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co_avanya

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Hello again! We are back with another development diary. This time we look at the economy re-work or as we like to call it “Economy 2.0” set to release within the upcoming two weeks. You’ve shared a lot of great feedback with us, from bringing bugs to our attention to sharing how you feel while playing the game. As we went through your feedback, it became clear that certain systems, particularly the economic simulation, weren’t transparent enough and didn’t allow you enough control over your city. We felt this was important to improve, so for the past few months, we have overhauled several systems based on your feedback.

Before we get into the nitty-gritty of these changes, we want to thank you for the detailed and constructive feedback you shared. It really helped us understand what issues you experienced, what information you lacked, and how we could improve things. We look forward to hearing your feedback following these changes so we can continue to work on improving Cities: Skylines II and make it the best it possibly can be.

Alright, let’s get to it! Our goal with Economy 2.0 was to make the systems more straightforward and responsive, so you can make more meaningful choices and have more control over the various gameplay aspects. This means fewer safeguards and automated systems that work invisibly under the surface and an increased level of challenge. We still aim for the game to be playable without paying too much attention to where and how money and resources flow in the city so new players have a chance to succeed, while still leaving room for experienced players to benefit from optimizing their city. We’ll get into the details below but to give you a quick overview here are the major changes of Economy 2.0:

  • Government Subsidies have been removed to make the economy more challenging and transparent
  • Importing City Services from Outside Connections now has a toggle and a fee
  • City Service Upkeep costs have been increased
  • Calculations for Demand have been improved
  • New calculations for rent and household spending allow citizens to afford to live in Low Density Residential
  • The production chain has been rebalanced to bring tax income to a more reasonable level


THE ECONOMY
A key point in the feedback we received was that the game didn’t challenge many of you when it comes to managing the city’s finances. Striking the right balance is hard. We want new players to be able to dive into the game while still providing players from Cities: Skylines or long-term fans of the city-building genre a challenge. We introduced Government Subsidies in Cities: Skylines II to act as a helping hand as your city got established, allowing them to scale with expenses. But they also removed agency and consequences from the game. Why build a city with a well-balanced economy if the government will cover all the expenses of your Utopia?

We considered several approaches to Government Subsidies but in the end, we decided to completely remove them from the city budget. This puts you in full control of your city’s finances and gives you a reason to consider what you spend your money on and when. It will be up to you to create a profitable city, and when you succeed, you get to take all the credit. If you struggle to get the hang of it, the in-game tutorials are there to help you out and the tips can always be accessed through the Advisor (the question mark in the top-right corner of the screen). And of course, you can always ask us or your fellow players for help.

MONEY
Money makes the world, or in this case the city, go round. In Cities: Skylines II, money circulates both within the city and in and out of the simulation through money sources and sinks. We work with 4 entities in Cities: Skylines II:
  • You, the player/the city
  • Households
  • Companies
  • Abstracted investors

Each of these has ways they can gain or lose money, some of which are preset and automatic, some of which are within your control. Below we have a quick overview of these to give you a sense of how money flows in your city, and how you can affect it.

Money.png


CITY SERVICES
As you can see, City Service construction and upkeep, along with roads of course, are where most (if not all) of your money goes. In Economy 2.0 we’ve rebalanced the costs of City Services which includes a significant increase in the upkeep costs. Our goal here is to give your choices more meaning as your city grows. Is your city’s economy strong enough to afford a University or will you have to increase taxes to pay for it? Can you afford to improve the city’s mail service to make citizens happy or will that have to wait until your economy is more stable? These are the kinds of questions we hope you will be asking yourself as you play with the update.

But services aren’t just available locally in your city. Your neighbors can provide you with garbage trucks or ambulances from Outside Connections if your city isn’t quite able to provide those for your citizens yet. With our initial design, the only cost of importing services (excluding Electricity and Water and Sewage) was the time it took the service vehicles to arrive and perform the needed tasks. Economy 2.0 changes that by adding a fee for importing services, which scales with the city’s population.

