[Informer Article] The Problem and A Solution

There's been much talk lately about Runescape's economy being out of control, inflated, or just downright screwed up. Pretty much everyone agrees this is a problem and that Jagex needs to fix it. They have tried a number of things but most of those have had little to no impact.

Now I know what you're thinking, "Oh, sure, Mr. Know-It-All has the perfect solution."
No, I don't. You see, the problem is too widespread for any single action or person to be able to fix it. One update can't, Jagex alone can't, and players alone can't. It will require multiple updates, some hard choices by Jagex, and the community of players to accept the changes.
The things I will talk about are only a few changes that should be done, they alone will not fix the problem. While I may not use the 'economically correct' terms, those of you with degrees should still be able to understand what I'm referring to. Game economies are not quite as complicated as the real world, though they do share similarities.

:: What exactly IS the problem? ::
"The value of Coins is screwed up."

Yea, Coins. Coins are what we refer to as 'Gold Pieces' and 'Cash'. Coins are an actual item in Runescape. In most MMOs, or just about any game for that matter, currency is just a number. You can see it but you can't really feel it the same way you can in Runescape. While the exact effect of this is debatable, it is an interesting thing to note. I am not by any means saying this is a bad game mechanic, in fact it may be better than currency merely being a number. I think it is important to keep this fact in mind - to treat GP as the item 'Coins' that it is instead of just a number.

So, with that out of the way we get to the subject:
"The value of Coins is screwed up."

The value of GP has been diminished over the years. This is caused by a number of factors. But what exactly does it do? It causes you to need more GP to buy the same item/do the same task, the item/task is just as useful now as it was previously but due to the value of GP lessening you need more to purchase or accomplish the same thing.

This is inflation, the lessening of buying power of a currency due to price increases.

How do you fix that? Raise the value of the currency.
How do you do that? Well, that is where it gets a little more complicated. You see, there are multiple ways to do it and multiple causes to diminished worth.

In Runescape the main cause is too much GP coming into the game. This causes the value of each coin to be lessened. What causes all this gold to enter the game? It is not bots or RWTs.

"WHAT?!?!!111?!?!?!?!?!!?!111? YES IT IS!!!!11!!!!11!"

No, it isn't. Most bots and RWTs do not farm the item Coins. They farm items which they then sell on the Grand Exchange to real players. Bots and RWTs get their money from players like you and I who buy resources and supplies (such as when we buy 99 Herblore or 99 Prayer).

We, you and I, The Players, are the ones who bring all this excessive GP into the game.

Does that make us bad? No, we're merely playing the game. There are two primary things that bring all this excessive gold into the game; Coinshare and The Squeal of Fortune.

Coinshare
Supposedly Coinshare sells high value items on the Grand Exchange instantly for 5% below average market value. This would seem fine, you and your group get your share of coins. The problem is, I have found no evidence that Coinshare puts the item on the market. The item seems to be instantly turned into cash and given to the players and then removed from the game. This causes millions of Coins to be instantly added to the game.

Squeal of Fortune
There's been lots of bashing of the Squeal ever since its addition. The reasons for this are valid and I will not echo them here. However I will explain how the Squeal adds excessive GP to the game.

Almost every result on the Squeal can be converted into GP. You can also get GP flat out as a result. Granted, most of these results only give 500-25,000gp per person. And with there only being ~45k on at any given time that doesn't seem like much.
But wait a minute. Since the Squeal is a daily, many people only hop on for a moment to do the daily. Also, the 45k playing right now will not be the same 45k that are playing 12 hours from now.

Let's do some math. We'll assume that on average most people get 10k GP or its equivalent everyday. If we assume only 45k people spin, 45,000 players x 10,000gp each = 450,000,000 gp entering the game per day. That's 450m influx of Coins, per day. If we are hopeful and say that there are 100k unique players logging onto Runescape everyday then. 100,000 players x 10,000gp each = 1,000,000,000 gp entering the game each day. That's 1b, daily.

When you take into account the fact that most active players will gain a few spins each day, and then assume each spin is worth 500-25,000 it doesn't take long to see how quickly the gold from Squeal of Fortune comes into the game. Granted, not everyone uses the Squeal and not every result gives cash. Still, though, it cannot be denied that the Squeal of Fortune adds hundreds of millions of GP each day.

