Sunday, 29 January 2017

Ponzi Scheme

Plays: 5Px1.

The Game

Ponzi Scheme is designed by Taiwanese designer Jesse Li. Around the Essen 2016 period I had come across some positive reviews, but I was never particularly interested to try it. The subject matter is depressing, and the box cover does not inspire confidence. I got to try it at recently. I think it was Ivan who brought it. I had a pleasant surprise.

The premise of the game is you are all fraudsters running scams, offering too-good-to-be-true investment schemes to raise money to buy companies. The schemes you run are all not sustainable because the interest being promised is impossibly high. You are just trying to raise money to buy up companies, from the market as well as from one another via hostile takeovers. Sooner or later, someone will be unable to pay the interest due, and the schemes will break down. That person goes bankrupt and loses automatically. The rest then compare points. Most points will come from the portfolio of companies you own. Some will come from cash in hand, and some from luxury goods bought during the game.

There are always 9 investment schemes on the board, divided into three rows, and sorted in ascending order. The large number on each scheme card indicates how much cash you will receive when you choose to run the scheme. The card also tells you how frequently you need to pay interest in future, and how much to pay. There is a meaning to how the schemes are divided into three rows. When you choose to run a scheme from the first row, you must claim your first company in one of the four industries. That means if you already own companies in all industries, you can't run any scheme from the first row. Similarly, to run a scheme from the second row, you must at the same time claim your second company in one of the four industries. That means the prerequisite is owning exactly one company in one of the industries. The third row works the same way. If you want to buy the fourth or fifth company in a particular industry, you can't do so via starting an investment scheme. You will have to do so via hostile takeovers.

To buy a company from another player, you yourself must have a company in the same industry. On your turn, you specify an opponent and a company, then put the amount you are willing to pay into a leather folder. You pass the folder to the company owner, offering to buy his company. Now he has two options. Either accept the money and give his company to you, or counterattack by paying you the same amount and then taking your company instead. He puts that amount of money into the folder, and returns the folder to you together with your money. You only have one chance to set the price. There is no back-and-forth bargaining. Also, the transaction amount is kept secret from all other players.

Ivan, Sinbad, Allen. That long black folder in Sinbad's hands in the folder used during hostile takeovers. Everyone has a player screen to keep his cash secret. There are ways to estimate how much money your opponents have. Consider whether they have recently launched any new scheme, whether they have recently paid any big amount of interest, whether they have just bought another company, or received money due to their companies being bought.

The four stacks of tiles in the foreground are the companies in the four industries - media, agriculture, transportation and properties.

Some of the investment scheme cards have bear icons (see the bottom three). When there are five such cards on the board, the market will crash, and during that round everyone must pay interest not only for the current round but also for the next. Market crashes are dangerous. However that does not necessary mean everyone will try to stop them. If you happen to be in good shape, it might be a good time to let someone go bankrupt so that you can win the game.

The large tiles on the right are the luxury items. The game starts with four, and one of them has already been bought. The large numbers are the costs, and the small numbers the point values. Point values range from 1 to 4.

This hexagonal rondel is an important tool. The red arrow indicates the current round, and the numbers indicate future rounds. Whenever you launch a scheme, you place the scheme card next to the sector of the future round when you expect to make the first interest payment. The rondel is turned every round, and each time the red arrow points to one or more scheme cards, it is time for you to pay interest.

The Play

There are two main dimensions in Ponzi Scheme you need to manage - staying alive (ha ha ha ha...), and competing for companies. Let's talk about acquiring companies first, since that's how you score points. There are quite a few tactics involved. Even from the start when you are claiming your first companies, you are already setting yourself up to compete with the players who have invested in the same industries, and isolating yourself from those who are not yet in the same industries. If many players have vested interests in an industry, there will be more competition, but also more opportunities. If few have invested in an industry, the opposite is true. There are pros and cons in both cases. Hostile takeovers are crucial to winning. Attack at the right time, and you may catch your opponent with his pants down - not having enough cash to counterattack, or not having enough cash to dare counterattack. Miscalculate your opponent's funds, or his appetite for risk-taking, and you will find yourself losing a company to him instead. Sometimes a hostile takeover is merely a disguise for selling your own company at a good price. Set a price that your opponent can't refuse, and you'll secure much needed funds while giving away a company that you are not keen about in the first place. Hostile takeovers are very much about reading your opponents. You need to have a good guess about how much money they have left, and how highly they value a certain company. You need to observe their interest payment cycle. If a big interest payment is coming up, they are probably desperate for some cash to stay afloat.

