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Armchair Dev - Animal Crossing Economy Curosities

Animal Crossing: New Horizons is a life simulation title that released internationally for the Nintendo Switch on March 20, 2020. It couldn't have come at a better time due to the world being in a global pandemic and stay-at-home orders were put in place. At the time of writing the best selling Animal Crossing title in its series and is the fastest selling on the Nintendo Switch[1].

As a player with way too many hours clocked in game, I find it fascinating how this game's virtual economy has developed, having impact in both digital and physical spaces. While it is not uncommon for a video game with a multiplayer component to develop an economy in ways the developers had not anticipated, watching this one unfold has been very interesting.

What is a Virtual Economy? #

A "Virtual Economy" is an emergent economy existing in a virtual world, usually exchanging virtual goods in context of an online game, particularly in massively multiplayer online games.[2]

People enter these virtual economies for recreation and entertainment rather than necessity. When systems exist to exchange goods between players, they will find ways to manipulate systems either around resources to be acquired or the currency itself. In these cases, often an alternative currency can be established due to a fixed price around it.

What about Animal Crossing then? #

In Animal Crossing: New Horizons, players are able to trade pretty much every kind of item within the game, from furnitures to fruit, the exception being fish and insects. This is pretty bog standard in terms of what one could be expected. What was not expected was how players would build up their own secondary market to trade online through player made systems like turnip.exchange and nookazon, and to the extent of how massive they would become.

Players have even gone as far as to establish methods around trading desired villagers by exploiting the mechanisms when one is moving out and now available to be "adopted" for another's own island barring they also have an open space. It's a song and dance, and there is a lot of money, both real and digital, going around.

On the topic of villagers, the game sports a system to utilize the many Animal Crossing Amiibo cards produced for prevous entries to call up an animal villager on demand and begin the process of enticing them to live on their island, prompting a selected villager to be evicted from their home. This system can be used to make desired villagers available when the prospective buyer has an open plot.

The Stalk Market #

One of my favorite events in the game is the SOW Joan Stalk Market. It has been around since the first title, and is probably the fastest way to make big Bells short of using a duplication glitch.

Daisy Mae from Animal Crossing
Image Source: Know Your Meme - Stonks

Every Sunday, Daisy Mae (the pig in the picture above), arrives on your island between the hours of 5:00 and 12:00. Here she offers you a deal to buy bunches of turnips, not for consumption but purely for an attempt at making profit.

After Sunday passes, the player can check the shop for a buy back price twice a day. The phenomenon here is players are now able to communicate their own island's price, effectively min-maxing their gains. It's stalk manipulation.

This has become another point of contention where players will post their prices when significantly high, requiring tips or donations in order to gain access to the coveted high sale price.

Players have been able to even leverage price calculators based around a datamined information from the game executable. The price trends are deterministic, but require some information to glean which route you may be on for the coming week.

This is also one other entertaining aspect to the weekly sale requirement. Players have to sell before the following Sunday, lest all of their turnips spoil. This mechanism happens as long as the player has turnips past any Sunday, effectively preventing time travelling players from hopping around for an exceedingly good sale price.

The Villager Market #

Around the time of the announcement that Animal Crossing amiibo cards were elligible to be used to invite specific villagers to your island, the once idle market had suddenly begun booming. Certain villagers being more sought after than others to the point that the card value were in the tens of hundreds of dollars in USD. It should go as no surprise then that Nintendo seems to be counteracting this be reissuing new prints, at least in Japan, of the much sought after booster packs of amiibo cards[3].

Not only has the physical market had a jump, but there was the development of a market for trading villagers as mentioned earlier based on when they are moving out. Often times players are trading in terms of Nook Mile Tickets (NMT) which can almost be considered a stably backed currency since the generation required involves effort to produce a ticket, whereas something like Bells can be gained by selling tree branches, weeds, and fruit.