The task system is another, though much smaller scale, way that money is added to the game. A few hundred to a few thousand coins are given for doing random, usually fairly easy, tasks. This adds up when you have over 100k players doing them. If you figure a conservative 500m daily from the Squeal and probably about that from Coinshare (weekends likely have much higher rates for Coinshare) you get an easy 1 billion gold added to the game everyday. Not too mention what tasks give.

The reason these things are a problem is because they make gold out of thin air and are relatively easy and/or cheap to do. Squeal is completely free. Coinsharing, the cost depends on what you're fighting and who you're with. Most Coinsharing does not require millions of GP. Though your gear might be worth millions, your supplies and resources are likely 100k or less.

The ultimate cause of Inflation in Games is currency being too easy to acquire.

:: How do you fix Coins' Value? ::
It is not by moneysink. Moneysinks do not 'fix' anything. They merely attempt to treat a symptom of it. It's like having a bullet wound and taking a ton of pain reliever instead of getting the bullet removed. Sure, the medicine might make you feel better for awhile, but soon you'll feel the real affects of the wound. Or it'll be too late and you'll die.

Like Pain reliever, Moneysinks can be beneficial if used in conjunction with treatment of the actual problem. I'm a firm believer in the fact that a healthy economy will not have any moneysinks. Moneysinks and maintenance or advancement fees are different.

A Moneysink is a game mechanic added with the sole intention of stealing players' money.

After all that is what a Moneysink is added to do, take players' money.

Runescape needs a scaling Moneysink. Yes, I just said Runescape needs a Moneysink, but a specific type. A scaling Moneysink uses a percentage to determine the amount of cash taken instead of a solid number. For any moneysink to be effective it has to be a game mechanic that at least 75% of the players use regularly without changing their play style. This is why the following Moneysinks have failed: Barrows Armours repair fee, Construction Skill, Zaros GWD Armour Repair Fee, Chaotic Weapons Repair Fee, Drygore Weapons Repair Fee, and PoP Armour Repair Fee.

Most players do not use many of these and those that do usually are able to acquire more gold than the cost, thus negating the goldsink.

While I believe in Repair and Maintenance fees, they should not be used as an absurdly high moneysink. All equipment should either be repairable for a fair amount based on its level, or never need repair.

The best Moneysink Jagex could add is a Grand Exchange Tax or Fee.

Almost every MMO has a fee for using their Grand Exchange/Auction House. Why is this? This fee helps give the convenience of the GE/AH a value. The Grand Exchange is currently free; people use it to sell everything without a thought. Giving this a value makes people think before they buy or sell.

One of the main reasons a Grand Exchange Fee Moneysink would work is because nearly everyone uses the Grand Exchange. It's a way of life in Runescape now. Think about it, how often do you trade with a player to buy or sell something? Yea, that's what I thought.

The Fee has to be scaling.

If you set it at 5k per listing it only affects small listings. 5k out of a 5m sale is nothing. 5k out of a 2k sale is... more than all of it.

If you set it at 5%, well, now that has much more of an affect, doesn't it? That 5m sale just cost 250k, and the 2k sale only cost 100.

This percentage based fee would help remove cash evenly. A player buying full Torva would have to pay an additional 11.85m. Considering they're already spending over 230m, it wouldn't affect their functionality much. A player buying Barrows would pay about 80k more. Is this being biased against Rich players? Not at all. The percentage is the same for both, the Rich player is just choosing to spend more.

The tax could be evaded entirely if the player buys the item outside of the Grand Exchange through a private trade with another player. This would make it worth looking for a buyer outside of the Grand Exchange, and consequently looking for a seller.

You see, this tax would be on both sides. If a seller sells an item for 1m then Buyer must pay 1.05m, the seller only receives 0.95m. This makes each transaction remove 10% of the item's worth from the Economy.

But equipment is only a small portion of Grand Exchange transactions. Commodities and resources are most of it. A Variable Commodity Tax would apply to Commodity transactions such as Sharks, Logs, and Herbs. This would start at 5%, and raise by 1% for every thousand or ten thousand of the item being purchased (max 50% tax).

500 Herbs at 1k each would be worth 500k, the Buyer pays 525k and the Seller receives 475k. 50k removed from the game.
10,000 Herbs at 1k each would be worth 10m, the Buyer pays 11m and the Seller receives 9m. 2m removed from the game.

Obviously if a player is wanting to buy or sell large quantities for maximum profit they will sell off the Grand Exchange. This would require them to search for a buyer/seller. If you were buying 100k of something this would be worth it, but if you were only buying a few thousand it would be worth paying the convenience fee.

