EVE's Self-UNcontained Economy

This blog entry will examine, in a problem/solution/consequence analysis, the issue of Real Money Trade in CCP's EVE Online. While RMT is considered a problem in a great many online games, I believe the scenario that has played out in EVE helps to strongly illustrate the many poorly understood motivations and consequences behind the problem.

Let me set the stage and get everyone caught up to speed. EVE Online has a large, persistant online world. Large means that many players are sharing the same game-space and directly or indirectly compete with one another. Persistant means that the world keeps on going even if you're not playing it. These factors combine to produce the effect that all players are competing, whether they want to or not, with a great many other players.

One of the ways players compete is in the aquisition of in-game money, a virtual currency called "ISK" in EVE Online. For many players, simply earning ISK consititutes the fun of EVE. However, for others, acquiring ISK is a tedius pre-requisite for whatever other activities they find fun. For this latter, ISK acquisition is a "grind" and their goal is simple: acquire as much ISK as possible in as little time as possible.

Problem #1: When players who want ISK as fast as possible calculate the ISK they can earn per hour of gameplay, they might be a bit dissapointed when they find out the answer is "not much." This can become particularly problematic to players with very limited time available to spend playing the game. If you need, say, 1 billion ISK to buy a ship you want to fly, but you can only earn 10 million ISK per hour, it will take you 100 hours to earn enough for the ship. If a casual player only spends 5 hours a week playing EVE, that's 20 weeks for a new ship.

Solution #1: This is where differences in the real world economy come into play. Consider if said casual player earns $50/hour working a real-life, non-EVE job. Consider if other people can't even earn 50 cents an hour in a non-EVE job. Said casual player could simply work one hour of overtime and hire other people at $0.50/hour to farm ISK. Because the casual player has an advantageous position in real life, he can convert one hour of his time into 100 hours of game time. Instead of 20 weeks, he can have his ship in one hour.

Consequence #1: However, ISK acquisition rate can be improved through a number of different factors, including group coordination, investments of very large amounts of money to destabilize the player markets, and the use of exploits and macros to gain more ISK from the game than is intended by the designers. Obviously, RMT will employ these tactics to increase the money they can earn by selling ISK. These can have negative consequences on the game for other, unrelated players, including poor game performance due to the unequal load placed on the server or unfair market prices. 

Problem #2: Thus, from the operating company's point of view, the RMT market causes increased server load, upping operation costs for the company. They can also cause the game to be less fun for many players not involved in RMT, which might cause those players to stop playing the game (and stop paying the company subscription fees). This makes Real Money Traders a problem to be eliminated, but as long as it is profitable to trade money due to the demand from players who want ISK fast and the supply of people who can earn more farming ISK than anything else, the problem will persist.

Solution #2: Most companies employ a whack-a-mole procedure of banning RMT from their game, but as long as the demand for quick in-game currency exists, traders will just create new accounts and get back into the game. The solution taken by CCP in EVE Online is the PLEX, a 30-day gamecard that can be traded as an in-game item. The principle is simple: if you want to buy ISK, you buy some PLEXes from CCP, then when you log in you have some PLEXes in your inventory, you can then put them on the in-game market and sell them to other players. Other players also benefit from this system, because they can play for free if they farm up enough ISK each month. It's win-win, right?

Consequence #2: Sadly, it isn't perfect, because the RMT suppliers aren't interested in buying PLEXes, yet are willing to farm up more ISK than most "honest" players. A pair of PLEXes (CCP only sells them two at a time) costs $35 and, right now, each sells for about 300 million ISK. That's about 17.15 million ISK per dollar. On the other hand, RMT are selling 600 million ISK for about $28. That's about 21.43 million ISK per dollar, a far better value. Moreover, when you sell PLEXes, you're competing in the vicious EVE in-game market, and it depends on another player buying it. Buying from an RMT is fast and easy: you get your ISK within minutes of making a purchase.

Problem #3: The worst part is, based on the past few months, PLEX prices in EVE have been going down. I've personally watched them go from over 330 mil each to below 290 mil each since I became interested in the issue. The main problem? More supply than demand. It seems that there are more people who want to buy ISK (and are willing to do so by buying PLEXes) than there are players willing to farm ISK to play the game for free. And since the main farmers of ISK aren't buying PLEXes in volume equivalent to their ISK output, there's just no way to meet the ISK demand and supply through game time cards.

Solution #3: So what's CCP to do? Some people have suggested that CCP institute a price floor for PLEXes: having the game buy them for a fixed price that's higher than the rate the RMT offer, such as 22.86 ISK/$ (400 mil ISK per PLEX). This would also defeat the instant exchange advantage that RMT offer, since players who buy PLEXes can always cash them in instantly at the floor price. This also allows CCP to cash in beyond their subscription base: currently, PLEXes are only bought and used to replace subscriptions, so their overall income is no higher. By simply cashing in PLEXes, CCP can directly monetize the desire for ISK.

Consequence #3: This would make it even harder for people to play for free by making PLEXes more expensive, but it would also flood the market with a lot of extra game-generated ISK. Is this a problem? No, not really. It might upset players who think it's unfair that some players can just buy a lot of in-game money which is just generated by the game and stuck in their pocket, but this won't actually impair their game experience or destabilize the market.

Why won't it? That's in the next blog entry!

So, conclusion, the PLEX is a poor patch solution for combatting RMT; CCP, and likely every other MMO vendor, should probably just sell their in-game currency directly to players.