Railroad Tycoon: Learning Economics Through Games

Posted by | July 08, 2014 | Opinion | No Comments
railroad tycoons

While I was working at the Pixelkin booth at the Seattle Retro Gaming Expo, I chatted a bit about the earliest games I played growing up. One game I played with my brother was the 1990 classic Railroad Tycoon, an economics simulator where players got to manage a railroad from the early 19th century through the Gilded Age. The computer-controlled opponents attempted to beat players by connecting cities with resources and buying out their rivals’ shareholders.

This game, with its balance sheets and stock options, was actually loads of fun and a big success in its time.

Railroad Tycoon Income Statement

Income calculation for fun!

Railroad Tycoon taught my brother and me a great deal about economics. I remember asking my parents what “share” meant. Also, “what’s a hostile takeover?!”  My conversations with my brother and our parents made me a better student and helped me get more out of what interested me. The game was a gateway into learning how our economic world worked—including why we have antitrust laws in the U.S.

Using games to learn and discuss economics is a very old concept. Elizabeth Magie first patented The Landlord’s Game, which later became Monopoly, in 1904. Much like Monopoly, the 1990 Railroad Tycoon presented a simplified system of loans, construction, competition, and chance. The game created my first real awareness of important economic truths. I learned that price is related to supply and demand rather than quality. I also learned that loans were not free and can eventually cost you dearly.

More complex and challenging economic simulators are still being released. Railroads, Railroad Tycoon’s modern successor, was released in 2006. Games like Civilization, Tropico, and most massively multiplayer online roleplaying games (MMORPGs), include an economic component that can be a vehicle to teach kids the use of money and the value of saving. Even if your kids aren’t interested in finance or entrepreneurship, they might still be drawn to games that will teach them related concepts. These are concepts we all need to understand, regardless of circumstance or profession.

Railroad Tycoon

“Even if your kids aren’t interested in finance or entrepreneurship, they might still be drawn to games that will teach them related concepts.”

There are lots of chances to work as a family team on these lessons as well. Games like Minecraft can offer economics lessons, including division of labor and the value of trading. I have organized groups in MMORPGs like World of Warcraft and Star Wars: The Old Republic to produce cottage industries that create in-game cash flow for the whole group.

Focusing on these aspects of games can be great gateways into discussing business ethics with your kids. Why are monopolies bad for the consumer? Why is cooperation more profitable than conflict? These are just a few of the fundamental economic questions that can be expored in games.

Video games are great vehicles for kids learning money management, because players feel they earned the in-game resources they have accumulated. Sometimes players can feel more sense of ownership over Warcraft gold than a weekly allowance, and these virtual resources are traded for virtual goods that matter to players. Games let players feel what it’s like to risk money and spend it, without having to involve any real cash. This makes them an ideal learning opportunity.

Building Rails

For me, Railroad Tycoon created a lifelong passion for economics. I loved working with my brother to concoct business plans to ensure our railroad would encompass the entire map. I enjoyed taking the calculated risks on when to build and where. I liked cautiously buying up my own stock to ensure I kept a controlling share.  I even liked paying off my debts so I no longer had those drains on my statement sheets. With our parents there to hear our plans and teach us, my brother and I were encouraged to stay interested in a game with “shares” and “statement sheets.”

Although as a child I was convinced that I could own and run a major railroad, I probably never will. I did get eerily close in my career, though, when I bought, sold, and did cost analysis on raw metals for an aerospace materials company. I learned more about economics later in my youth through school and job training, but it was a video game and my parents being involved that first sparked that interest.

Jason de Kanter

About Jason de Kanter

Jason grew up a PC gamer from the days games came on cassette tapes. He has worked as a writing teacher, and knows his continued interest in gaming creates a shared vocabulary with young people. Jason loves bringing new players into the gaming hobby. His preference is for multiplayer games–particularly ones where players can form their own communities to work together. You can catch him blathering on at length about various issues with geek culture at KitschKobold.blogspot.com.