Jul 16, 2017

Debtzilla - Game Design Diary Part II: Money Mechanics

After 1 year of design work and 13 design blueprints later, Debtzilla the board game is finally born. The biggest challenge of designing Debtzilla is the challenge of incorporating various important money concepts such as income statement and compound interest without resorting to players filling out a real balance sheet and whipping out their calculators. The other challenge is to create a game that flows, easy to learn, builds tension gradually to a climax and engaging the players at an intense level making them feel that time flies by quickly.

A Logical Timeline

In Debtzilla, a daily routine is developed which mirrors the working routine of an average working adult. In the morning, players work, earn an income and plan how you want to build their wealth in order to buy gadgets to power up your hero. In the late afternoon, they knock off from their work and head to the shopping street, checking out the latest gadgets that they can use to battle the villains. At night, the villains begin to prowl the streets looking for innocent citizens to scam while the players try to stop them with whatever resources they have accumulated. Once the villains are confronted and the dust has settled, the damage done to the city is tallied and the impact of the hero's actions will be felt in the following day in the form of interference from the final boss: Debtzilla. This flow of events help players get into the game quickly, minimizing their game learning time as it is intuitive and correspond to their daily lives.

Gamification of Balance Sheet

The biggest problem when designing this game is to find an efficient way to represent an income statement without resorting to actually filling in an actual income statement and slowing down game. How do I incorporate expenses such as interest payments, insurance premiums, personal expenses, while at the same time allowing players to build their income via dividends and proving their saving rates by budgeting and re-financing their loan. I borrowed heavily from the deck building mechanics of a famous boardgame named  Dominion whereby players start with a stand deck of cards and they get to pick new cards from a common pool, resulting in each players having different sets of monsters and abilities by the end of the game. However, the huge variety of cards offered by Dominion often result in a steep learning curve for players, which is daunting for non-gamers, which Debtzilla is trying to reach. As a result, a simplified version of the deck building mechanics is designed, with players limited to 8 cards to choose from, rather than hundreds typical in deck building game. The system is designed in such a way that more cards can be added to the Income deck in the future if I am keen to add in more kinds of debts and money instruments, such as medical debt, investment loan and car loans.

Law of Compound Interest

One of the key mechanic that I am trying to design into the game is the idea of an escalation mechanic similar to the boardgame Pandemic where players have to stop viruses from spreading exponentially. The world of finance has its own form of virus, it's called the the law of compounding interest represented by this formula
The actual calculation of compound interest actually requires a financial calculator and the mechanic to represent this formula in an actual game mechanic took some trials and errors before I got it to work elegantly.

The law of compound interest is designed into the health of Debtzilla in the form of the interest rate bar. At the initial stage, Debtzilla grows at a slow pace, often prompting players to be more reckless in their spendings. As the gauge move beyond 60, Debtzilla health starts to jump much faster, often causing panic among the players, who now will be trying to pay back the debt they have borrowed, but more often than not, the accumulated interest payment has grown so much by than that whatever amount thrown at the monster only delays the apocalypse by a turn or two. It translate the feeling of despair of crushing debt very well as players are now forced to work together to as any mis-step will lead to a losing end game.

Other Challenges

There are other challenges in design, such as balancing a 2 player vs a 4 player game and ensuring a good win-lose ratio for a cooperative game. However, these topic I will leave for another day as there are more things to talk about in the game design process.

Jul 8, 2017

Will Central Bank Tightening Derail the Bull Market?

The Trump bull rally that has been raging in the past few months have come to a halt in June. Let us take a look at some of the significant events for the month and its complication.

Mess at UK Election

The UK Prime Minister Theresa May called for an election in a bid to strengthen her coalition going into the Brexit talks with the European Union. Her lead in polls have been derailed by a series of campaign communication errors and terrorist attacks, leading to the Conservative party in losing their parliamentary majority. 

Results:  The stock market barely blinked at this political disaster. 

Oil Market Crash

The oil market went into a bear market, despite efforts by the OPEC nations and Russia to pop up the price via production cuts. The US shale producers increased their production in respond to the rising prices creating a sudden surge in supply in the market. Oil price fell to $42 from a high of $57 seen at the start of the year.

Result: The decline in the stock price of Oil companies dragged down global stock prices

Central Banks Increasingly Hawkish Stance

Other than maintaining their stance of 3 interest rate hikes for the year, the US Federal Reserve is looking to unwind their 4.5 trillion balance sheet as a result of securities buying due to Quantitative Easing. The EU central bank also noted that the European economy is getting stronger and it may be time to start tapering on their QE program. China's debt level reached a new record level again, prompting Moody to downgrade its credit ratings. The Chinese central bank, in a bid to lower the leverage level, has been unwinding the loose monetary policies implemented last year to stabilize a crashing stock market and slowing economy. 

Result: Stock market tumbled as the fear that one of the key drivers of stock market returns may be removed in the near future.

Technology Stock Slipped 

Major technology stocks slipped during June despite not having any major driver for its downtrend. Analysts are worried that the valuation of technology stock has risen too fast too much in the fast few years.

Results: The Tech stock decline affected the US Stock market and the impact is much greater than oil companies as the result of the higher weightings in the S&P500 as compared to oil.


What does this mean?

Some say that this is a foreshadowing of a major correction in months ahead as a result of an irrational run for the past few months. Some say that it is a temporary blip and the market fundamentals are still strong. In my opinion, I will watch the actions of the central banks closely and if there is a tightening of monetary policies around the globe, the high debt level that has been accumulated as a result of a prolonged zero interest rate environment will come back to haunt us.

On another note, Jim Rogers thinks that the market may crash this year.
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