The adoption of an alternative currency to Bells is something often adopted by the playerbase when the primary currency of the game has become hyperinflated to the point of being devalued.

Economic Oddities #

Island economies are isolated from one another, but the value of the bell has inflated drastically. So much so we are seeing secondary market item prices become outlandish compared to what they should be.

Case in point, a query on nookazon.com for a common item such as the Axe. The axe is a mainstay tool in the series, dating all the way back to the original release on Game Cube (or N64 if you are from Japan.)

Nookazon.com item listing for "Axe"
Image Source: Nookazon - Axe

On May 7, 2020 the value of the item on the website was selling at an average price of 5,000 Bells. This already is quite odd given the item is already purchasable from the Nook's Cranny, an in game shop, for 2,500 Bells - and it is craftable by the player. So right there it is already going for 2x the retail price, and it is infinitely purchasable in game so you would expect it to be valued considerably less.

At the time of writing May 10, 2020, the price is now sitting at an average of 13,250 Bells. I was not tracking previous price trends for this item, but within the span of 4 days it has jumped 8,250 Bells, now at 5.3x the original price of the item in game. This of course could be caused by outliers at the far end of the bell curve causing the average price of items to skyrocket, or it could be this demographic of players are now targeting those fresh off the seaplane and looking to get some later game (though this takes a short period of time to acquire, relatively speaking to the game) earlier. Luckily the price of the DIY is still where it should be, given that too is also directly purchasable from Nook's Cranny.

Combating Hyperinflation #

Nintendo has made strides to combat the inflation that is occurring by by imposing a change to the in game bank's interest rate, effectively capping the maximum yield. This specific change is due in part to countering players who can exploit the bank's interest system by time travelling several years into the future, effectively able to gain infinite interest and maxing out their account.

While this doesn't obviously impact other players, it can be seen as cheapening the experience when players see others having spent the same amount of time as them somehow having much more advanced island developments.

Time travel is already a controversial subject within the game's community, but my proposal to discourage time travel and combat the already inflating currency would be to impose interest on the loans given out by Tom Nook for house repayments.

A typical player will pay it back relatively quickly, whereas the time traveler could likely blow past certain points in time causing their house loan to increase drastically over time effectively nullifying any gains they would have made in interest from the bank. This would likely never become a consideration as it can ruin the player experience, even though it would make the loans much more realistic.

What if? #

What if all island economies were tied together? That could lead to some interesting results where you could effectively have the value of a Bell fluctuate and change depending on how the market was behaving. More likely than not, you would end up with the market crashing as people figure out how to generate near infinite Bells - or you would have the problem of people never connecting online suddenly seeing their market tank as they are now being impacted by a system they had never taken part in.

This could be tied to just turnips, and make the market much more dynamic based on player buy and sale rates more similar to the real world stock market. Once again this would likely yield turnips becoming devalued as people buy excess waiting for the ideal sale price.

Conclusion #

I have a lot of thoughts about how this game could be advanced to take advantage of the dynamic economy it has wrought, but at the same time I can see almost immediately how players will ruin it.

Unless there were more MMO like systems in place such as the auction house or more uses for the primary and secondary currencies, we will likely see the Bell ultimately devalued in the secondary player market. If there were more ways to remove Bells from the economy instead of having them cycle through it, then maybe there could be a way to have such a thing happen.

There is also alot of potential for the NMT market value to crash as well. Early in game, players are able to generate miles very quickly, but as time goes on those high value tasks will dwindle away until it is nothing left but the daily type tasks of chopping wood, catching critters, and hitting rocks. This would likely end up with the prices of villagers dropping significantly as no one will be able to afford it in addition to the fresh print runs of amiibo cards making those villager trade markets a moot point.

Sources #

[1] Nintendo - Year End Financial Results March 2020

[2] Virtual Economy - Wikipedia

[3] Nintendo Thwarts Scalpers with Animal Crossing Amiibo Card Restock - Nintendo Life