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How I helped destroy Star Wars Galaxies (mediumdifficulty.com)
650 points by mziulu on Mar 7, 2012 | hide | past | web | favorite | 119 comments

I was 14 years old when Galaxies was first announced, two years prior to its release. Like the author of this article, I too was crazy excited about this game when I first heard about it. My friends and I did all the same things that the author said he did, such as fantasizing about being a bounty hunter, or chillin' with Luke, etc. The idea of the game excited me more than actually wanting to play it, though. I've never been much of a gamer but games were how I learned to program. So, my approach to Galaxies took me to similar places as the author, but I got there a different way.

When Galaxies was announced, I was in my peak of reverse engineering Blizzard games. I had been reverse engineering the Battle.net client protocol since Diablo 1 and StarCraft. Battle.net had a community full of people who reverse engineered the Blizzard games and there was somewhat of a competition as to who could write the coolest bots, as we called them. Bots were apps that emulated the official clients and could completely sign into Battle.net without using the actual game. Most of mine were just console apps, because I enjoyed the reverse engineering more than the coding.

So, when Galaxies finally came out in beta, a friend of mine luckily got a copy. The computer that I used at that time, which was a shared family computer, was terrible so I didn't expect to play the game, but I did ask him for a copy of the game's directory so that I could start writing Galaxies bots. I focused all of my time on reverse engineering the Galaxies client protocol. I would stay up until the sun came up, staring at the game in a debugger. When a family member need to computer or I had to go to school, I'd hit print on IDA and print out an entire dll - tons of paper. I'd basically annotate the printed out assembly with what I thought was happening and then I'd get home and confirm or deny it with the debugger at run-time. I'd borrow my friends account so that I could see the sign in process in real-time and get packet dumps. I did this for months straight and it never got old.

The end result was a console application that could emulate the official client and sign in to Galaxies, select your character and respond to various events. My friends would level up new character's professions and I'd run them on my terrible computer while we were at school, and over night. I could run many at once with no problem.

While we did not have the in-game success with making tons of money, I did save a lot of money up front on a lot of new computers and tons of copies of Galaxies. :)

I hope all this is on your resume.

You're the sort of person I like to mention when folk come up with half-assed "encryption" schemes. The kind of person who reads hex for fun.

Haha. Funny enough, when I was a sophomore in college, I applied to Nortel for a C++ job. During my interviews, I told them these stories. It was one of those cases where you feel like you're the object of a show-and-tell, or something. My interviewer kept walking me around to all of his friends, having me tell them these stories. Everyone seemed so interested. Needless to say, I ended up getting the job. It was a cool job. I got to help code Nortel's 4G wireless data service, doing low level network protocol stuff. That is, until they went bankrupt.

Would love to hear more about the tools of the trade. What did you use back then for debugging/packet sniffing, and what would you use now?

I would use basically the same set of tools, today.

I used IDA to annotate the dis-assembly of various files that I was interested in. I never did like IDA's run-time debugging interface. So, I used OllyDbg for most of my debugging. I liked OllyDbg because of the graphical nature of it all. But, I would also use WinDbg if I wanted to set breakpoints on unresolved symbols. I couldn't seem to get OllyDbg to do that. WinDbg is great if you're familiar with the more command-line approach.

I used Ethereal, now named Wireshark, for packet capture and inspection. You just have to get familiar with the filters to harness the power of it. I'd typically start by using netstat to see what ports were being used, and then I'd filter on those ports. A lot of my first protocol reverse engineering was really just pure brute force by staring at packet dumps of multiple log in attempts with all the cases (success, fail, etc) and just basically doing a manual diff process, noting the changes. Until I got better at using IDA and WinDbg, anyways.

For quick and dirty virtual mem scanning, I'd just use this tool called ArtMoney. It was an amazing tool because you could scan the memory for some data, bookmark offsets and then re-scan. Basically, you could build upon previous scans, allowing you to sieve results. Like, in StarCraft this was so easy because if you were trying to find a value that was increasing or decreasing, like supply income, you scan and scan again saying "show me only the results that went down since last scan." Then, scan again using those results but only show the ones that went up. Usually, after 3-4 sieve scans you'd be staring at your values. Then you just attach OllyDbg to the process, breakpoint on memory read or write to them, see where it breaks and step out a few function calls (because you'd usually land in some low level write function or loop event or something).

Lots of tools, but the key is just to use common sense. Think about what it's logically doing. Use your knowledge of game loops and stuff to determine what you're probably looking at or looking for. Always annotate the assembly code, even if at first it seems small and stupid. Over time those small notes add up and you'll end up with fully commented code. :P A lot can be researched by poking around in the files in the install directories, too.

Thanks a lot for sharing. I hadn't heard of IDA/OllyDbg before.

I work at a company that makes MMOs. If this guy's statements are true, then he was making significantly more money exploiting an MMO than I do by programming one.

The irony is staggering.

There's tons of people making more within the Microsoft/Oracle/SAP/Apple/etc ecosystems than employees of those companies, too. This is different insofar as the market was not intentionally created, but it's hard to blame him for "exploiting" the circumstances.

I use "exploiting" in a more technical sense here. An exploit is using a bug in the game for personal gain, in an always-on multiplayer game with an economy affecting all players, the permanent effects of an exploit can be much worse. That's not what's happening here, because no bugs are necessarily being exploited (though maybe at one point they were; a buggy drop rate resulting in excessively high yields for farmers, for example) but the farmers tend to get lumped in with the exploiters in the developer's mind because the exploit/fraud departments of customer service work pretty closely together.

Gold farming has generally been considered a fraud of sorts, because it can seriously damage the in-game economy or the player perception of the economy, and many gold farmers perform actual fraud (creating accounts with fake or stolen CC numbers).

The fact that we even have these problems is both amazing and wonderful.

The fact that there are cartels within computer games hiring low cost foreign workers to manipulate a virtual experience for real monetary gain, and there are investigative units trying to track them down is fucking awesome.

I was an original beta player for UO and we had a fantastic run exploiting bugs and high speed Internet connections from the Intel game lab we ran, with multiple accounts to dominate and reach wealth and fame.

It was my golden years of gaming actually. Now I may play an hour or two of skyrim a week if I am lucky.

Back then I was making nearly nearly 70k to play UO from a sick lab 12+hours a day.

"The fact that we even have these problems is both amazing and wonderful. The fact that there are cartels within computer games hiring low cost foreign workers to manipulate a virtual experience for real monetary gain, and there are investigative units trying to track them down is fucking awesome."

