Quote of the Day – It’s All About the Equity

…all microtransactions that sell game content also destroy equity.

-Ramin Shokrizade, in his The Barrier to Big post

Free to play, revenue models, and why some MMOs succeed while others fail remain hot topics in the MMO blogesphere, with a myriad of different opinions represented.

One recent thread has been the impact on MMOs of players being able to buy items that would otherwise be earned through game play.  The argument was made at one point that, since you cannot “win” an MMO, that how other players acquire their gear and the like has no impact on you.

Mr. Shokrizade’s reply to that is quite succinct.

What if I spent three months earning the first horse in a game, and then a few days later I found out that 500 other players now had horses. But this was not due to a bug per se, this was because the game host decided that horses were cool and that players would pay real money for them. Again I describe this in Mona Lisa. Now horses are not cool anymore, and my equity has been destroyed. I’m upset! More importantly, I have now lost confidence in the game world and it’s hosts because I know they will not protect my efforts

It is not about winning.  Winning, which exactly nobody was arguing in favor of, is just a straw man.  It is about the value associated with your play and the developer not making you feel like your efforts were for nothing.

It is, in fact, about equity.  Aradune‘s famous flaming sword in EverQuest would have been less cool if we all could have had one for a few bucks.

That sword

That sword

And, frankly, cool is a serious factor in an avidly social game.

The setup to a "frog in a blender" joke

This guy has never been cool

This is part of the reason people get worked up about free-to-play, when the allegedly “cool” items are in the cash shop.

Anyway, despite a few obvious errors (as Edward Castronova will tell you, in detail, that EverQuest quite clearly had an economy before WoW… and WoW did not come out in 2003), and a rather specific use of the word “content” (something else people have argued about… this is not SynCaine’s usage… or maybe it is), it is a decent, if short, article that briefly examines why two games were successful… WoW and EVE Online (clearly a different definition than Strauss Zelnick used)… while other games failed to get there after those two blazed the trail.

Just the other day I put the player economies of the two games in different leagues. I wonder how that figures into things, and if new games are taking note or not?

Now who is going to argue that they love it when MMOs trivialize their efforts?

I am sure somebody will.

Or they will argue that you shouldn’t care about equity at all.

Bonus points for saying “it’s just a game.”

23 responses to “Quote of the Day – It’s All About the Equity

  1. I’ll wade in as the first voice of the whales (I spend money in free to play games): what if the person who is buying that pony allows you to earn it for free?

    My point is that in free to play games someone has to pay or no one gets to play for free. Spending a lot of time aquiring something means it is frustrating when someone buys it but how else will these games make money? I with I had the time to grind away getting all the cool items (or tank modules in my case as I only play World of Tank atm) but I just don’t so I throw my cash around to get what I otherwise would grind for (I rarely play stock tanks and unlock modules with free xp).

  2. @Gank – I spend money in free to play games as well and, like you, I do so in World of Tanks.

    I do not think that alone is the problem. (And the post linked actually brings up WoT.) It is one thing to be able to buy things or speed up your advance through the tiers. I prefer to play as Premium because I just don’t play as much as some people, but I still like to advance.

    It is more a matter of not making people who advance at whatever rate feel like they wasted their time. There is a clear line between Gold tanks and tanks you earn. If they were, for example, to make the Maus available for cash, that would piss people off.

    That doesn’t mean people don’t get cranky about Gold tanks still. Somebody is always ready to shout “Wallet Warrior!” And even premium ammo, which can be purchased for credits, gets some people pissed off. But they can still have their pride that they play in a tier 8 that they earned rather than bought, and that distinction is clear to all who know the difference.

    Equity is annoyingly intangible in this set of circumstances, and means different things to different people. I would also make the case that World of Tanks is a bit different due to its nature, though the feeling of equity does still apply.

  3. I’m not sure it *destroys* equity as much as it tells you how little game designers value your time. Remembering that I’m really bad at tanks, I still have 3300 battles in, yet I do not own a T8 tank. I also have worse ADHD that you do, I think.

    Someone can walk in and buy a Lowe for $51.95.

    So all that time invested is worth $51.95… conveniently ignoring the enjoyment I get out of playing.

    I’ve also been convinced that gaming is the one remaining way people with more time than money can lord over people with more money than time. Once you let money into the equation, that all goes out the window. “BG until my eyes bleed for Warlord gear or buy better in the cash shop? Let me think…” the latter is easy choice if you have the money, the former takes something people like to call skill. I call it insanity or dedication myself.

  4. I think the original article comes from a false premise, though. It assumes that cash shop items have no equity. If you work hard for your horse, and I then spend $20 for mine, then we both have equity – you value yours because you worked for it (it cost you time), I value mine because it cost me money, and anyone observing that both of us have horses can see that we both have something that we made a sacrifice (of time or money) to obtain.

