This is likely as close as we'll ever get to being in Amalur again.

The news was bad yesterday, but rumors coming from a local mass media station (!) in the area has made it oh, so much worse. According to Joystiq and Fox News 25 Boston, the studio has laid off its entire staff and is attempting to sell Big Huge Games, the viable game developer 38 Studios purchased in mid 2009.

BHG was responsible for Kingdoms of Amalur: Reckoning, a single-player action RPG set in Project Copernacus’ universe. BHG also created the award-winning Rise of Nations RTS franchise and later worked on an Age of Empires expansion, The Asian Dynasties. The layoffs currently include the employees at BHG.

The report starts off with the most damning statement possible: “Curt Schilling’s video game company could be out of business by the weekend.” This coming from a Joystiq source.

This layoffs mean an estimated 350+ people are now out of work. If 38 Studios cannot maintain payments on the ~$50 million it still owes the state of Rhode Island, then the state will win a second prize of the Amalur IP, worth an estimated $20 million.

Considering Curt Schilling was seen exiting the parking lot with a box of his stuff in the backseat, it appears that the underdog has lost.

Also announced were two more beta weekends, which begin on June 15th – 17th and June 22nd – 24th. The next beta weekend will allow players to select from all three factions and to travel outside of Kingsmouth and into the Savage Coast, where they’ll find the Hell Raised epic dungeon. The last beta weekend will focus on PvP as players will battle it out on the Eldorado battlefield.

For more information, head over to TWS official site.

Now this is not the first MMO game to merge all their servers into a few. DC Universe Online did this last year when they merged all their servers into four massive ones as the player population fell. So it seems BioWare has the same idea. This is all good and fine, but are mega-servers really anything to be excited about?

Mega-servers do sound like they’d be awesome, ten of thousands of more players all on the same server, I mean, that sounds awesome to me, right? However looking at it logistically, there’ really won’t be any noticeable impact to players.  Illum is not all of a sudden going to be able to support thousands of PvP players at the same time. Hell when I was playing, my frames per second dropped to single digits once there were more than 50 players there.

Dungeons in SWTOR are also mainly instanced, so again this has no greater benefit than a cross-server group finder would have. The only conceivable difference I can think of would be that the auction house would have more activity in it and people wouldn’t have to worry about server-transfers to join friends.

On top of that SWTOR is basically an co-op MMORPG at best, so more players really doesn’t make a difference. I soloed the entire game, grouping maybe three times total. For a game like SWTOR that is very single-player oriented, it just doesn’t seem like Mega-Servers would matter at all. But then again, it’ll save BioWare some time from constantly having to merge servers.

Liar, Liar!

SMITE: Demigods, Deities and Gods Explained is a column dedicated to introducing prospective players of SMITE to its massive back story of lore. From the Greek to Hindu, each week we’ll look at two characters from a major pantheon and provide a quick recap of their history and in what capacity their digital incarnation will represent on the field of Hi-Rez Studios upcoming MOBA.

Lore: Agni, as the God of Fire, is revered as one of the most important gods in Hindu mythology; second to Indra, his twin, in power and importance. The twice-born deity is the director of numerous religious ceremonies and duties, including being the messenger between mortals and gods. Unlike that of other pantheons, the God of Fire is not strictly a destructive god, and rarely is described as one. Instead Agni is held to high esteem as an example of knowledge for his role in sacrifices and diplomacy between the people and the pantheon.

As with many Hindu gods, Agni’s lineage and physical manifestation are routinely different for each legend. Labeled as the twice-born god, Agni is the eldest son of Brahma or born of Dyaus Pita and Prthivi. He’s typically represented as a two-headed, two- or seven-handed god with a ram as the chosen vehicle and possess seven tongues of flame.

In-Game: Agni is a complicated ranged spellcaster. To lay out maximum DPS players must chain together moves, from his passive ability to that of gas clouds and ignition abilities like Flame Wall. In addition to direct magical damage, half of Agni’s abilities leave a damage-over-time proc on their target. This destructive incarnation of Agni also has a stun and personal movement buff at his disposal.

Further reading:

• Agni on Wikipedia
• Hindu Mythology on Wikipedia
• Concepts of Hinduism

Head over to SMITE: Demigods, Deities and Gods Explained for access to details for all of the playable characters.