From one point of view, sure. It really is a bummer to the player experience since the reality of it is that a company can and will protect itself better than it's users in aggregate will protect themselves, so you just end up with the current WoW situation of a huge stream of hacked accounts draining resources of the game company and destroying the play experience of the players. I'm not sure where any of this is wonderful, really. It isn't like the myth of the gold farmer where they hire out warehouses of employees to play the game building up "new gold" in the player economy, it's just key loggers and trojans and ten million potential victims.

Is "almost 6 figures" significantly more than you make? I think you need a better job.

$100,000k is a lot higher than you would get as a game programmer in most places outside of a handful of really hot markets (Seattle, Vancouver, SV, etc).

Generally speaking expect a 30% pay cut compared to a non-games programmer (varying on what kind of games, zynga-style stuff is highly payed IIRC).

Eh, I'd wager that most of the south american cocaine suppliers are making more than Friedrich Gaedcke did in his lifetime.

I immediately thought of this too. Could there possibly be a revenue opportunity for these game developers that they are missing? Should the game developers focus on the gameplay with economics in mind so as it should be a an objective and not just a byproduct?

Yes. The US MMORPG companies resisted the Korea/China Free2Play model, where you sell advancement fairly directly for hard currency, for cultural reasons. (My read is that their business guys were totally clueless and their devs had passionate hatred for selling advancement. They wanted you to earn advancement the proper way: by dropping out of school and devoting your life to the game.)

Every gold farmer was competing on price with someone who had INSERT ... INTO ITEMS; available to them and the manual labor was winning.

There were many folks who said that there were solid commercial reasons for this refusal at the time. A lot of them boiled down to "I don't know about those crazy Asians but sophisticated American consumers don't want to do this thing that we're spending thousands of man-hours a month unsuccessfully trying to prevent Americans from doing." Those have been pretty decisively proven wrong since a) when AAA US MMORPGs experiment with item sales they make serious bank and b) the Free2Play model empirically has worked very, very well in the US, especially when you compare the revenue per user and in aggregate against the HUGE premium embedded in development costs of the AAA subscription RPGs.

Oh, also, Zynga ROFLstomped the entire industry. (10~50% of the revenues of the most successful MMORPGs for 2~3% of the development costs of the median AAA MMORPG... and they did it more times in a three year period than there have been successful AAA MMORPGs in history.)

REAMDE (http://www.amazon.com/Reamde-Novel-Neal-Stephenson/dp/006197...) by Neal Stephenson is an interesting, fictional take on what might happen if an MMORPG embraced the farmers.

It's also a really quick read for a Stephenson book.

I don't know how this slipped under my radar, thanks for the recommendation!

Play Money is a fantastic non-fiction account of online gaming economies if anyone wants a more extensive non-fiction treatment of the topic.

As you say Zynga proves it can work for some games.

But I can also understand the resistance to it. I only just started playing my first MMORPG (SW:TOR), and as a player I think it would bother me if they openly sold advancement to the people that would be in the PVP matches with me. I know a certain amount in the background is unavoidable, but that is fair easier to tolerate than having the company sanction much less be involved in it.

So, if the amount of money they would gain from the purchasers exceeds the amount they would lose from people with my opinions dropping the game, then from a business perspective they should do it, but it comes at a cost. Of course the middle ground is to do it on some servers and consider outside purchases cheating on other servers, but even that might turn off some potential players that see it as distasteful.

Actually its not Zynga - I think the original was a Korean MMORPG which set the tone for other AAA MMOs.

The f2p model was tested with a lot of other games, both in China and Korea. I think gunz online was one of them.

Anyhoo - the major American brands resisted because of the cultural idea behind an MMO of the time - as in a world, which you subscribed to be in, and act within.

Being able to pay money to advance faster than other people broke the golden rule of immersion the original founders/artists had in mind.

Dont forget, this is now a bygone age of gaming - where people created games as an extension of their imagination and a hope to enact cool things in character.

Today those drives are still there, but completely leashed to the need to ensure profitability.

Its led to more attempts and games, but you now don't have things like sprawling empty wastelands in the barrens of WoW. Every square inch has been maximized to ensure that it has no dead spaces, or environments which let people advance at anything beyond the average rate decided by the designers.

Most designers for MMOs will avoid selling advancement enhancing goods - it destroys the game in the long run.

The model they use is one where if you aren't paying, you are the content. They need to make sure it is egalitarian at a gameplay level.

Beyond that, its free for monetization.

Too be fair, zynga is a parasite on facebooks infrastructure. So while syngas direct development costs are low, the real cost of developing what was required to provide zynga the platform is over a billion. (considering Facebook stated their network inf investment has been 1B)

Also, zynga is an idea thieving bandit of a company - so their costs are also far lower due to their hiring people that can copy as opposed to the thought leaders who would have come up with original content.

But if the only metric you choose to measure them on is revenue to expense, then by that myopic unethical lens - sure they look good.

> zynga is a parasite on facebooks infrastructure

They are facebook's largest advertiser, IIRC. Additionally, I believe facebook has invested in zynga, so the relationship is more symbiotic than parasitic. I am anti-zynga, but its important to be accurate in our critiques.

I agree that it is symbiotic, but they are still a parasite :)

Ahh, no. Sales of credits to fund RMT in games like Zynga is where Facebook's largest growth in revenues come from: about 30% of the sale price of the credits goes to Facebook. Games like Zynga's make FB users more "sticky" and spend more time on the site which helps raise advertising "hits".

In what way does that refute what I said: that Zynga is wholly dependent on Facebook's infrastructure.

This doesnt mean they dont have their own infrastructure - but it is different than an MMO company like SWG/WOW that have their own infrastructure for 100% of the game.

The point made was that Zynga is doing what MMOs do at far lower cost. I said the cost was offset because Facebook foots the bill for the platform on which Zynga depends.

Too be fair, zynga is a parasite on facebooks infrastructure.

I believe Zynga provides more of Facebook's profits than any other company.

Zynga could easily argue that Facebook is a parasite by profiting from all the people who want to play Zynga's games.

Actually, there's a major shift in the industry (to "free to play") that companies have been making. Basically, the company provides an in-game item shop where players can use real money to buy in-game items. These shops accomplish pretty much what this guy was doing, but keep the money in the company purse, and circumvent many of his limitations: there's no need to farm the game when you make the game, and you can sell items which farmers could never obtain.

In almost all cases, it has meant a higher amount of revenue, either for brand-new games or for games which transition to the F2P model or an in-between hybrid model. It looks like, generally, big-name MMORPGs are still starting out with a subscription model, but most games at other tiers are launching free-to-play with an item shop. Lots of long-running MMOs are transitioning to a hybrid model to add revenue to a product from which little is expected but also little is being spent on (just enough money to keep the servers running and keep a slow flow of updates).