    Arguably, if the cash shop price is too cheap then the cool factor is diluted because it’s easier to obtain by that route, but that’s just a matter of setting the right price level.

    Gear resets DO destroy equity, on the other hand, and I’ve seen players disheartened by the Burning Crusade expansion, for example, where hard-earned top tier items were suddenly eclipsed by the trash drops that every schmuck was finding in the first zone of the expansion (later expansions were probably seen as less of a kick in the teeth because people had got accustomed to the idea, but BC definitely came as a shock).

  5. @Chris – you’re right, I definitely see more hate flowing from the time rich / cash poor players towards the “pay 2 win” crowd than I see from the cash rich players towards the “no life grinders”. I suspect it’s because the first category are more likely to have their sense of self-worth tied to their in-game achievements. Players with cash to flash will tend to be older and more successful IRL, so either their self-worth is tied to things outside the game or they’re just more mature and less bothered about such things.

    This might be why, when someone starts spewing vitriol about gold tanks or their equivalent, that the most effective rejoinder is “do you want fries with that?” :)

  6. @kiantremayne – I wouldn’t say false, but perhaps overstated? The equity proposition for the two horses you mention are different, and as long as the two horses are distinguishable, the in-game earned horse retains some equity even in a cash shop environment. If they are exactly the same… for example if WoT sold the Maus in for cash… then the equity in the eyes of the person who earned theirs the hard way is quite probably greatly diminished.

    One of the problems I have with cash shops is one that is tough to express, since it relates only to personal anecdotal experience. Basically, in my experience, things easily obtained with real world cash in-game are often not valued the way things are if earned by playing the game.

    My proof is in people whom I know who have purchased game currency via illicit RMT. That ill-gotten currency tends to either get squandered quickly or it tends to take the edge off the game and reduces the desire to play. That quick and easy cash spoils people and tends to either send them right back for more or makes the game so trivial that they lose interest. That isn’t how it goes for everybody, but I have seen it enough times to know the story well, and it is an equity issue in its own way.

    That doesn’t mean that everything in the cash shop kills the game, but companies have to be careful.

  7. I totally agree with this argument in every way! …except one. For it to be valid, the item in the cash shop must come after it has already been available in the game. However, since that rarely (ever?) happens in F2P models, Mr. Shokrizade’s analogy (!) is crap.

    If both options exist from the jump, there is no equity problem. Those who wish to pay with time, can pay with time; and those who wish to pay with cash, with cash.

    Where there can be a problem is in games without a 2-way economy, where the *only* way to get the cool what-zit is with cash. However, this is no more unfair than subscription based games where the *only* way to get the cool what-zit is to spend time. I’m certain at least some players don’t want to hear that, because it strikes at the heart of their F2P angst, but there it is.

  8. Sweat equity is the term that should be used. The amount of effort to get say a top tier raiding sword with laser beams would be set near, I dunno, 100 hours. At my salary I can look at that and say, LOGICALLY, it would be more efficient to buy it, even if it cost 1000$. Emotionally, the more I invest, the more equity I have so in the same case, the relative value of that item might be 10k.

    There is a disconnect between measuring real life equity and in-game equity, as Diablo3 so clearly demonstrates.

    Economies can’t be described in 4 paragraphs and his post makes that clear. Even his 39 page report would only scratch the surface of implementation. It’s a good topic, Gevlon has made a career out of it and Marcko an infamous one.

  9. @HZ – Well, I can come up with at least one right off the top of my head, which is festival mounts in LOTRO, where Turbine sold mounts identical to those earned in game. And LOTRO also sells level 20 armor in the cash shop that is better than any crafted that you can wear at that level, which flips the usual problem on its head.

    But yes, I was more interested in his argument (I am not sure it is an analogy… more just a hypothetical) because of the truthiness I recognized in it about how I feel about things I earn through, as noted just above, sweat equity versus those purchased.

    I am not sure I can wade into the time vs. money equality debate because I waver on where I stand depending on what we’re talking about. I don’t mind it in WoT, where there is a parallel but NOT identical path to buy into tier 8, as an example. But when people start in on wanting to bypass playing the game because they want to see the final boss in the end game final raid because they paid the same for the box so the company owes it to them, I find my sympathies for my fellow “more money than time” players drops through the floor. But then I am fine with LOTRO’s scaling model that lets you do the book instances solo. So where do I really stand?

    And, as noted above as well, I am a bit surprised on reflection that the devaluation of end-game raiding gear with each new expansion doesn’t figure in his world view.

  10. @Wilhelm He does mention a few times that expansions can diminish equity. He goes into a bit more detail in his replies to the comments as well.

  11. @Wilhelm

    … then the equity in the eyes of the person who earned theirs the hard way is quite probably greatly diminished.

