Team Comment - Vex on the Economy, Part II - October 30, 2001
UO's Economy, Part II

Howdy! This is the second installment in a series of comments from me on the state of, and our future plans for, the virtual in-game economy of Ultima Online.

Recently, we made some changes to UO that were intended to increase the availability and stabilize the prices of reagents. Those changes worked as intended, but there was an unfortunate side effect. The availability of many other commonly used supplies increased enormously as well. Leather, boards, ingots, arrows, and crossbow bolts suddenly became widely available at cheap prices. In-game resource gatherers were heavily impacted by this.

Now, we just need to do some fine-tuning.

One thing that the original UO designers and the current design team share is a desire to see a well-functioning economy in the game. As I've stated before, I believe we are halfway there. However, certain economical factors (namely, NPC prices) cause choke points that adversely affect pricing and availability of commodities in Britannia's marketplace. Here are the biggest issues:

1> Inflation

Currently, the way UO is set up, the amount of gold in circulation steadily increases over time. Basically, the amount of gold that can be created through monster loot in any given day is a considerable amount. Gold cannot leave the system at a comparable rate. Over time, with gold in greater and greater supply, two things happen. First, for the big-ticket items like rares and houses that are traded strictly between players, prices will tend to rise. Second, since prices for many items are fixed by the system and can't rise to meet inflation, they inevitably lose some of their value.

How do you address inflation? Basically, we need to find ways to take gold out of the system. An issue we face is that we can't simply take the gold away. We have to return value for the gold lost. This means things like taxes may not be all that effective. Instead, we feel a combination of two approaches will help the situation. First, we need more big-ticket "gold sinks" that sufficiently motivate players to spend the money. And second, we need to find ways to attach reasonable and small recurring costs to new game features that don't hurt players but steadily siphon off gold a little bit at a time.

Ideally, it should be possible for gold to exit the system about as fast as it comes in. This can be accomplished by having gold drains that are proportional to the amount of gold in the system. If there is a limit to the amount of gold created per unit time, and a percentage of that gold is drained out of the system per unit time, then there is an equilibrium point where gold enters and exits the system at more or less the same rate. This point would vary depending on many factors, like how much people hunt and loot, and how much people utilize the gold-draining features of the game.

2> Hard-coded prices

This is related to #1 above. When prices are fixed and can't adjust to inflation, the value of different items becomes skewed. The prices that NPCs charge for their limited supply of things are vastly different from the prices that players charge each other for larger quantities of the same things. For example, the way it used to be, players would tend to pay more per ingot based on the size of the transaction. Players were exchanging gold for time -- it was worth paying an extra few gold per ingot to get a huge number of ingots all at once. The player-to-player ingot price reflected fair marked value based on real supply and demand and inflation. NPCs didn't figure into the picture because they didn't stock many ingots. Now, all that has changed. Huge quantities of ingots can be bought at a fixed price from NPCs, and the player-to-player ingot trade has been affected by this.

To address hard-coded prices, some fair means must be found to take NPCs out of the equation. This basically means a system that allows NPCs to adjust their prices based on the actual market, using a non-exploitable algorithm. We think we have found a workable solution, which will be discussed in a moment.

Given the need to combat inflation and the undesirability of hard-coded prices, there are other factors to consider as well. Number one is availability. The game's virtual economics shouldn't adversely affect anyone's playstyle. This is why, for example, we couldn't just remove NPC merchants from the game completely. If nobody is on selling what you need, then your time is being wasted. You'll either resort to playing differently than you want to (like, making a sword instead of just buying one to kill monsters), or you'll log out and go elsewhere.

So, here's the solution. For those commodities that can be gathered/created by players in bulk, NPCs will now adjust their prices based on actual activity and have unlimited quantities in stock. For now, these items are: boards, ingots, leather, arrows, and crossbow bolts. All other items (like reagents, etc.) will continue to be traded by NPCs exactly as they do now. But, for these five items, NPCs will trade them differently.

1> Players may buy or sell up to 500 of these items to/from an NPC at one time.

2> For every 1000 units sold to a player, the NPC raises its price by 1 gold per unit.

3> For every 1000 units bought from a player, the NPC drops its price by 1 gold per unit.

4> The NPC always pays players 1 gold per unit less than the price at which it sells the item.

5> NPC prices for these items are stored in the backup, meaning they won't reset in the morning.

6> There are other features in place to prevent problems cropping up from shopkeepers being killed or deleted.

This means that players who need these items will find them always available. It also means that the prices for these items will adjust to meet a fair market price. The idea is that as consumers buy these items, their prices steadily increase. As prices increase, players will be motivated to sell back stockpiles (or go create some more and sell them). Now, since NPCs pay one gold less than they charge, their activity begins to act as a gold drain that is only a small amount per transaction, but over time will remove huge amounts of gold from the system.