I think it would be much harder these days for a player to make money by through farming, except for with the old guard of MMORPGs which still don't have an item shop. I could be wrong, I am not looking at these economies closely so I don't know if the farmers are actually able to provide items / prices competitive with the developrs.

> Should the game developers focus on the gameplay with economics in mind so as it should be a an objective and not just a byproduct?

Isn't that what EVE did? (Also, you might want to read Stephenson's latest novel, Reamde, for an exploration of a game company that did just that.)

Eve focuses much more (industry leading) on in-game economics as a gameplay aspect , but not as exceptionally much on converting game money to real money. Second Life has a rather sophisticated and officially supported currency exchange with out-of -game currency (dollars)

Slightly tangental but I believe one of the online poker playing websites (Absolute Poker) was accused of having a rogue insider who would fix tournaments.


I realize it's not the same but it's in the same vein: engineers with an upper hand beating the in-game economy.

MMO designers far too often create the need and people like the guy from the story naturally arise to fill it. This is usually done by having items to be purchased from NPCs for absurd values. Examples are pets, mounts, movement speed, costumes, and the like. Designers reason that not every one will need or what them but fail to take into account human emotions like greed, envy, and fear. These drive competitiveness for many a player and item sellers provide a simple and effective means to remedy it.

The costs of these items or services in game helps to establish the value of what is traded among players, either directly or through an auction house.

Actually the game designers completely understand those human emotions like greed, envy and fear.

They design these things into the game [i] on purpose [/i]

The economics of video games, in terms of GDP is simple - people constantly produce thing from a never ending well of digital resource nodes.

As a result of crafting + drop + trash sales, total gold in the servers always goes up, causing unending price inflation.

Its a pretty cool example of what would happen in a world with plenty.

Game designers create gold sinks to give people - especially the stupidly rich - something to dump their gold into.

I've been on the wow servers soon after vanilla launched - some gamers (and some human beings in general) are just wired to enjoy amassing wealth and gaming the economy.

These sinks were created to ensure that those players end up doing minimal damage to the average player.

I doubt he was making more than you on an hourly level.

I'll bet he was as an employer of 12 people.

It wasn't clear to me whether the OP made "almost 6 figures" a month or a year?

I used to make some money selling pixels as well, mainly from UO ('real estate' mainly since land in that game was very limited), City of Heroes, SWG and WoW. If you got in at the start (when selling on eBay was still 'legal') you made a pretty penny.

But it was unsustainable due to new MMOs, new tech and the rise of professional farmers. You had to constantly adapt, see where the game is going, and jump ship before the game collapses. I remember getting calls in the middle of the night from the west coast, asking about my auctions and how it all works and if there was more. And getting interrogated by my mum since I'm getting all these calls from strangers.

Farming by hand, or playing the auction house no longer is the optimal way to go. Now people offer full blown services to play your toon for you, using VM, to mask/hide your IP incase you/they get caught (so you can claim you got hacked), with really good players charging up to thousands of dollars to play your character.

Good times.

EDIT: Now that I thought about it some more, I noticed my pattern at the beginning was doing everything myself, whether is scouring for bargains, farming gold, flipping properties – then I moved on to hiring people within the game and paying them in-game gold for them to farm for me (in SWG, I would provide locations of mineral fields to my 'employee's and set a price ahead of time how much I'd pay per unit, and I'd buy all they have) – then I moved on to automatic botting/scripting in WoW. Interestingly, this aligns somewhat closely to real life industries and how they improve output.

Then I also realized first there was the emergence of sellers (the farmers), then came the companies that has its own farming team in addition to buying pixels from farmers and flipping them for profit. And finally, the arrival of platforms – connecting direct buyers with direct sellers while taking a cut (similar to eBay) – and it's these guys are making the real money – taking zero risks (not worrying about getting caught), providing minimal support and very scalable.

And now the gaming companies wants to keep everything to themselves and take a cut. Blizzard's D3 will be paid close attention to how its Auction House system works out – it will be very, very interesting to see where it all leads.

An interesting insight into how bits of the modern world actually work.

The most significant thing for me was the romanticization. How the guy ascribes emotional significance to a shitty MMO. He's gaming the shitty MMO, just like he is being gamed by the shitty MMO's designers. And it has all this importance to him. Sad, poignant, alarming, eerie.

Sounds like pretty much every salaryman in the "real world".


Was anyone else reminded of Catch-22?


"At the beginning of the novel, it [Milo's syndicate] is merely a system that gets fresh eggs to his mess hall by buying them in Sicily for one cent, selling them to Malta for four and a half cents, buying them back for seven cents, and finally selling them to the mess halls for five cents."

The character of Milo Minderbinder is one of the greatest satires of laissez-faire capitalism ever created.

"In a democracy, the government is the people," Milo explained. "We’re people, aren’t we? So we might just as well keep the money and eliminate the middleman. Frankly, I’d like to see the government get out of war altogether and leave the whole field to private industry."

I really enjoyed this article, but the interesting thing to me is the need to rationalize why things like MMOs fade away. It seems like they have a natural life cycle. This guy didn't bring Star Wars Galaxies down. The developers adding New Game Experience (NGE) or the Combat Update (CU) didn't destroy the game. The world went on.

The game was released in 2001. In 2003 it had 400,000 subscribers. They released the controversial NGE/CU changes in 2005. It wasn't until 2009 that they shut down about half the servers. And they didn't shut down the game until a new Star Wars MMO was imminent.*

I can't image that most of the market for a Star Wars MMO hadn't tried it, maybe played it quite a bit, and then moved on in the space of 10 years. I understand the desire for things to last forever, but I don't know that most things will.

* Numbers to be taken with a grain of salt, they were culled from wikipedia.

Not all MMOs fade away. WoW still has over ten million subscribers and doesn't seem to be fading at all. And I'm not surprised changes they made in 2005 took so long to kill SWG. People who have put literally years into a game are emotionally invested and have online relationships they don't want to abandon, at least not casually.

What actually kills a game is the lack of new serious players to balance out the slow attrition of the veterans. The temptation for companies running these games is to make them more "accessible" to more casual gamers. But there's a fine line between "accessible" and "not addictive enough to flip people into paying customers".

SW was a case study of what never to do in an MMO. Its pretty much necessary knowledge when designing a game of the type.