Now, we can’t add a fee and not give you a way to avoid it, so we have added a new City Policy called Import City Services. It works as a toggle: When it’s enabled your city can and will import services that are lacking in your city, and when it’s disabled, which is the default, your city relies on what’s available locally. In its current form, it’s an all-or-nothing toggle, but we are considering expanding the service import to give you more control. What do you think, any particular direction you would like us to take? We’d love to hear your thoughts.

CityPolicy.png

City Policies can be found by clicking the City Information button next to the demand bars


LIFE IN THE CITY
While we call this systems rework “Economy 2.0” it affects more than just the economic simulation. To complement both the changes to the financial side of the game and the improvements to the Land Value system in patch 1.1.0f1, we’ve made improvements to Demand, Rent, Education, and Citizen Happiness. These changes affect your citizens’ lives, and how and where they choose to live.

DEMAND
Most noticeable are the changes to how Demand is calculated, allowing it to be more responsive and more accurately reflect the state of the city at any given time. Residential demand has been expanded so the desired density is tied to the size and wealth of households. On average low density residential is the most expensive type of housing as a single household is responsible for the building’s expenses (paying Rent and Upkeep), while residents in medium and high density can split the costs. When wealthier households move into the city, the demand for low density increases, and when citizens with lower wealth, such as students, want to move in, the demand for high density goes up. Similarly, families will want more space, preferring low or medium density homes, while singles are perfectly happy with the smaller homes found in high density apartment complexes.

The type of households that spawn are determined by the average citizen happiness, homelessness in the city, the residential tax rates, available education spots, and open job positions.

Turning our attention to commercial demand, it’s now more closely tied to what households need. The more households consume, the more demand for commercial zones you’ll see. We’ve tweaked the household need for shopping, forcing them to pay rent and consider the garbage fee before going shopping. Furthermore, we have also tied the types of companies that can inhabit commercial buildings more closely to the products citizens consume. This means you’re less likely to see a bunch of the same companies spawn as the simulation seeks to provide a more varied selection of products for your citizens.

Both office and industry demand have been adjusted to a more reasonable level to match the other zone types, and their interactions with commercial have been strengthened, so you can produce what your shops need locally. Additionally, industry now has more workplaces so you can satisfy the demand more easily.

EDUCATION AND WORK
We’ve made tweaks to education before, particularly to encourage more teens to go to high school, but we didn’t quite reach our goals, so Economy 2.0 includes further improvements to the education system. Children always go to elementary school if the city has one with available student spots, while teens have a high chance of going to high school. Some will still choose to work, especially if no school is available, but you should see more teens in high school. We’ve also improved the chance they graduate from both elementary and high school, and for those adults who didn’t get their high school diploma, there is now a chance, albeit low, to apply to a high school with available student spots so that they can graduate.

Teens and adults can both join the workforce if there are suitable jobs for them. However, if they have health problems, such as being sick or injured, they don’t count as employable citizens and will need to recover before they can work. They may find work in the city, if any job positions with their skill level or lower are available, or they may resort to finding work in a neighboring city, though working in Outside Connections is less desirable with this rework.

If they cannot find work, they become unemployed and receive unemployment from the government. However, this option is only available for a limited time, so if you don’t provide them with suitable jobs, they will eventually have no other option than to leave the city as they cannot pay their rent.


BUILDING A BUSINESS
Your city consists of more than just citizens though, many businesses make it their home too, and demand isn’t the only thing we tweaked for commercial, industry, and office. Let’s take a look at what else has changed, starting with production. You already know the basics: One or more input resources are processed and turned into a more refined product, which requires both workers and time. Higher education level workers do this more efficiently (they work smarter, not harder), and each product has a certain amount of work needed to produce one unit. Previously, the game calculated the amount of work needed at the start of the game, but we have changed that to a preconfigured amount to make the game more predictable and allow us to finetune things. Additionally, we have adjusted the amount of work needed to produce a single unit for all products reducing the overall production, which in turn reduces the company profits, and by extension, the amount of tax you can collect from them.

But that’s not all. The price of resources has been adjusted as well as how it’s calculated. It now has two parts: A discounted price paid by industrial companies when they purchase materials for their production, and a normal price for commercial companies to purchase the goods. The two prices are then combined into one as they’re sold to consumers, allowing everyone to profit (hopefully, at least) from the sales. But don’t worry about the consumers, we have also increased the wages companies pay so the citizens can afford both their homes and the resources they need.

