Friday, June 24, 2011

EVE and the case of the $60 Monocle

On June 21st, CCP games launched the most recent expansion to EVE, EVE: Incarna. This added the ability to walk around for the first time and to see your entire avatar rather than just your portrait and ship. In addition, they introduced new vanity items and a new type of currency to purchase them. The reaction so far has been pretty negative, mostly due to the crazy prices on some of these new items. There is also concern that CCP will offer in game benefits with this system.

A leaked email recently showed that 52 monocles were sold in the first 40 hours which is quite underwhelming, especially considering over 1500 accounts have been confirmed canceled. In addition, the total player count numbers have been much less when compared to previous new expansions.

I figured I'd write a quick blog to explain to non-EVE players what PLEX/ISK/Aurum/etc are, how the current system is set up and what CCP can do to fix it.

In EVE, the most basic unit of currency is ISK (Interstellar-Kredit, also the Icelandic Kronar where the game is produced). This currency is dropped by npc enemies and given as rewards for completing quests. It is used to trade for goods and services between players.

There is also the PLEX (Pilot License EXtension), which can be consumed to add one month of game time to an account. PLEXs are created by purchasing a 60 day Game Time Card (GTC) with real money and then converting that into 2 PLEXs in game. PLEXs can be sold between players and give some players an opportunity to essentially purchase ISK by paying for another players monthly subscription. In addition, players can "play for free" by buying a PLEX from another player. A PLEX is worth about $17.50 and is currently trading for about 400Million ISK in game.

With the new expansion, CCP introduced a new currency called Aurum. The exchange rate is 1PLEX for 3500 Aurum. Aurum is the only currency able to be used to purchase the new vanity items.

So, with this arrangement, a monocle is worth:

(1Monocle/12000Aurum)*(3500Aurum/PLEX)*(1PLEX/$17.50) = 1Monocle for $60

That's pretty spendy for a single item that at the moment you can barely see.

There are 2 main problems with this system. The first is that the price of items is locked in terms of game time. EVE is built on a player run economy and prices of items fluctuate with supply and demand. A monocle however will always be worth exactly 3.42 months of game time no matter what the demand is and the supply will never run out. If vanity item prices were allowed to fluctuate the prices would be determined by what players are willing to pay. In a blog post, CCP explained that players should want the items because they are expensive, comparing them to designer clothes. However real world designer items are expensive because there are differences in quality, supply and demand.

The other issue is that there is no real use for the items. You can not yet interact with other player's avatars, so many of the new vanity items can not actually be seen at all. In addition, there are already many ways to flaunt your wealth in game. For the price of a monocle, you could build a starbase, buy a dreadnaught or carrier and claim space, buy a freighter and start a career as an industrialist or upgrade your ships with rare items.

I think the way to solve these issues is to take an idea from Team Fortress 2 or Magic the Gathering and introduce an element of randomness to the system. Both games are successful and have vanity items that regularly sell for over $100. In Team Fortress 2, there are hats with particle effects like flames while in Magic there are foil cards which are identical to standard cards except shiny. In fact, team fortress 2 recently became free to play because of the success of their in game store The difference is that neither of these companies directly set the price of their rare items as CCP has tried to do. Instead, they sell a chance for a rare item and set the percentages. Magic sells $4 packs and Team Fortress 2 sells $2.50 keys each of which has a chance of resulting in a rare item. Gamers love to gamble and this type of system has been proven successful because it introduces actual rarity and allows player demand to set prices.

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