    You don’t specify which way is the hard way. I assume you mean going to school, getting some sort of qualification, finding a job, saving money, paying off a student loan, and then using what is left to buy the thing. That’s obviously what you mean by doing it the hard way, right?

    Obviously you don’t. You think that earning RL money is easy, and grinding out gold in a virtual game is hard.

    LOL

  12. Sweat equity is a good term to use, but it’s an emotional measurement and therefore subjective. Different people value their time differently. Some random thoughts in no particular order:

    1) Back in EQ I would have been frighteningly angry if SOE had come around and started selling Soulfire (or any of the other major quest rewards) in a cash shop. Not necessarily for the time invested but because so much of the fun of the game for me was figuring out those quests on my own – picking up all the subtle hints and clues and really paying attention to the lore so that you didn’t have to go consult a spoiler site for it. I realize that there were plenty of folks playing MMORPGs back in the day who really couldn’t care less about that stuff and were perfectly happy using the spoiler sites, but it’s really the same sort of distinction. It’s not time per se, it’s more about what aspects of the game you find meaningful and are personally invested in. I think the conflict happens mainly between people who are invested in whatever activity they had to do to “earn” the stuff, vs. people who are really only there for social interaction in a game setting. As an example, my fiance is a heavy roleplayer, and she buys stuff in cash shops all the time (much to my dismay when she comes around asking me to buy her more points to spend…). But she’s not really interested in going out and doing quests, she’d rather roleplay with her friends instead. It’s hard for me to say that’s not a valid playstyle when I sit down and think about it objectively, and for her, the cash shop helps her do more of what she enjoys.

    2) I never had a problem with what Turbine did in LOTRO while I was playing it for two reasons: First, you were never required to use the cash shop even while doing F2P – playing the game itself rewarded you with points to spend to unlock content and such. Second, even when they did duplicate something it was usually something that had been time-limited, like the festival mounts that might only have been available during that two-week period when you were busy with family stuff and couldn’t log on. So it seemed pretty reasonable. Although I might have felt differently if they had peddled my “Defiant” title in the store when I was playing – after all, THAT took completing a little-known (and difficult) optional instance in Angmar that everyone had completely forgotten about by the time Mirkwood shipped, and that of course made it unique and cool when I was running around with it :)

    3) I’ll be the first to admit that I have been known to buy PLEX in EVE and turn around and sell them for in-game money, usually in order to finance a major corporation purchase. Why? Because as much as I love the game, grinding missions or complexes or solo mining for money is super-boring – and I like the fact that I’m exchanging game time for currency (instead of just plunking down my credit card to buy it directly). That PLEX I sell gets used to let someone else play who might not be able to do so otherwise. I feel like this is an important distinction – there’s some folks in my corp for example that are trying to finish school, start a family, pay off student loans, AND they’re trying to become teachers. They both work (one of them has two jobs) an ungodly amount of hours and they still barely make ends meet. EVE is quite literally the only MMO they can afford to enjoy, and that’s because they can do PI to fund the in-game money they need to buy PLEX for their accounts every month. If they couldn’t buy game time with in-game currency, they quite literally couldn’t play. I realize the discussion so far has been about cash shops and virtual items but I think it bears mentioning. Even when I sell the PLEX and use the money for a shiny new battleship, I’m buying that battleship from another player or group of players – and I think that’s why you don’t see tons of people complaining that PLEX are ruining EVE, even us old farts who were happily paying subscriptions before CCP ever thought about letting players trade time codes.

  13. @Gavin

    “You think that earning RL money is easy, and grinding out gold in a virtual game is hard.”

    Given the current rate of hours of effort vs. dollars spent, then frequently yes. I am just napkin-mathing this, but according to the internet the average hourly earnings for employed Americans is about $23/hr. Unfortunately it’s hard to know what the average cash shop item price is, but let’s be generous and say $25.

    If this hypothetical average person puts 10 hours of effort into obtaining an item, that’s $230 of their time. The person who just pays up front is getting a much better deal.

    I find as I get older that I have more disposable income but my time is a lot more precious so .. yes, paying for something on the cash shop is a lot easier for me! (Although personally I tend to be a cash shop shunner for many of the reasons mentioned above.)

  14. Pingback: It’s the Economy Stupid | Leo's Life

  15. @Gavin – We were talking about how to obtain items in a game. The choice of spending hours doing something is obviously the hard way, versus spending some money to get there instantly. Pretending the spending the money part is hard is being disingenuous, and I speak as somebody who has done all you describe. In fact, it is all that time at work that, in part, makes spending time the “hard way.”

    I will be interested to hear when it comes time to buy a house, whether you will find building it from scratch yourself or buying one ready made the “hard way.”

    @Verran – Indeed, that is the problem with coming to some sort of formal conclusion based on this sort of thing, the value assigned is quite subjective. My favorite mount in WoW is one it took me a long time to earn, and the effort it took, and the rarity of that mount, is part of what makes it a favorite.

