What is the point of the 10 percent tax....

[bailey]

Straight from the horses' mouth

There is a tax because other games have it to control inflation.

As far as controlling inflation, what inflation?? Most cards start out costing a lot and then decline as if jumping off a cliff unless the card gets known as "meta" and the decline is slower. There may be a bump up later if the card becomes a bottleneck in a mission with a "meta" reward, and then decline again as the reward itself becomes less "meta".

The real problem is deflation so adding a 10% tax is hugely impactful and not in a player-friendly way.

Inflation is a real problem in a game like Eve Online which never reset and the tax there is 8% and you can lower it to about 3% by playing the game. Because it never resets, inflation is a huge problem with the most commonly traded item doubling in price since about 5 years ago.

Since Perfect Team resets from scratch every year, so I'd now like to know what are the "comparable games where it worked well" that Markus used to decide the 10% tax? Do those games reset every year?
Has anyone given it a thought since then about changing the tax?

I agree with HRB -- it's time to dump the tax, because inflation is a non-factor in games that reset every year. Let's have a tax holiday to see what happens.

Of course, the real reason there is a tax is not to control inflation, but to give it to perfect point buyers. The taxes you pay on every sale is refunded to the buyers of perfect points who get at least 10% "bonus points" on every purchase.

[PunishedF2P]

Originally Posted by bailey

Straight from the horses' mouth

There is a tax because other games have it to control inflation.

As far as controlling inflation, what inflation?? Most cards start out costing a lot and then decline as if jumping off a cliff unless the card gets known as "meta" and the decline is slower. There may be a bump up later if the card becomes a bottleneck in a mission with a "meta" reward, and then decline again as the reward itself becomes less "meta".

The real problem is deflation so adding a 10% tax is hugely impactful and not in a player-friendly way.

Inflation is a real problem in a game like Eve Online which never reset and the tax there is 8% and you can lower it to about 3% by playing the game. Because it never resets, inflation is a huge problem with the most commonly traded item doubling in price since about 5 years ago.

Since Perfect Team resets from scratch every year, so I'd now like to know what are the "comparable games where it worked well" that Markus used to decide the 10% tax? Do those games reset every year?
Has anyone given it a thought since then about changing the tax?

I agree with HRB -- it's time to dump the tax, because inflation is a non-factor in games that reset every year. Let's have a tax holiday to see what happens.

Of course, the real reason there is a tax is not to control inflation, but to give it to perfect point buyers. The taxes you pay on every sale is refunded to the buyers of perfect points who get at least 10% "bonus points" on every purchase.

Out of curiosity, could you think of a similar game that didn't have a tax? Ever?

Expecting OOTP to set new benchmarks and become the first sports card game ever that doesn't have a tax is just goofy and out of touch with reality, lol. And criticizing them for an aspect of the game that every game like it ever also has... kind of goofy and out of touch with reality, sorry guys.

[bailey]

Originally Posted by PunishedF2P

Out of curiosity, could you think of a similar game that didn't have a tax? Ever?

Expecting OOTP to set new benchmarks and become the first sports card game ever that doesn't have a tax is just goofy and out of touch with reality, lol. And criticizing them for an aspect of the game that every game like it ever also has... kind of goofy and out of touch with reality, sorry guys.

How many other games reset every year? (Not arguing, just want to know.) I don't expect anything to come from posting, it's a discussion. I think it's plainly obvious there is no inflation in Perfect Team ergo no need for a tax. Telling me I'm out of touch with reality is not helpful to the discussion.

[dishnet34]

Originally Posted by bailey

How many other games reset every year? (Not arguing, just want to know.)

For starters...MLB The Show (10% AH/Card Shop tax), NBA 2K (15%), Madden Ultimate Team (5%), FIFA/EA FC Ultimate Team (5%), EA Sports' NHL Ultimate Team game (5%).

[dishnet34]

I found this explanation very insightful from the FIFA/EA FC Ultimate Team reddit when someone asked what the point was, and I find it fascinating. I'll quote it here:

For those who don’t understand, let’s look at SS Rudiger as an example.

On PC, his price is fluctuating from around 520K-580K throughout the day. If there was no tax, people just wanting to make a profit would swoop up the Rudiger anytime he went below 560K or 570K so they could make 10-20K profit selling at 580K when his price fluctuates back up.

