A Realm Reborn Column: Crafting and the Economy @MMORPG.com

[Aela]

I wanted to update folks and let them know that Ryahl's most recent FFXIV column at MMORPG.com posted today. It is a discussion of crafting and the economy in FFXIV.

Final Fantasy XIV: A Realm Reborn Column: Crafting and the Economy

The link above is to the article. Additionally, there are two companion pieces that posted last week on EorzeaReborn.com that accompany this piece. They are:

Of Hammers and Scales

Too Similar and Too Many: Gear and Item Saturation in MMOs

Please feel free to respond either here, at MMORPG, or at EorzeaReborn if you have any thoughts or comments. Ryahl is always happy for discussions and thoughts on his POVs.

[katsujin]

I think one of the problems that can never really be addressed in an MMO is the resourced called "labor." In game you could say that labor force are crafters, but since it is a part of the game there are a ton of crafters. In the real world the number of "producers" are much more limited compared to the number of consumers. (this is because of the relative time and capital investment necessary to produce goods)For example if 3/10 players are crafters that means that each crafter only has to produce a particular good 3 times to completely saturate the market. This results in a surplus, a surplus results in goods being sold at a loss.

In real life producers would produce less of an item if they could not sell them. They would purchase less raw materials, and then they would cut their employee hours and send less items to the market. Also in real life people are much less willing to take a loss where as in game the price of an object will often drop much further because players will sell products simply to get rid of them rather than to make a profit or break even.

What this ultimately means is that for most crafters, you will lose gil as a crafter. If someone offers an item for sale, if the price is high you will think "I might as well make it myself then." And you will produce it yourself. In the last link when the author talks about scarcity, he is correct. Everything is abundant in game, and players are used to getting things easily because the games and especially end game are gear centric. Sometimes people will immediately judge you as a player based on your gear. This is the social element of economics as it's considered a "social science."

[Ryahl]

That's a great point. For a crafting economy to work, you need to balance the ratio of crafters (and really crafted items) to the number of adventurers (offset by non-crafted items entering the adventuring economy).

[indira]

I think one of the problems that can never really be addressed in an MMO is the resourced called "labor." In game you could say that labor force are crafters, but since it is a part of the game there are a ton of crafters. In the real world the number of "producers" are much more limited compared to the number of consumers. (this is because of the relative time and capital investment necessary to produce goods)For example if 3/10 players are crafters that means that each crafter only has to produce a particular good 3 times to completely saturate the market. This results in a surplus, a surplus results in goods being sold at a loss.

In real life producers would produce less of an item if they could not sell them. They would purchase less raw materials, and then they would cut their employee hours and send less items to the market. Also in real life people are much less willing to take a loss where as in game the price of an object will often drop much further because players will sell products simply to get rid of them rather than to make a profit or break even.

What this ultimately means is that for most crafters, you will lose gil as a crafter. If someone offers an item for sale, if the price is high you will think "I might as well make it myself then." And you will produce it yourself. In the last link when the author talks about scarcity, he is correct. Everything is abundant in game, and players are used to getting things easily because the games and especially end game are gear centric. Sometimes people will immediately judge you as a player based on your gear. This is the social element of economics as it's considered a "social science."

i been saying this for a while and getting flamed. there no real economy.
other games fixed this problem by making many versions of one thing and mats and the best was SW galaxys.

star wars galaxys each thing you made was different from the last even had its own ID like a finger print and there were different qualitys. and crafters skills really mattered. and equip had a permanent decay till its no good anymore.

FFXIV you have normal equip then +1 and there are no other differences, once again i say the crafting system sucks almost pointless to not have it be a auto craft like WoW. everone can make the same thing which can make selling useless or not be worth anything worth the trouble

[Aela]

i been saying this for a while and getting flamed. there no real economy.
other games fixed this problem by making many versions of one thing and mats and the best was SW galaxys.

star wars galaxys each thing you made was different from the last even had its own ID like a finger print and there were different qualitys. and crafters skills really mattered. and equip had a permanent decay till its no good anymore.

FFXIV you have normal equip then +1 and there are no other differences, once again i say the crafting system sucks almost pointless to not have it be a auto craft like WoW. everone can make the same thing which can make selling useless or not be worth anything worth the trouble

I get where you are coming from, but we're really wondering what the influx of quest reward gear is going to do to the overall game market. As many folks have said (else where as well as here), the majority of gear from 1.0 came from crafters. While a lot of discussion has focused on the "quest games" impact on xp, I don't remember seeing much about itemization and gear effects of the changes.

