The Sinking Neopoint

Introduction

Remember back in the days when Draik morphing potions were only 200,000 neopoints? Right now, as you browse lots in the Trading Post, you would probably encounter Neopians asking for tens of millions of neopoints for the same item.

In economics, prices of items are determined simply by two forces – demand and supply of the items.

Obviously when an item is more sought after, people are willing to pay more for it and sellers would set higher prices to profit. Conversely, if there is more of an item in the market, prices would be lowered as the item is much easier to obtain; essentially the value of items is lowered. All these can be explained using graphs, but I shall not go into the details as this is not the gist of my article.

You might now be asking yourself, what is the point of the above paragraph? Well, treat neopoint as an “item”. When there is a huge supply of neopoints in the economy (and this is the case currently), neopoints are easier to obtain. The value of neopoints is lowered as a result. Sellers set higher prices for their items because the ‘purchasing power’ of neopoints is lowered.

To put it simply and in reference to the Draik morphing potions – sellers think that 200,000 NP is no longer enough to let go of such a rare item as the amount is easily obtained. The general increase in price level is known as inflation.

The flooding of neopoints

Neopoints, the currency of Neopets, are ‘created’ daily through games, the stock market, dailies and random events, etc.

Let’s do the math: assume there are 30,000 active players a day. Assume that each player earns 30,000 neopoints a day on average. That is almost a billion neopoints entering the game a day!

As games and random events are built-in features of the site, which cause players to come back each day, The Neopets Team (TNT) can do nothing to remove such features.

Granted, neopoints are ‘destroyed’ every day as well. Just as there are many ways neopoints are ‘created’, there are multiple ways where neopoints are ‘destroyed’ including neopoint sinks.

The concern and neopoint sinks

In a game where appealing and useful items are expensive and difficult to obtain, many would not find the game appealing. Players would also often complain about such conditions which would force TNT to act in order to satisfy players. TNT must balance between scarcity of neopoints and ease of acquiring them.

The obvious solution is to reduce the amount of neopoints in the economy, which would do less harm than just mass restocking rare items. The most predominant way to do so is of course using sinks.

Sinks are basically features that take away currency from the economy, reducing the amount of currency in circulation- thus making the currency more ‘valuable’. Sinks can be passive or active; however, in the context of Neopets, only active sinks exist, which I shall cover.

Active sinks are where players voluntarily throw away their money, often to obtain a unique item and in Neopets, avatars too. They are faster acting because players can throw as much money as they want!

Past, current strategies and suggestions

This section evaluates the strategies TNT has set in place to combat inflation. In this section, I would also give some of my own humble opinions and suggestions.

1. Tombola donations

Occasionally, the Tombola guy would ask for donations (around 100,000 NP) to help run his store. This has been implemented for as long as I could remember, even perhaps as early as Tombola has become a site feature. This is an okay neopoint sink as Tombola does give out small amount of neopoints to winners. Overall the amount of neopoints that is put out of circulation is more than what is given out to players.

2. Random events

One of the most unique features of the site are the random events (REs). A player could be a millionaire overnight by finding a rare item or could lose a fortune from taxes! The Tax Beast and other variations of the REs can cause players with large amount of neopoints on hand to lose 10% (or more). Other REs, like the Mutant Kadoatie, deduct set amount of neopoints (around 5000 NP). In my opinion, this is not an effective sink because as the name suggest, they are random. Furthermore, hefty taxes are easily avoided by placing neopoints in the bank. Also, poorer players may be targeted rather than the wealthy.

TNT may consider targeting richer players, but this would cause unrest. Players might be more willing to have large amounts of neopoints on hand, if such events give out avatars, e.g. getting a Tax Beast avatar if a player has to pay a million neopoints in tax.

3. Shops

One of the oldest feature of the game, believe it or not, the Neopian shops are actually sinks! When a player buys an item from the shops, he gives up neopoints to obtain it. These neopoints are out of circulation from the economy; thus players can no longer spend them.

4. Lever of Doom, Wishing Well and Kelp

Some view it as frustrating, I call it genius. These few features give players an option to donate, spend or relinquish neopoints to get avatars. There is a flaw, however. These features are mainly targeting people who collect avatars (which is a lot still). Furthermore, poorer players may actually have to spend more than richer, luckier players.

5. Save the Wheels

Killing two weewoos with one stone, TNT released this site event as a neopoint sink as well as to redesign the older features of the site. All in all, 12,371,691,860 NP was donated to the Neopian Conservation Society to Save the Wheels! There was even a player who donated a billion!

The stamp given out could be viewed as an investment item for players to donate. An avatar could be released to encourage more donations in future events.

6. Stamp auction/ re-release

Quite a number mistook this as an opportunity for all to obtain the stamp avatars. TNT obviously had other plans in mind. The monthly auction would periodically remove tons of neopoints as players compete to bid and obtain these rare R101 stamps for their collections. Recently the Commander Garoo Stamp’s final bid was an astounding 174,016,666 NP! In a year or two, potentially billions of neopoints could be removed from circulation. Bravo, TNT!

As TNT has addressed why they do not use other methods to re-release these stamps, I shall not discuss it here. To learn more, please visit editorial 482.

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I hope that this article has enlightened readers to the idea of a sink and provide a clearer picture to why TNT has implemented them. Neopoint sinks are intended to benefit all players and not a means to further frustrate players. So if you are a player with billions of neopoints rotting in the bank, why not help out the Neopian economy when the next BIG active sink is released?