Alright, that was a lot of information! With that, we’ll end today’s dev diary, but don’t miss part 2 coming next week where we look at Rent, Building Upgrades, and what happens to existing cities. In the meantime, we’d love to hear your thoughts on what’s to come. Any changes you’re particularly excited about? Any that leave you with questions? Let us know in the comments below.
 
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Any chance you can make the subsidies an option when starting the game?

Besides that, this stuff looks good. We like positive communication explaining whats happening.
Currently, government subsidies are completely gone as we have Unlimited Money as an option to not worry about finances. That said, we want to hear how things feel with these changes and from there determine if we need to make adjustments or have something in between no help and Unlimited Money.

i like that people can work in outside connections, but can students study in outside connections at all? it's pretty common in my region that students usually outsource to a different school via public transport.

(it might already be a thing, i just never noticed it in game)
This is already an option, but when studying outside the city, there's a pretty high chance they will move out of the city.

Ooh! Will we be able to see more of these inputs/outputs/etc. (particularly budgets/expenses/rent as a currency-n°) for companies+households in game?
This isn't currently planned to be exposed, but we're very interested in hearing what information would help you better manage your cities. The company profitability infoview should give you some idea of how companies are doing already, while households have the wealth infoview.
 
Can there be a limited time offering of city services at the beginning of making a new city? After hitting a certain milestone, that offering will be rescinded automatically.

City Services should be granular, because different towns and cities function differently when it comes to city services. Hopefully, we get to see more variety of city services which we can choose to import or export.
The city policy to import services becomes available at milestone 4: Grand Village and can then be toggled on and off as you need it.

This rework sounds good so far. When you say that industry has more workplaces, do you mean they employ more? (That would help with some realism).
Yes, more people can be employed in factories, though it's worth noting that companies can scale their workforce up and down depending on profits, so depending on how companies are doing in your city, you may not see an overall increase in people employed in industry.

Does this mean that now even if there is no demand for apartments, apartments will build if there is a high overall residential demand? So if there is a lot of low density demand, and a little high density demand but no low density zones and lots of high density zones, apartments will be built in the high density zones that are there?
No buildings will be constructed if there isn't any demand, but we expect that you will see more of a mix of the residential zone types than you had before. So if you struggled to get high density residential demand in your city, you should see an improvement after the patch is live.

Sounds like it might go into the right direction. Looking forward to the patch.

In regards to the imported city service: I like more options. If you can split it up and perhaps even give something like a maximum budget per month or similar to limit how much is imported, that would be great.

Is there also limiting factor put in place in regards to the exports of services? Like does the amount of money I get from exporting water and/or electricity get smaller the more I export? Basically simulating a demand outside the city.

Nothing is mentioned so far about some of the bigger bugs in the economy. I hope these will get fixed as well? For example this weird tax overflow bug or whatever it is, where you suddenly make billions from a single type of industry? Will we only hear about these fixes in the patch notes?
No limits to the export but that sounds like an interesting idea. I'll make a note to share with the design team, though no promises! ^^

As for tax overflow bug, that has been resolved with the economy re-work. We have a bunch more fixes in the patch which will be shared in the patch notes once the update is live.

Important question!

Will Economy 2.0 address children-only households in CS2? Children younger than teens cannot work and earn income, and they are many cases where we will have children alone in their households because seniors have died. If going by the dev diary, it will be really difficult for them to forcibly pay the rent and consider the garbage fees and shop for items.


As a result, will there be city services to address this, such as adoption centers?
No more orphaned children trying to survive in your city. Social services have found their closest relatives and they will move out of the city instead.

Does the policy work on the whole city only or per district as well? For satellite towns near the map borders, it might be better/easier to buy services from the outside, while the main city can provide services to itself.
It's city-wide and found in the City Policy panel.

This is welcomed news.

Feedback:

1) Any chance unemployment benefits become a slider toggle with a numerical value instead of a predefined set benefit?

This may be a too much micro management but it could also have a default option. I’m seeing good changes but I’m not seeing my intentional choices reflected. There’s more trade offs to consider but not direct input.

