Monday, January 2, 2012

Dragonvale, bringing the Fun; yet a poor simulation of markets

I had a wonderful Christmas.  My nephews got me addicted to the Dragonvale game.  A land where one breeds dragons of various types - did you know, dragons are very hybidizable (I'm sure that's not a standard dictionary word).

Dragonvale - iOS simulation game.
To build up to a high enough level to purchase a breeding cave one must build treat farms, dragon habits and grow crops.  For this there is an internal game monetary market.  The prices of these goods are set by the game designers (I'm assuming it is not a true "free market").  The game does not have a sane and balanced market pricing system.

The objective of any game designer is to get you to play and have fun.  That is objective number one - design in the fun-factor (see MIT Technology Review's Exploiting the Fun Factor).  A secondary objective is to build a game where people will spend money - real cash in exchange for virtual goods.  This is one technique for the game company to make money (in app purchases of virtual goods).  Luckily the iOS designers created a way to protect my mother's credit card from her grandkids desire for dragon gem stones.  This game market place is big business $16 billion in 2010, quite a bit larger than the movie ticket sells for the same time, $10.6 billion.  This is perhaps one of the fastest growing industries, starting in the early 1970s (Pong by Atari was a 1972 game smash hit).

Dragon Habitats
"Why are games important? Because people will reward businesses that cater to their appetite for fun, providing commercial incentives for every incremental improvement in the technology that delivers that entertainment. And game designers are masters at stoking that appetite. Every designer from Pong on has deliberately tried to make their games addictive, with a grab bag of psychological tricks that include humor, storytelling, and reward systems similar to the payoff schedules that lure gamblers. And some designers succeed, serving up jolts of pleasure in such a way that users can't stop coming back for more."                                      -- Stephen Cass  "Exploiting the Fun Factor"
An example of the unbalanced game market pricing is that a treat farm cost $100 (coin of the realm).  With this treat farm a land owner such as myself may grow crops to feed dragons.  Now at a sufficient level (experience points) an owner is given the opportunity to upgrade the treat farm to a larger farm, capable of growing the same crops but with an even larger selection of crops costing more and providing various levels of food.  The cost of the upgrade is $25,000.  The cost of purchasing out-right is $25,000.  This unbalanced transaction in the economic system of the game concerns me.


The net effect after the upgraded transaction is a large treat farm with total cost of $25,100 (100 original cost + 25,000 upgrade).  The net effect of purchasing two separate farms one small (100) and one large (25,000) is that the owner is capable of producing twice as much food, for the same fixed cost (excluding real estate area which is a limited supply).  However after the purchase of a second treat farm if the owner wished to recover land area they may sell the smaller treat farm and recover 1/2 of the original purchase price of the farm ($50).  Making a true apples-to-apples comparison then one has an upgrade option of $25,100 versus an option of purchasing and selling cost of $25,050.  I call this an unbalanced market price for the farms.

Why would the game designers create such an unbalanced system.  They are encouraging the land owner to use limited resources money and land space in unnatural ways.  There is both a monetary reason to consume more space (purchasing two farms vs upgrading a farm) and poor land use practice to purchase two farms rather than upgrade.

Now some people will see this as an opportunity to game the system.  To take advantage of this inequity in the economic system to make more money on similar capabilities of production.  Yes this type of inequity exist in all markets.  Yet my concern is that if we are teaching our young children to make poor (non-sane) economic decision at such a young age, what will become of these children when they have they own credit cards.  Will they believe they can take a cash advance from the card and put it in the bank to earn interest at say 4% and then pay back the credit card company?  A system of kiting loans rarely works out for the credit card customer, banks are not as nieve as young people some times believe.

The book that started an economic reasoning
nation, published in 1776 by Scottish economist
and moral philosopher Adam Smith.
I believe that the game designer have not purposefully made this inequity in their game's economy.  They have just made simplifications and nice "round" numbers for the market place.  Thereby creating these non-sensical opportunities to teach poor money management techniques.  Now some people will believe that the young people who play these games may not be learning these poor finical lessons.  I do not.  I believe that the best way to learn something is to make it fun.  This is an area the game designers have excelled.  Their game is fun.  It teaches some good lessons and some poor lessons.  The thing with these fantasize world simulations is that they are very good at teaching lessons, I just wish they taught lessons Adam Smith could be proud of.


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