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July 10, 2011 / jwaxo

Railroad Tycoon II (Econ 101)

[As I am out of town on vacation with my parents, my brother, and his family, I thought now would be the perfect time to run this guest post from my best friend growing up, Sean. He’s featured in a few posts, and a good writer with his own small blog that he generally only posts in when he’s putting something else off. Enjoy this story that I feel describes him pretty much to a T]

I should make it a requirement that guest posters draw their own doodles. I probably wouldn’t get any guests at all, though.

Most people play games as a way to have fun.  While that definitely applies to me, too, it was only part of the story when I was a kid.  See, as a kid, I mostly played games to practice and hone my skills of world domination.

I’m pretty sure almost all the games I played in my youth can be tied to that theme.  Master of Orion prepared me to take over and govern the galaxy.  SimCity trained me to develop and organize societies in the most optimal way possible.  Red Alert and Starcraft taught me the futuristic military tactics I would need to take over the world.  And to build a giant army, you need money, right?  That’s where the business games came in.

Of all the genres, the economic ones like SimTower and Rollercoaster Tycoon (or anything with “Tycoon” on the end, for that matter) were always my favorite.  I don’t know if that was because I was a “smart/nerdy” kid, or just plain greedy.  But nothing brought me more joy than setting up a winning business model and watching the dollars come streaming in.

The problem I always ran into was what to do with all that money once you really started to rake it in.  Generally, your only option was to add more to your tower/theme park/business, which would net you even more money as long as you did it right.  But now you just had even more money.  This problem plagued most of the games I played – until Railroad Tycoon II.

On the surface, it was a pretty simple game.  You build train tracks, stations, and buy trains to connect point A to point B and shuttle things between them.  There was a little more to it than that, since you could move, say, grain from a farm to a bakery in the city to have it turned into “food”, which sold for a lot more.  But there was so much more to the game than that.

Most of this additional content was contained in ancient, paper computer monitors, or “books”.

See, the creators of Railroad Tycoon II added a simple but elegant level of gameplay.  Not only did you have a business (in this case, a railroading business), but you also had a character who started the business.  You got to choose how much of your starting personal money to put in, and how much starting money to accept from investors.  Your personal money was never enough to really get things started, so you had to accept investors, who in exchange got – gasp – shares of stock in your company.

That’s right.  This game had a fully interactive stock market.  You started with an amount of stock proportional to your initial contribution to the company, and you could use your personal wealth and market tactics like margin buying and short selling to trade more stock as you went along, independent of your company’s funds.  As your rail company did better, the stock price would go up, and if you needed more funds you could issue more stock – which came at the cost of lowering your stock price.

The true brilliance came in when you added in other, computer-controlled companies that you could interact with.  You could pay them for the right to use their tracks, buy stock in their company, and even engineer hostile takeovers and mergers through the stock market.  It was beautiful.

Like There Will Be Blood, just with railroads and less milkshakes.

One day I played a level where you had a mission to bring your personal net worth above $65 million in a certain amount of time.  I had gotten really good at making efficient and profitable rail companies, but how was I supposed to get my personal net worth that high?  And then it struck me.  I nearly bankrupted my character by buying stock in my own company whenever I possibly could, going deep into debt to buy as many shares as possible.  My company, meanwhile, was doing quite well, and when I started to really make some profits, I hiked the dividend the company was paying on its stocks.

Since my guy owned some 40% of the company by now, I could literally give my character 40% of the company’s soaring profits by setting dividends ridiculously high.  And as I got more and more money that way, I could afford to buy more and more of the company’s stock.  I could also increase that percentage by having the company buy back some of its own stock from investors (which simultaneously raised the value of my stocks).  By the end of the game, I owned something like 90% of the company’s stock and had a personal net worth around $80 million.

In short, Railroad Tycoon II taught me not only how to create a successful business, but also how to milk that company for all it was worth.  Pure genius.

And now you know why I’m an Economics major.

And he would probably enjoy being under there.


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