I am always fascinated by the market economies built inside multiplayer computer games to exchange virtual goods among players, and the recently released Elder Scrolls Online (ESO) has some interesting twists on usually accepted norms.
As a MMOG (massively multiplayer online game), ESO follows in the footsteps of Everquest, Dark Age of Camelot and World of Warcraft (WoW), as well as more recent iterative efforts like Guild Wars 2 and Diablo 3. In all of these games, the fantasy milieu of swords, staves and sabatons has to include a way of crafting and trading the tools of the medieval swashbuckling trade in the fictional world of Tamriel.
Without going deeply into the history of such things, the crucial point here is that in the most successful of these games, WoW, the economic system had evolved to a point where there was a universally accessible "auction house" (AH) for ethereal items which acted in much the same way as globalised stock markets do in the real world. You could put your imaginary halberd up for sale on the AH in WoW and if it was priced competitively, it could be sold in a matter of seconds to one of millions of customers browsing newly listed goods in real time. An analogy can be drawn with the high frequency trading systems on the "real" Wall Street, which have revolutionised the financial sector in recent years. The HFT systems behind the AH were developed over many iterations, to streamline the processes and ensure the broadest and most efficient market possible.
Now comes ESO, which seeks to reverse some of these innovations as discussed in the fanbase's Tamriel Foundry forums. Instead of a global AH, trading is only possible face to face, or in guilds of a maximum of 500 members. You can only be a member of five guilds, so instead of millions of potential trading partners, you can only max out at 2,500. In addition, instead of the best items in the games being rare drops from powerful boss monsters which would drive demand on the auction house, each and every player can conceivably make the best items themselves by spending time levelling up their own crafting skills.
Why would Zenimax, the developers of ESO, seek to turn back history like this? The reaction of one ESO player to the whiners illustrates the reasons:
This economic design by Zenimax reminds me of the Dodd-Frank reforms on Wall Street after the global financial crisis, which were passed to put a handbrake on the speculators who caused the crisis. You could argue about how successful Dodd-Frank has been, but we're talking here about intention. Just as Dodd-Frank was an attempt to encourage economic actors to abandon speculation in favour of investment in the "real" economy of making things, ESO has carefully planned its guild trading system to reward those who play the game of fulfilling quests, slaying monsters and storming keeps, rather than the meta game of playing the markets.What’s hilarious too is the fear mongering from the AH banker wannabes.“This will ruin the game” “the game will be unplayable!” ect ect.REALITY CHECK: No auction house in favor of trading and crafting means PLAYING THE GAME IS THE MOST REWARDING ACTIVITY and sitting around and flipping items (ie not really playing) IS NOT.Get that through your wow heads. You don’t deserve to be rich sitting in town like a silk swaddeled merchant, if you want to be rich you have two options:1. Do something! Go be an adventurer.2. Create something! Be a master crafter.Or do both,The adventurers drive the economy needing gear, they supply mats and demand. The crafters foster the economy by creating gear, they supply mats demand and items.Where does a AH flipper fit into this system exactly? They don’t. They are a parasite that creates nothing but inflation and raises the price (workload) for both crafters and adventurers through the illusion of convience, which is easier to click through but costs twice as much gold, ie workload on the real players.If you want to sit in one place and click through one menu while creating nothing but more work for other players you do not deserve to be powerful or rich, you deserve to be ostricized for the parasite you are.
That is not to say trading is dead in ESO, far from it. The meta game now, such as it is, is to find the best trading guild - or perhaps in the longer term, to find the best guild for player versus player combat which nurtures its master crafters for the benefit of the rest of the guild. This kind of mercantilism is possibly more genuinely medieval than the HFT systems of WoW, but will it hold up over time? Only those playing in Tamriel have the power to complete that destiny.