandbox game where "rankings" aren't obvious and universal (like ilvl comparisons in WoW)? Because it hurts the newbie the most. His options are limited to gain wealth so mudflation increases the income difference between newbies and veterans.


Tonight was especially bad for Goon slaves. Don't be like them, leave the servitude of evil!

27 comments:

Rammstein said...

@arrendis:

"And every day, agriculture is powered by the energy streaming in from space - from the sun. How is that different from isk being produced by mining asteroids that respawn every day?"

If you can't tell the difference between a game and real life already, there's nothing anyone could say over the internet that could help you understand. Sorry.

"This is where you start to fall apart. Real life is, in fact, a zero-sum game."

No it isn't.

"This is hidden by the fact that the sum is totaled on a scale you will never see."

No it isn't, squared. A. That's not a fact, that's a metaphor. There isn't a giant invisible scale out there measuring utility, so it's not a fact. B. The metaphor is incorrect.

Anonymous said...

Former eve economist, which has taken a position in a university now, made a talk on that. Basically it was the opposite of what you're writing here. Inflation does exist in eve, prices economy wise are rising (can't remember the exact number, but you can Google it) with plex prices rising extremely fast. Also there is no devaluation of early gear like in theme park mmos. Almost every item is being produced, bought and destroyed (used) on a constant basis with no correlation with player age. It would be wise to read his research.

Anonymous said...

by definition mudflation was caused by every npc dropping currency when killed. these money faucets increase the money supply. I played / coded on a mud that was developed at my university by one of the economic faculty that was designed to have a zero-sum economy. some of the post grad students wrote thesis about the mud economy.

in eve there are money faucets and money sinks. while FW exploitation that happened a year or so back was technically an ISK sink my belief is that it increased the velocity of the economy and tapped into a lot of what were up till then static piles of isk.

Gevlon said...

@Arrendis: I believe my blog will be better off without you being obtuse and writing literally longer comments than the original post, arguing definitions and side issues.

Goodbye.

Chanina said...

It is always tricky to separate sinks and faucets correctly in eve but in the overall context you have some good points.

Eve has inflation like the real world has but Dr. Egnoy presented on fanfest some stats and it was a very common value like 3 - 5% or something. Thats a healthy range for a growing economy.

I agree with you that eve needs a few more sinks to take isk out of the game. But you don't have to hit everything with a "50% less income for everyone" hammer. It isn't that far out of balance and more convenient ways like higher production costs will most likely bring better solutions.

Especially if you think of supers and titan production. thats currently only a matter of POS fuel and besides buying the BPOs for the supers there is no isk sink involved. After Crius that will change and even Jobs at POS will have significant production costs and that will hit exactly those who are rich. the space veterans and old alliances.

L Papay said...

well, price increase is not always inflation. Most accurate definition would be more money units chasing same amount of goods. So (total isk)/(market volume) .. and problem is how to measure market volume in terms other than $/Isk.
Then again, one can use time, and see how much hours you need to put in to say, get PLEX. It is not monetary inflation, but might be much more effective measurement. After all, ISK are "printed at will", time is not, and both in EVE and in real life the real question is how much time I need to work (spend time on) to get what I need.
And this brings things again at the matter of no-lifers and their impact on gameplay design.

Bobbins said...

Isn't one of the greatest causes of mudflation in Eve the constant buffing of Nullsec?

Tom Hoffman said...

I would say the parallels to real world economics are a bit more direct. The "increase of wealth in the total people-base" in real life is simply that -- the increase in wealth. We just don't talk about "wealth" statistics much in real life because it is harder to calculate or estimate than income.

The analogue to mudflation is technological change in real life, and dealing with it is a difficult problem for economists that has no settled answer. Are people wealthier today than 10 years ago because they have better televisions, despite the fact that flat screen TV's have gone down in price, does your wealth go up in down with the market price of your cell phone or its utility, etc.

GDP is production over time. If you have a hurricane hit, that's bad for wealth, but good for GDP over the medium term, because you're re-building what was destroyed.

Alrenous said...

Inflation is inherently the conflation of two things. Inflation is defined as the decreasing value of coinage, but this has two possible causes. Increasing supply of coinage; and decreasing supply of goods, which is the same as decreasing demand for coinage.

GDP growth would, left to itself, lead to deflation, because it will increase demand for coinage by increasing supply of goods. Mudflation is but browner inflation, the opposite of GDP++. That's the simple reason GDP++ is good and mudflation isn't.