This makes people work and think more, or they can pay more for ease.

Regardless, Moneysinks do not and cannot fix the problem. If you only add a Moneysink you will make people buy even more RWT gold. When a Moneysink is added it should have a set plan for removal. A specific, trackable, goal must be set before the Moneysink is added. Once that goal is reached or is approached the Moneysink is lessened and finally removed. A Convenience Tax could be lowered as the goal was approached and then removed entirely.

:: So, let's Recap ::

The problem is the value of Coins is low.
This is caused by too much Gold being added to the Economy.
Moneysinks are not good for a healthy game, though they can be used as temporary tools(like pain reliever).

:: Solutions? ::

Remove Coinshare and the Squeal of Fortune.
Well dang, that made y'all happy, didn't it? I guess removing them entirely might be a bit too much of a change for the Runescape Community.
But wait, I thought change was good?
Oh fine, we'll do something else instead of that drastic change.

Fix Coinshare to where it only sells the item if someone is buying actually the item.
"But what happens if no one is buying the item when the drop happens?"
"You get NOTHING!"

You get the drop like normal. I mean, it gets treated as if normal lootshare is on, whoever has the right amount of potential to get it, gets it. Your buddy can then give you your share of it.

"How does that prevent scamming?"
It doesn't, now does it? That's why you lootshare with friends. Used to be, back in the day, that you would fight a big monster with some friends and whoever did the most damage got the drop. They would then split that with their friends by either selling it and giving them the cash share later, or by giving them the share value once they all banked. Strangely, the economy worked just fine back then even with an occasional scam or two. If you get scammed, well, it stinks like heck. Believe me, I've been scammed for quite a load before by a friend even. It's life. The person that really loses in that situation is the scammer though. They lost you as a friend and possibly got kicked from their clan. Is a 100m item really worth that? To some, perhaps, but you don't want to play with someone you can't trust, do you?

Now about removing the Squeal of Fortune...
Well, to be honest they just need to get rid of it. I'm not sure of what kind of compromise we could do here. Getting rid of all the cash bag results and the ability to convert results to cash is about the only way. At least then people have to sell the items and can't get 200m in a moment.

:: The Long and The Short of it is 'this' ::

Jagex is allowing - and encouraging - too much Gold to come into the game. This must be fixed by removing/changing the thing(s) that are bringing/allowing this gold to come into the game - regardless of what they may be. This is not caused just by bots, in fact it may not be caused by bots at all. An effective Moneysink can be added IF (and only IF), it has a set goal that is achievable and once achieved the Moneysink will be removed.

Well, this article is over 2,500 words now and I've probably lost or am about to lose some readers due to the disease known as 'TLDR Syndrome'... Eh, at least I know there's some of you that stuck it out and read the whole thing. While the instances and suggestions stated may not be perfect in exact detail(I'm only human after all ), the Concepts have sound thought and reason behind them. Although I do not have an Economics Degrees, I have studied Game Mechanics and Design for over a decade.

If anyone would like to discuss this in more detail I'd be happy to do so on the forums. Please comment and quote whichever part you're interested in.

This was originally posted as an Informer Runescape article.

You have said above that you don't believe money sinks are the answer, but I was wondering what your thoughts are on the Well of Goodwill. What sort of impact do you see this making in the long term? Will it even make a dent at least in the short term?

I'm still building my analysis of the WoG. It appears that currently it will only be in until the end of November, with 'plans' to have it more often. This has a few potential meanings.
1: They likely want to see how effective it is as a money and item sink, as it is blatantly obvious that is the primary intentions of this update.
2: They want to find out how much this is going to cost them. They are essentially buying gold out of the economy. It is obvious they aren't doing this out of the goodness of their hearts otherwise it would be done differently.
3: They want to see the players' reactions.

The few problems I have found so far are:
It's more efficient for players to buy bonds from other players with their GP instead of putting the GP directly into the WoG. Thus to be most efficient you would actually NOT sink any GP, but instead you would sink Bonds. You would sell GP for bonds so that you could donate the bonds to the charity..i.e. encouraging RWT - for both sides. Bonds should not be donateable, only actual game items.
The hiscores has made this into just a show of wealth. Only few are doing it for charity, and those are the people on last 50 pages. This is competition, not charity.
The titles are also incentive, further encouraging people to do this.
The Wishful costs 1 gp and gives aleast $0.0000001
The Generous costs 10m and gives $1.
The Charitable costs 1b and gives $100.
These(specifically the 3rd one) are elitist titles, only acquirable through buying them with gp(rather large amounts, I might add). It would be the same if you went to an NPC and gave them the cash for a title. If Jagex hadn't stated this as a reward it wouldn't be quite so bad, though people would've still found out and word would've spread.