A few of questions:



Does this extend to the size of the property as well? For example, is there a cost difference between 2x2 low density and 6x6 low density?

I guess I’m asking because:



What do you all mean by type of household if not the zone type? I can only imagine size of lot as the unstated factor.
We'll look at the rent calculations in the next development diary, but the cost is affected by the lot size, so a 2x2 low density residential home would be cheaper than a 6x6 low density residential home (assuming all the other factors are the same of course).

As for household type, that refers to whether it's singles or families. As an example, education in your city affects which households spawn. Good elementary school coverage and capacity makes the city more appealing to families, while the ability to study at a college or university increases the likelihood of singles moving to your city.
 
Let's go through some more questions (and sorry to anyone I missed!)

Wages & Dividends (paid by employer)

Im not grasping how these are different things and why
Wages are an expense that companies have to pay, while dividends are paid from any potential profit.

Will there be some report on homeless people, amount, demographics etc? Didn't see any homeless in my cities yet, but there had to be some :)
This is the sort of feedback we'd love to hear. If there's any information you feel is currently lacking that would help you become a better mayor, don't hesitate to let us know. Of course, I can't make any promises, but I'm compiling a list for the design team to look at.

Sound all very good. I am looking forward to test the changes!

Question: Will it be possible that low income households gradually move from low density to higher density buildings, i.e. households changing their place to live if economic situation forces them? Or vice versa, if households get more wealthy over time?
Yes, when this patch is live low income households will look for high density homes since they are more affordable. You should also have less wealthy people in high density (assuming of course there is low density homes for sale they can move into).

these look like good changes to the game. Would this mean that all of the safeguards and guardrails that were mentioned just after release, such as teleportation of goods if they are stuck in traffic, are now gone? Would there be any changes to how the traffic simulation works?
Despawning still happens, but citizens and goods always restart their journey when that happens. As for changes to the traffic simulation, are there anything specific you would hope to see?

Hi @co_avanya

Thank you for this update. Sounds super exciting and a good direction for the future of SCII.

Now, I do have some questions/feedback and hope you find time to answer them:

  • I definitely think it's important that in the future there's, in addition to the hard on/off button, also more precise settings. So you can keep the all-or-nothing button in game, but right below maybe, grayed out, some more buttons that target the different services. As in, I might be interested to import electricity, but not the trash service etc.

  • What I currently struggle with in my city is the following: I get demand for high density, I build skyscrapers etc. Later on though, these buildings are left behind with a sad face. When hovering over it, it says the reason for leaving the building is unhappiness. The unhappiness itself is in my case often due to small apartments.
    • Now, first of all, I find it strange that every resident in a skyscraper collectively decided to leave the building. This seems a very counterintuitive mechanic. Is there something planned to handle this in the future?
    • Secondly, why do people, who move into skyscrapers, complain about small apartments? Because there's not more low density? But that raises the question, can you ever run away from this issue? It seems like this mechanic causes a ping pong between lower and higher density and you can never truly satisfy your citizens. Which is very frustrating because every now or then, one of my skyscrapers gets abandoned.
    • Thirdly, often I have the situation that my skyscrapers are left behind, in the same moment though I still have high demand for high density. This as well makes no real sense.

  • Is this a new feature? I wasn't aware, unemployed citizens receive unemployment money. Will there be a toggle for this too in the future? Not necessary a hard toggle but more something like the tax toggle?

Edit: I forgot one thing
  • Currently, I don't really see the reason to own a hospital. I have skyscrapers, mid density etc but I got 6 patients in my hospital? I feel like the chance of injury should be increased
  • And why is that my whole city is full of alerts that citizens have been waiting for a morgue transporter when at the cemetery cars are only used by 10% (I have no meaningful traffic)?
  • Prisons are not really needed either. Maybe it's because I only have 35k citizens but you'd still think there are more criminals convicted no?

Thanks for answering these questions!
The changes to household spawning and preferences should resolve the situations where wealthy people move into apartments and then complain. They may still become wealthy and look for lower densities/more spacious homes, but that will be reflected in your demand so you have a chance to respond to it.

As for unemployment, it's been a part of the economic system since release. I can't remember if we covered it in one of the dev diaries, but if we did, it was likely briefly along with all the other systems we discussed.