But an example: when someone else buys a house, it doesn't make yours less valuable. It still keeps the rain off you and your stuff.

While you're correct that MUDs are zero sum, it's because they're inherently competitive, not because pixel wealth isn't 'real.' EVE has PVP, so when someone gets a better ship, the time-to-die of your ship goes down. (Keeps less rain off.) Even without PVP, there's status-whoring, see WoW mailbox-blocking mounts. Without direct PVP, pixel goods become positional goods for indirect PVP. If you buy your house not to keep the rain off but to one-up your neighbours, someone buying a similar house does decrease the value of that investment.

When the goods supply goes up but the ISK supply is kept constant, it will look like deflation but is still mudflation, since the price of PLEX will going up at least as fast. Your grocery bill has gone down but your rent has gone up by at least that much. Or, it means something like the standard throwaway ship has gone up a class; it looks like the price of ships is going down but really the price of flying is staying the same.

Gevlon said...

@Chanina: there is indeed no big inflation. No one claimed otherwise. I'm talking about mudflation. Simple examples:
- Everyone has his ISK doubled: 100% inflation.
- Everyone has his ISK and ships and modules and everything else in his hangar doubled: 100% mudflation with no inflation.

@Bobbins: buffing one zone would mean competitive nerfing the other. The mudflation comes from EVERYTHING getting buffed.

@Alrenous: indeed, if tritanium supply increases, the total wealth of players increase, therefore PLEX price will increase with seeming deflation. However it won't really happen, since there is very little barrier of entry of different farming opportunities, so the prices will return to their original value (except PLEX of course). With simple example: if mining yield would double overnight, the price of the trit should drop to half. But it won't as many miners will just switch to missioning or ratting.

Von Keigai said...

games are necessarily zero sum.

False in general. Also false in EVE. EVE has real trading. Outside of trading, it is quite possible for a player to have fun without impinging on anyone else in EVE. For example, you can fly around doing sight-seeing, and making pretty pictures of what you see.


The pixel items have no real value and give no happiness by themselves.

Oh, posh. Every time a ship model is updated, people ooh and aaah. (You can actually hear the noise at fanfest, or so I have read.) That noise does not mean they are thinking, "aha, I am uniquely positioned to use this new paint job to increase my income/kills/etc. at the expense of everyone else". It means, translated from the chimpanzee: "pretty! shiny! me like! me want!".

Or, consider the skins they are now selling. Entirely fluff; no game effect whatsoever. Yet people buy them. You simply cannot explain that within a paradigm of zero-sum.

As for pixel items having no value, that's poppycock. Easy proof: Please give me all your ISK. No? Aha. Now: if your pixel money truly had no real value to you, you'd be just as happy to give it to me as not. You have not done so. Therefore I can conclude that you do value your ISK. (I'd offer you a dollar for all your ISK if I were allowed to, to make your valuation clearer. But let me also note the existence of RMT.)


If they would, the game developers would just give them to everybody, since they can create game items with a click.

I don't know how you miss this stuff. But this is exactly what they do, for example at Christmas, and sure enough it makes everyone happy. Or most people at least. Most recently, we all got a bunch of Geckos. People do not respond to that by saying, "dammit, stop it with the free stuff, I hate it". They say, "ooh, cool".

Now, why don't they do it all the time? Good question!


As for the PLEX price, it does not relate to mudflation; indeed, PLEX are a unique item in EVE in that they have significant value but no in-game use. Their main out-of-game use -- extending subscription by 30 days -- has not changed. Thus, you are 180 degrees off on that. The increased price of PLEX is caused by (a) currency dilution ("inflation"), (b) increased demand for PLEX from new uses, and (c) increased demand for PLEX as money.

Rammstein said...

@von keigai

"Also false in EVE. EVE has real trading. Outside of trading, it is quite possible for a player to have fun without impinging on anyone else in EVE. For example, you can fly around doing sight-seeing, and making pretty pictures of what you see."

This is true; however it's not fatal to Gevlon's argument.

This is because the continuance of his argument doesn't actually depend on EVE being a zero-sum game: "This means that the "GDP growth" which is the very purpose of every non-symbolic government decisions in real life, is an bad thing in a game. It's bad, because it makes game performance ("winning") incomparable with previous performance. "

Your counterexample of flying around taking screenshots, for example, clearly doesn't go against this latter claim. Gevlon just needs to tone down his ZSG premise to the minimum needed to support his ongoing conclusion, and then reargue the new premise. It's somewhat disingenuous of you VK, to write such a long response to a minor part of Gev's argument, and not even spend a sentence analyzing how your critique affects his main premise.