With the 5% tax, selling at 580K only nets you 551K so anyone who bought the card at 551K or higher just to sell at 580K is actually LOSING coins.

Since it would be dumb for a trader to do this, the cards remain available in that price range for players who actually want to buy and use the card.

Not to mention the price would go up significantly on the card if all the traders bought the copies from 551K-580K since the supply would go way down and that’s the nature of supply and demand.

I know it's different games, but the same concept applies.

[bailey]

Originally Posted by dishnet34

I found this explanation very insightful from the FIFA/EA FC Ultimate Team reddit when someone asked what the point was, and I find it fascinating. I'll quote it here:


I know it's different games, but the same concept applies.

So, the purpose of the tax is to make life difficult for the flipper.

But, with no tax, I'm guessing the spread would tighten considerably.

Love the concept of a 5% tax, though! Thanks!!

[dishnet34]

Yeah, the 10% tax ain't gonna change anytime soon. Sorry to burst that bubble, bud.

[kq76]

The explanation that it's there to control inflation is bunk, if you only take "control" to mean "decrease". (Edit: And to be clear, I don't say that to imply Markus is lying. I'm sure he's just repeating what he's seen others say.) A basic economics course, however, teaches you that one of the biggest causes of inflation is increasing costs. What does this tax do? It increases costs (it decreases the PP you'd get for your cards which is effectively the same as what increased costs would do). And therefore, it adds to inflation.

If you don't see it, just ask yourself, if you really want more than the minimum for a diamond, what do you have to do? You have to ask for more than 4444. You might have been good with getting 4444, but after the tax that brings you down to 4K. To actually get 4444 you have to sell 4938. That policy right there just increased the price by 11.111...%. What's inflation? The increase of prices.

Still don't believe me? Fair enough, I'm not an economist. Read what an actual economist says on the relationship between taxes and inflation. Just keep in mind, monetary policy = interest rates, fiscal policy = taxes. Now yes, some people (economists and not) might only talk about how raising taxes decrease inflation, but they're not telling you everything.

Yes, taxing transactions does decrease inflation too, by taking money out of the system, similar to how a government would increase interest rates or taxes. But it's not like that's the only thing it does.

You know what else adds to inflation? All the PP you get from missions, tournaments, etc. Like in the real world where governments just print more money, that's another big cause of inflation. I'd say all that contributes a tonne to the inflation in the system. Does anyone want them to decrease that? Taxing (or decreasing what you get from) these would do a far better job of decreasing inflation. Read enough economic articles and you'll probably see some say something to the effect of, "you have to attack the demand side of the equation to counter inflation, not the supply side". Well, that's what this would do.

So what is it really there for? Well, it should be obvious. It's to take PP out of the system so that more actual money is needed to buy what you want. Do I disagree with that? No, not at all. And I'm sure most don't.

As for how best OOTP should milk the cow, it's up to them. I disagree with the idea that they should increase the cost to buy the game and get rid of the tax. That would just make the barrier to entry higher for everyone. I'd also disagree with putting a higher tax on the whales. A 10% tax doesn't really hurt the player buying/selling irons through golds. It really only hurts those buying diamonds and perfects. It's like buying something cheap IRL vs buying something expensive. You probably don't even think about the tax on a chocolate bar, but the tax on a car you more likely would.

One might argue, "just get rid of the tax for those lower levels" and/or "just increase the tax on those expensive cards" so it doesn't constantly irritate us. But that, while it would reduce the irritation, probably doesn't make the most sense either as you don't want to discourage the whales from whaling and you might want to discourage the junk traders from trading so much which might lower your server costs. Maybe it wouldn't help server costs or dissuade whales from whaling and in that case it would make sense to get rid of some people's frustration, but only they can make that calculation.

Nah, they've probably got it right. And really, if you don't want to pay the tax, it's simple, just don't partake in the buying and selling anymore.

(FWIW, I haven't played PT in OOTP25 so I may have gotten some details wrong like the math above, but I imagine things are for the most part the same as in 24.)

[PunishedF2P]

Originally Posted by bailey

How many other games reset every year? (Not arguing, just want to know.) I don't expect anything to come from posting, it's a discussion. I think it's plainly obvious there is no inflation in Perfect Team ergo no need for a tax. Telling me I'm out of touch with reality is not helpful to the discussion.

I wasn't referring to you specifically as being the one complaining or out of touch with reality, lol. More a general statement. You know I like you, Bailey!