Yeah, he seems to forget that it's just a game, and after a while people want to play new games. Games, by their very nature, appeal partly for the novelty (who wants to play a game if all the challenge is gone?) which means that when the novelty wears off, people will go elsewhere. Nothing wrong with that. It's like thinking a movie is leaving the theater because the popcorn is getting stale.

I'm not sure that is inherent to games. Many people devote a lifetime to mastering games like Chess or Go.

Its a little more true of video games, but even there the lifetimes can be quite long. The original StarCraft was relased in 98 and is still being actively played even with StarCraft II out.

Of course, the thing all these examples have in common is competition with other players, but that is true in all MMOs as well.

That's true, but I still feel like the nature of MMOs encourage the "novelty factor", even if it's longer than many video games. Chess, Go, Starcraft, Sim City and other timeless games share the characteristic of being different and continually challenging. Most MMOs have a tendency to get repetitive. Sure, you can go on raids, trade, etc, but there's not the continually evolving strategy and new challenge of a different style of play, new sequences, etc. The games engine simply isn't that rich, it's underlying structure is still limited.

Not all MMOs die off so quickly, so I would attribute developer carelessness as contributing to a game's decline.

Take Gemstone, it's still around after 24 years and still earning money. http://www.play.net/gs4/

I was buying and selling virtual weapons in text MUDs almost 20 years ago. This offline market for virtual game items predates the MMORPG genre itself.

http://realmsofdespair.org/ was my MUD of choice as a kid.

Did I miss something in the article? I clicked on a title promising the ruination of SWG and all I found was a guy contributing significant revenue to Sony while providing their players with a service they obviously desired. I understand there is an argument that virtual currency sales may decrease buyers' CLV but in the absence of an argument or evidence along those lines all I read was a story about an MMO players inflated self image and his tragic love affair with his game.

I think the TL;DR; is that he was a huge part of the economy on 3 SWG servers, and when they changed the game to make being a Jedi easy, he stopped playing. And when he stopped playing, he ended up accelerating the downfall of Galaxies as a whole since he was such a big factor on those 3 servers.

I thinks it's more that the downfall of Galaxies was tied to being able to get very cool powers without making much effort, like the new Jedi who killed his character. He encouraged it by feeding a system where players could buy credits with real money instead of 'earning' it in-game.

I really loved playing SWG - not so much for the game, but for the ‘business’ aspects of it. Whilst not as successful as the OP, I made thousands of $US from the game by being part of a oligopoly.

One of the game mechanics was the concept of ‘buffs’ - basically chemical stimulants your character could consume to temporarily boost critical stats which aided in combat. They were an essential item in PvP (player vs player) combat if you wanted to have that edge and so were in high demand. Buffs could only be made by the ‘doctor’ class and only by the top level doctors. Another critical game mechanic was that the quality of the buff affected how much of a boost you could receive to your stats, and the quality of the buffs was affected by the quality of the raw materials you sourced to make the buff (every resource had a variety of stats - this game was a real minmax-ers delight). The highest quality buffs were the only one that people were interested in buying.

Most of the resources required for the buffs were reasonably easy to find - but there was one which was rare - avian meat. The highest quality avian meat, harvested by killing particular birds, only appeared (real-time) once a month for a few days. Without this avian meat, you could not produce the highest quality buffs.

The first time I made buffs - I happened to time it during the HQ (high quality) avian meat period. I spent hours killing the birds to collect meat. I made my buffs, had a shop near Coronet (the main trading city in the game) and sold out within a few days. And I noticed that all the doctors sold out within days too - and that the last few that had some stock could request extortion prices for their stock. That gave me an idea …

The next month when the avian meat spawned, I parked my character in the main spaceport and keyed up a macro (the game had an in-game macro system). All my macro did was cause my character to shout out every minute “Buying avian meat @ Z credits/piece - sell to my vendor at coords X,Y”. I basically bankrupted myself buying up as much avian meat as I could whilst it was available.

I made up a batch of buffs and started selling them - I ran out after 20 days - but I was now substantially more wealthy! I figured - heck I’m on a good thing - let’s do that the next month. Of course, no good thing goes unnoticed …

The next month, there were three other doctors in the spaceport shouting out that they were buying avian meat. Well this simply would not do! So I basically upped the price I was offering to purchase avian meat above theirs - heck - I was flush with funds from last month so I figured I could out buy them. It turns out I was right - I was able to purchase even more avian meat than the last month and I was able to produce enough HQ buffs to just last the month. Then the third month - this is when the market dynamics got interesting …

By now, several people had noticed that avian meat was in hot demand once a month. In the third month, there were several ‘shouters’ when the HQ avian meat started spawning. Like last month, I upped the price I was willing to offer to price them out of the market - a bidding war erupted, but with my bankroll, I could outbid anyone (although I was cringing how fast I was going through my credits). Like any market, with the prices rising so quick, it changed behaviours - suddenly many of the ‘hunters’ in the game were out killing birds to collect meat. I effectively had my own contractor workforce out hunting avian meat!

By the end of the third HQ avian meat season, I had more meat than I ever had before. I realised I almost had complete control of the buff market on my server so I changed my selling tactics. I made my batch of buffs and started selling them, but I jacked the price up (100% increase) - this time I wanted to be able to continuously sell my buffs to last the full month. Other buff sellers kept selling them at the going rate … so I did the rounds of the cities each night and bought up any HQ buffs which were under my price and added them to my stockpile. By the end of the first week, I was bankrupt although I had a huge stockpile of HQ buffs - but most importantly, virtually every buff vendor was empty … except mine. I jacked my price up even further and did a roaring trade.

Over the next few cycles I cemented my reputation as one of the few reliable buff vendors who could consistently offer the highest quality buffs month-round. With the constant trade and monopoly prices, I was able to further entrench my dominant position each month by continuing to out bid any other doctor who tried to purchase avian meat. There were two other doctors on the server who managed to offer buffs for most of the month, and whilst I never talked to them, I noticed that they never went below whatever price I set. Our little oligopoly had a total lock on the buff market - it was a golden age!

When I quit the game a couple of months later, I had millions in credits which I sold for a few thousand $US. SWG let me play out my monopolistic capitalistic fantasies - how I loved that game :D

I've done some business in EVE Online for a while, and it's as much fun as you describe, but a somewhat more mature market. Any competent EVE trader would have squeezed into your market quite easily, and even have a choice of two methods.

The "Chinese gold farmer" way is to be in the spaceport all the time and keep outbidding you minimal amounts. At the end of the month, your resource stocks would be bought at the same price, and their quantities proportional to the relative time amounts each of you has spent in the spaceport. So they can sell at the same price as you, or even lower if they value their time less and would accept less profit.