The second main dimension is to not be the first to bankrupt. Everyone is on a slippery slope, which will only get steeper and steeper. You can be bold and reckless, but you don't want to be the first to crash and burn. Every time you run a new scheme, you are getting cash to help keep you alive and buy more companies. However you are also committed to even more interest payments, accelerating the countdown of your personal time bomb. It is quite scary. Everyone is waiting and hoping for someone else to die first. When picking investment schemes to run, sometimes you'd rather pick one with a small up-front gain and a longer repayment period or smaller repayment amount. Some other times you want to pick a scheme that gets you a huge lump sum, even if the payment period is short, and the interest amount high. Sometimes you make the decision based on your long-term strategy. Sometimes you decide out of desperation. Deciding the right type of scheme to run is a big part of Ponzi Scheme.

One needs to think hard when initiating a hostile takeover. If you do intend to buy the company, you need to set a price which your target cannot afford to pay, or is not willing to pay. If you actually hope your target will buy your company instead, the price you set must be both attractive and affordable.

In the game we played, I decided to go all out on media companies. I had five at this point. That is 15 points, which is a lot. The first company of an industry you own is worth 1pt, the second is worth 2pts, and so on.

During our game, there were a few times I was surprised by the result of a hostile takeover. Sometimes I thought the target would counterattack and buy a company from the active player instead, but he didn't and the active player (who was probably intending to sell and not buy) ended up really buying a company. This can be quite bad for the active player. He may have gained some points, but cashflow becomes tighter now.

We paid close attention to the interest payment cycles of our opponents, because you are most vulnerable just before a big payment is due. You need to do all you can to make sure you have enough cash - sell companies, start new schemes, save money. That's when people may try to buy your companies at low prices. Sharks smell blood from 5 kilometres away.

Our game ended earlier than we had expected, and it was all my fault. I made a miscalculation, and ran short of money to pay interest. I thought I still had one round to run a new scheme to earn money. In Ponzi Scheme, changing start player and rotating the rondel is done in the middle of a round. I had subconsciously thought of these as being start-of-round actions, resulting in my fatal mistake. The others were puzzled by my actions in the last round. They could see I had a big repayment due, but I still confidently initiated a hostile takeover, which was successful, and also fatal.

The Thoughts

Ponzi Scheme is a savage game. "Highly interactive" does not do it justice. The game system is already punishing, and unlike Antiquity, you will never claw your way out of the hole. You can only hope someone else dies first. There is a timing element. You want to position yourself to be most successful, except for the player who is going to bankrupt. You try to manipulate the game to end at such an opportune moment. Market crashes are a tool that may help you achieve this. Naturally, the players who don't think they are ready will try to prolong the game. Debt is ever increasing, and pressure ever mounting. The game can be suffocating. Money enters the system when players launch new investment schemes, and leaves the system when interest is paid. During the short time that money is in the players' hands, you need to make the most of it to gobble up companies.

That sinking feeling of an ever increasing debt was what originally deterred me from trying the game. Now that I have played the game, I feel it is but a stage, an erratic timer. It is within its boundaries that you need to learn to survive and compete. I like how tightly money flows, how you need to sense your opponents' weaknesses, and how you need to value how much they are willing to pay. Despite having an axe hanging over your heads, there is still much space for competition. There is no use obsessing about the axe. Avoiding it is only sufficient to not lose, it is not enough if you want to win. You need to be aggressive, just not too aggressive to get yourself bankrupted.