The response was directed to you as far as the question.

All other games I have played like this that have a card collecting / auction element - Madden, FIFA, 2k, Tap, 9 Innings, Coaching Sims - have a tax. And most of these games reset (Madden, FIFA, 2K, all the main franchises)

An anecdote: One year over a decade ago, Madden Mobile had an achievement you could reach during the month that would suspend the auction tax - and I would (and many others like me) spend 30-60 minutes day in the auction house flipping cards after I'd suspended the tax and basically became an elite P2W squad. They removed that the following year, lmao.

[PunishedF2P]

Originally Posted by dishnet34

I found this explanation very insightful from the FIFA/EA FC Ultimate Team reddit when someone asked what the point was, and I find it fascinating. I'll quote it here:


I know it's different games, but the same concept applies.

Yeah, I did this exact thing in Madden Mobile one year when they had a suspended auction tax achievement. Gangbusters.

[HRBaker]

Originally Posted by kq76

The explanation that it's there to control inflation is bunk, if you only take "control" to mean "decrease". (Edit: And to be clear, I don't say that to imply Markus is lying. I'm sure he's just repeating what he's seen others say.) A basic economics course, however, teaches you that one of the biggest causes of inflation is increasing costs. What does this tax do? It increases costs (it decreases the PP you'd get for your cards which is effectively the same as what increased costs would do). And therefore, it adds to inflation.

If you don't see it, just ask yourself, if you really want more than the minimum for a diamond, what do you have to do? You have to ask for more than 4444. You might have been good with getting 4444, but after the tax that brings you down to 4K. To actually get 4444 you have to sell 4938. That policy right there just increased the price by 11.111...%. What's inflation? The increase of prices.

Still don't believe me? Fair enough, I'm not an economist. Read what an actual economist says on the relationship between taxes and inflation. Just keep in mind, monetary policy = interest rates, fiscal policy = taxes. Now yes, some people (economists and not) might only talk about how raising taxes decrease inflation, but they're not telling you everything.

Yes, taxing transactions does decrease inflation too, by taking money out of the system, similar to how a government would increase interest rates or taxes. But it's not like that's the only thing it does.

You know what else adds to inflation? All the PP you get from missions, tournaments, etc. Like in the real world where governments just print more money, that's another big cause of inflation. I'd say all that contributes a tonne to the inflation in the system. Does anyone want them to decrease that? Taxing (or decreasing what you get from) these would do a far better job of decreasing inflation. Read enough economic articles and you'll probably see some say something to the effect of, "you have to attack the demand side of the equation to counter inflation, not the supply side". Well, that's what this would do.

So what is it really there for? Well, it should be obvious. It's to take PP out of the system so that more actual money is needed to buy what you want. Do I disagree with that? No, not at all. And I'm sure most don't.

As for how best OOTP should milk the cow, it's up to them. I disagree with the idea that they should increase the cost to buy the game and get rid of the tax. That would just make the barrier to entry higher for everyone. I'd also disagree with putting a higher tax on the whales. A 10% tax doesn't really hurt the player buying/selling irons through golds. It really only hurts those buying diamonds and perfects. It's like buying something cheap IRL vs buying something expensive. You probably don't even think about the tax on a chocolate bar, but the tax on a car you more likely would.

One might argue, "just get rid of the tax for those lower levels" and/or "just increase the tax on those expensive cards" so it doesn't constantly irritate us. But that, while it would reduce the irritation, probably doesn't make the most sense either as you don't want to discourage the whales from whaling and you might want to discourage the junk traders from trading so much which might lower your server costs. Maybe it wouldn't help server costs or dissuade whales from whaling and in that case it would make sense to get rid of some people's frustration, but only they can make that calculation.

Nah, they've probably got it right. And really, if you don't want to pay the tax, it's simple, just don't partake in the buying and selling anymore.

(FWIW, I haven't played PT in OOTP25 so I may have gotten some details wrong like the math above, but I imagine things are for the most part the same as in 24.)

Thank you kq76 for the fairly complete explanation. I'm still not sure I agree with everything you said, but the logic is convincing. I do miss the days, however, when questions like this were supplied by the developers.

[kq76]

Originally Posted by HRBaker

...I'm still not sure I agree with everything you said, but the logic is convincing...

