In principle, I agree. In practice, getting a good in-game economy requires a level of expertise that very few people have. For instance, Ultima Online, Everquest and Asheron's Call all lack one. So does almost every DikuMUD and their descendents. The exceptions I've seen tend to be MUDs where the economy is a fundamental part of the whole game design and one of the most important things in the game (like Achaea). That's fine, but it requires economic expertise that few MUD designers have, and it requires it to be present from the very beginning.
Players absolutely hate losing all their items on logout. They also absolutely hate equipment decay, money paid to NPCs that doesn't flow back into the economy, and essentially every other possible money-sink in the in-game economy. With no money sinks, inflation runs rampant immediately. Did you know that of the three big MMORPGS in the US (same three mentioned above), only Ultima Online has even a single sink for money? That sink is purchasing reagents, and it's only a sink because they get used up when you cast spells. Nothing else removes total value (in money plus items) from the economy in any of those games.
Sadly, most hobbyist MUDs have the same problem to a similar, horrific degree.
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