When I wrote my first impressions of TERA I ended it by saying, “I could just be under that “new mmorpg” spell that seems to make every new MMO game better than it actually is“. Well I must still be under that spell because I’m still having a blast with the game.

Once you hit level 30, the speed at which you level begins to slow down and the mobs begin to get harder. This is actually a great thing, not only because it puts greater emphasis on acquiring better gear for your level, but also because it takes some of the grind out of the game.

Up until about level 30, you’ll rarely die from mobs, but after, they get tougher and are closer grouped together, combined with TERA’s very quick respawn rate, you will get caught and respawned on many-a-times.

While this can be frustrating for some, I love it. To me grinding is the most painful when you can’t lose and you’re just going through the motions, but when the game makes it difficult, it changes from a grind to a challenge, which to me is much more enjoyable, even though I’ll be swearing up a storm when I die.

PvP is still missing-in-action. You’ll get ganked once in a while, but for the most part players won’t bother since there is currently no stat system to record kills or rewards for PvPing. Guild vs Guild is still there, but I haven’t participated in it much, as I never seem to see anyone from the enemy guild during the times I’m on. I also play during off-peak hours, so that’s probably why.

Combat is still the beacon of shining light in TERA. Dungeons start to become more frequent after 30 and up until this point are mostly solo-able, but there have been a few that require a group of five, including some that are part of the main storyline.

You’ll also have the opportunity to take down a few BAMs by yourself as part of the main story, and while you can of course invite a friend to help, it’s crazy exciting taking one down on your own. My first solo BAM fight lasted about 10 min, my heart was pounding, my fingers were sweaty and when that big f*cker hit the floor my arms when straight into the air as I claimed victory over it. Since then I’ve taken down a few more BAMs solo and each time it’s just as exciting. En Masse seemed to get it just right with solo BAMs, making them just hard enough where you will fail if you’re not careful, but not so hard that you’ll keep dying.

TERA’s political system is getting underway as voting begins tomorrow for the first elections.  So we’ll see how that goes.

What TERA needs to do in my opinion is concentrate on BAMS, dungeons and PvP, and not so much on standard questing, it’s just boring and a grind. TERA has the tools to become a great MMO, they just need to minimize the things they’re doing wrong and maximize the things they are doing right.

Despite numerous pleas, reassurance from the top, continued taxpayer loan payments and various looks of the in-development MMOG, 38 Studios remains on the brink of collapse. Recent events include not paying its employees, eventually letting a healthy sum of its staff go or seeing a talent exodus. Some to local companies like Turbine Entertainment, others to faraway lands.

Late yesterday, Rhode Island governor Lincoln Chafee put another bullet next to the studio. He admitted that the company has seen no new outside investment, an emerging trend in the genre. Making matters worse, the plea for additional taxpayer funds has gone unanswered. Leaving the company in an ever-deepening hole. Chafee stated that he is doing everything in his power to make sure the company remains afloat. A complete collapse would see the state lose hundreds of millions of dollars and almost certainly Chafee’s chance at a reelection.

With employees fleeing like rats off a sinking ship and rumors that the company’s healthcare is about to expire, 38 Studios and Project Copernicus may not be long for this world.

I for one, am still cheering for the underdog.

Last time, we looked at some of the pricing implications of the Diablo 3 auction house fee structure and why Blizzard implemented these fees. This time, we’ll propose some other fee systems and consider some economic ideas that have relevance to the Diablo 3 auction house.

One of the basic ideas of economics that gets thrown around a lot by laymen is “supply and demand“. They are really two separate ideas that can be used in conjunction with each other to predict market behavior. Let’s delve into some of these economic ideas to approach the auction house and its fees.

To make a basic graph of what “supply and demand” looks like, we need to understand how suppliers and consumers react to pricing. Intuitively, if something (lets say a super-awesome sword) can be sold for a high price, people are going to do what they need to in order to get it so that they can garner a large sum of money. Conversely, if the sword is offered at a lower price, less people are going to be willing to sell it. At higher prices, more swords will be offered for sale, and at lower prices, there will be less swords. As for consumers, they will buy more swords the lower the price is, as they will be able to more easily afford them at lower prices and be more willing to part with less of their hard-earned cash. At higher prices, people will only buy swords if they really want them. Thus, at higher prices, less swords will be bought, and at lower prices, more swords will be bought. If we asked sword-producers how much they would sell a particular sword for at a variety of prices and graphed it, then asked sword-consumers how many swords they would buy at a variety of prices, we would get a graph like this:

The important idea is that the supply curve has a positive slope, whereas the demand curse has a negative slope.