[HamHam]

I think one of the problems that can never really be addressed in an MMO is the resourced called "labor." In game you could say that labor force are crafters, but since it is a part of the game there are a ton of crafters. In the real world the number of "producers" are much more limited compared to the number of consumers. (this is because of the relative time and capital investment necessary to produce goods)For example if 3/10 players are crafters that means that each crafter only has to produce a particular good 3 times to completely saturate the market. This results in a surplus, a surplus results in goods being sold at a loss.

In real life producers would produce less of an item if they could not sell them. They would purchase less raw materials, and then they would cut their employee hours and send less items to the market. Also in real life people are much less willing to take a loss where as in game the price of an object will often drop much further because players will sell products simply to get rid of them rather than to make a profit or break even.

What this ultimately means is that for most crafters, you will lose gil as a crafter. If someone offers an item for sale, if the price is high you will think "I might as well make it myself then." And you will produce it yourself. In the last link when the author talks about scarcity, he is correct. Everything is abundant in game, and players are used to getting things easily because the games and especially end game are gear centric. Sometimes people will immediately judge you as a player based on your gear. This is the social element of economics as it's considered a "social science."

something that could be solved if crafters were only allowed to have one craft at cap, while other craft skills can only be leveled up to 50% of your maxed craft skill. As the level cap is increase, and as you level up, the secondary and third crafting skills can go up as long as it maintain the 50% once the crafter have reached the cap. The results will be limiting the amount of crafters with many skills and taking out the supply surplus out of the market.

However, the risk is a few will be only able to have certain crafts and could cause the monopolization of certain markets. Just like in the real world.

[katsujin]

something that could be solved if crafters were only allowed to have one craft at cap, while other craft skills can only be leveled up to 50% of your maxed craft skill. As the level cap is increase, and as you level up, the secondary and third crafting skills can go up as long as it maintain the 50% once the crafter have reached the cap. The results will be limiting the amount of crafters with many skills and taking out the supply surplus out of the market.

However, the risk is a few will be only able to have certain crafts and could cause the monopolization of certain markets. Just like in the real world.

lol If you replace one problem with another I'm not sure if I would call it "solving." But also I don't believe it would solve the problem regardless, it will definitely decrease surplus but it won't fix it. You would essentially be reducing the number of crafters for any particular good by 1/8th but all that really means is that instead of producing 3 goods they have to produce 32 goods in order saturate the market. It's something that is still rather easy to do. Of course in an actual situation there will still be many more of one type of crafter than other crafters for instance more blacksmiths than there are alchemists. Either way the problem still remains, it's too easy to produce more, also crafters often flood the market with certain items just for the sake of leveling.

At the same time real world market would be unacceptable in game. Rich being incredibly rich, having access to resources that the general population can't seem to touch. This actually does somewhat happen with regards to rare items and HNM LS in the past. But as far as true crafting and gathering scarcity most people would not accept that type of system in game. To give you a real world example Tamahagane is only sold to specific manufacturers in japan. A normal person has almost no chance to purchase it. Real world scarcity, not to mention monopolizations, patents, copy rights, resource rights, won't be accepted in game, and probably rightfully so, but that's one of the reasons a "real economy" in game is impossible. (atleast at the moment) And the problem can't be solved.

[Mjollnir]

The one thing, though, that really irks me about this article? The plural for leve is leves... not leve's.

See now my deleted post above yours said the same but then I wondered if Ryahl was attempting to use an apostrophe for contraction's sake (as in "o'clock", "Hallowe'en", etc.), ie levequest = leve', hence my deletion.

Though now you pointed it out too, I went and looked it up and levequest -> leve is just a clipped form with no requisite for an apostrophe. So, either way it's wrong, yeah

As for the more important matter: the article!

Didn't play GW2, but I like the sound of the AH. Don't quite understand why anonymity is necessary, but that probably comes from only being able to read about it and not experience it first-hand. If ARR were to go this way, I would be very happy.

I think the most important function is the cross-server aspect. I wonder if this wouldn't be implemented in ARR due to the comparative wealth imbalance between old and new servers. If it were, it should be able to prevent (by sheer amount of transactions) that awful price-fixing that occurred in FFXI which was created by malicious manipulation of an item's price history. It should also balance out the welath between old and new servers after a little while...

Without cross-server functionality, which I would think is a more likely scenario, I think the AH needs a full sales history - not just last 10 or 30 etc. This sounds like it could be a lot of data to load up each time you select an item, but if it were done on demand (ie show first 10 by default, expand to re-query the server for a full history), it would reduce some of the load. If only a limited history is used, then players with a lot of capital can more easily manipulate the market through history-fixing, frustrating buyers who don't have a surplus of gil and getting rich in the process (giving them more power over the market).

