In General: Engines and Investment pt.2

Welcome back to part two of my series on investment in strategy games. If you missed part one make sure to check it out here: Part 1. At the end of that post I left you with some homework, which was to compare and contrast three different cards with the goal of identify which of them is a good investment. What do they do, what are they good for, what you have to put into them to get something back, questions like these are what define the parameters for our investments. The interplay between these parameters and the actual game state we are in will provide the answer to the following question, which is what today's installment is all about. That question is:

What makes an investment 'good'?

• "An investment is good if it makes you money." This is what you will hear most often. This is, of course, the most wrong, but it feels okay. If I buy a property, like a space on the monopoly board, I give up a hundred bucks or so with the initial outlay, but then every couple turns or so someone will land on it and have to pay me a portion of that money back. I turned a lump sum of cash into a predictable income. That's all well and good. This makes people comfortable. That chunk of cash isn't burning up in their pockets and they get a check every month to pay their own bills with (see how the return schedule lines up conveniently with the subject's expense schedule) so you don't have to worry about the details as much. If you only own one piece of the board though, you are unlikely to ever make back what you spent to get it. This demonstrates the problem of low return on investment. You don't get back what you gave away. 
• "An investment is good if it makes you more money than you invested." When offered the above explanation, people will often have some sort of eureka moment and return with this answer. They think they 'get it' now. This is just about as bad as the previous response. Let's re-examine the monopoly example and talk about some end behavior. The ways you could make back your money on that monopoly square are: 1. Get lucky OR 2. Stay in the game for a VERY long time. That is it. You need to have a bunch of people land on the square to make the investment 'worth it', but that could take a little time or a lot of time and you have no control in which one actually occurs. This is a very bad investment because, in all likelihood, getting back what you invested will take too long. This is because of the time-value of money. Any resource can be put to some use and if you start early you will get the most out of it. This is completely separate from the economic concept of inflation; instead it is based on the concept of mercantilism. The idea that, through savvy business transactions, you can turn a small amount of money into a larger amount of money over time.
• "A good investment outperforms its opportunity cost." This is the correct answer, but the hardest to see. People tend to be poor at evaluating the opportunity cost of their decisions. Sometimes the decisions are difficult to stomach. In a financial crisis your money might be safer in your mattress at home than it is in the stock market. It might provide more value in another country's currency. Maybe there is simply no value to be had and you have to find the alternative that simply minimizes your losses. A lot of people lose hope; they tend to give up entirely instead of micromanaging a losing proposition. The highest value alternative is the one that you should always take. Whether you end up ahead or behind, you will have done the best you could and you never know when mitigating a bad situation by taking only a small loss with give you an edge in the future. 

Phew. That was a lot to go over, but I wanted to make sure you got the whole picture because this stuff is important. A keen understanding of these theoretical principles will make you better at literally EVERYTHING, not just games. Let's take a look at how these three schools of thought translate to Magic. 

Return on Investment - This metric pushes you to get the most value out of the resources you spend. If you aren't getting a high return on investment you are mostly likely wasting your resources. This is a problem in Magic because you gave away X amount of your resources, but didn't receive X amount of benefit in exchange. Now, your opponent is ahead by the difference and will be for the rest of the game. It is easy to see how this will make it to difficult to win unless the situation changes. Imagine getting something on sale. You spent less for the same amount of value. Which would you rather have, a Grizzly Bears or a Gray Ogre? 

Time-Value of Money - The decisions you make have consequences that might not be immediate. You could spend a lot now, but get back even more in the long term. If that's the case then you need to make sure your investments account for the time-value of your resources. The person whose investments consistently outperform their expected time value is going to be dramatically advantaged to win the game. This is easiest to see in a race situation. You and your opponent both spend three mana. You get a 3/2 and your opponent gets a 2/3. If neither of you can ever block you will win substantially faster. Your investment pays off in more damage than your opponents investment did, and the longer this stays true the further ahead you will get.

Highest Value Alternative - So now we get to the tricky part. Magic is a tough game. Even if you have the best deck in the room you still have to play it. There will be wins and losses, bad beats and fist pumps galore, but being able to OPTIMALLY pilot your way through a single game will require making the right choices several times in a row without the benefits of unlimited time or perfect information. So how are you supposed to navigate the figurative sea of options to land upon the shores of success? Well, the first one is to tease your audience and then leave them hanging...

In next week's In General we will be talking about several different cards, types of cards, and strategies that make good use of them. By doing this we are hoping to come up with a unifying set of characteristics that will show us which investment cards to play and which ones to avoid!

-GG