The new NPC behavior lessens the possibility of exploits. It may also make available a new in-game merchant profession, where players will buy from one NPC at a low price and sell back to another at a higher price. Players will be able to profit by this short-term, but since that activity will stabilize prices, the profit potential is limited. There may be big gains to be made early on, but down the line prices will have to be watched carefully and price differences used quickly. It's even expected that this change will somewhat increase inter-facet travel, as enterprising merchants expand their horizons in search of a better deal.

If successful, we would eventually like to expand this system to cover everything traded by NPCs in the game. However, in order to do something like that, it would require a lot of changes to be made. Foremost, players would have to be able to gather or create any commodity (like reagents, blank scrolls, etc.) in amounts large enough for supply to meet demand.

For those who have questions or concerns, visit the Discussions forum. I'll try to answer as many questions about this as I can.

Michael "Vex" Moore
Designer, UO Live

Team Comment - Comments from Vex - August 6, 2001
Ultima Online's Economy

I'd like to take a moment or five to talk about UO’s economy in a big-picture sort of way. The things I am writing about here are basically my thoughts and opinions as a game designer. Nothing written here is to be construed in any way as plans for future development on UO. My intent is to give you a little insight into my thought processes on the subject.

Most players will agree that, while UO’s economy in some respects works amazingly well, it also has some downsides. For example, take the housing trade. It has been a roaring success despite early on lack of support for secure house trading. Houses are bought, sold, and auctioned outside the game. UO’s virtual real-estate market reflects a real one in many ways. Some properties are at premium value and others are more modestly priced. Location, size, and other factors influence the market, which is entirely driven by its participants.

But, in other respects, like player-NPC trading, the system is completely controlled by the game engine. Prices for commodities are mostly fixed, somewhat limiting dynamic supply and demand-based economics. Furthermore, there is no guarantee of supply of a needed item (like spell reagents), making it somewhat inconvenient at times for players to get the things they need right away. It is clear that the system could be improved – and it is our job, as game designers, to create workable win-win solutions.

So, what is the basis for the imperfections in UO’s virtual economy? The answer lies in classic design approaches rooted in single-player games. Classic single-player design approach dictates a totally designed economic situation. It makes perfect sense in the context of a single-player game. Almost universally, prices and monster loot are fixed in single-player RPGs. Designers have goals in mind. In a single player RPG, the "economy" designed into it isn't an economy (in this context) at all. Rather, it is a subgame built into the whole. Game designers predetermine monster loot and shop item costs. Its whole purpose is to act as a barrier to overcome in order to win the game. Usually, by the end of such a game, the main character has more money than he can use. The economic subgame has been beaten. There is no point in simulating a supply and demand economy in this kind of game. It would just be a bunch of trees falling in a forest with nobody around to hear, while the player is busily slaughtering demons in the underworld.

Unfortunately, the same approach is almost universally used in multiplayer games as well. Better equipment costs more money, and higher-level monsters drop more. In the early game, a player might have to play for an hour to collect up a few hundred units of currency, but in the late game the money might be rolling in ten or a hundred times as fast. The only problem is, in a multiplayer game you have "lowbies" and "ubers" mixing it up together. One veteran player giving away the loot from one short hunting trip to a new player will totally blow the curve for the new player. One thousand gold coins might mean five minutes of play to a veteran, but five hours to a newbie. This illuminates a basic flaw of the multiplayer game's economy. It's true that in the real world, one hour of an all-star basketball player’s time might be worth thousands of hours of an average Joe's. The only difference is, in a multiplayer game, all players can reach that all-star level of virtual income just by progressing through the game. If everybody in the world got multimillion dollar contracts to do their jobs, then the dollar would be next to worthless.

How could it be designed better? That’s a tough one, for sure. The casual gamer probably doesn’t want to spend much time shopping. Being on a limited time budget, this type of player wants to equip and go. Many players would probably prefer fixed prices, considering that prices are generally stable in the real world and they’re used to fixed prices in single-player games. Merchants would prefer to see real supply and demand determine prices, finding the dynamics of a reality-based economy enjoyable. Virtual craftsmen want to be guaranteed a demand for their services. With so many different playstyles to accommodate, a perfect solution will be difficult indeed to find.

I'm going to leave this article at that, for now. For my next few Comments from the Team articles, I intend to delve deeper into this same subject. Eventually, I'll get around to exploring some possible solutions, and I look forward to discussing this subject at our upcoming Online Worlds Fanfest.

Michael “Vex” Moore
Designer, UO Live

Team Comment - Comments from Vex - April 9, 2001
Howdy! I’m Vex, designer on UO Live. Let me start this off by talking a bit about how I got to be here.