"As for pixel items having no value, that's poppycock. Easy proof: Please give me all your ISK. No? Aha. Now: if your pixel money truly had no real value to you, you'd be just as happy to give it to me as not"

You're using obviously different definitions of 'real value' here; arguments based on equivocation are not productive or worthwhile. The added rhetoric does nothing to help this situation.

"People do not respond to that by saying, "dammit, stop it with the free stuff, I hate it". They say, "ooh, cool""

No, they by and large respond by saying "dammit, stop it with the free stuff that's not this other free stuff that I actually want."

"As for the PLEX price, it does not relate to mudflation; indeed, PLEX are a unique item in EVE in that they have significant value but no in-game use. Their main out-of-game use -- extending subscription by 30 days -- has not changed. Thus, you are 180 degrees off on that."

This line of reasoning is irrelevant.

"(a) currency dilution ("inflation"),"

If the amount of currency doubles, and the amount of ingame goods doubles, then the result is 0% inflation, but the price of PLEX will still double--what do we call this increase? Mudflation. Again, this disagreement is semantical and definitional, therefore uninteresting; but if we include the price of PLEX in ingame inflation, then it raises 2 important questions: A. who decides how much PLEX counts towards inflation index?
B if CCP drops/raises the price of subscription/PLEX in terms of real world currency, that would then dramatically affect your measurement of ingame inflation; which seems like an undesirable consequence.

Von Keigai said...

Rammstein, I torpedoed the heart of his argument. You claim that the ZSG claim is not needed, but I am not seeing that. Gevlon uses it to support his claim that "GDP growth... is an bad thing in a game". Which is false; GDP growth in EVE is a good thing. (Also you need the claim that pixel items have no value, another pretty obvious boner.) As such, you cannot look at the size of EVE's economy changing and deduce anything about "mudflation".

Gevlon then attempts to get to his conclusion via a second line of argument, namely, that "purposeful mudflation... is very easy to measure [via] the PLEX price." This is entirely false, as I argue. In fact the PLEX price is one the few prices in the game that mudflation won't effect. If you put in, say, free Gecko drones, then the prices of other drones will drop slightly since they substitute. But there is no substitute to be found in-game for PLEX.

Fidtz said...

The correct amount of mudflation is important because it prevents the *permanent* consolidation of wealth in the hands of a few people/empires without those few having to keep running to stay in place. In the long term it keeps the game world dynamic. What the correct amount is is unknown but it is not zero or less.

This can be seen in the real world in the rise and fall (or mutation) of the 19th century railway magnates. If good roads, internal combustion and then aircraft had never happened, those people would still dominate the whole transport market.

Technology allowed their dominance then expanded (mudflated) it away from them.

Gevlon said...

If GDP growth is a good thing, then devs should grow it HUGE by giving everyone free stuff.

Of course PLEX is the item that mudflation won't effect, that's why it's a perfect item to measure the mudflation. In simple terms: a year ago, you had to give 100M tritanium for a PLEX, now you have to give 125M.

Anonymous said...

What are you measuring the decline in value by? For mudflation to exist, items in game must be declining in value, which they aren't.

I can only think that you are coming to this conclusion from the increase in plex price. So because a plex costs more isk and items are worth the same amount of isk, then to buy a plex with isk converted from items would require more of those items. But that's not mudflation, that's the increase in price of plex and nothing more. You've purposely chosen an item that has gone up in price, pointed at it and said "that's mudflation right there".

Think about it from the point of view of a player who doesn't touch plex. For it to be mudflation, his value would need to be in decline too, since it's a total economic effect, not an effect to target only buyers of a certain item. Plex prices increasing are no more a sign of mudflation than the increase in the price of wool in WoW due to increased demand.

Anonymous said...

Start a personal property income tax that is taken daily. This includes all assets as well.

I don't think its the faucets, its the big money makers and horders in the game. Those that buy plex just to maintain their isk worry free of inflation. If there was "asset tax" people wouldn't be so inclined to avoid inflation and you would see plex prices go down.

Xmas said...

I think you're leaving out something on Plex prices here. CCP has introduced more uses for Plex (multicharacter training, mostly) that has driven up demand.

This isn't necessarily inflation or mudflation, though it certainly does have a considerable knock-on effect for people who farm isk to pay for their accounts with Plex. The thing about Plex, unlike other items in the game is that once it is used, it's gone, and the only way new Plex comes into the game is by people buying them with real life money. All other items in the game can be generated in the game (farmed, mined, salvaged or built).

