Econ-Friday Ranting 10/24/26

“In an Economic System, any given thing is valuable because it: requires investment and/or opportunity to obtain and: has a Demand close to or exceeding its Supply. The Value is set by the relative Value of this Investment or Opportunity.”

In MMORPGs, the above statement has a set of logical follow-ups that are important to the design. I don’t know if this Rant should be considered technical or not, so brace for that.

Assume a boss that all players on the server can fight once per day. Any item that drops for every player on the server when this boss is defeated has an equal Opportunity for all players, and a roughly equal Investment for all players. Games do not design bosses with just this type of drop.

Assume an item that drops from this boss completely randomly to only 10% of players, but due to the game having roles, only 15-20% of players actually want this item. Let’s also assume the item is not consumable. The Investment is still small, the Demand and Supply are as I defined them. Everyone will probably have their item in a week, and there will then be a massive oversupply. In this example, if we then assume there’s a Market where this item can be sold, that Market does its job during that week, and then becomes flooded. No individual player ‘knows that the chance to sell this item is past and it is no longer an item that is in-Demand’. At this level, Resource Sinks handle some of it by extending the time it takes for everyone to have the item, and also expanding the Demand that every new player encounters.

Throne and Liberty’s old Traiting system was the simple example of this. Players didn’t need 1 of the item for ‘full power’, they needed about 12, so it could be assumed to take 12 weeks for everyone who wanted a ‘full power’ version to get one, if the item was somehow only able to be improved by combining the exact same item. Black Desert Online has a somewhat similar outcome for high level ‘Boss Gear’ (but in practice this isn’t what happened for various reasons).

Still, the market will be flooded eventually, unless the game is robust enough to have a new target every 12 weeks (in TL’s case) or similar. We’re ignoring the concept of other pathways or pipelines for this drop, for this example, though that would also be a good contributor to a Price Floor.

If the Designer attempts to solve this by reducing the droprate of the item, most players complain. It doesn’t matter which method is used, because all usable methods will slow down the acquisition of the item, and therefore the player’s ability to obtain and use it and experience that progression. For the item to be valuable, it must be ‘rarer’, and for that to be true, the investment required to obtain it must be larger on average.

Note I say ‘on average’ because many games used to solve this by just ‘making the droprate very low’, and this worked Economically. Players do not seem to like it. A 1% droprate on an item may sometimes seem necessary if that item is supposed to be ‘valuable’ enough to cause things like social interaction, but it still results in some players investing 200x the effort of the first person to get this drop. This is a part of some ‘Classic’ MMORPGs that I don’t personally know any fans of. So, more modern ones have a different system, the ‘pity drop’.

Pity Drops are Tokens. They’re a type of ‘Currency’ that is normally untradeable. They go into the player’s inventory most of the time, and serve minimal other purpose (some games are better about this than others), but at least they stack. No one is confused about ‘how much investment will be required to get their item’ (for the rest of this Rant let’s assume you need 100x to make the Pity Drop-Crafted Item). The item itself, when obtained using these, is usually not tradeable either. This isn’t actually necessary but it’s not too complex to explain why it is often Best Practices: if the item is tradeable then you’ve gone back to the equivalent of ‘it drops to everyone on the server’, it just takes longer.

What happens if the Pity Drop itself is Tradeable, though?

It depends on if it is always Tradeable or not, and that’s the same loop. If it is tradeable 1% of the time, then really it’s just using a less stressful version of the ‘low droprate’ model. Some players can get the item faster by putting in more effort somewhere else, and at that point the progression becomes largely decoupled from anything related to the challenge or other investments involved in fighting the Boss (this is neutral, it basically is a question of if this part of the game is supposed to be challenging). Assuming that at least one player per day gets a Tradeable or sellable version of the drop and sells it, then someone on the server can theoretically get their ‘Pity Drop’ 2x as fast, and this happens without actually limiting any of those who get the Tradeable Version very much (assuming 1 drop each, 50 people all have to fight the boss one more time, for example, for some other person to have their Pity Drop-Crafted Item on day 50 instead of day 100).

