18xx with Ambie: Capitalization

Hi! I’m Ambie, and this is my video series about 18xx games. If you’re not sure what 18xx games are, check out my 18xx intro video. In this video, I’m going to talk about incremental and full capitalization.

When you start up a corporation in 18xx games, you need to buy the President's or Director's share, sometimes along with other shares to reach a certain threshold of ownership in players' hands. In some games, such as 1830 or 1889, the money that you spend on the shares goes to the bank, and then when the corporation starts, it gets 100% of its value as cash. This is called full capitalization. In other games, such as 1846 or 1849, the money you spend on the shares goes directly into the corporations, so the cash that the corporation has is only equal to the amount of shares it sold, not 100% of the shares. This is called incremental capitalization.

This slight change in rules - full capitalization versus incremental capitalization - can drastically change the way money is perceived in the game.

In 1830-like games, shares start out owned by the bank and you have to pay the par price to get them. When you start the company, it gets ten times the par value as its cash, so you’re getting a big influx of free money to spend on new trains, since you usually only have to pay 50 or 60% of the full amount in order to get the corporation started. This can make the train rush I talked about in the last last video go faster, since players don’t need to have as much personal money in order to get money in the corporations. For example, $600 of your own money can turn into $1000 in the corporation, which can buy two 5 trains at $450 each! Also, the current stock price won’t affect the amount of money the company has. If someone else trashes your stock, it already had the full capitalization in there, so it doesn't lose any cash!

Conversely, in games like 1846 with incremental capitalization, the money has to come from the players into the corporations. The shares usually start out owned by the corporations and the players buy them directly from the corporations, so the companies only get as much money as the players pay them. When the stock price changes, the amount of money going into the company per share also changes. So as the game goes on and your stock price increases, you can buy an expensive share and it will put a lot of money into the company! But the opposite can also happen - other people can buy a lot of cheap shares early on so that your company doesn’t get that much money.

Another thing that you can sometimes do in games with incremental capitalization is issue shares from the corporation. If players haven’t bought the shares yet, the corporation can issue them to the bank and get money for them. This usually has consequences like dropping the stock price, but it can get an influx of capital into the corporation even if players aren’t buying shares. The timing of issuing shares is important so that your corporation will have the money it needs to buy the trains it needs. For example, in 1849, you can only issue shares at the end of each turn, so you have to plan ahead and issue shares the turn before you want to use all the money you get from it!

Thanks for watching 18xx With Ambie! You can email me at ambie@dicetower.com with any questions, comments, or suggestions for future videos!

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