Jagex is not doing this "Out of the goodness of their heart" as they say. How do I know this?

They're a UK company and these are UK charities, why are they using an American Value? Because the dollar is weaker than the euro.
As I write this the first page of the Charity hiscores are worth 40,708 score. As the value of that chart is millions, 40,708 x 1,000,000 = 40,708,000,000. 40,708,000,000 / 10,000,000(exchange rate per dollar to charity) = $4,070.80. $4,070.80 ~ currency exchange rate = €2,963.60. By using dollar as the conversion they can lower their out-of-pocket costs. The majority of people will think oh, cool, a dollar, when in reality they're only giving ~.73 euro. Yes, this is the current equivalent of a dollar but it is not what people are thinking.

One interesting thing about the WoG is that you can throw almost any item in there. Some people have theorized doing this to raise the value of some items. This sounds good, but is unlikely to actually be done considering they could've done this before by simply dropping the items in their houses or at deserted banks on low pop servers. The only difference now is their money will supposedly go to charity instead of just going away.

To directly answer your questions, Rickles:
I don't think this will have much impact on the value of Coins, or the economy and game environment, whether in the long or short term. The reason being it costs so much and as I stated people don't want to let go of their money. People will only 'donate' that which they deem excess - they will maintain an ample amount for their 'needs'.

I don't expect the current giving to increase much after this weekend either. There will be some, but not much. Mostly people who want the titles.
It may have some effect on the economy during the next few days but its unlikely most of us will notice it.

A player made a good point on the WoG thread. They noted that a few months ago Jagex encouraged us to buy spins to get the golden chinchompa, samids gloves, and cash bags. And yet now they are pushing goldsinks like all get out with Bonds and the WoG not even 2 months apart. Is Jagex finally realizing the dire mistakes they have made over the past few years by giving away gold too easily and too often? Perhaps...


I know your thoughts on High Alchemy, and though it does still have some effect I believe it is minor compared to other things. Also, Alchemy has been in RS as long as I can remember(can any vouch whether or not it was in RSC?). There were not gold and economy problems in Runescape until after 2007. There were only a few ways to actually acquire coins, namely; from monster drops, by thieving, by selling items to stores, or by alchemy. Selling items to stores was the most common - you could sell any item and any quantity in a relatively quick fashion. Alchemy was next, and used more by higher levels because High Alchemy gave 50% more coins than stores. The downside was it cost a Nature rune(~200-300 GP worth at the time), thus you would only High Alchemy items which gave more than the cost. If a shop bought an item for 1,000, it would high alchemy for 1,500 thus you would gain ~200 coins by using alchemy. If an item only sold for 500 to a shop then it would high alchemy for 750, and you would actually lose 50 coins by using alchemy. Low alchemy merely gave shop value and so was just for convenience - at the cost of 200-300 GP.

Alchemy was not used nearly as much as it may seem due mainly to the cost but also due to the time required. It takes a few seconds to alchemy each item, whereas you could sell upwards of 50(or hundreds after the 50 option was added to selling) in the same amount of time with a store.

I should also note there were a few stores which bought things for High Alchemy prices. The main difference between Alchemy and Stores is convenience - on both sides. Stores give convenience because they will buy any quantity of anything, but your profit will suffer the more you sell the same item to them in succession. Alchemy gives convenience because it does not require a store and you will always receive full value for the item, but you must pay a Nature rune and the few seconds to alchemy each and every item.
Overall the system worked good and was well balanced.

Higher trades should be taxed more, but proportionately. If someone is spending 50m they have enough to spend 52.5m. In comparison it isn't much. And that's how the system would work, it doesn't seem like much so it wouldn't be noticed by most.
BTW, with your example it's cheaper to buy 10m than it is to buy 9.9m, just saying
But you're right, too high and it won't be used by anyone, too low and it's completely ineffective. It has to be set at an effective but fair value for the service it offers - convenience.

