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Railroad Tycoon II: Gold Edition

October 7, 1999
Web posted at: 10:51 a.m. EDT (1451 GMT)

by Rawn Shah

screen shot

(IDG) -- I never grew up with toy trains. In fact, where I grew up, there weren't any trains at all. Hence, I could not understand the fascination of some other kids with toy trains and railway sets. It is possible, however, that this particular fascination has been lurking dormant in my psyche since childhood -- and has been awakened now that I've come across Railroad Tycoon.

I saw Sid Meier's original version in action probably six or seven years ago, but in spite of my intense fervor for strategy games like SimCity and Civilization, it never quite caught my attention. Years later, on first trying Railroad Tycoon II on a Windows machine, I was hooked. I didn't buy the full version and only tried the demo, but that still made for hours of fun. Now I'm overjoyed that Loki's come out with a Linux version as well, allowing me to fully explore not just the original game but the latest Gold version, which isn't even out on Windows yet.

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I had a friendly chat with Scott Draeker, CEO of Loki Software, at the LinuxWorld Expo. In front of Loki's booth, where the company was demonstrating several of its games, (thanks for the T-shirt, Scott and Kate!), we talked about Loki's raging success in the business, and the intensity of its game-release schedule. Loki's first-year plan is to put out eight titles either previously or simultaneously released for the Windows platform. On track this year is the third and latest title: Railroad Tycoon II Gold Edition (RT2GE). Others also demonstrated at the show included a beta of Eric's Ultimate Solitaire. My T-shirt also says that the Armored Mech-style game Heavy Gear II is forthcoming in the fall. If Loki keeps to its schedule -- which it has managed to do almost perfectly so far -- we should expect a few more titles to be on shelves by the Christmas season. Scott rather ambitiously declared that Loki would do sixteen new game titles next year.
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Playing the Game

RT2GE is a game that J.P. Morgan would have assigned as homework for his executive staff, had he had the capability at the time. It is a strategic simulation of running a railroad company, and it presents both the track-laying perspective and the Wall Street scene. You build a railroad company in a certain area of the map and compete with one to eight other computer players in a bid to build up your personal wealth to the maximum. This is a financial game, although there is the cool part of watching the trains go around as well. (For those who like the train simulations more than the stock market wheeling and dealing, there's a sandbox mode that allows your empire to expand without competition.)

I must say I enjoy hearing the ching-ching-ching sound of money going in the bank each time my trains successfully carry a load between stations. It's a game about money, involving not only the run of a railroad business but also watching the company finances and stock. You have to understand that there are two separate entities involved in your railroad company: the company's wealth/stock portfolio, and your own wealth/stock portfolio. You start out with a basic salary of around $10,000 a year, plus whatever amount you did not spend initially when creating the game. A healthy company will give you bonuses every so often and raise your salary. An ailing company will reduce your salary until you earn so little, you can't afford to play anymore or get fired.

The basic goal of the game is to achieve a certain personal wealth by a given date. When you start the game, you have a small amount of cash of your own as well as the public investment in your company. Depending upon the difficulty level at which you begin, the odds are stacked financially for or against you as compared to the other computer players. At lower difficulty ratings the trains generate more revenue per trip and you don't have to worry about the stock market or running industries. I think you lose half the fun that way, which is why I always play a hard or custom game (with stock market and industries included but with no bonuses per player).

Game Scenarios

In the basic scenario, you have to build a railroad that can successfully carry passengers and cargo between two cities and generate a healthy revenue. You do this by building the stations and tracks, and buying the engines to run the trains. Each train can carry up to six cars behind it, but I recommend a maximum of four, or you'll wear out the trains too easily. Each station also has different resources that generate income (hotels, saloons, restaurants), speed the exchange of cargo (post offices, telephone wires, grain silos), or help maintain the train (sanding towers, water towers, roundhouses). Not every station needs all of the buildings, but placing them intelligently will help smooth your routes and speed your shipments.

More advanced scenarios require you to carry a certain amount of cargo between two cities by a particular deadline, such as From Cape to Cairo, in which you have to build a track between Cairo, Egypt, and Capetown, South Africa. You have to buy into territories of other countries as you go along, and build more track.

De train! De train! Eets de train, boss!

Watching the trains go around your tracks, busily carrying all the cargo and passengers, is pleasantly relaxing. Each train in the game is based upon a real engine that was produced in the US or another country, from the early days of railroading up to the present time. Starting in the steam engine-generation, you will see all the famous trains of the past, into the diesel era, and then the electric era. You can run a three-truck Shay, like the classic choo-choo trains, or zoom around in the latest, greatest French TGV, made even more famous by that scene in Mission: Impossible in which Tom Cruise hangs off the end for dear life.

