I recently heard crafting in MMORPGs described as a "pyramid." At the bottom are many low-level crafters making lots of junk, while at the top are a few high-level crafters cranking out the same few items.
As a production system existing only to service a game economy, that probably seems like it makes sense.
As gameplay, it sucks. It's not much fun for anyone, which is bad news if your game economy depends on people actually wanting to be crafters.
The thing is, why does the pyramid appear in the first place?
As a possible answer, I go back to my theory of player-centered design. The crafting pyramid appears because the rules of crafting gameplay are designed as a production system, so they attract the gamers who think of "crafting" as production. The rules that promote this behavior attract the people who enjoy this approach, so we see even more of it over time because the rules create a constituency of supporters with the veterans at the top protecting their trade from the newcomers at the bottom.
Which makes sense if you think of crafting as a trade. But aren't there other ways to think about crafting?
What about the gamers who make things because of the pleasure they feel in making things? Why are the artists and the artisans neglected when crafting gameplay is being designed?
I think we see the Pyramid Problem because crafting designers are failing to ask: Who is crafting for? Once you know that, then -- and only then -- should you create the rules for how it works. (That goes for any game system, actually.)
This, I think, is where most MMORPG designers err. Instead of seeing crafting in its larger constructive sense, crafting in most MMORPG is viewed as a necessary evil for keeping fighters stocked with weapons and armor. It's just another game subsystem that has to be cranked out to support combat mechanics.
Game designers aren't wrong that letting players supply each other with arms and armor can be effective. Combat is an important part of most MMORPGs, and combatants don't like having to rely solely on random loot drops for their gear. So a player crafting system usually looks like a good idea... but that's where things start to go wrong, because a crafting system that exists only to serve cold economic necessity is just no fun as a game. And the result of such constrained thinking is gameplay that is lethally boring because it's no better than a manufacturing system with some character skills tacked on to make crafting a "game."
The usual gameplay features for crafters basically turn those players into machines -- push some buttons, make a widget; push some buttons, make a widget; repeat until you get tired of being treated like a machine and leave the game entirely. That's not player-centered design -- it's system-centered design, which may work well when you're being paid for it, but when you're the one paying for it (as entertainment), it breaks down. That's where pyramids appear.
It's no wonder so many game economies don't run well. That's what you get when game designers view item creation as a production subsystem in which gamers are treated like cogs in an economic machine, rather than realizing that some people actually enjoy making things and creating gameplay that rewards and encourages the creativity of those subscribers.
In short, the Pyramid Problem comes from game designers thinking of crafting as a manufacturing/sales game. Crafting systems in MMORPGs will continue to fail to function as imagined until game designers realize that crafting needs to be designed to be as much about artistic creativity and virtuoso craftsmanship as about manufacturing and sales. When designers start offering gameplay features in which the value of a crafted object is defined at least as much by its creator as by its purchaser, and generating gameplay systems accordingly, then we'll see the crafting pyramid turned upside-down so that with increasing character experience comes increasing ability to make new and beautiful things.
But not until then.