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Norrath Economic Report Now Available
Edward Castronova writes "Some months ago, Slashdot posted a note about on a survey I was doing for a report on the economy of EverQuest. The report is done and can be downloaded (Scroll down for the Document Download button). Tidbits: Norrath's GDP per capita is higher than that of China and India; its currency sells for about a penny per platinum piece, which makes it more valuable in $US than the yen; a typical person can make about US$3.50 an hour working there by farming the bots and selling the loot; the deflation rate is almost 30 percent annually. There's also some microeconomic analysis and an overview of the MMORPG market. Comments and reactions appreciated. Thanks, Edward Castronova, Associate Professor of Economics, Cal State Fullerton."
So when are we going to be able to exchange platinum pieces in bureaux de change? And has anyone got a page showing the currency against the dollar/Euro?
But the idea of these virtual economies is quite interesting. How about using them to experiment with possible economic models? Why not set up a modern-day game with different shards representing economic models and see which one works best? The US government or the EU could fund it. Players could play for free and the government could see how they'd react to e.g. different interest rates.
OK, it's a bit stupid, but it would be a cool experiment.
Perhaps its because I dont play Everyquest regularly, but I really *dont get* how the EverQuest universe has a deflation rate of like 30% annually...
I mean, theoretically, as more people play and level up characters, wouldnt that increase the general money supply, thereby causing *inflation*?
Plus, from the macroeconomics courses I have taken it seems like deflationis really hard to pull off, and requires people not to be buying stuff and a *loss* of overall money as compared to overall goods/items.
Maybe deflation is possible if less and less people are playing everquest (less *active* money available, therefore prices go down) but from talking to my evercrack addicted friends it sure doesnt seem this way...
typo? or more explanation?
Not that I mind... not at all.
But I must say this is the geekiest thing I have ever read on slashdot over the past 6 years...
You guys can still surprise me.
-da5id
I can play around 16-18 hours a day, and i need a base monthly fee of $60 dollars for the Internet and EverQuest accounts, then after that you can pay me for the number of hours i have worked(played) and everything in the game i gathered will be yours ofcourse, too sell or to keep as thee likes.
Quazion.
What I'm wondering is whether a "real world" economy and a virtual economy are strongly coupled. So, if the virtual economy collapsed, would it affect GDP of real countries? In this case, no, because the amounts we're talking about are tiny. But if the "Entropia" project mentioned towards the end of the report were to succeed in its aims, perhaps it would.
:)
Would economic trends in the real world influence the virtual one? In this case yes, to some degree; if people can't pay their subscriptions, they can't exist in the virtual world and production will fall. Consider this quote:
> It is important to stress that the external
> market for Norrathian goods is
> underground. Sony has stated that Norrathian
> items are its intellectual property
> (Sandoval, 2001). Trading these items for US
> currency is considered theft. Nonetheless,
> trade goes on.
Scary, no? Enforcing such a law would be equivalent to forcing the devaluation of the virtual currency. So, the virtual world economy would continue to function, but with its ties to the real world (partially) severed.
Does that bode well for Entropia? If the virtual items and currencies are the (intellectual) property of one individual, or corporation, or government, then can virtual economies be any use at all?
Or, to turn that on its head, can EverQuest be used as a model for the distribution of intellectual assets in the real world?
Having read that last sentence, I'm sure I've had too much coffee.
These sigs are more interesting tha
An interesting question would be how has the introduction of horses affected the economy.
For those that don't know, the latest upgrade (Shadows of Luclin) introduced horses to the game. You can buy a horse which lets you travel fasters. (And look cool).
The thing is, they are *very* expensive. The cheapest one is about 10000 platium for a slow horse going up to well over 100,000platinum for a fast one.
Even the cheapest one is more than the vast majority of players can afford and the expensive ones only a few people can affort at the moment.
I'd be interested to see how this affects the economy.
Obviously it's a huge money sink, which should reduce the prices of things. (If people have spent all their money, they won't pay so much when they want to buy things)
But also, it means that many people have got all the old junk they had in the bank and started selling it. So does this reduce prices as there are more for sale, and people want whatever they can get, or does it increase prices because people want the money to buy a horse and so are unwilling to part with items for a bargain price.
It's interesting. But I have no answers.
Sig is taking a break!
Excellent!
We have an analysis of the (broken) economy in Ultima Online @ The In-game Economics of Ultima Online
And this story describes EQ. We just need a paper discribing the history of D2's economy (i.e. the ramifications of the massive dupes this last weekend will have, the SOJ gamble trick in the early versions, etc.)
Okay, this seems to be a point of confusion from the comments I have read.
30% deflation means that the currency of EverQuest can buy more EverQuest stuff every year.
30% inflation would imply that your same amount of EverQuest money would buy you less EverQuest stuff.
Thus, the value of items in EverQuest depreciate drastically over time, in opposition to the real world. As many people have pointed it, this is because items in EverQuest that were once scarce become phased out by new items that are better and replace the old high value items.
Thus, if you hold large quanitities of money in EverQuest, its better to hang onto it for awhile before making a purchase, because you will be able to buy more later. However, if you hold large quantities of valuable items, you'd better sell them fast, because they are only going to lose value over time.
This is exactly correct. A great example is the Wurmslayer. This is a weapon that used to be one of the very best in the game. Ignoring the fact that that is no longer the case, let's look at how it came to be valuable in the first place:
It requires a quest which involves killing a fairly tough dragon. So, only people who are high level and can call on a few other high-level folks to help will have the item. Also, the dragon only shows up ("spawns", in the lingo) infrequently, so this further restricts supply.
Ok, so you have very few of these, and they're hotly contested. This jacks up the price and people who do the quest get well rewarded.
After a few months, however you start to get secondary sales. People get better weapons (their "epics") or they decide to stop playing a class that can use such a weapon, so they decide to sell it. This creates a second wave of availability from folks who expect to take a little bit of a loss from what they paid (sellers rarely expect to make more money than what they paid in EQ).
So, now the price bumps down a notch, but it's still fairly high, and rewards those who do the quest well. However, as time goes by and more people do the quest, you begin to reach an equilibrium where there are more folks selling Wurmslayers second-hand than there are doing the quest. Now, the price can drop BELOW the level where it's worth doing the quest at all!
In the end, an item that started selling around 5-10k is now down to about 2k after just 2 years since the expansion's release.
More dramatic drops happen when items first come out in an expansion though. The recent release of Shadow of Luclin created a flood of neat new items people were willing to pay a great deal for until they realized that they were relatively common.