Slashdot Mirror
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.
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
Simple:
Tradeable items do not decay, and their appearance rate is either constant, or increasing as avatars gain in average level, therefore the offering grows while the market is roughly constant.
Secondly, new items are being discovered as avatars gain in level or as the world is expanded, reducing the value of older items.
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!
When the game started out, relatively mundane items were pretty powerful because no one as yet had gotten to the high-level areas with the "phat loot". Early on, a guy running around in simple bronze platemail was a rare sight. Weapons with a damage/delay ratio of 1:3 (or 1:2 for two-handed swords and the like) were godly and commanded godly prices--if they were sold at all.
As time went on there was inflation, as people gained thousands of platinum pieces (the EQ currency) and bid up the prices of those items. But the inflation reversed itself after a while.
Items don't decay in EQ. They don't wear out. The only way they leave the world is if they are destroyed by a player, on a character when it is deleted, or poof when a corpse poofs. So as time went on, more and more of the items entered the economy, and better and better stuff was found. Verant has added three expansions over the past two years, and each one has had better toys and phatter loot. As that stuff enters circulation, the former "godly" stuff becomes less valuable and typically gets passed down to lower-level "twinks" (alternate characters equipped with hand-me-down or purchased loot that's better than what they could get on their own) or sold.
Using an example--there's an EQ weapon called a Short Sword of the Ykesha. It looks like a Ghurka khukri knife, and will occasionally hit a target with a 75-point damage spell. In the early game, it used to be the bad-ass one-handed sword, a rare drop off a tough level 40ish monster in a very tough dungeon (Lower Guk). When they would be sold, which was rare, they would go for 8,000+ plat.
Well, since the Kunark, Velious, and now Luclin expansion packs, there's stuff out there that makes the Ykesha look totally lame--plus, the number of Ykeshas on the server gradually increased over time, as more and more people entered that dungeon and killed that particular monster. The price of the weapon spiked up on my server as people started scoring a lot of money, but once the better weapons entered the picture the price went into freefall. Now "Yaks" go for 1000 plat or even less.
It's an odd combination--people have more plat than ever before, but prices are simultaneously falling. The result is that there are level 5 twinks running around in gear that my warrior didn't have at level 40 18 months ago.
The same thing happens as new servers are brought online, but it happens faster there because people already know exactly where to go to maximize their income and their chance at items.
Verant has tried to introduce money sinks to reduce the amount of money in circulation (horses that cost 110k plat, for example), but that won't solve the deflation. Item decay might, but it's way too late in the game's lifecycle to introduce that. If I end up spending 15 hours of my no-life to camp the Frenzied Wumpus for the Ass-Kicking Widget of Doom, there's no way I want my widget to break or wear out in a couple months.
In short--the deflationary aspect in EQ doesn't seem to have much to do with the money supply, it's got more to do with the supply of items that people want to trade for.
"Settle down, Beavis. We've got an experiment to do."