The "lazy" way (my favorite) requires very little capital and very little time. The idea is to seriously outbid you but only offer to buy small quantities. You will only be able to match this bidding war up to a limit, since you're paying very inflated prices and buying a hundred times more than I do. (If you miscalculate, you'll end up with a huge stock of finished products that you can only sell profitably at ten times the previous price, and people will simply not buy.) Once you've reached this limit, you have to allow me into the market, and I'm buying and selling at pretty much the same prices as you do.

Both excellent techniques. I think the reason I didn't suffer from these techniques was:

Chinese Gold Farmer method: You needed as large a bankroll as myself and you needed to buy enough avian meat to last the month. My first mover advantage on this market insulated me from any casual gamer - none had the bankroll (or were willing to invest it the way I was) and I guess I was lucky that a 'professional' CGF didn't appear :)

Lazy method: Because you needed such huge quantities to last the month, I tended to ignore the 'casual' buyers of avian meat - the ones who would offer prices above mine, but in small quantities. I didn't mind people selling buffs in small quantities because I knew they would run out after a few days whereas I could sell continuously through the whole month - and once the other vendors started running out, I jacked my prices up again further building my bankroll and cementing my position for the next cycle.

And some people argue laissez-faire capitalism does not naturally lead to concentration of capital and oligopolies/monopolies. I guess they should play MMOs ;)

This particular anecdote relies upon incompetent competition:

> Other buff sellers kept selling them at the going rate … so I did the rounds of the cities each night and bought up any HQ buffs which were under my price and added them to my stockpile.

As well as high barriers to entry:

> Buffs could only be made by the ‘doctor’ class and only by the top level doctors.

Basically there is massive demand for buffs, but the supply is restricted by the avian meat availability. Thus a huge demand for avian meat with low supply. The price should go up, and this guy brought the market price in line by outbidding everyone else.

He corners the market, and like any cornerer, he has to overbid the "market price" to shut everyone else out. Now he is in a weak and vulnerable position, to any of his competition. He has a large supply of capital goods that he overpaid for.

The overbidding for avian meat should induce more "mining" (hunting) of the avian meat -- it should be wildly profitable relative to effort invested. This should tend to raise supply, making the overbidding market cornerer's job even harder.

Anyone with half a brain should mine some avian meat and then offer to sell it for (pinky to lower lip) 1 billion dollars (or whatever). The market cornerer will either pay the asking price or relinquish some control of the market.

Since there is no monopoly on buff producers (per the anecdote), the meat miner can lower the price until it sells to a buff producer (whether the cornerer or not). The miner extracts the profit, and the buff producer, with such high input costs, should have smaller margins on the finished product.

> Anyone with half a brain should mine some avian meat and then offer to sell it for (pinky to lower lip) 1 billion dollars (or whatever). The market cornerer will either pay the asking price or relinquish some control of the market.

What prevented this from happening is that supplying a months worth of buffs required a lot of avian meat. And avian meat was a pain in the arse to harvest - you had to roam all over the map looking for the changing spawn points and if I remember correctly, you would only have maybe 20 pieces of the resource for every hour hunting - it was seriously time consuming. So I never encountered a hunter who was selling bulk amounts of avian meat - they all sold in dribs and drabs and so had no negotiating power with me. The small amounts they potentially could individually withheld would have almost no impact to my manufacturing -the only way to affect me was if they ganged up, which would have required substantial coordination.

I was also very dynamic with my pricing - the amount I set was based on what other vendors offered. With my huge bankroll (thanks to first mover advantage), I trumped any bid and scared other doctors away - they simply knew they couldn't compete. As soon as they gave up, I reduced my prices.

Ah, makes sense. I would still tell this story in terms of a first-mover advantage, as well as one of innovation. The point is, in a market economy, it is nearly impossible to maintain a monopoly (or oligarchy) over time. Your margins will get squeezed by new competition enticed by your margins. It seems like you got lucky in discouraging your competition, but I don't think that's a reliable tactic. A determined competitor could severely damage you and open up the market by forcing you to overbid.

I think innovation is baked into your assumption, which doesn't necessarily hold true.

On a separate note Video games are some of the best laboratories we have to allow us to test economics - and iirc papers have been done to test and learn from these environments. I doubt I can dig any up, if I can, I will post it.

No one has pointed out that the whole business ends up increasing market efficiency--the end result was that the price for buffs stabilized over the course of the month.

>The overbidding for avian meat should induce more "mining" (hunting) of the avian meat -- it should be wildly profitable relative to effort invested. This should tend to raise supply, making the overbidding market cornerer's job even harder.

I believe in this story, there was a limited supply of meat - it couldn't be infinitely mined.

If I understand correctly, two things enabled (the flippin’ brilliant) tobtoh to maintain his oligopoly:

1. An artificial, rigid caste system that allowed only a tiny pool of players to produce the best buffs

2. An artificial, rigid "ingredients" system that ensured the best buff could only be made from one extremely rare material (and no amount of innovation could escape this)

Anarchists would argue that those types of market restrictions are bound to cause oligopolies to form!

That said, even with his oligopoly, it sounds like he nearly single-handedly created a huge market for that avian meat, and that market enriched a lot of other players.

I might be misreading the story, though!

He didnt create a market - left to normal dynamics in video games, the resources would have been distributed normally, probably more efficiently on average as well.

Check WoW out for example - the analysis on the spreads, ideal prices to sell ores, gold, are at OCD levels of accuracy.

Addons scan the auction house for undervalued goods, undertake pricing strategies, hold historical data on those goods and allow people to know whether an item is under or over valued.

Websites are dedicated to identifying prices across all the servers and that leads to people doing cross server arbitrage.

He didn't improve the market, he just made a monopoly. A pretty cool one at that.

I was the same, except I targeted a different portion of the economy. I became a resource dealer.

The resource spawning system drew my attention, and I ended up spending countless hours developing tracking systems outside the game to both keep track of the current and past spawns as well as keep track of my harvester fleet. I knew almost immediately when the best Rhodium Steel for a particular weapon spawned and would drop every harvester on the strongest vein I could find.

For those unfamiliar with the resource mechanics of SWG, there was a fixed hierarchy of resource types that different crafting recipes required. The more advanced the recipe, the more specific the resource requirement (e.g., Rhodium Steel instead of just Metal). Every couple weeks the current spawn of a given type would dry up and a new one would come along to take its place with different stats. These stats ultimately determined the final stats of items crafted with the resource.