I'm not too concerned about crafting being problematic in ARR. There was a strong market in 1.0 wherein I would sell through all of my items for sale (low to mid-range stuff) in a day on two retainers. I was buying and camping top-range HQ gear and materia; in a couple of cases having to wait a week for the specific item to come up, but that was no hassle. Yeah, the MW system was weak when it came to price history ignoring materia, or if there were over thirty sales on, or having to search prices for twenty items in separate windows before heading back to the retainer and listing them for sale... But ARR AH will have sorted all that, right?!

What this ultimately means is that for most crafters, you will lose gil as a crafter.

I protest this. In the games I've played, I've used online databases and wikis to extensively research recipes and current market prices on the path to levelling up crafting jobs/skills specifically so that I don't lose money. That, for me, is the game - capping out with a lot more money than I started. Ok, arguably I could have gone and killed mobs for all that time I spent in spreadsheets, farmed more money's-worth of drops and bought my way through an inefficient (but quicker) path to the top, but this latter method is less enjoyable for me as it lacks in... elegance...

something that could be solved if crafters were only allowed to have one craft at cap

FFXIV is the first game I've played where you can have all crafts at cap. Only capping one (or three) craft(s) on a character in other games just prompted me to make more characters to cap each craft. It actually really prolonged the life of those games for me, but I'm happy that FFXIV is different and allows all on one character so that I don't have to spend extra time repeating content.

My main worry is not the crafting mechanic, nor the auction house, nor the demand (or lack) for crafted gear, but something else: gil buyers. The impact these players have on the economy ruin the crafting/gathering/market 'game' that I and a good few others like to play. I understand that the battle/gear elements of the game are the primary focus of the designers, but I hope some really harsh/strict measures are put into place to deal with the gil buyers.

[Ryahl]

First of all, thanks to everyone for reading and commenting.

As to apostrophe-gate, my apologies. Editing is important and bad writing makes it hard to follow the writer's point. In this case, we clearly dropped the ball on one. That's an explanation, not a justification, the "leve's" statement needs to be corrected. If it was at EorzeaReborn, Aela or I would fix it immediately. I'll email Bill and see if we can get a quick edit-fix applied!

I'm pretty sure I have an it's/its disaster near the end of the most recent EorzeaReborn column (thirty days in the sun), but that just came off Google Docs today and I still need a bit of space away from the article before I can edit it sanely. It is hard to edit my own work right after writing (I still "hear" it the way I meant it).

On the Guild Wars 2 auction house. There are a couple of reasons for anonymity. First, it is probably necessary given their cross-server system and size of clientele at play. Second, since they post the quantity demand and value offered (e.g. 10 offers to buy at 24 copper vs. 200 offers to sell at 30 copper), user specific information is drowned out for the sake of data quality. The names in this case are less important than the numbers. You could probably still include user data in a drill-down format, though.

Personally, I like a good auction house. I liked the FFXI blind-model way back when. Given the few AH in the market at the time they made it, the FFXI AH was quite innovative. These days, I prefer the buy/sell variant (e.g. where you can list a buy order as well as a sell order) for simple efficiency sake. It's harder to manipulate the market when both buyers and sellers can enter positions.

I think the real challenge for good crafting is the quest hub. When you have to reward gear via quest, it takes away a market for the crafter/shopkeeper. While I concede the point that low levels tend to be craft barren after a few months, quest hubs run through end-game.

[Ferth]

...
I think the real challenge for good crafting is the quest hub. When you have to reward gear via quest, it takes away a market for the crafter/shopkeeper. While I concede the point that low levels tend to be craft barren after a few months, quest hubs run through end-game.

While this is true, this is what I was trying to get at with my comments on materia.

One thing we really don't know right now is how long the higher levels will take. {{Whoops, wasn't paying attention. Excerpt deleted.}}

It's entirely possible that a character at level 30 could potentially convert a given slot of armor into materia numerous times before they effectively outgrow it. If there were reason to do so, and if the person were proactive about it they could run through far more pieces of armor than the quest givers supply, which would create demand for crafted armor.

On the other end of that, were lower level materia worth pursuing and melding to gear a crafter could make a piece of armor much more valuable and beneficial to wear than the quest reward pieces.

This is a lot of supposition which depends greatly on how the materia system turns out. But I'd like to hope that since the climb to higher levels will more than likely take significantly longer than it did in 1.0 the need for materia melded gear will go up in those interim levels, giving an effective niche for both high value, high quality melded gear and lower value materia fodder.