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MMORPG Economies Explored in Depth
Obscure Economist writes "The Social Science Research Network (SSRN, http://www.ssrn.com) has just posted a free download of "On Virtual Economies," a new broad-focused study of the market for MMORPGs. Think of it as a less descriptive, but more predictive, follow-up to my paper on the EverQuest economy of last spring. The link, for those interested:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id =338500. Comments and criticism appreciated. Edward Castronova, Associate Professor of Economics, Cal State Fullerton"
there is this /. article. that showcases someone's ideas about how to unbalance a game with exploits in the economy.
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"First things first -- but not necessarily in that order"
-- The Doctor, "Doctor
Since they are subscription based and need servers, piracy is cut down , almost all of it. What i don't approve is that the games cost full price like every offline game plus the subscription, which is not cheap at all.
At least anarchy online allows you to test the game for free
Open Source Java Web Forum with LDAP authentication
Quote from abstract:
It will also raise certain constitutional issues, since it is not clear, today, exactly who has jurisdiction over these new economies.
Don't the games already dictate the control of these economies? MMORPG game makers decide the rules of the economy according to what they think makes them enjoyable. Granted, if you are selling EverQuest items on Ebay, then you are subject to U.S. economic laws, but why would any government care about the economic activities in a virtual world, except in areas that affect their own economies? There may be an answer to this I don't see. If so, what is it?
Boom Shanka
Virtual Economies will have to expand immensely to have any real effect on real economies. Sure, people trade some EverCrack stuff on Ebay but it is a miniscule amount compared to the rest of the economy. It really has no effect on the real world. How can a virual economy ever have something that is truly valuable? I can't think of an instance and I don't see one coming about.
FoundNews.com - get paid to blog.,
No, I didn't waste 1000 hours this year playing EverCrack, it was important research!
National economies are suffering now that online economies are manipulated through dubious means using real world monies. The value of the EverQuest currency currently exceeds the value of the US dollar. Other markets are experiencing similiar downfalls. One solution proposed by Microsoft Corporation is to alter the virual economies with DRM technology to facilitate fair usage of currency. RIAA sources say that they are also working on a solution but offered no details.
people reveal that they are willing to pay money to be constrained.
This is an interesting observation. As many of us know, cheating takes all the fun out of the game for most normal people (15 year olds that crave attention and respect in an unhealthy way excepted). In art, self-imposed contraints are what makes good art. Without contraints, the games become meaningless.
I think when bugs are discovered in games that allow rampant cloning of items or free money to spread, is parallel to what would happen in society when and if we discover a way to make a "replicator" type device.
These games do make an interesting microcosm for sociologists to study. Identifing the differences is more interesting, since once we identify how it is different from the macro-society, we can use it as a model.
I've had enough abrasive sigs. Kittens are cute and fuzzy.
Interestingly enough, US Banks have the power to create and destroy money.
The way it works is this. MyBank (insured FDIC) has a certain amount of money on deposit with its local Federal Reserve Bank (NY, Phillie, Whatnot). The Federal Reserve then sets a multiplier, allowing MyBank to loan out Z*Deposit where Z is a number chosen between 1 and however many Cherios Allen Greenspan ate for breakfast this morning.
MyBank then lends you that money. It just up and lends it to you. It didn't have the money to lend, but the Fed said it could so it does.
The key to the entire system is the ASSUMPTION that money is scarce. Or rather, that money has inherent value.
In the case of a MMORPG money is created (typicaly) by killing stuff. This killing of stuff is work, and requires the player (or a cleverly written bot) to spend time persuing this activity.
This time is equivilent to work. As long as people feel that they have to work to get money and that money in turn can be used to get someone else to work for them (or something else) the economy will keep going.
So in essence, as long as the player can not randomly create money (but can work for it), it really is just as valid as any other national currency (except perhaps the old Lira, which was so worthless as to require several million to buy a mellon)
Killfile(TGK)
No trees were killed in the creation of this post. However, many electrons were inconvenienced.
EverCrack may not have an "immense effect", but there are plenty of instances of pretty much worthless things gaining value because they are rare and people want them. Look at stamps. Little pieces of scrap paper with a face value of pocket change. How about baseball cards? Just cheap cardboard. The pictures and information on both are easily duplicated. So why in the heck do people pay hundreds or thousands of dollars for them?
Heck compared to a stamp an Axe of Power or a level 99 character seems much more interesting and useful for entertainment. As long as it is sufficiently rare and useful, people will attach some sort monetary value to it.
