When Gaia staffers attended business and industry conferences, we normally didn't pay attention to whatever they say. That changed when ex-COO Jason Loia released his infamous "Dopamine, Baby!" presentation for his audience in Manos Accelerator. Although we weren't able to view the presentation in its entirety, the parts that were available to us infuriated us enough to make the mere mention of the names of the ex-CEO and the ex-COO bannable offenses while they were in power. Although in similar events they still acted like we'll never know about their presentations, we ever since began paying close attention to whatever they have to say.
Now that they're gone, the new management has went as far as to denounce the practices of the previous management. When it comes to handling the economy, though, they would benefit from listening to the advice of people who have worked before on stabilizing the economy.
Here are some excerpts from a presentation by David Jesse, Gaia's former head of product management and business analytics, where he shares what he learned from former Gaia economist Saar "Sagger-AT3" Golde.
On managing inflation
During Golde's time, they released some gold generators as an experiment, and they found out that releasing them indefinitely would be bad for Gaia's economy and the non-cash users who see gold as a representation of the time they spent on the site. Schofield and Loia decided to go ahead with reviving these items anyway, and the prices of everything skyrocketed as expected. Unless unforeseen management changes happen, gold generators are gone. If they aren't still convinced of the risks of directly selling gold after Gaia's economy experienced inflation rates beyond 1 million percent, then nothing will.
Balancing between cash users and gold users
If selling lots of gold is bad enough, giving away too much of it at once is just as bad. So does not having enough goods that can be bought with gold. They have to balance two sets of prices:
- The prices of items with respect to each other,
- And the rewards for site activities with respect to each other.
Part of maintaining user activity in a game is making the activities challenging enough and making the rewards for those activities worthwhile enough.
To summarize this slide, engagement currency (Gaia gold) is supposed to be a reward for site activity, while cash currency (Gaia cash) is aimed for those who are willing to support the site financially.
If balancing between cash and gold is hard back then, it would be definitely much harder after gold took a massive hit in value. A replacement currency (very likely to be platinum) is intended to address this discrepancy, but if this replacement currency would be able to maintain its value with respect to the cash currency, Gaia's user retention rates would improve.
Gaia's trade system could also serve to balance the wealth of the two groups: heavy cash users and heavy gold users. Although these two groups aren't mutually exclusive, the collapse of one group would destabilize the market and would lead to economic decline as members of one group would stop trading with members of the other group and instead trade within the group through barter and other means (like the use of items for bidding in art auctions).
Some ideas from Gaia's past have to be abandoned, but some of them have to be taken into consideration, depending on how well they have worked. These approaches have worked well before the barrage of gold generators destroyed the economy, so Gaia can consider these once more when it comes to repairing and renewing the economy.
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