25 January 2023
Simulating Economic Roller Coasters
Today we are taking you behind the scenes to see how we generate economic cycles in the game. 😀
Let’s dive right in!
The Importance of Adaptability
Successful entrepreneurship requires adaptability—the ability to roll with unexpected punches capable of knocking out your best-laid plans.
Imagine starting out as a food truck entrepreneur. You’ve carefully selected the best location, perfected your menu, and are just beginning to get into the flow of things. But just weeks into your launch, the economy takes a nose dive.
Suddenly, your carefully crafted plans and projections go up in smoke, and you are left scrambling to save your business.
This is a scenario many entrepreneurs have faced at some point, and the ability to quickly adapt their business strategy to unexpected economic realities is often what differentiates successful businesses from the rest.
Simulating Economic Impact
We decided to simulate the same phenomenon in the game to allow you to flex your strategic-thinking skills. Each city in the game has a different difficulty level based on many factors, including its economic situation 📉.
Like in real life, each city’s economy in the game experiences business cycles of economic growth and downturn. Although an average cycle lasts about ten years, we thought it would be fun to implement business cycles in the game as one-year rotations 😎.
The city has nine customer segments with unique spending limits and habits. Their perceived value of your burger 🍔 & drink 🥤 increases or decreases depending on the economic situation.
Here’s how we designed it.
Let’s take Washington DC, as an example. The graph below shows the annual GDP growth for the US. Despite the micro tremors, the overall 10-year cycle is unmistakable. ⬇️
For our simulation, we picked the US’s ten-year average GDP growth rate (2%) to generate the base case scenario of the economy:
The graph below illustrates the outcome of the formula.
As you strive to grow your business, the economic growth percentage will move across the blue dotted line to simulate economic growth or slow down.
Real economies also experience unexpected spikes and dips in the business cycle. We catered to this by implementing an events mechanic.
Based on the probability of occurrence, events such as technological breakthroughs 💻, international sports events 🏈, or trade wars and taxes will feed the simulation with spikes and dips.
The population size is divided into outdoor and base population sizes. The outdoor population size is the total number of customers that are outdoors and willing to make a purchase. The base population size is the total number of customers, including those indoors.
The economic situation influences the outdoor population size. Many or fewer customers are willing to come out and spend depending on if the economy is in a growth phase or a downturn.
Each segment has a Base Economic Happiness, e.g. 40 units. Their current economic happiness per time will fluctuate upwards ↗️ or downwards ↘️ depending on the current economic condition.
Example of the calculation for the Parent segment.
Y generates the current economic happiness 😄 value of the Parent segment. You can see the difference between the outdoor and base population size as well as the current and base economic happiness in the customer segment tooltip.
Less population leads to fewer sales for your business ☹️. You will need to strategize, adjust your price, increase your marketing spending and improve your burger quality to drive sales. Additionally, having enough savings to weather the hard times really helps. 😉
That’s it for this episode!
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Live Long and Prosper ,