[MUD-Dev2] [DESIGN] *Starting* Real Currency Based Worlds

[William Leader]

Nick Koranda wrote:
> Real world currency based MMOG's have always been interesting to me.  
> I can understand the concept of adding real currency to the 
> game...i.e. a person pays $10 and gets 1000 gold in the game.  The 
> user could also exchange the gold he/she has made in game for real money.
>
> The idea that I have not fully grasped is the specific concept of 
> *starting* a world like this.  Take a very simple example world, one 
> with 100 trees.  A user enters the game with an axe in hand.  The user 
> takes some time and chops down 10 trees and sells them for 1 gold each 
> at a market.  He now has 10 gold.  Given my previous exchange rate 
> above, that would give him $0.10 real currency.  Now at this point, 
> with one user in the game and no user contributed money, there is no 
> real currency in the game to give the user if he choses to exchange it.
>
> This is where I am puzzled.  Does the creator of the world have to 
> "populate" the world with enough real-world currency to pay out any 
> resources or gold that can be gathered or produced?  So the example 
> would require that the user add $1 of real world money for the trees 
> to be backed by real world currency?  If true, then starting a world 
> would require that the creator add a lot of money for a large world.  
> The other alternative is to have users pay to play some amount...and 
> given that amount, release an equivalent amount resources into the 
> world.  I dont think that would work based on what I have read on a 
> closed loop resource system.  The resources would quickly run dry with 
> hording.
>
> So what are the ideas for starting a real world currency world so that 
> the economy would sustain itself and even make the creators money as 
> well as give the opportunity for users to make money too?
Aside from the worrying about the problems inside the virtual world 
about the economy. for exchanging the currency of the realm for real 
world currency, you can't really peg it at a certain value. Instead you 
have to create a money market where those with game currency can post it 
for sale at whatever they feel its worth. Other players can then buy it. 
Market forces will automatically adjust the exchange rate. Once you do 
this you have to be very careful about creating money in game since the 
excess money will flood the market and push the exchange rate to an extreme.

For a working example. Consider Second Life. The Virtual Currency in 
Second Life is the Linden ($L) They have setup the LindeX which is a 
fully functional money market. Check out 
https://secondlife.com/currency/market.php. Last year they allowed the 
creation of Free (no monthly fee, but can't own land in game) accounts 
in Second Life, and as you would imagine they got a great deal of new 
residents (they/we aren't exactly players) Each of these free accounts 
was granted a stipend of some amount of $L I think it might have been 
$L100 but it don't remember exactly. As soon as they opened LindeX they 
price of $L started to fall dramatically, and they ended up having to 
remove the stipend from the free accounts. Once they did this the price 
of $L leveled out at ~$300L to US$1 it floats up and down and is 
currently trading at L$275 to US$1. The lesson here is if you are going 
to try to create a working relationship between in game economy, and the 
real world, you need a money market, and you need to be extra carefull 
about sources of money in game.

-Will