Why don't you just create modifiable difficulty presets so everyone can adjust how hard he want to play? You want to make it easy for newcomers but you take out all the fun for the community that is also thr result of the challenge CS1 had posed.
Standard "no promises" disclaimer, but I'd love to hear what kind of "difficulty dials" you'd find useful. Are we talking about things like higher costs/upkeep that generally affect the financial side? Or are we talking about citizens' happiness or any other aspects of the game you'd like to make easier or harder?
 
What is being done in this patch to address this problem?

I hope new UI screens, more information, more details.

If I click on a household, I want to know everything about them. How much they earn, how much they spend on rent or education or transport. Are they happy about their house? The services in the neighbourhood? Is there enough parking available?

Same for businesses and industries.
This is exactly the kind of feedback I was hoping for. Thank you for sharing! As for happiness, we already have a breakdown of what influences it, which can be found when hovering over the happiness section of a household or citizens Selected Info Panel. Similarly, companies have a breakdown of what affects their efficiency.

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@co_avanya

Is income for citizens directly linked to education level or based on education and company profitability?

As an example, can a low skilled worker working for a highly profitable company/industry earn more than a high skilled worker working for a not so profitable company?
If that is the case wouldn't it make sense to tax residents based on income and not education?
It's based on both the job's skill level (which corresponds to the different education levels) and company profitability. When companies are profitable, employees receive dividends, which are essentially bonuses based on the company's profits.

Are there also plans to split commercial and industrial zoning types? I've added two posts in the suggestion channel, but the it could also take the form of setting a district to a certain type of commercial and or industrial to have better control on what types of companies can spawn. Is there anything planned to address this in the upcoming economy patch?
It's currently not planned, but I've seen the request pop up in the community, so it's already made its way onto our community wishlist. Of course, that doesn't mean we'll end up splitting the zones. I'd love to understand this wish better though. Are we talking about a desire to have more control over how the city looks or functions? Is it about reducing how often the same companies appear next to each other? Or something completely different?

I don't get this paragraph.

First of all, how is the price of raw materials calculated?
Secondly, shouldn't the calculation run as follows (all numbers and percentages are just for display purposes):
a) price per raw material
b) plus related wages
c) plus a mark up for profit
where the markup has to be sufficient to cover the taxes AND give a reasonable profit.
(And I have even left out costs like energy, water, services, transportation just to keep the example simple)

Let's say your company produces a one material product.
a) 1 item of raw material (100)
b) related wages (+100 = total cost so far 200)
c) 10% mark up (+20 => 220 sales price)
Sales price minus costs makes a raw profit of 20 before taxes, of which then 10% taxes will be deducted, leaving the company with a profit of 18 per item produced.

You make it sound like any industrial customer would get that product for say 200, while for the household it would in the first instance be the full 220 from above.
But then you add both prices (for whatever reason) and (assumedly) divide by 2 = 210. Else it would be 420 for the household.

So in the first case the household only pays 210, but the producing company doesn't make any profit (and therefore, wouldn't pay taxes as I assume).
In the second case the producing company still doesn't make any profit (no taxes then), but the household pays 420 and the commercial company is profitable like hell.

So, I would really like to know how you are calculating prices in the game. Both locally and "regionally". Please?
Wages aren't used when determining the price of products. Let's use your example of a raw material costing 100 (all numbers are just examples, I can't remember the numbers we use off the top of my head). The industry company pays 100 for the raw materials, turns them into products, and sell them to commercial for 200. Commercial then sell them to customers for 300.

Wages come into play when we look at whether the company made a profit by comparing all their expenses (wages, rent, resource cost, transport costs, and service fees) to their income from sales. Wages and resource costs are fixed values, while rent and transport costs depends on where the company and its buyers are. Lastly, service fees are a mixed of fixed values and values you can adjust in the budget.

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Households receive Dividends from their employer & wages, for being an employee?

I dont understand. Dividends are paid for investing in a share. Are all employees shareholders automatically of their workplace?
Essentially yes, though Dividends in the game also cover things like bonuses paid out to employees because of a good year. We just use one term and one calculation for the benefits employees receive when the company they work for does well.