Every train has a purchase price, an annual maintenance cost, and a fuel cost. Each train can run at different speeds, depending upon the number of cars it tows and the grade or steepness of the track. You will probably pick a different engine to pull the train in each scenario. A scenario in which there are mostly flat lands, such as those of the American Midwest or the French countryside, calls for an engine that can run very fast in low grades of 2 percent or less, even if it runs at ridculously slowly at grades of 6 percent. On the other hand, if you have hilly country, you need an engine that can perform well at high grades, as well as one with a high acceleration rating because of all the twists and turns.

Speed is the overall factor when it comes to delivering a payload, but don't sacrifice speed for reliability or cost. If you have to replace the engine every few years or so, it won't be worth it. In general, look for an engine that is rated above average, good, or better when it comes to reliability, even if it's not quite as quick as the fastest thing on the market. The maintenance and fuel consumption of the train are an annual expense, so try to pick one which will have a cost lower than the revenue you generate from the load it carries. That's where your profit comes from.

Remember too that there is no such thing as an all-purpose train. Each train has its own attributes that make it good or bad. However, a few of my favorites are the 2-6-0 Mogul, GP-9 (diesel), and GG1 (electric). They aren't the fastest trains, but they give the best bang for the buck in their respective time periods. The types of trains you can choose from depend upon the time period and the country in which you play. For example, in England, you won't find the GG1 available at any time, since its an American-made engine.

Working on the railroad

When you first start the game, finding a suitable location to place your stations and build your tracks is crucial. You cannot build two different sets of tracks which are not connected together. Thus, you must grow outward from your starting location. You will have enough money to build two stations, track between them, and a train or two, depending upon your company's starting cash.

The best locations for a station will have five to twenty houses, and some industry that produces -- and not converts -- resources that will be needed in another city nearby of equal status. For example, in the Heartland, USA scenario (see Figure 1), Omaha has a medium number of houses, a chemical plant or two, a meat packing plant, and an oil refinery, while Lincoln has a small population with a fertilizer plant and a bakery. This is great, because there is enough population to move back and forth between the cities; what's more, the chemical plant in Omaha will generate two carloads of chemicals that can be sold to the fertilizer plant in Lincoln. If you look nearby, there are other resources (farms, cattle yards, oil fields) that could supply the other industries (see Figures 2 and 3). This way, you don't have to depend upon passenger revenue alone.

In the very beginning, moving people and mail around will generate the most revenue, especially if the economy is healthy. As soon as you hit a recession, however, fewer people travel, and your company's revenues fall. A game usually starts with a normal economy and goes up, so set up passenger and mail train routes first, preferably between cities that are next to each other. Look for an advantage of sending industry cargo next, preferably the most profitable ones like food and oil.

You can borrow money to build more tracks, stations, and trains by issuing bonds, but you should do this only when the economy is healthy. This way, you pay less interest, and the new routes should be able to generate enough cash to pay off the bonds fairly quickly. In some cases, it is definitely worth it to get a bond to finance some high-value cargo transfers between towns and cities. It may even pay off by the second trip it takes, and boost your revenues at the same time.

Playing the stock market

The second challenge of the game is keeping a healthy stock value for your fictional company. In scenarios with multiple computer or human players, you need to beat others by achieving the most financial success, in both personal and corporate earnings. When you first start the game, you are issued some amount of stock and normally have $0 or less in cash. The basic rules of the stock market always apply: buy a stock when it's low and sell it when it's high.

If you expect a stock to drop in value, you can sell shares you don't own on margin when the price is high, planning to buy them back later at a lower price. Some scenarios do not allow you to buy and sell on margin, and in those you have to do your best to keep raising your company's value until you get enough to buy into other companies.

For each company, there are usually two pairs of graphs shown, one indicating the current share value, and the second indicating the earnings per share. You can also display several other graphs, but these two are enough for most purposes. The share value goes up and down based upon the amount of revenue that the company is generating at any given time. The higher the earnings per share, the higher your share value goes. Your share value should always be below the earnings per share for the best results. If the share value (in blue) goes above the earnings per share (in brown), you can expect the shares to fall in the future, thus lowering your own personal purchasing power and total value. If the share value is far below the revenues per share, then buy as much as possible, since the shares will soon shoot up in value. The best situation is to have the two graphs, with blue below brown, in parallel, in a steady to sharp incline. This means that the share value and your own purchasing power is going up, rapidly.

At the very start of the game, as players are just starting up their companies, you want to buy stock whenever possible. Since most of the companies attempt to reach a share value high enough to cause a stock split, player shares can double fairly quickly from the outset. It is common to see a 2-for-1 split (you get two shares for every one you own, at half the price) within the first six to nine months of the game. Sometimes you can even get a 3-for-1 split, which is even better. The most amazing thing I have seen is a 6-for-1 split by a computer player.

