Eve Online economic analysis released

CCP Games, the makers of MMO Eve Online, has released its first quarterly economic newsletter, which analyses the population and economy of the game.

It's the first publication of its kind, and has been written by Eve's resident economist Eyjolfur Gudmundsson, who was previously the dean of Economics in CCP's home city of Reykjavik, and assistant Kjartan T Halldorsson.

Unlike most MMOs Eve Online is based largely on user-generated content, and features a highly complex economic model, based around a single persistent world made up of almost 200,000 subscribers.

According to Gudmundsson this creates markets "that behave in the same manner as markets in the real world," and means that managing this element of the game is crucial to its long-term appeal.

"We can directly relate this to real world experience of market change," Gudmundsson told GamesIndustry.biz. "About a year ago, we implemented a change in the game that broke down monopolies for production of certain items, making these items available at a lower price and more abundant than before.

"The same has happened in real life when monopolies have been lifted of production and services - for example the US airline industry in the late 70s and early 80s - when people are given the right tools they can produce more, using less."

However, while one of the benefits of working on Eve's economy is that there is plenty of data to work with - the game records all transactions that take place - the traditional economic approach has to be modified slightly.

"Since life in Eve evolves at a faster pace than real life, we must use a so-called 'chained price index' rather than a representative basket. In real life, representative baskets are always used and in many cases the surveys for these baskets are done with very long time intervals.

"By looking at our results it is obvious how the fixed basket approach can overestimate the impact of price changes, just as predicted by theory. With consumer preferences changing faster now in real life than ever before (consumer electronics is a good example), this might be a lesson that could help us understand better changes in price levels and how we measure that outside virtual worlds."

The report takes in statistics about character population and demographics as well as macroeconomics, but while users on the game's forums tend to point to an overall inflation within the economy, the actual facts are somewhat different.

"Though the overall conclusion is that there has been more than 40 per cent deflation in Eve Online from September 2006 through 2007, it appears that there are underlying inflationary pressures due to increased purchasing power," states the report.

The next newsletter will be due in three months' time, and will take in the initial reaction by the game's player base to the forthcoming expansion, Trinity.