LOTRO: HOME OF THE WHITE MICE?

It seems to me that a successful MMORPG represents, amongst other things, an almost perfect microeconomic model – and what’s more, one based on the responses and reactions of real people, rather than computer algorithms. All the elements of classic market economy theory are present: supply and demand, gluts and shortages, self-interest and a very moderate amount of altruism, love of novelty and brand loyalty - and of course, determined efforts to influence, manipulate or subvert the market…

This conceit is reinforced by the frequently violent fluctuations of LOTRO’s economy as expressed though Auction House prices. Among the reasons for such fluctuations are changes in the supply of specific goods as implemented by the designers (i.e., price control by the government) and the introduction of new and hence more desirable goods (i.e., innovation and marketing by manufacturers). At the moment we seem to be going through a mild depression, with prices for many goods set high while demand is falling. The current price for that perennial market indicator, the Beryl Shard, is floating just above 1 gold, up more than 40% from early January. Scarcity drives up prices, needless to say, but sometimes it does so to the point of also driving out buyers. Bits of the highly desirable Armour of the Aurochs set, for instance, which have the great market advantage of not being Bind on Acquire (BoA), are found almost exclusively in Helegrod – but as we know, Helegrod requires 24-man raids which are difficult to organise and, as far as the individual player is concerned, offer a very poor return on time invested. The result is that not many players bother to raid there, and Armour of the Aurochs pieces are correspondingly scarce; a Helm of the Aurochs may be the most expensive item on the Laurelin AH, offered at 70G with an 80G buy-out.

Not surprisingly, the current scarcity of top-quality single-use recipes has also driven up the price of the very best crafted weapons, armour and jewellery; Etched Beryl Necklaces average 5-6G, Etched Beryl Bracelets 12-14G and Etched Beryl Earrings 15-16G. On the other hand, the general disdain in which Annuminas armour is held by most players and the extreme difficulty of assembling complete sets (is anybody still bothering?) means that the market for Arnorian Armour Fragments and Battered Arnorian Armour has almost collapsed; current prices are as low as 10-20 silver for the former and about 300S for the latter, with no takers. Rift-Iron Coins are on offer for 400-500S each, again with no takers at that price – probably a reflection of the fact that there’s not much of value to buy with them. In general, it can be taken for granted that irrespective of what the developers intended, the price of poorly thought-out or unimpressive goods will quickly go though the floor – another perfect concordance with real-world economics.

Come to think of it, how do we know that LOTRO’s economy isn’t already being manipulated by economists from the Harvard Business School running arcane experiments? Maybe those infamous gold-farmers are really MBAs, and all of us are nothing more than white mice running through a sophisticated economics simulation. A chilling thought.