The point at which they intersect is the equilibrium point, where there will be the same number of swords for sale as swords bought. On this graph, this is at 100 swords and $6. Any higher and there would be more supplied than demanded, and leftover unsold units. Any cheaper and there wouldn’t be enough swords to go around. Notice that 99 people would have paid a higher price and are rather happy that they only have to pay $6, whereas 99 suppliers would have sold for lower prices and are glad to sell at $6. The fact that you would have paid $9 for a sword but only had to pay $6 means you essentially have $3 extra to buy other things that make you happy. We have a term for this “happiness” in economics, called welfare. Here is how we show how much welfare, or happiness, is made by the economy in our example:

The red area is “consumer surplus“, or how much happiness is gained by buyers, and the green area is “producer surplus“, or how much happiness is gained by sellers. Lots of happiness for lots of people is very good.

Now, we were operating under the unstated assumption that people were able to freely trade with each other with no other costs, in this case, without fees. What happens when we throw in a $1 fee for trading a sword?

As you can see by my awesome and 100%-to-scale graph, the equilibrium price has changed to $6.50. It isn’t quite the previous equilibrium price + fee essentially because the higher prices caused some buyers to become uninterested and leave the market. Additionally, now only 90 swords are traded. This is definitely less happiness than before, but where does the happiness go? Well, some of it goes to Blizzard, and some of it dies a cruel death.

Blizzard is able to get a good deal of revenue out of this, which covers some of its costs and provides benefits to the traders, but undoubtedly also represents some company profit.

The purple area is lost welfare called “deadweight loss“. It represents sales that would have been made without the fee, as well as the lost profit from sellers and less money left in the pockets of buyers. It is normally associated with a tax or price ceiling, but its effects can be evident in the case of these auction house fees. Here, it is (relatively) small, but actually calculating it requires a lot of data to determine the exact shape of the supply and demand curves.

Like I said last time, I believe that the $1 fee is going to deter a lot of people from using the RMAH (real-money auction house) for cheap items, especially sub-$2.60. The above graph showed the effect of a $1 fee on a $6 item, let’s consider the cheapest items, where I think most of the demand lies. Take a look at this graph with some possible values for what effect the fee could have on trading:

Without any fee, 50,00 items would be traded at $1.50. With the fee, only 6,000 items are traded at the higher price of $2. What does the deadweight loss, welfare, and Blizzard revenue look like?

That is a lot of happiness that nobody is going to have – lost to people not trading as much and sending most of the money to Blizzard instead to each other. Blizzard should care about this – deadweight loss represents a big economic loss due to their policies and fees.

Of course, the specific numbers are fictional and not even Blizzard knows actual numbers until trading starts happening, but the general idea is still valid, especially if a very large number of the trades are demanded at low prices. The $1 isn’t as big of a deal if the price was, say, $100.

The deadweight loss is much smaller for more expensive items since the fee does not scale with price. Also note that if the relative quantities are realistic with actual values, Blizzard makes way more money ($60,000 versus $19,000) on cheaper items, even with the inhibitive $1 fee on cheap items.

We don’t know what Blizzard’s average per-trade costs are for providing the customer service and security that they might use as a “floor price”, but I really think that they could have come up with a better fee structure than “$1 for all items”. The 15% for commodities scales much better and works well for cheap items. If the fee on $1.50 items was $0.25 instead of $1, we would have a graph that looks more like the above one than the previous chart. There would be more happy customers, and they would probably have higher direct revenues from the trades, too.

Could the market failure be high enough to cause third-party services and “black market” trading? I think it is rather unlikely that they would become dominant, but I think that they will exist. Depending on the cost of gold, the $2.60 threshold could cover a lot of items. Ultimately, its a buyers market, and if you can get a full set of gear for $5 on a third party site or $10 on Blizzard’s in-game auction house, are you really going to go to the third-party site? Convenience might trump price.