This means the Demand for those stays high for awhile, and then drops off suddenly. From day 1-50, Demand is maximum, starting to drop off after that as more and more players get the item, and remember that every day that passes means those theoretical ‘perfect attendance’ players each need less. At day 60, they ‘only’ need to buy 40 of the tradeable item to meet their ‘quota’ of 100, and so on.

This slow falloff is also not bad, it’s neutral, and lasts about the same 12 weeks for most people who care about the item, but the ‘problem’ is hidden in the fact that this is structured as a ‘Currency’. A Currency is not experienced as ‘Progression’ for most people, it’s experienced as ‘a grind’, a way of ‘waiting to get the thing you want’ instead of ‘enjoying having the thing you want and progressing the thing itself’. Then on the Econ side, all of these ‘collapse’, but the issue with a Pity Currency is the Knowledge Path, which is almost always worse than any other option in the same space. By oversimplifying, it often becomes misleading, which Developers and Designers often get away with because the modern era allows them to just ‘ignore’ certain Noob Traps and assume the community will make guides.

This is not one of the places where that works well, and here’s the example why, contrasting between MineCraft and Random Generic Modern MMORPG for the first part, then getting more technical.

MineCraft has the concept of Netherite Armor, which is valuable. The investment is large. The item is literally rare, but let’s ignore the fact that the game has a hard limit on this per server because that limit is huge and just assume everyone can get them.

Even a MineCraft player that never looked anything up, is unlikely to devalue or throw away too many Ancient Debris, the material used for making this armor. Hold that thought even though it isn’t very important.

An MMORPG player, on the other hand, is paying Opportunity Cost to attend a Daily boss. If that player does not know that they want Pity Drop-Crafted Item, they might reasonably choose not to go. If they happened to go once, got the Tradeable Token on their first run, and sold it on the first day when it has huge Demand, they now don’t know how important it is to go to this Boss. They might prioritize it heavily and tell their friends that they should all go. Then they might all spend 3 weeks collecting Tokens that they won’t use, chasing the chance of the early drop of the Tradeable version. Then, finally, they get one, they’re invigorated, they commit to always going to this boss, it becomes a habit. Four weeks later, they finally get another one, slightly frustrated that it’s taken this long, but who cares? It’s been worth it, these things are worth a lot…

Except that this ‘day 49’ might be the last day they are worth that much. By the time they get another drop a month later, it’s still worth it, but nowhere near as much. They’ve collected 77 Tokens each, but did they even really want or need the Pity Drop-Crafted Item? If they decide that they ‘should at least finish it so that they didn’t waste their time’, now you’ve got another 23 days of fighting a Boss that they don’t really want to fight, to get items they don’t really need/want to use.

Economic Activity between players at this level comes down to the concept of the Underlying Limited Resource. That thing that makes players able to engage in trade at all. In older games it was only time, and this has many problems. In more modern games it is often ‘Energy’, but this affects the Supply side and gets ‘gamed’ quite easily, with players constantly looking for exploits. In our example above, it might look like ‘Time’ but it’s actually ‘Luck’, and explaining why that is often bad when it comes to Tokens or Currencies is an entire separate Rant.

The answer varies slightly from one game to another, with the main old Rant that touched on it here, but to tie together everything from the last few months:

“If you add Tokens to try to remove Complexity and possibly worsened a Knowledge Path while making a less functional playloop, then you solve this by making those Tokens multipurpose, now you’ve made a Material and added the Complexity back. Both forms result in a period of players getting ‘Items they might not really want or need’, which they often can’t trade or sell because it would result in a problem to the Demand curve, a problem that mostly exists because you didn’t commit harder to making a Material.”

Materials can solve the problem of the Underlying Limited Resource without immediately leading to overflooding by helping to buffer the Demand from falling suddenly. At least for this week, the ‘math’ on this one is left as an exercise to the Reader. Your ‘hint’ was in the MineCraft part, but of course, you can just wait a week or two, after all, Time is Money.