Thinking more about it, I could have done a better job of a few points:

Taxes, regardless of whether they're income or sales taxes, just don't have a simple relationship with inflation. And it's because, not only do they take money out of the system, but they also effectively increase prices and there's a tonne of psychology that goes into purchase decisions. It's not like a 10% tax should definitely result in less inflation.

When people say, "we should increase taxes to control inflation", I really don't think they're saying it thinking, "yeah, X increase in taxes really should result in Y less inflation". Assuming they're not delusional, that is. No, I'm convinced it's more like, "inflation is a problem and increasing taxes *might* help inflation, while it'll definitely help our coffers, so yeah, let's do it".

Ultimately, does this tax really decrease inflation in the system? Maybe, but I'd be incredibly impressed if any video game company could prove to me with math that these taxes really do keep the inflation in their systems down. And I wouldn't expect them to be able to either. It's just not their specialty. They're game developers, not economists.

It is very simple, however, that an increase in taxes results in more money for a government (or, in this case, company). There's no guesswork in that.

Besides, if you were them, would you really be all that concerned, ahead of time, about "inflation" in the system? Sure, I might be a little concerned, but if it was really a problem, I'd look into decreasing the rewards as that would have a far more direct impact on inflation. And I have no doubt that they've considered the impact of rewards too.

In the end, I just don't buy the inflation reason. Let's just be frank, it's a way to generate revenue. And should anyone really fault them for wanting to make money at this? No, not at all.

And I am cool with people asking why the tax exists if they really don't know why, but I'm just tired of seeing people whinge about it. There are far more important things to complain about and work on.

[Syd Thrift]

Yeah, the bottom line here is:

1. All of these kinds of games use a tax in some way. It’s not going away.

2. The real trade-off is between having a tax like this or allowing the game to inflate a lot more over the course of the year, which is probably okay for people who jumped in in April but makes trading/flipping onerous to the point of being inaccessible to people who arrive later. Like kq said, inflation is about velocity of money and the more you allow it to move around swiftly, the more it goes up.

3. Hitting the whales is problematic because let’s face it, the whales are who fuel something like 90% of the revenue for these games. If you hit them too hard or make it seem like you’re singling them out they’ll just go where this isn’t happening. It’s really similar to how Vegas goes out of their way to accommodate high rollers.

4. If you never spend money on the game that of course is your prerogative, and I know there are ways to still build really good and competitive teams that way, but you’d want to bear in mind that OOTPD has families and this is a moneymaking venture for them, and their first goal with this game, especially with Perfect Team, has to be to figure out how to maximize profit (that doesn’t mean by gouging people because long term profit is also a thing but let’s be real here, this is why PT in particular exists).

[LeeD]

The smart manipulation strategy is to place buy orders for 60-70% of L10, acquire and hold cards, then relist for 125-150% of L10 when there are no current sellers. It would include over-bidding to a degree as long as the buy bid is still expected to bring back more in sale value. This requires a spreadsheet-like knowledge (or an actual spreadsheet) of the card set cross-referenced with the mission structure, which always has actual bottlenecks (not particularly useful for card flippers) and bottlenecks waiting to happen (where the card flipper wants to operate). It obviously works best with uncommon cards, where supply won't quickly increase to offset the acquisition of many copies by one player.

This is, BTW, the reason that there is inflationary pressure on those uncommon cards and the reasoning behind both the ten-card limit and the 10% sales tax. Without both of these, the problem would be far worse. As is, it's still a problem with no clear solution due to sticky prices.

Look at the card prices by mission and try to explain why Bronze card X is selling for 160 PP, while Bronze card Y can be had for 40 PP. Supply is theoretically equal (same chance to pull both when opening packs), demand is theoretically equal (both are part of one mission and both are about equally useful as cards), so the prices should also theoretically be equal...but aren't. Why? Because card X has a higher L10, for whatever reason it exists (usually random happenstance in the days immediately following mission drop, but sometimes due to manipulation, and sometimes due to blatant cheating where a player overpaid in order to move PP between two accounts). Most players aren't particularly picky about paying L10 price or something near it regardless of why that L10 exists, so cards that are overvalued tend to remain so until the mission involved is far off into the rear-view mirror and supply overwhelmingly exceeds demand.

Rarity. Bottlenecks. Inflationary pressures. Sticky prices. The hedge fund manager types love this. It's right up their alley...and there's really nothing that could be done to stop it, short of forced sales of duplicate cards, which would have a long list of unintended consequences.