David Hecht has just posted an excellent message on the 18xx mailing list explaining how you can really push the rate of train purchases in Steam Over Holland, and noted how this is an example of how credit in various forms can be used to accelerate the flow of the game.
I think I need to check whether my design makes it too easy for players to loot companies. Currently I'm intending to allow companies to be floated once 3 shares have been bought (out of 5). This would make 5 shares worth of cash available to the company. This company could buy trains from another to transfer the cash, or possibly just buy new trains in order to start a new phase and sell the new trains to another company. The player could then sell the company, getting some cash back from the shares.
Let's assume that the shares are valued at x. The player has to pay 3x in order to float the company. The company gets 5x. When the player sells the shares, he gets 1x back (because players do not get any money from selling the director's certificate). If the company has no trains, the player would only receive 0.5x. So for an outlay of 2x or 2.5x from the player, the company gets 5x.
This is comparable to 1830 et al - actually it's less return than in 1830, which gives 10x to the company for 2x of player money (or even no loss at all, if the player can dump the company on someone else). The difference is that it may be easier to buy the second company in Britain Under Steam.
I don't see a way of avoiding this, unless I turn to strict incremental capitalisation, without the option of selling shares from the company to the bank pool. Anyway, this sort of thing makes 1825, 1830 et al rather successful games, so my hope is that is will do here too.
I will note one balancing element about the Steam Over Holland approach. In order for the company to get all its cash, it has to sell shares to the bank pool. If it sells more than one per operating round, its share price drops. So directors have to trade off the rate at which they get cash against the value of their shares. This is quite appealing and I may decide to go down this route after all, although as I previously noted, I don't like the idea of paying dividends to the company for unsold shares in its treasury.
Wednesday 19 August 2009
Monday 17 August 2009
Simplified train shuffling?
I'm wondering whether it's worth adding a simpler mechanism to transfer money between companies. The classic mechanism is for one company to buy a train from the other, at an arbitrary rate. This can be used to get a train where it's wanted or to get a large amount of money into the second company so that it can buy a new train. Managing this shuffling of trains can get complicated.
A simpler mechanism would simply be to let any company aid another when purchasing a new train. There would be no need to work out which existing train to shuffle between the two; one could simply add its money to the other's.
The downsides of this? Well, one is that neither company would suffer any disadvantage. In the existing mechanism, the transfer of the train means that the second company must lose some income (and possibly share price too) before it gets to buy the new train. So you have to trade off the benefit against the cost. With the simpler approach, there would be no loss of income. So the question is whether this level of decision making adds to the game or distracts attention from the larger issues of managing share portfolios and train runs.
In fact, that is perhaps the second downside. If this becomes too easy, will it remove an element of fun from the game? I'm not convinced; given muy target audience, I think this may be worth a try. I can always revert to the tried and tested system if the newfangled approach doesn't work.
A simpler mechanism would simply be to let any company aid another when purchasing a new train. There would be no need to work out which existing train to shuffle between the two; one could simply add its money to the other's.
The downsides of this? Well, one is that neither company would suffer any disadvantage. In the existing mechanism, the transfer of the train means that the second company must lose some income (and possibly share price too) before it gets to buy the new train. So you have to trade off the benefit against the cost. With the simpler approach, there would be no loss of income. So the question is whether this level of decision making adds to the game or distracts attention from the larger issues of managing share portfolios and train runs.
In fact, that is perhaps the second downside. If this becomes too easy, will it remove an element of fun from the game? I'm not convinced; given muy target audience, I think this may be worth a try. I can always revert to the tried and tested system if the newfangled approach doesn't work.
Sunday 16 August 2009
Another reason for using 5-share companies
Way back when I started this blog, I noted that I wanted to simplify the core system of paying dividends. My idea was to pay out only multiples of £10. This would require a company to have an income of £100 before dividends would be paid, and I noted that this might be tricky at the start of a game.
If you throw 5-share companies into this mix, the problem becomes simpler. A 5-share company need only earn £50 before it pays £10/share. This should be easy.
Having two separate strands come together like this gives me a good feeling. It's one way in which the different elements of the design are beginning to gel.
If you throw 5-share companies into this mix, the problem becomes simpler. A 5-share company need only earn £50 before it pays £10/share. This should be easy.
Having two separate strands come together like this gives me a good feeling. It's one way in which the different elements of the design are beginning to gel.
Tuesday 4 August 2009
5-share companies
So, if I don’t want incremental capitalisation, and would like companies to start with just a small number of shares in play, but don’t want to make asset stripping too easy, what mechanisms are still available?
One approach that might work is if companies start with just 5 shares apiece, each share representing 20% of the company. This is a mechanism that David Hecht has used in several of his games. The director’s certificate will be 40% of the company and the company will begin with half its full capital.
The distribution of shares is the same as the minor companies in 1825, but these 5-share companies are allowed to morph into 10-share companies at a later stage of the game. This “growing up” gives them an extra tranche of capital and each share becomes worth 10% of the company, therefore giving less income.. The conditions and mechanisms for this will need to be developed. In 18Ardennes, the only one of David Hecht’s games that I’ve played, the director can choose to convert the company during its turn. Some of David’s games require a company to have reached a certain destination city before they can convert.