I think we’ll see a change in the fee structure after the RMAH has been live for a few months. The most traded item on the RMAH will probably be gold, because prices will be lower there due to its superior fee structure (as well as other in-game demand for gold).

Right now, a bigger threat to a working economy is the poor state of the auction house. It is offline often and buggy. The interface is very poor for finding items and comparing them to the items you already have. The 10 item cap helps prevent flooding of the AH with poor quality items, but does it inhibit productive trading? Leave your thoughts in the comments and we’ll take a look at the interface problems another time!

If you are interested in learning more about deadweight loss, check out this video from Khan Academy:

Part 1 | Part 2 | Part 3

Now this isn’t necessarily bad news, depending on who you are and how you’re looking at it. As a MMO developer, this is probably horrible news for you, but as a gamer, I think it couldn’t be any better.

You see there’s a reason for all of this; there’s a reason why SWTOR players are leaving in droves and why MMOs can’t seem to reach and hold that elusive one million subscribers/player mark. It’s a little game called World of Warcraft. You might have heard about it.

Until developers and publishers realize they’re never going to beat WoW by creating a clone of it, they’re all going to fail. But don’t tell that to the guys behind the Elder Scrolls MMO, it seems they’re as clueless as BioWare was and from the list of features that have been released so far, it seems we’ll have another dead-on-arrival MMO late next year.

Sure there are indie MMO developers creating gems like Pathfinder Online, Embers of Caerus and Dominus, which is now canceled, but they’re under funded, unpolished, and graphically out-dated. The second a developer creates a Kickstarter project, that tells me the game will either never see the light of day or will be released well before it should be. I have no interest in games like that.

The failure of SWTOR is undisputed. While it might be profitable for a long time, it’s once optimistic view that it can compete with WoW has been shattered and it’s left to fight for the scraps off the WoW table amongst the dozens of other “wow killers”.

The failure of SWTOR should be a wake up call to the entire industry that it’s time to try something new, but it seems with games like WildStar, Elder Scrolls and others on the horizon, were going to have to go through a few more failures before it sinks in.

The previous record was set by no other then Blizzard’s Cataclysm expansion which sold 3.3 million copies. What’s the fastest selling game of all time? Activision Blizzard’s CoD Black Ops expansion, which sold 7 million copies in its first 24 hrs, including 4.5 million pre-orders.

Since launching on May 15th, more than 6.3 million copies have been sold at retail stores and online making it the biggest PC-game launch in history.

My guess, Hi-Rez will modify for added sex appeal.

SMITE: Demigods, Deities and Gods Explained is a new column dedicated to introducing prospective players of SMITE to its massive backstory of lore. From the Greek to Hindi, each week we’ll look at two characters from a major pantheon and provide a quick recap of their history and in what capacity their digital incarnation will represent on the field of Hi-Rez Studios upcoming MOBA.

Lore: Arachne’s history delivers a classic message to the people of Greece, “Do Not Mess With Gods.” A weaver that believed herself superior to Athena, goddess of wisdom and strategy, she had the audacity to tell other mortals about her prowess. Being easily offended by lesser beings as Greek gods often were, Athena organized a weaving challenge, assured she’d win due to Arachne utilizing Athena’s own knowledge as part of the her craft.

The cockiness of Ararchne was warranted, as her tapestry won the challenge. Sadly, the reward was not employment or friendship with the goddess. Her trophy was to be her own disfigurement. The target of Athena’s jealousy and rage over the magnificent tapestry, Athena destroyed the mortal’s equipment and product only to turn her insecurity to the female’s physical attributes. Slashing her face and ruining her beauty was not enough. Athena completed her vengeance by transforming Arachne’s body to that of a spider.

Hell hath no fury like a woman scorned.

In-Game: Those afflicted by arachnophobia may be affected at ranged, but Arachne is truly dangerous up close and personal. A very unique character to SMITE, Arachne can unleash non-controllable minions and happens to be one of SMITE’s jungle-capable gods.

Further reading:

• Arachne on Wikipedia
• Greek Mythology on Wikipedia
• Metamorphoses by Ovid

Head over to SMITE: Demigods, Deities and Gods Explained for access to details for all of the playable characters.