Resources also spawned in "veins" similar to how they're found in real life. The closer to the center of the spawn you were, the more yield your harvesters produced. It was possible to effectively block out any competition by placing enough harvesters on a vein, and this is exactly what I did.

At one point I even started doing "contract" work for the high-end crafters. They would give me a quantity of a resource they wanted and I would deliver it daily as the harvesters collected.

At the end (sometime around when the Jedi questing was introduced) I had amassed enough credits that I was within the top 5-10 on the server I played. I sold it all on eBay and more than paid for my time playing.

It's amusing that even in universes built specifically to fulfill people's power fantasies, the biggest power is usually achieved by people who do shady business :-)

I wonder what a formalized game theory representation of this would look like. Might make for interesting study.

People are doing this - iirc the economist who did research on everquest for a lark, realized that the ingame economy was actually outperforming some third world countries.

Other research has continued on this as well - pretty sure game theory systems have been tested here.

Its always been a hope of mine that at some point, blizzard open sources their trading and economy data for people in the academic community.

The best labs to test human group behavior to changing incentives is probably video games. They've already established that in a world where everyone is created equal, you end up with only a small fraction cornering most of the resources/gold.

Yup that's correct. Check out Ed Castronova's paper: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=294828

When I was in high school with plenty of time on my hands I turned my hobby of playing Everquest into a pretty lucrative business (especially for a 17yr old). I found it amazing what people would pay for items to help advance their characters, especially those who were older and had limited time, and thus wanted to minimize time-sinks.

If you enjoyed this article you might like to give "For the Win" by Cory Doctorow a read, it's a pretty fun book that asks questions with regards to game economies and how they might affect the real world.

Same subject, vastly different caliber. I can't read four sentences of Doctorow's writing without seizing in a paroxysm of grimacing and twitching and all sorts of disapproving body language.

Thank you for saying that. I've never understood why a large portion of the tech community seems to worship him. Thought I was the only way that felt that way...

huh, interesting, if it's not too much trouble could you please provide some examples + explanation? I'm not doubting you, I'm a pleb when it comes to things like this and just get lost in the stories, I'd like to learn what people with some training in things like this notice.

I haven't read that one, yet.

I'd also recommend Stephenson's "Reamde", and Stross's "Halting State".

Neal Stephenson's Reamde also has a rather good discussion on real world money MMORPGs.

which might have been even better without the exceptionally drawn-out terrorist 'side-'plot

I've never really played a lot of MMOs (though I had friends who were very into SWG and still lament its changes and eventual demise) but the crazy stuff that goes on in virtual economies like this has always interested me.

Reminds me of Julian Dibbell's "Play Money" [1], where he spends a year trying to make Ultima Online his main source of income.


> the crazy stuff that goes on in virtual economies like this has always interested me.

If you want crazy, you should check Eve Online's economy, it's on a wholly different level and scale.

Especially as CCP (the game developer) takes a cut of real-world to in-game money conversions: you can buy PLEX (1-month account extension) with real money, and it's an in-game item which you can exchange for virtual currency (by selling it to other players).

EVE is ridiculous - I remember reading about a guy who spent months setting up an in game bank, and then stole all the funds and made about $100,000 of real money.

EVE had at least one other great story from the early days, the Nightfreeze scam:


This makes me feel so sorry for HardHat and the others, I don't think I could ever pull something like this off. One good reason to stay away from EVE in my opinion.

CCP has an economist on their payroll.


I remember a story where some guy/clan had a bunch of PLEX in a freighter, and they lost the whole lot when it was blown up. The real value of that PLEX was not insignificant.

The big question is: Do game economies make sense at all, do they benefit the game enjoyment for all users?

This story sounds very common today, i tried similar things in WoW but never to earn real money. Common players don't care much about game money, that makes it so easy to exploit the system. In the end it is was fun for myself, but the common player was forced to grind a little more because of people like me.

I think the case is that if a game grows large enough, it will inevitably develop an economy. It's just a natural aspect of human society.

I've only ever played WoW, but jacked up economy on servers wasn't fun. And I mean JACKED up. It does add an element of realism though, nothing comes for free in this world.

WoW is extremely easy to exploit, because there are so few players in the market and so many important items. I made artificial scarcities before raids started, it did this over a few months or so until somebody made bets against me and from this point we attacked each others strategies. It was just fun for me, i had no financial involvement. It was probably similar to old days on the wall street, when you get too many savvy players it get's difficult. I thought about trading algorithms, but feared Blizzard will close my account if they find out.

I wrote an Auction House bot and ran it for most of a year without any interference from Blizzard. It was a simple poll/buy/sell script against a price database that I maintained.

When Blizzard launched the web interface to the auction house, they also exposed a bunch of JSON accepting/returning URLs that implemented searching, buying, and selling. The URLs and their parameters were easily reverse-engineerable from the web Auction House's javascript.

I had to log in to that account once or twice a week to manage inventory space, but other than that it was autonomous. My trading account was flagged only twice - once because I mailed a large amount of gold to my main character, and once because I intercepted some items that a gold seller was using to launder hacked gold.

In short, Blizzard's involvement with their economy is entirely focused on policing RMT. They don't care how players manipulate markets.

Thats pretty cool.

Did you hit the gold cap, and do you still run the programs?

I was a Master Armorsmith on Lowca I would bring in 20mil credits/week that had a value of around $200 on Ebay. I made thousands selling credits from SWG on eBay which was great for a teenager (I was 17 - now I'm 27) They killed the game in 2005 trying to make it "assessable" and that's the last time I played SWG or any MMO. I have fond memories of the economy and learned a lot that has helped me in the real business world (taking care of customers etc..) I actually had been thinking about writing something similar to this about SWG for a while now glad someone took the time to write it.

Good interview from a couple of years ago along the same lines: https://www.youtube.com/watch?v=PWvHcoqru7I&feature=play...

+1 for Julian Dibbel's book Play Money also. Great read if your into virtual economies, along with Castronova's Synthetic Worlds.

This sounds similar to what happened with WoW, at first things are really hard to obtain, going after the real hardcore gamers and those that want to spend the time to know the economy well, work together well and master professions.

As the game goes on they try more and more to appeal to the casual gamer which either doesn't have the skills or the time to master the game in the same way. Meaning it becomes hard to really differentiate yourself from others playing the game as most of everyone has pretty good items and didn't have to work hard to acquire them.

Even though I have nowhere near enough time to be a hardcore gamer at anything these days, I still don't think I'd really enjoy playing something causally and having it all handed to me.