A disadvantage of this mechanism is that it can reduce the need to withhold dividends, thus making things easier for the director. An advantage is that it could encourage more diverse shareholdings, because the director need only buy 3 shares to start the company, with another 2 available immediately and 5 more appearing if the company converts to 10 shares.
One approach that might work is if companies start with just 5 shares apiece, each share representing 20% of the company. This is a mechanism that David Hecht has used in several of his games. The director’s certificate will be 40% of the company and the company will begin with half its full capital.
The distribution of shares is the same as the minor companies in 1825, but these 5-share companies are allowed to morph into 10-share companies at a later stage of the game. This “growing up” gives them an extra tranche of capital and each share becomes worth 10% of the company, therefore giving less income.. The conditions and mechanisms for this will need to be developed. In 18Ardennes, the only one of David Hecht’s games that I’ve played, the director can choose to convert the company during its turn. Some of David’s games require a company to have reached a certain destination city before they can convert.
A disadvantage of this mechanism is that it can reduce the need to withhold dividends, thus making things easier for the director. An advantage is that it could encourage more diverse shareholdings, because the director need only buy 3 shares to start the company, with another 2 available immediately and 5 more appearing if the company converts to 10 shares.
Monday 3 August 2009
On asset stripping
I’ve mentioned that I don’t plan to use incremental capitalisation in Britain Under Steam. I’ve also suggested that companies might start after a small number of shares have been purchased, instead of the more traditional 60%. There is a major problem with this combination. If a player can start a fully-capitalised second company by purchasing just 20% of the shares, he or she could then strip the assets from this company and then dump it. Even if the shares were worthless, this would give their first company 100% of the capital at a mere 20% of the cost (which would be incurred by the player).
This is far too easy a gain. It’s not that I want to forbid asset stripping as a tactic; I just want it to have a balance between pros and cons. I conclude that the ability to start companies by buying just 20% of the shares only really works with some form of partial capitalisation.
If the director receives the current price for the shares, then the loss to the player is even less. In my post about Investors vs. Entrepreneurs, I already mentioned the rule that shares in a company without a train will be valued at half-price. I am considering adding that the director’s certificate in a trainless company will be worthless. This is an attempt to make asset stripping more costly.
This will require an anti-dumping rule. If Players A and B have 5 and 4 shares in a company respectively, and Player A sells 2 shares, then the directorship would normally pass to Player B. The anti-dumping rule will allow Player B to immediately sell the minimum number of shares required to avoid inheriting a worthless director’s certificate.
Even with these rules, floating a fully-capitalised company on the sale of 20% of its shares won't work for me.
This is far too easy a gain. It’s not that I want to forbid asset stripping as a tactic; I just want it to have a balance between pros and cons. I conclude that the ability to start companies by buying just 20% of the shares only really works with some form of partial capitalisation.
If the director receives the current price for the shares, then the loss to the player is even less. In my post about Investors vs. Entrepreneurs, I already mentioned the rule that shares in a company without a train will be valued at half-price. I am considering adding that the director’s certificate in a trainless company will be worthless. This is an attempt to make asset stripping more costly.
This will require an anti-dumping rule. If Players A and B have 5 and 4 shares in a company respectively, and Player A sells 2 shares, then the directorship would normally pass to Player B. The anti-dumping rule will allow Player B to immediately sell the minimum number of shares required to avoid inheriting a worthless director’s certificate.
Even with these rules, floating a fully-capitalised company on the sale of 20% of its shares won't work for me.
Sunday 2 August 2009
Starting the game
The question that is exercising me at the moment is how the game should start. I am caught between two competing desires. On the one hand, I want players to be able to invest in a range of companies from the start of the game, as a viable strategy. On the other hand, I want a range of companies to be available, as opposed to imposing a fixed order for company purchase. There is a definite tension here; if each player can start a company, why would they invest in another company instead?
One twist that I’m considering is to charge a small fee for starting a company. When a player starts a company, they would have to pay this fee to the bank (representing administration charges, or “gifts” to members of parliament to approve the formation of the new company). In game terms, this would be a cost for the advantage of holding the president’s certificate, which gives double the number of shares for one slot against the certificate limit. So some players might prefer to invest in an existing company, rather than pay the fee to create one of their own.
As a detail, one player might have the special ability to create a company for nothing, either as a special power or if play reaches the last player with none of the others having started a company. This would ensure that at least one player would start a company.
Returning to the question of how the game should start, one possible approach would be to have a small number of companies available to begin with, where that number is less than the number of players. The available companies could be dealt randomly at the start of the game (thus providing variety across games). Or the players could choose which companies to start but the total number could be limited.
Another option would be to limit the number of shares that players can buy in each company. In fact, many 18xx games limit this to 60%. So if players each start a company and have money left over, then they can only invest in other player’s companies. This does potentially leave each player owning 60% of a single company, which would be a less diverse portfolio than found in 1825, for example, but it does encourage some degree of diversity.