Back around March of 2000, Origin sent out the call for new designers for the UO Live team. After reading the requirements on the job listing on OSI’s web site, I found myself suddenly re-evaluating how I thought about my career and, in many ways, my life in general. At that time, I was already an all-out UO addict. I literally played daily, and some weekends I would get in twelve hours or more in a single day. And if I wasn’t playing the game, I was talking about it on message boards.

So - the job requirements fit me to a T. The first thing I decided was that there was no doubt about whether or not I’d send in my résumé. And then a question bowled over that (rather simple) decision: Why in the world hadn’t I gone looking for work in the gaming industry before? I am a gamer to the core. I’ve played games for as long as I can remember. Pong. An Atari 2600. Pen and paper roleplaying games. Board games. A Commodore Vic-20. An Atari 800XL. A PC clone. Card games. MUDs. Play by mail. You name it, chances are I’ve played it. My wife and I had been running a MUD together for about four years.

My career to date had been satisfactory. I was making enough to live comfortably and my work (mostly Windows based database and software application design and implementation) was interesting. But I still hadn’t answered that question. I don’t know why it took me six years to realize that being a game designer and programmer was what I really wanted to do professionally. I guess I figured that it was adequate as a hobby. Silly me.

Origin flew me out to Austin for a grueling round of interviews. I met many UO people who I’d only known until then by their handles. And when it was all over and done with and I had landed back home, still in awe of the whole idea of moving to Austin and actually getting paid to design for Ultima Online, they turned me down.

In retrospect, I see the toughness of the decision they faced at the time. All of those who got the jobs instead of me are amazing people. Carly (aka LadyMOI) and Sage basically built a new design team from the ground up, and I guarantee you they did one hell of a job. Back at home, I talked with Carly on the phone and exchanged a few emails. I was definitely disappointed about losing out, but I also realized that there would certainly be other opportunities. And another opportunity did come several months later. This time, after another round of interviews, I was extended a job offer.

So, here I am. It’s now been just a touch over six months since my first day at Origin. It feels like it’s been six years. I was used to working hard before, but I wasn’t really prepared for the pace kept around here. I’ve already lost track of the number of late nights and weekends I’ve spent here in the office, helping to put out one fire or another. I don’t remember the number of weeks we’ve been in crunch since I started. But even though this has by far been the most demanding job I’ve ever held, it has also without a doubt been the most satisfying one.

In my time here, I have quickly learned the difference in scale between running a MUD with a few hundred players and working on a big-time online RPG. Writing code for a server cluster instead of a single process involves levels of complexity heretofore unknown to me. Having to balance the needs of thousands upon thousands of diverse players completely eclipses the same task in the context of a small MUD. I am still a neophyte in the commercial gaming biz, but in these six short fast-paced months, I have already been able to prove my abilities while at the same time gaining what feels like a lifetime’s worth of knowledge about the relatively new field of massively multiplayer games.

Carly and Sage made it possible for me. I thank them both for looking for new talent outside the gaming industry. They’ve given me a very rare and precious opportunity. It was a gamble for them and for me, but one that has paid off well. I am honored to work with Sage, who manages to be everything a leader should be while being pulled in every direction at once. This entire team is strong, and we augment each other well. Each of us brings a unique perspective to the table. But even though we all have different interests in Ultima Online and different opinions as to what the game needs, we work together well and get along splendidly. My hat is off to you guys as well.

This is an interesting time for all of us on the UO team. With the recent inauguration of the Event Design team, UO now has the largest design team in its history. With the former Third Dawn team merging with UO Live, we now also have the largest software engineering team in UO’s history. We are in a position where we have unprecedented resources to distribute. I feel like everything that has happened with this game until now has just been a prelude. We’re gearing up for prime time now, ladies and gents, so buckle up and hang on to your hats.

What’s in store for Ultima Online? Well, that is still largely being decided. Here’s what I do know. First, WE WILL SHIP VET REWARDS. No promises as to when. I am working on the Vet Rewards system with some of the programming team. I feel good about the progress we are making. Look for it soon on a Test Center near you. Next, we are setting a goal of attacking all known bugs in the game. Until now, there have never been enough resources to throw at this task, and many harmless but annoying bugs have gone unfixed for way too long. In addition, we are looking forward to adding new content to the game. What else do we have in store? I can’t give any more details than these. As we complete our restructuring and flesh out our plans for the upcoming year, more and more will become known.

These are exciting times to be working on Ultima Online. With the release of Third Dawn, these are exciting times to be playing Ultima Online. Now we are poised to take this game to new heights, and I am honored to be part of the team that will accomplish that task.

Michael “Vex” Moore
Designer, UO Live