There's also a worthwhile case study in the Neopets economy, which as far as I know didn't really adapt in these ways. You could grind on puzzle games for the local currency, but it stopped being about the puzzles and started being about trying to make in-game money. And then, what happened is that non-casual gamers would know all of the shop-inventory respawn times and would camp them, to buy up all of the commodities that the shops contained -- especially medicines and such. They would then resell them for much more money in their own user-defined shops. So it became the exact opposite: at first things were really easy to obtain, and they were mostly going after kids -- casual gamers. But their surge in popularity seemed to create a change in focus towards hardcore gamers eager to camp the spawn points and use multiple accounts to get freebies. At one point I even remember putting all of my money in the stock market just so that I could feed my Neopets with free soup from the in-game welfare department, because getting food was such a nuisance otherwise.

There is a deeper question lurking beneath all of this, I feel -- and unfortunately for me it has deep ties with questions of meaning and purpose and thus gets bound up in my religion, which I do not want to talk too much about here. But the question is, "what makes a game worthwhile? why do you keep playing?" My Neopets were not very worthwhile and, since they're immortal, I imagine they've been starving in a cold computer database for the last way-too-many years. I obviously got bored with the grind necessary to take care of them, but why? Why did I complete all of Morrowind and yet found Oblivion impossible to play? What is it in my human quest that I am looking to create in a game, and are games unreal or real or hyper-real or something else? If we don't enjoy "having it all handed to us" but yet we also don't enjoy "working for it", what exactly do we want?

I for one want to be rewarded for the time I play, while still not being completely left out of the social part of the game because I simply cannot put in the longer and longer grind hours they keep recquiring of players.

I want to feel like I'm discovering things, achieving things e participate in the game story. Why is that so incompatible with an mmo without having me staring at a screen for hours on end and alienating my family from my presence?

I want to put in an hour or half a day or everyother day without doing repetitive tasks. I want to earn stuff yes, but not work for it. By work I mean doing something boring and repetitive that has nothing to do with the game itself (how many tons of ore it takes to make a sword again?). We already have to work hard in life, why they want us to do work more in exchange for entertainment (if you can call it that).

In the end, all they want is addicted players (hence the lottery reward model) to keep the money coming.

I got stung by them before, now I choose to live.

You sound like someone who would end up enjoying dwarf fortress.

I posted this earlier, on another forum and its valid here -

Your talking about being interesting. And no one had an interesting life by remaining safe and within their comfort zone.

At least thats my 2 c.\

Morrowind also had the uncanny valley going for it, you could fill in a lot of gaps with your own imagination. Oblivion added far too many guard rails and bread crumb paths - it became disney land.

Sounds interesting, got a link to that study?

Sorry. When I say "case study" I mean "case to be studied," in the future tense, as opposed to in the past tense. I do not know whether anyone has ever done an academic user-economy study of Neopets.

World of Warcraft was designed from the beginning with casual in mind. You cannot lose anything and player A is better than B only because A spent more time on the game than B. They introduced bound items and made crafting more of a time-sink than a player-based economy. Years of WoW market dominance has warped the meaning of 'hardcore' somewhat though. I still wouldn't make it a function of how much time is spent on something; it would make Farmville full of 'hardcore gamers'.

PS. The above statements are to be taken in context of MMOs with a player-based economy, such as EVE.

You never played Vanilla. Raids were almost impossible for over 90% of the players in the beginning. There are professional WoW players today, who are sponsored. It was designed for hardcore and casual players. With the Addons it got more and more casual friendly.

Soulbound items did exactly the opposite, materials were still traded and when it was crafted there was no resell value. That meant the demand stayed high. The economy was also influenced trough expensive mounts and auction taxes. It may be not as complex as EVE, but big because everyone participated in it.

I have and I also played UO and my friends played EQ.

Comparing to those two tittles WOW is super tame and casual.

Edit: I played EVE too and it is pretty much up there with UO in terms of there being a real possibility of getting a heart attack by playing the game.

It was the difference between working at Foxconn and working for a Japanese megacorp: sure, there's a casual option among the two, but neither is exactly stress-free. (Bona fides: participated in 3 of the above 4 soulsucking activities.)

>> World of Warcraft was designed from the beginning with casual in mind.

How are 5h-8h raids designed with casual in mind?

Specially considering that any item you just happen to pick-up casually (as in not in raids) is plain garbage next to those and it matters a whole lot in a pvp-oriented game?

I disagree completely. WoW is designed from the ground up for addiction.

Because the only thing you risk doing those bullshit molten core raids was time; your own and that of your fellow party members. The whole point I was trying to make is that focusing on being a time sink and addicting is not what makes a game 'hardcore'.

Actually, one of the original distinctions between "casual" and "hardcore" was the amount of time put in. (See Jessica Mulligan's "Developing Online Games" from 2003.)

I love the last paragraph in his post.

"Because it wasn’t the game I loved. That game died in 2005 with the NGE/CU. It died when developers turned their backs on the gamers who had spent the effort and instead listened to the lazy, whining voices who wanted it all given to them."

Sounds a lot like the government of today.

Nonsense. Game companies cater to those that are the most profitable.

Oh wait.... Nevermind.

He was a job creator. Or something...

Exploiting computer games for temporary cash seems like an incredibly pathetic way to earn a living. Surely those with the intelligence to accomplish such things could contribute their time to something more productive?

How is it pathetic? It's just like any other business. Identify a consumer need, provide that need, ????, profit. You could make the same argument for almost any other business, especially anything related to art.

"Drawing pictures seems like an incredibly pathetic way to earn a living. Surely those with the intelligence to accomplish such things could contribute their time to something more productive?"

If we all we ever did was "something more productive" the world would be a damn boring place, and one in which I would not want to live.

They spotted a niche; they exploited that niche.

Why is that any more pathetic than cat-picture-websites?

A few people will be more able to do this kind of informal work from home than more formal work for an employer because they are ill and not able to get work, or not able to get support at work.

Good for the OP to have made money doing something he loved, however time spent gaming (or writing useless SAAS apps or mobile applications for that matter) is a waste of good brain cells. Unless something helps our future generations either by providing an example for how to love and care for each other or by furthering humanity's development, it is waste of time.

[In summer 2001] We talked constantly, speculated, made suggestions, argued about how Jedi should work; we were two years from ever even playing and we already had deep and powerful opinions about a game that didn’t exist yet. It was unprecedented.

It was at least a year late for being unprecedented :). I was doing exactly the same in mid-late 2000 with Eve Online.

