The New Gold Rush (Ep. 8)

Mudflation

Mudflation presents a unique challenge in massively multiplayer online games (MMOs), where the value of in-game items and currency declines due to player progression and game expansion. Mitch Lasky explains that as experienced players accumulate wealth and discard items, the economy suffers from both asset deflation and currency inflation 1. This phenomenon, observed in games like EverQuest, results in a pyramid-like structure of player cohorts, where new players start with resources that expand the money supply 2.

At one point, they had to turn off gravity in the in-world physics engine in market towns because it became physically impossible for characters to carry around all of the currency that you needed to buy things.

--- Mitch Lasky

Addressing mudflation requires careful economic design to balance player progression and resource distribution.

   

Player Incentives

Game economies are integral to player engagement, offering incentives for achieving goals and encouraging cooperation. Mitch Lasky highlights that maintaining fun and resilience are key challenges in designing these economies, as they must balance rewards and player experience 3. Trust is another critical factor, with Jenova Chen's game Sky exemplifying a system that encourages positive behavior through gifting and altruism 4.

You have to earn the right to be social in the game.

--- Mitch Lasky

This approach contrasts with the often speculative nature of web3 games, suggesting a path for future game design that prioritizes community and trust.

   

Economic Evolution

The evolution of game economies has seen significant changes, with platforms like Second Life and Valve's Marketplace adapting to player needs. Mitch Lasky notes that Second Life's economy allowed players to earn real income, though it lacked mass appeal due to minimal competition 5. Valve, on the other hand, benefits from its marketplace by taking a cut from all transactions, effectively controlling the economy 6.

They're just double, triple, quadruple dipping in all of the fees and the money never actually gets to leave the ecosystem.

--- Blake Robbins

These examples illustrate the diverse strategies in managing virtual economies, highlighting the balance between player engagement and economic control.