A variation on this approach would be to set a lower maximum. At the start, it could be as low as 20%, which would both encourage cross-investment and allow scope for buying more shares as the game progresses. Perhaps the limit could increase as the game progresses through different phases. For a while I was quite taken by this idea, which could be an interesting twist on the 18XX theme – but it has one big disadvantage, which I’ll explain in my next post.
One twist that I’m considering is to charge a small fee for starting a company. When a player starts a company, they would have to pay this fee to the bank (representing administration charges, or “gifts” to members of parliament to approve the formation of the new company). In game terms, this would be a cost for the advantage of holding the president’s certificate, which gives double the number of shares for one slot against the certificate limit. So some players might prefer to invest in an existing company, rather than pay the fee to create one of their own.
As a detail, one player might have the special ability to create a company for nothing, either as a special power or if play reaches the last player with none of the others having started a company. This would ensure that at least one player would start a company.
Returning to the question of how the game should start, one possible approach would be to have a small number of companies available to begin with, where that number is less than the number of players. The available companies could be dealt randomly at the start of the game (thus providing variety across games). Or the players could choose which companies to start but the total number could be limited.
Another option would be to limit the number of shares that players can buy in each company. In fact, many 18xx games limit this to 60%. So if players each start a company and have money left over, then they can only invest in other player’s companies. This does potentially leave each player owning 60% of a single company, which would be a less diverse portfolio than found in 1825, for example, but it does encourage some degree of diversity.
A variation on this approach would be to set a lower maximum. At the start, it could be as low as 20%, which would both encourage cross-investment and allow scope for buying more shares as the game progresses. Perhaps the limit could increase as the game progresses through different phases. For a while I was quite taken by this idea, which could be an interesting twist on the 18XX theme – but it has one big disadvantage, which I’ll explain in my next post.
Saturday 1 August 2009
On incremental capitalisation
In some 18xx games, the money (capital) available to companies is received as players purchase each share. I.e. when the players buy the shares, the money is placed in the company instead of being paid to the bank. This is called incremental capitalisation. Usually, companies may start operations with only a few shares sold, instead of the 60% required by 1825, 1830, et al.
This seems quite natural. It does reflect, to a certain extent, the way shares work in the real world. I’m happy to play these games. On the other hand, I do think this mechanism has some disadvantages.
Incremental capitalisation certainly encourages a player-as-entrepreneur flavour rather than a player-as-investor approach, because each player is strongly encouraged to invest in their own company in order to give it more capital and therefore improve the performance of their existing shares. (This is accentuated, of course, if they are not allowed to sell the president’s certificate).
In game terms, one disadvantage is that it establishes a direct feedback between how well a player is doing and how well his or her company is doing. With full capitalisation, the company starts with all its capital available and so how well the company performs is independent of any further investment. With either approach, if the company does poorly, the return to the player will be lower, but with incremental capitalisation the reverse is also true. This can leave players stuck in a losing position.
Another disadvantage is that if a company is popular, it will do better as a result of more of its shares being bought. This can introduce a “kingmaker” element to the game, where a player in last place can directly affect the performance of the leading players. It can even lead to collusion between players, e.g. if two players agree to buy each others’ shares in preference to those of other opponents.
In most of these games, when a company pays dividends, the company itself receives income from any unsold shares. This gives a stream of income to the company. Depending on the exact flow of the game, it can remove a key element of the full capitalisation approach, namely deciding when to withhold dividends. This element is one I want to preserve in my game, because it can significantly influence decisions of when to drop an investment in a given company.
So, other things being equal, I will prefer not to adopt incremental capitalisation for Britain Under Steam. Even if I do end up going with this approach, I would still avoid paying dividends to unsold shares.
This seems quite natural. It does reflect, to a certain extent, the way shares work in the real world. I’m happy to play these games. On the other hand, I do think this mechanism has some disadvantages.
Incremental capitalisation certainly encourages a player-as-entrepreneur flavour rather than a player-as-investor approach, because each player is strongly encouraged to invest in their own company in order to give it more capital and therefore improve the performance of their existing shares. (This is accentuated, of course, if they are not allowed to sell the president’s certificate).
In game terms, one disadvantage is that it establishes a direct feedback between how well a player is doing and how well his or her company is doing. With full capitalisation, the company starts with all its capital available and so how well the company performs is independent of any further investment. With either approach, if the company does poorly, the return to the player will be lower, but with incremental capitalisation the reverse is also true. This can leave players stuck in a losing position.
Another disadvantage is that if a company is popular, it will do better as a result of more of its shares being bought. This can introduce a “kingmaker” element to the game, where a player in last place can directly affect the performance of the leading players. It can even lead to collusion between players, e.g. if two players agree to buy each others’ shares in preference to those of other opponents.
In most of these games, when a company pays dividends, the company itself receives income from any unsold shares. This gives a stream of income to the company. Depending on the exact flow of the game, it can remove a key element of the full capitalisation approach, namely deciding when to withhold dividends. This element is one I want to preserve in my game, because it can significantly influence decisions of when to drop an investment in a given company.
So, other things being equal, I will prefer not to adopt incremental capitalisation for Britain Under Steam. Even if I do end up going with this approach, I would still avoid paying dividends to unsold shares.
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