I played Star Wars Galaxies for 7 years and met a lot of cool people. At times it didn't feel like a Star Wars game but I made the most of it. I didn't agree with some of the changes (both major and minor) but now I appreciate that I was part something great. I miss it from time to time and regret 0 time I spent playing Star Wars Galaxies.

This is terrifying on so many levels.

Sounds like our beloved banking system tbh. Say you take a loan out. You give it to someone to buy a house. They put it into a bank. Then another guy takes a loan out from that bank, and gets twice loaned money to buy a house of his own. The guy he buys it from puts it into a bank. That bank then loans out the money to another guy who gets thrice loaned money for his house. All the while the banks are placing interest on the money they lend out (which BTW was widely considered illegal/immoral until ~1600) which ends up with the modern banking system literally creating money.

A hypothetical economy has $10,000 in total currency, a bank has all $10,000 in cash reserves to begin with. There are 40 members of society, each of them with a different occupation but together they form a basic economy.

Pete is loaned $9,000 from the bank.

Pete pays Bill that money for an old car.

Bill puts $9,000 in the bank.

The banking system has $10,000 cash.

Jane is loaned $9,000 from the bank.

Jane pays Matt that money for renovations to her house.

Matt puts $9,000 in the bank.

The bank has $10,000 cash.

The bank charges interest on these loans.

The bank is owed $10,000 from Pete

The bank is owed $10,000 from Jane

The bank owes $9,000 to Bill

The bank owes $9,000 to Matt

Pete and Jane pay back $10,000 each, $20,000 collectively, but wait, that can't happen, because there is only $10,000 in the entire economy and Bill and Matt each have a net worth of $9,000, accounting for 90% of the wealth of the economy (as far as they think, anyways). Lets step back.

The bank has $10,000 cash

The bank owes Matt $9,000

The bank owes Bill $9,000

Jane owes the bank $10,000

Pete owes the bank $10,000

## The Bank's Assets

Pete $10,000

Jane $10,000

Cash $10,000


Total $30,000

## Liabilities

Bill $9,000

Matt $9,000


Total $18,000

The Bank's Net worth $12,000

Pete's net worth -$10,000

Jane's net worth -$10,000

Bill's net worth $9,000

Matt's net worth $9,000

Total currency in the system $10,000

The total currency in the system is still $10,000, but the bank's accountant says it is worth $12,000. What? Not only that, but if the bank were to be found in the wrong, it would not just crumble the bank, but the entire economic system -- because everyone is involved and has a stake in what the bank is doing here.

Now, there are plenty of businesses in the world that, more or less, have a license to "print money" so to speak. People who offer their time for money have this to a certain extent, if I give you 10 hours of my day and you have to pay $1000 for it, I have basically created a debt in the system for $1000, without having first put $1000 of actual currency into the system.

The banking system is remarkable in this context however, because it uses money itself to create more money, while simultaneously making everyone a stakeholder in their being right -- increasing the danger to the system far more than any other existing entity. Bank's also vest rich people into their system by making them little lender's themselves (when our money makes interest by way of our banks investing/loaning it to others)

If I dont get paid my $1000 that I say you owe then too bad for me and I may sue you. But if the bank doesn't get paid it's $18,000 in the scenario above the whole economy is coming down with them. The banking system of borrowing and lending money that is not backed by anything tangible is a house of cards. It is a similar system to the OP's article that feeds itself. The guy who wrote this article I think got a first-hand perspective in how extraordinary it is when you see all of the working parts at once.

So, what happens when the bank does get found in the wrong in the above scenario? Let's walk through that.

Pete and Jane can't find the money to pay back their debt. They may have thought they had it in their sights, but for some reason they just can't seem to get enough money to pay back the bank (obviously, the money necessary just doesn't exist unless they can find a way to print money faster than the bank, but more on that later...) and so they both decide the bank is a sham and take up legal claims, suing the bank in their society's courts for usury and fraud.

The bank is (quite hypothetically) found guilty of both usury and fraud, since the extent of the economy is easily defined in this society it is easily reasoned that the bank is corrupting the system. A single entity cannot claim to have more currency than is in existence. It's loans are voided ab initio.

## The Bank's Assets

Cash $10,000


Total $10,000

## Liabilities

Bill $9,000

Matt $9,000


Total $18,000

Pete's net worth $0

Jane's net worth $0

Bill's net worth $9,000

Matt's net worth $9,000

The Bank's Net worth -$8,000

Total currency in the system $10,000

Bill and Matt hear of this debacle, and quickly go to the bank to withdraw their money. But it's a race to the counter, the bank only has $10,000 and they are both owed $9,000. It is worth noting at this point that the bank has literally no legal measures to take to prevent it from being liable for it's debts to Bill and Matt.

Bill gets to the counter first and withdraws all of his $9,000. The bank is legally obligated to pay Bill his $9,000 and does so. Matt gets to the counter but there is only $1,000 left, he withdraws the $1,000 that he can.

Matt sues the bank for not paying him back his money (he gave them his cold hard earned cash, afterall). The courts find Matt in the right and the bank owes him $9,000 that they do not have. The bank goes bankrupt, the economy goes bankrupt (funny that word) -- Matt and everyone else in the society refuse to use money as currency because it is not reliable.

But was it the currency that made the system collapse? No. It was the failed predictions of those in the banking system, who have more stakeholders than any other business ever has or should have. It is indeed true that once a stakeholder was made out of the richest few (themselves and those who produced the most in this scenario), every single person who relies on money subsequently became stakeholders, which is everyone in society.

System's that are similar to that described in the OP's article quickly fail, unless accurate predictions can be made about what the "economy" can "absorb" or rather, what can be skimmed off the top while not bringing the house of cards down. In OP's case there was little pre-planned organization and he had no insight into too many other things affecting his process so it was not really possible.

Fractional banking has nothing to do with what the OP described. Users were earning game money through other means and combining it with game money they bought with real currency. There was no lending.

There was no lending but there is a strong correlation. The game creators decided to start giving away what was once worth time, effort, and money. That ultimately destroyed the OP's process. In a similar fashion, giving away money as a bank does with a loan, destroys the economy's process. This is done under many guises of course. Loans can actually help the economy, just as in OP's case, a free character given to someone who was a merchant would have helped the gameplay because more competition and production of goods would have resulted, but free characters for any and all destroyed the system.

tl:dr I believe that loans from banks should only be legal as investments into a business and loans to individuals (even for houses) should be financed from private companies so that the total risk to the economy is evenly dispersed.

EDIT: My apologies for the way-too-long scenario and explanation, but it seemed remarkably similar to the banking crisis (to me at least) and I thought it might make for an interesting discussion.

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