In-Game Currencies: Understanding Mudflation

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Mudflation is a special form of inflation in virtual game worlds such as MMORPGs or MUDs. It marks the decline of the currency or the decline of the usefulness of objects (such as weapons, armor, etc.) and is associated with the decline of game content.

In principle mudflation holds all the (game) systems, on the central level-ups and of players to build and are typically characterized by infinite supply of items and game currency.

The real life effect of several forms of mudflation have risen because game operators incorporated real-world currency exchanges into games. As such more and more potent items may have to be sold in order to yield a particular revenue stream. Ever rising potency can rapidly induce problems with game mechanics, at the same time diminishing value.

Mudflation is a portmanteau word from MUD and inflation. The term reached prominence at the height of the success of ‘Everquest’ and became popular especially after the Ruins-of-Kunark expansion.

Mudflation is powered by two main factors: firstly, players buying goods or money by solving certain tasks. The rewards will be created by the game through the game mechanics from scratch, and handed over to the players more frequently within the closed world game. The increasing frequency pushes the price, in trade with other players.
 
The second factor is regularly published (some paid) upgrades, which usually introduce an incentive for the players to improve by taking on new challenges. More powerful weapons, tougher armor, among other things simplify the difficulty of the old game content. Well equipped players can return to old areas and easily collect large amounts of money or property.

Issues surrounding the basic economic framework of the game are commonly noted as a sustained descent in the valuation of the game currency. Frequently the issue can be followed back to the game’s administrators who establish a policy to disburse the game currency as part of the game function. Such a policy induces an ever rising sum of game currency in circulation, which leads to a decline in value.

It is difficult to remove the currency from circulation, gamers actively chase awards and the currency reward will only be forfeited in the event that there is a valuable alternative to be earned. There are also professional companies, particularly in Asia, which produce the values in game farms and then sell the yielded in-game currency for another currency (eg U.S. dollars), thus mudflation is accelerated.

In some business models, the game operator of certain goods or currency also sell directly to the players. This principle generates continually game currency that devalues them.

As a result of mudflation certain items are more expensive, as the value of the currency falls further and further. At the same time decreases the value of existing objects, as they are outclassed by new ones. Consequently, older game content is less challenging, and the outstanding rewards (which usually remain on the old state) become less interesting. Thus, the attractiveness of the game for new players decreases.
 

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