However, some people not using the GE is not entirely a bad thing. The proposed fee could be avoided by both parties trading outside of the GE. This requires more work on both sides, due to having to find the buyer and seller. This is rewarded by higher profit/savings(both, potentially). Large value trades would likely be done outside of the GE due to the massive potential savings on both sides - this is perfectly fine.

You see, the problem is most people and Jagex think, "WE HAVE GOT TO REMOVE GOLD NOW! LET'S ADD GOLDSINKS GOLDSINKS GOLDSINKS!"
No, we don't have to 'REMOVE GOLD NOW'. We have to fix the value of Coins. This can - and must - be done through a multitude of different channels. There must be a value to convenience - and work.


Perhaps that is why the majority of games have an Auctioning Fee?

Squeal spins and RC could be purchasable with GP. That would make more sense, though it would cut into Jagex's revenue from those two so they likely won't do it. Bonds definitely won't be, as that would directly affect Jagex's primary income due to a large majority of players switching to using GP bought bonds to pay for members.
GP should definitely be used for the Cosmetics offered in the SGS and Squeal. The loyalty point items should only be purchasable via loyalty points, not by anything else - not even RC - otherwise it devalues the 'loyalty'. True loyalty can't be bought.


Yep.

Thank you both for your comments and questions

Regarding the titles...
If they had just made an NPC that could give you a title for money then it would be fine. My problem - which is echoed by many on the RSOF - is that they're giving them as rewards for donating. With Runescape's Competition based playerbase this turns it into a goal/cost rather than a reward. People see, "I need to pay 10m for this title and 1b for this title." instead of, "Oh, a title, that was unexpected."

Americans likely spend the most IRL cash. Both of those are possible reasons for using the dollar here.

Alchemy is essentially the same as a shop - creating GP. I could argue that shops are worse because they have absolutely no cost, where as alchemy has the rune costs. It's probably best for us to just let this one lie We both understand the problem at large and that alchemy had some affect, though the exact magnitude is uncalculable.

I know your example was just that. A tiered system may work, but I don't like the idea of lowering the fee because people are spending more. The 'Middle Class' are not the ones with tons of money and they aren't the ones spending tons either. The 'Middle Class' does not have 150m+ armor, i.e. Torva. To the Middle Class spending 10m on something is big. To the 'Upper Class' spending 100m isn't very much. A 1-5% fee would be fine. If someone is spending 1b they are unlikely to really notice 50m. 500k off of 10m is enough to note, but not likely to effect most people. Those who can't afford the fee will either work to get more cash, work to get the item themselves, or work to find a seller on the forums. If the cash issue is as big a problem as Jagex is making it out to be and we know it is, then a small fee would not be a problem.

This is the point.
The fee must be reasonable on large transactions as well otherwise you get the problem we have now - people buying skills which devalues the skill and clogs up the HS. If people couldn't buy XP so easily via the GE then we wouldn't have so many maxed people.

The fee would have to be adjusted by Jagex. Start at 5%, if that turns out to be too much(as evidenced by reports and analysis, not the rich players whining) then you lower it to 4. Apparently they are able to track how much gold is in the economy so they could see how well each amount worked. People will accept it as if it's always been there because most games have it.
I know one game that has a 30% fee, that's a bit steep. Most I've seen are between 3-15%.

I think you give the players too much credit People are lazy. They WILL use the GE because they've been trained to. Yes, people won't use it if it is too steep, but 5% is not steep, even on a 100m transaction that's only 5m. If I was buying a 100m item I wouldn't notice another 5m.


Gold sinks are part of the remedy, yes. They're useful when used correctly. However I haven't seen any gold sinks produce results, whether quick or slow.

Yes, removing Coinshare rightoff would cause a riot. They don't have to remove it, just fix it. It has to not give cash immediately, unless the item is actually bought by another player.
SoF doesn't have to go away, though doing so would make a fair number of players happy(though conversely some angry). Instead they just remove the cash bags - unannounced. They do a promotion, like the recent idol one, and just replace the cash bag options with the promo item. When the promo is over you put normal items where the promo items were and don't add the cash bags back. You also remove the convert to cash button, or make it send to the WoG, or make it turn it into half the current GE value.


Umm, do you really want me to answer that? I think we both know the answer.

But yes, the price needs to be reasonable. That's the biggest thing with anything.
They also need to not advertise things as moneysinks. It must be added in a creative, sensible, fair manner.
If you tell me this is designed to steal my money, I won't use it. But if you tell me how this benefits me/my play experience, I may use it.