I think CCP is looking to relieve some of the Plex price pressure with this ending of ETC sales. The time codes and the time code bazaar are just a level of complexity that add lag to the efficiency of the in-game Plex market.

So really, the high Plex prices right now are a signal to people with Real Life Money to buy Plex and exchange them for in game money...which sounds like a good idea. :)

Provi Miner said...

A few things: Plex first, the rise in plex has been comming simple reason it needed to be put on par with RMT. Make plex purchase in game/or through ccp worth as much as selling plex for real money (not through ccp).

"hurt the noob" All noobs are screwed, people tell them to mine (which is horrible unless you like it), then people tell them station trading is where to go except you need a decent bankroll, then people say null or WH and so on.

A noob can make isk it just is not going to happen early in their eve careers. IMO noobs should be told "try everything" find one thing you love and if its an isk producer do it and have fun. If it is not an isk producer: Find something that you don't mind doing in addition to what you love and have fun. I personally don't mine as much as I did when I started, now I do about 5 different things all poorly but each keeps my attention for the short breaks between what I do enjoy. I mine a little, I pve a little (rat, mission), I trade a little, I run cargo a little, nothing serious but all equal on my value charts. The goal is enough isk to keep flying the ships I want to fly to pew pew. I refuse to be an srp whore. I know what I don't like and I don't do them. I don't sov grind, I don't pi or do reactions, I don't do moon goo, I don't fly above a BC and rarely that. There is no corner of eve I won't go to, there is no space off limits

Von Keigai said...

If GDP growth is a good thing, then devs should grow it HUGE by giving everyone free stuff.

No. GDP growth is good when it brought about by non-zero-sum means -- mining, production, trade; whereas it is neutral or bad if it is brought about by zero-sum means including "whipped up out of thin air". Adding all those Geckos is zero-sum right now. Long term it helps all current players at the expense of all future players. (Probably a slightly bad thing overall.) Whereas having me out on a grid killing sleepers is a good thing: it's "content". It's what CCP is selling.


PLEX is the item that mudflation won't effect

At least we agree on that. Or seem to. You contradict yourself in the next sentence.


that's why it's a perfect item to measure the mudflation.

No. You cannot measure a change in a thing with something not affected by that change.

Gevlon said...

@Von Keigai: PLEX is the gold standard. Its price is going up because everything else are in abundance.

@Anonymous: look at fleet ship "inflation". Once upon a time, BC fleets were the thing. Now T2 cruisers are the intro thing, everyone throws away BS fleets like dirt, capital fleets are common and every alliance tells their people to get into supers.

Anonymous said...

"If GDP growth is a good thing, then devs should grow it HUGE by giving everyone free stuff."

You make claims like this very often. Just because some amount of something is good doesn't mean any amount is good. During the winter I want more heat. That doesn't mean I want it to be 1000 degrees. There is a healthy amount of growth, and an unhealthy amount.

marseillefrog said...

@ Provi Miner

"A noob can make isk it just is not going to happen early in their eve careers"

This is not true. I made my first billion in around my first 21 days through trading by reading this blog and marketsforisk blog. And have made many billions since then.

Von Keigai said...

Gevlon, PLEX are a salable good, subject to the normal laws of economics. Supply and demand. It is a fact that their ISK price has risen. But even allowing that they move inversely to the supply of other stuff in the game, your interpretation is not the only possible explanation. I have given several reasons for the PLEX:ISK price rise. I assume you do not doubt that the implementation of multiple character training caused an increase in the demand for PLEX.

And in fact, I am curious as to where you are getting the idea that other prices are down. It certainly does not appear to be the case for minerals, in the most recent dev-blog where CCP showed price data. Last I was aware, Dr. Eyoj was saying there was modest inflation in EVE.

Tegiminis said...

You do not understand what zero sum means.

A "zero sum game" means that one person's success comes at the expense of someone else. While EVE may be a zero sum game, WoW most certainly is not; you receiving a nice piece of gear from a boss does not prevent somebody else from walking that same path.

Zero sum games are purely PvP. You can't have a zero sum pvE game.

Gevlon said...

@marseillefrog: but we made our money from trading. That's coming from other players, not farmed.

@Tegiminis: wrong. If others get the good gear, your gear is no longer leet. It's like a running contest. Other runners can't slow you down. But if they run faster, you lose.

Azrael said...

Removing the option to insure carriers and dreads could be a very, very interesting way to cutting down the money supply.