EVE Online Appoints In-World Economist

EVE Online For a while now, there has been talk of CCP Games hiring a lead economist to produce economic information about the massive game world of the space MMOG EVE Online. The appointment of this “Alan Greenspan of the virtual economy” was announced this Tuesday.

The man is Dr. Eyjólfur Guðmundsson, former Dean of the Faculty of Business and Science at the University of Akureyri, Iceland. Before Akureyri he was a research associate at the University of Rhode Island’s Department of Environmental and Natural Resource Economics where he also completed his PhD. Check out Guðmundsson’s first blog post for more about his background and plans. Let’s wish him luck and look forward to hearing more from his direction!


Diablo II economy in chaos as Ladder season ends

Diablo II Diablo II is a game released by Blizzard Entertainment in 2000. In the game, the player travels in the world of Sanctuary on a quest to defeat the three prime evils, Mephisto, Diablo and Baal, while fighting their demonic minions along the way. The original game ended in defeating Diablo, and the quest of defeating Baal was added in 2001 as part of the Lord of Destruction expansion.

The game can be played in single player mode, but it was, and still remains, very popular also on Battle.net, where both single player characters and characters stored on the game servers can play online. On Battle.net, an economy came to existence where players can trade items for other items or runes, which are widely used as the currency. For a long time, this economy remained fairly stable, although the price of items in runes continued to grow because of a large number of runes created by cheating.

This economy went into chaos on June 20th as Blizzard announced that the Ladder season would end on Monday, June 25th.

What is the Ladder? On Battle.net, the players are divided into realms for different areas, where people in the same timezone and hopefully with similar latencies can play together. Each realm is further divided into different parts. There is Open Battle.net, where players can bring their single player characters stored on their home computers. Then there is nonladder, where characters are stored on the servers. Finally there is the Ladder, where characters are also stored on the servers, but they face greater dangers and can find greater rewards than nonladder players. Each of these three is finally divided into softcore and hardcore, the difference being that softcore characters can get away with death for a loss of gold and experience, while hardcore characters only live once.

Characters created in the Ladder don’t however remain Ladder characters forever. The Ladder lasts for a limited time, and as each Ladder season ends existing Ladder characters become nonladder characters, and everyone gets a fresh start in the new Ladder season. There have been three seasons so far, and the fourth has just started. The characters moving to nonladder
can keep their items, including items which are otherwise not available in nonladder. This is the only way nonladder characters can gain the Ladder rewards, and the only interaction that exists between Ladder and nonladder. There is no way to keep old Ladder items in the new Ladder season.

This has had some interesting effects on the economy. Since only a short time remained to gain all the additional rewards available in the Ladder, several people started trading in an attempt to gain those rewards in the short time available. Specifically, this resulted in the demand for certain items and runes to increase quickly. These items can either be found or created only in the Ladder, and the runes are needed to create such items. Players who intended to migrate to nonladder hoarded these Ladder rewards, hoping to earn a profit by selling them in nonladder. Of course, this would cause the price of certain runes and items to go up, and this indeed happened: the price of a certain important rune doubled or even tripled over the weekend relative to other runes, and a combination of low runes could buy rare and valuable items which would otherwise have been unthinkable.

At the same time however, other players had no intention of migrating to nonladder. They wanted to keep the rewards and challenges available in Ladder, or they played for the joy of gaming alone, and welcomed the chance for a true fresh start. Some of these people, out of generosity or desire to vaunt their wealth, started giving away all of their Ladder possessions for free. Different varieties of giveaways were seen: simply dumping things on the ground for anyone to take, lotteries, guessing games, even making players search for the items scattered around the landscape while the person giving them away tried to kill them. There were few giveaways at first, but by Sunday there had been dozens. Such events would make prices go down, not only of Ladder only items but all equipment. This was an important factor in making possible trading high end items for the cheaper Ladder rewards.

On nonladder I cannot report on the developments, as I don’t play there myself. However, this is not the first Ladder reset, and some Ladder only items can already be found on nonladder from the past seasons. The values of these items very likely dropped sharply, as nonladder players could expect a flood of Ladder only gear coming. Still, the drop can be expected to be temporary, and by the time prices have settled down the Ladder items can be expected to fetch good prices.

There were also some other factors influencing the situation. First, not all players knew of the coming reset, and they did not prepare in any way. These people may be surprised and disappointed as they discover the items they want are no longer within the old price range, or that they sold something for well below the current market price. Another thing is that the runes on Battle.net are frequently created by cheating, especially the most expensive ones. The legitimate ways of getting high runes are slow or absurdly unlikely – you could make the highest rune by combining 14.3 billion of the lowest runes, or you could find one at a chance of one in a billion – so the few lucky people who have found them have cloned them using various cheat methods. Even though many people wanted Ladder only items to take with them to nonladder, they were at the same time worried about trading for hacked items which might disappear or be deleted as the new season started. Making an expensive item may take several high runes, and if a single one of them is hacked, the entire item might disappear.

Lastly, it is important to note that the trading and giveaways were all happening in a very active community, where the members often knew each other, had traded before and generally trusted other long-time members. One could find better deals being offered from strangers in Battle.net, yet I don’t feel bad at all for not taking them and trading with community members instead for slightly lower prices. Also, it is doubtful that any active community members missed the news about the reset, indeed it was known early, as the in-game news only announced the reset one day late. And as those news had not been updated in almost two years, several players had gotten used to ignoring them.

Now, what is yet to come? From June 25th onwards, the Diablo II economy will have a fresh start on Ladder. There will be no cloned high runes available, so their prices are going to skyrocket. The prices of runes in general will be considerably higher than they were prior to the reset, and there will be trading for low items which many would have not bothered even storing during the old Ladder season. Exactly where the economy will lead is still open to discussion. There was no patch issued to go with the reset, so the old cheating methods will still work, however it will take time before cloned items and runes become such a problem as they were.