The more the stock splits, the higher the overall value of the company, and the greater your ability to buy into other companies. Say each player gets 2,000 shares and Player A reaches a 2-for-1 split before Player B. This means that at that point, Player A will have 4,000 shares while Player B still has only 2,000. Player A thus has the advantage and might be able to sell 1,000 of his own shares to buy into Player B's company. Thus, when Player B's company reaches a 2-for-1 split, Player A has 3,000 of his own shares and 2,000 of Player B's shares, while Player B has only 4,000.

This may not matter much if Player A's shares are not worth as much as Player B's; but it gives an early advantage to Player A, which can later help in an attempt to take over Player B's company. Diversifying your stock portfolio is key. You do not want to restrict yourself to keeping shares in only one company, since the more your holdings are distributed across several companies, the less likely a cash flow problem in one company will cause a drop in your overall purchasing power.

Do not be afraid of keeping a high negative cash level, as long as you can maintain a high overall purchasing power. The purchasing power is your cash level plus the values of all the shares that you own. Thus if your share value is $7,000K ($7 million), while your cash level is -$5,500K (minus $5.5 million), your purchasing power is about $1,500K, giving you lots of room to buy more shares. Keep a watchful eye on your stocks, though. A small change of a dollar or two in the share value can mean a huge change in your purchasing power if you have 100,000 shares. It may even be enough to drop into negative amounts, thus requiring you to sell shares until you have a positive purchasing power again.


Mergers, or, more correctly, takeovers, are hard to pull off initially, but get progressively easier over time. If the scenario does not allow buying or selling on margin, you might as well forget attempting a takeover, since you need this ability to buy into others. The idea is for you to personally acquire as much of the target company's stock as possible, and then have your company attempt to merge with the other at a higher share price, thus making a profit for your personal account.

Attempting a merger requires your company to have a significant amount of cash, usually several million. You should not attempt a merger unless your company is in perfect health with high profit margins and a big bank account. Pay off all of your debts if you've issued bonds, and make sure that all your trains are running fine, since you will need to ignore them for a while and let them run themselves. You have to be able to depend on the votes of more than 50 percent of the target company's shares to pull it off. In some cases, particularly those in which the target company has been failing for a while, other shareholders may also side with you and aid the merger, but you shouldn't count on that. If the target company is still successful when you are attempting to merge, you have to own 50 percent or more, or the shareholders will vote against the merger.

The best targets are those that have a small positive or negative cash level and a small but continuous negative profit line. After you spend your company's money to buy out all the shares of the other company, you will incur all of its debt. If your recent acquisition has a negative cash level, it will be deducted from that of your company's. If it has a negative profit line, then your own profits have to be high enough to result in positive profits when the two are added together.

After your merger, you should look through the company's books carefully, paying particular attention to where all the expenses are going. If the acquired company has bonds that have not been paid off, keep an eye on them with a view towards paying them off as soon as possible, eliminating those bonds with the highest interest rates first. The acquired company is usually failing because of inefficient management of the trains, especially if it was a computer opponent. Even at the hardest level, the computer isn't too smart about how it builds its rail lines, or what loads the train carry. It relies more on its 10 to 25 percent cash advantage at the hard and expert level to beat you. Thus, to increase efficiency, you can make the train loads distribute better, upgrade facilities in some locations, or replace older trains. When you retire or replace a train, you will take a penalty of several hundred thousand in the profit line, so don't run rampant selling off all the trains and replacing them until your company can manage it.

Increasing the overall profitability of the company is your first priority because your earnings per share value will most likely nosedive after an acquisition. And with that goes your share price and your own purchasing power. You don't have try a takeover immediately, but it's better to do it in the first few years than waiting until your competitors are more powerful.

Do I like it?

This game is one of the best strategy titles out there that involves financial greed rather than heavy bloodshed. The Linux port is no different than the Windows version, although the beta version I tested did have an annoying bug that suddenly dropped you to $6.5 billion in the hole for no apparent reason. Loki has fixed this division by zero problem in the release version. I played this game on a VA Research StartX SP with a 400 MHz Celeron and 64 MB of RAM. The game ran just as well as on a Windows machine with a similar configuration, but with 96 MB of RAM, even on the scenarios with large maps. The scrolling wasn't as fast as the Windows version, but the game played just as quickly. For all you budding entrepreneurs and train fans out there, Railroad Tycoon II Gold Edition will provide many, many hours of entertainment. Even with the information I have given here, it is a good challenge for all.

Rawn Shah is an independent consultant in Tucson, AZ. He has worked with and written about multiplatform issues for years, and is constantly surprised at how few people know about useful system tools.

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