    Of course, on the flip side, my favorite mount in LOTRO is one I got from buying an expansion. So, clearly it is not a hard boundary for me.

  16. I feel like I’ve just disembarked from Mars when I read this kind of posts and threads…..

    …or maybe I’m the last one on Earth who actually values the enjoyement of playing a game instead of its rewards, which is why I tend up to pay for F2P when I stop playing them, since I see the money spent more like a reward for the developer allowing me to have a good time than “buying advancement”. Honestly, as long as I had fun obtaining the horse you talk about, I don’t give a rat’s ass if it becomes available the next day for cash.

    The only F2P/cash shop items I have a problem with are the ones which simply remove any difficulty from the game. Apart from making sure that I’ll never buy them (why would I want to spend money on something which makes me enjoy the game LESS?), it also tells me very clearly that the developer thinks that his own game is crap and people won’t complete it unless they pay, or that he’s dishonest and deliberately created a game which cannot be completed unless you pay…. but then sells it as “F2P”.

  17. The best economy I’ve dealt with is still the first — Ultima Online. It’s amazing how many things those guys got right out of the box, and how badly most much newer games have bungled this area.

  18. If a game isn’t a meritocracy, it’s not worth my time. For the people who play cash shop games and ask “why do you care what armor I’m wearing?” my only response is “why do you bother playing multiplayer games?”

  19. @Helistar – Clearly you are relaxed on the issue.

    But would you then give that advice to a company, in full knowledge that it does matter to some people? Would you advise an MMO developer to go ahead and sell the exact same items in the cash shop as get earned in the game?

    I submit that you ought to give a rat’s ass and more about the issue, at least in the abstract, as it can materially impact the financial good of the game you play.

    You might not agree with what was said about equity or how it is preserved or degraded… or that it exists at all for that matter… but you have to admit that there is probably better and worse course to chart on this.

  20. @Wilhelm: I don’t think I would give any advice to a company except “choose a target, do statistics, cater to that target”.

    It’s sure that there’s a significant part of the population for whom online achievements matter a lot, so catering to them and not “devaluing their equity” is probably a good business strategy. Especially as it can be done while making everyone happy (i.e. selling the same horse with a different color).

    As for the financial good of the game I play, well…. it’s not really my problem. What I mean is that games and entertainement are optional activities, and between me and the game company, it’s not me making a living out of the game….. on my side, I will certainly find something else to do…..

  21. @Helistar – Well, I did not think any gaming company would literally solicit your advice in any case, so making a point of saying you wouldn’t is a bit silly.

    My underlying point was somebody who cares about something a lot and who gets annoyed by people who do not care and people who do not care and who get annoyed by people who do care a lot are two sides of the same coin. They are equally invalid positions. So taking the position that people are otherworldly to care puts you on the same level while ignoring the reality of the situation.

    And you don’t care if your game of choice closes down and goes away tomorrow? That seems absurdly cavalier to me. I play MMOs because I for attachments to the games, the content, and the other players. If that goes away suddenly, I miss it.

    After all, if somebody steals your car or your home burns down, you will get a new car or find a new place to live. Life always goes on. Not caring is a little too Buddhist for me.

  22. Late to thread – hey, I’ve been on holiday! The horse example is twaddle. Your “equity” was

    a) the pleasure you got during those three months while savoring the sweet pleasure that would be yours when you owned the First Horse

    or

    b) the pleasure you got for the few days in which you owned the First Horse and few others, possibly no-one, owned the second, third, fourth horse.

    or

    c) the continuing pleasure of knowing that, while now everyone and his cat owns a horse, only YOU own the First Horse.

    I speak to this with some authority. When the Stromm server opened in Everquest, a brand new server which was to have no transferred characters and which therefore represented a complete Fresh Start, I decided that my mage would own the First Horse on Stromm. Horses in those days in EQ were vendor purchased for something like 50k plat. I dedicated all my efforts to earning the money. I went to places no-one else was going, got stuff no-one else had and traded it. I made my money and bought
    my horse.

    I have no way of knowing whether my horse was actually the First Horse on Stromm but I do know that it was the first horse I ever saw anyone riding there and people fell over themselves to ask me how come I had a horse.

    The “equity” in that purchase could not conceivably have been devalued had SOE decided to gift every player in the game a flying unicorn that shot laser beams from its horn 30 seconds after I bought my horse.

  23. Bhagpuss,

    You are special snowflake then and I mean that in a good way :)

    Most people I know won’t consider anything you mentioned as “equity”. The authors Mono Lisa example still holds for majority. If somebody produced an identical Mono Lisa, the value of the original will plummet to worthlessness. In fact it won’t be just the Mono Lisa, most art will fall in value…

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