Inflation and Eve Online Submitted Thursday, August 27, 2009 - 5:31:26 PM by Klaitu
There are a lot of punks out there who like to whine about Eve Online.. and it seems that Eve Online is also a home to many punks.
Eve Online is probably the only MMORPG that has been able to affect the operations of the so called "Chinese Gold Farmers" which seem to plague every online game. Since Eve Online has an actual functioning in-game economy and is managed by an actual Real-life economist, the gold farmers cah have a particularly devastating impact on players.
The Eve Online team has done various technical things to combat them, but the most controversial thing that they did was they began to sell ISK on their own website at an unbeatable price, which was a serious blow to the ISK sellers.
This is where the whining began, the primary whine being "But.. RMT causes inflation, and inflation is bad!"
The people who are whining about this don't know what they are talking about, and reveal how ignorant they are whenever they say it. So, I'm gonna lay down some knowledge.. not that I expect stupid people to even read this much text.
Let's say that there's a country.. Klaitopia. Klaitopia's currency is the Klaitudollar. There are exactly 100 Klaitudollars in circulation right now.
Let's say that Klaitopia falls on hard times, and is in debt to another nation. In order to pay off this debt, Klaitopia prints another 100 Klaitudollars and gives them to the other nation.
Now there are 200 Klaitudollars in circulation, which means that if you had 1 Klaitudollar before the printing, it is now worth exactly half of what is was worth before.
The absolute value of Klaitopia stayed the same, but the number of currency units within that value doubled. This is inflation.
In Eve Online (or any online game) inflation happens when money is created from nothing. If you loot a monster, or mine an asteroid, or collect a bounty from the game you are getting money that previously did not exist.
Game economies balance this by making situations where you are forced to return money to the system. Housing maintainance is a popular way to do this in games. In Eve Online, the inflation is offset by sales tax on every purchase, as well as fuel costs for space stations and Jump drives and so forth.
When a gold seller farms in Eve Online, he adds more and more ISK into the economy, and then transfers that money to someone who intends on using it. If there were no gold seller, this ISK would remain in it's original form (be it asteroids or bounties) and would not enter the economy.
When you buy ISK from Eve Online itself, it's a different matter entirely. You are actually buying 60 days of game time for the normal subscription fee. You are then given an in-game item which allows you to apply this subscription time to your account, or sell the subscription time to someone else. When you sell it to someone else, then you've essentially paid real money for fake money.
But when you sell this extra subscription time, you are not creating inflation, you are in fact, combating inflation. The money that you are paid did not come from nowhere, it came from another player, so all that is happening is that X amount of money is changing hands. The amount of money in the economy is not changed.. actually, the sales tax on the exchange actually reduces the amount of money in the economy.
Buying Pilot License Extensions of Game Time Codes does not lead to inflation. Period.
The most effective means that Eve Online has used to combat the gold farmers is to ban their accounts. Sure, a gold farmer can create another account, but the money on that account is locked, and will never re-enter the economy. 75% of all the money in Eve Online is on inactive or banned accounts. That's a lot of money that has been removed from the economy.
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