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.
Sunday, 16 August 2009
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.
Monday, 27 July 2009
Investors or Entrepreneurs?
One of the aspects of play I really like about 18xx games is that players do not directly control companies. They invest in companies and can, to an extent, switch their investments into companies that pay better dividends.
At least, that's how it was in 1829. 1830 introduced a style of play that made investment much riskier. In particular, it banned the sale of the president's share certificate. This meant that the president of a company could asset strip it and dump the shell onto any player who owned more than a single share. The hapless recipient would be unable to sell the shell and would have to buy a train from his own pocket, often leading to bankruptcy. This was, as the box announced, a game for robber barons.
Another trend is for companies to receive their capital as shares are purchased, rather than in a lump when the company first starts. This can lead to players focussing on their own companies rather than investing elsewhere, as they need the investment in order to better their companies. Again, usually players are forbidden from selling the president's certificate.
More recently, games such as 1861 begin with each player owning several minor companies outright. There is no cross-investment until much later in the game, after the minor companies have merged to form public companies.
I like 1830, 1861 et al., but I want to see more games that focus on the player as an investor rather than as an entrepreneur. So for Britain Under Steam, I intend to encourage this style of play if I can. I will certainly allow players to sell the president's certificate, as in 1825. The idea is that they won't be trapped if they invest in a company run by another player.
One consequence is that, if there is no penalty for leaving a company trainless, players will be more tempted to asset strip. This may or may not be desirable, depending on the rest of the game. However, I'm considering halving the value when selling shares in a trainless company; an idea suggested by Mike Hutton (and used, I believe, in 1860). I will need to experiment to see if this works.
A bigger question is how to handle the initial sale of companies, but that topic deserves a post of its own.
At least, that's how it was in 1829. 1830 introduced a style of play that made investment much riskier. In particular, it banned the sale of the president's share certificate. This meant that the president of a company could asset strip it and dump the shell onto any player who owned more than a single share. The hapless recipient would be unable to sell the shell and would have to buy a train from his own pocket, often leading to bankruptcy. This was, as the box announced, a game for robber barons.
Another trend is for companies to receive their capital as shares are purchased, rather than in a lump when the company first starts. This can lead to players focussing on their own companies rather than investing elsewhere, as they need the investment in order to better their companies. Again, usually players are forbidden from selling the president's certificate.
More recently, games such as 1861 begin with each player owning several minor companies outright. There is no cross-investment until much later in the game, after the minor companies have merged to form public companies.
I like 1830, 1861 et al., but I want to see more games that focus on the player as an investor rather than as an entrepreneur. So for Britain Under Steam, I intend to encourage this style of play if I can. I will certainly allow players to sell the president's certificate, as in 1825. The idea is that they won't be trapped if they invest in a company run by another player.
One consequence is that, if there is no penalty for leaving a company trainless, players will be more tempted to asset strip. This may or may not be desirable, depending on the rest of the game. However, I'm considering halving the value when selling shares in a trainless company; an idea suggested by Mike Hutton (and used, I believe, in 1860). I will need to experiment to see if this works.
A bigger question is how to handle the initial sale of companies, but that topic deserves a post of its own.
Wednesday, 15 July 2009
Varying the setup
Most existing 18xx games start with a fixed setup – a given number of companies, each starting in a fixed location. Although they do have a variety of opening moves available, depending on what the other players do, they can become susceptible to analysis and even being “solved”.
There are some minor exceptions. In Steam Over Holland, for example, each game starts with only some of the available private companies. (1825 is worth a mention because all the extension kits add a variety of options).
I’m wondering if I can add more variety to the setup, to prevent formulaic play. Some ideas I’ve had:
There are some minor exceptions. In Steam Over Holland, for example, each game starts with only some of the available private companies. (1825 is worth a mention because all the extension kits add a variety of options).
I’m wondering if I can add more variety to the setup, to prevent formulaic play. Some ideas I’ve had:
- Randomly deal special powers to each company at the start (rather than assign them to private companies and let players choose which company they end up with)
- Add special powers for players, such as the ability (once per game) to seize the priority, or start a new company at a discount, or to sell shares without affecting the stock price.
- Have more possible start hexes than companies, so that companies have a choice of where to start
- Randomly assign start hexes to companies in each game
- Make companies available in tiers, so that some are available at the start of the game, some later on, and so forth. Randomly deal companies to each tier.
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