Brian Ellenberger
As such any talk of jurisdiction over these "new economies" is just a pipe dream by over-addicted players; there is quite simply no such new economy at all, merely players (and sad, cheap addicted ones at that) within the current economy, trading their resources for ever more ephemeral rewards.
Indeed it seems like such talk of new economies is nothing more than subliminal advertising; trying to talk up the game to make it more important than it is. After all, it certianly suits the makers of the game if it's seen to be more "real"... even this sort of "negative" publicity is good for it since the sort of person that has such a pathetic life they get addicted to online games seems to be craving a reality of sorts, preferably one where they can overcome the crippling social, mental and physical deficiencies that plague them in real life. There is no genuine MMORPG economy. There's just a fringe of people who really need to get out more, trading within the regular economy on sites like EBay.
Jon Erikson, IT guru
A virtual economy, like any economy, must barter in scarcity. After all, it is scarcity which forces the choices of economics on people.
The most obvious object which a virtual economy could manage is time. You can't turn time into an encoded form on a computer which can be played back at any moment. By farming out your own time that you are willing to spend on some problem, you could get some credit that would be useful to negotiate time off of someone else's hands for a task you need completed by a certain time. It'll be the ultimate in specialization, where you need only know one thing well, because you can use that skill to aquire the credits that you use to buy the time of other people who specialize is some task you need completed.
If this sounds a lot like your day-to-day job life, it is. But it breaks down if you look at it from a non-time perspective. Things that are not direct people services aren't scarce in a digital world. You need to move to something else for the creation and release of digital knowledge, something like the street performer protocol. Then the goods (which, when released, are not scarce) can have the creators of those goods still benefit.
Traditional models of scarcity and resource utilization do not apply in a virtual economy. Once one copy of something is released, infinite copies may be made at any point. The only thing you, as a content producer, can do is set how much you want to release that product. This is the next step (IMO) in the evolution of economic theory because it'll allow people to make things on their own, without a big corporate body (RIAA, MPAA) taking a cut off of everything. Prices will go down, and creations will go up.
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Internet Explorer (n): Another bug -- that is, a feature that can't be turned off -- in Windows.
NASDAQ up 21.42 points
Dow down by 8.21
EverQuest SE up 1.50
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Hello, Slashdot user. My name is Dr. Sbaitso. I am here to help you.
I've been following the development of a new MMORPG, called Star Wars: Galaxies. The designers are trying some new concepts with the economies, and they really seem interesting:
1) Raw resources only exist in a set quantity. When a resource runs out, it is replaced by a brand new one, and the old one will never be available again. All the designs and items using the old material will become rares, meaning: a) designers stay busy, and b) prospectors stay busy.
2) You only get crafting experience when an item is *used*, not when it's made. Therefore, you are naturally motivated to make things people want, not whatever increases your skills the most.
I'm really interested to see how it turns out.
"I have never let my schooling interfere with my education." - Mark Twain
The only question is how much real money is it worth. When you get down to it, buying EQ characters or equipment on Ebay is no different than buying a movie or videogame or shelling out $40 to go to Six Flags. It's paying for entertainment. Buy powerful character, be more entertained. Selling characters and equipment is the same thing: Providing entertainment to someone who is willing to pay for it. It doesn't matter that the entertainment in question is 1's and 0's on a server somewhere, or that there's no "sink" for it (i.e., a way for money to leave the game). If more and more EQ Platinum becomes available, like any other currency, it'll just suffer rampant inflation. Sony creating lots of platinum, or players exploiting bugs to create lots of platinum, is no different than Mexico printing up lots of pesos to pay off national debt. It just makes the value of the platinum/pesos worth less in dollars.
EQ money is the same as real dollars - it represents production of a tradeable product.
When people buy EQ "Stuff", what they're REALLY buying is the TIME of the people who generated that stuff (or more accurately, they're buying the time they now don't have to spend getting the stuff themselves.)
EQ Platinum *IS* money, moreso than real platinum. Can't do anything with dollar bills, can't do anything with EQ platinum, but people will give you stuff for both because they believe other people will do the same. That's where it gets its value - not because of any useful properties, but just because people BELIEVE it's money.
One of these days, people won't play EQ anymore, and EQ money will be worthless. You'll be able to buy billions of EQ platinum pieces for $1 because no one will believe they have any value anymore.
Its exactly the same reason you can buy millions of Afghans or Lira for $1. People stopped believing the money was worth anything, so you needed a lot more of it for someone to trade you a dollar for it.
paintball
Why does everyone have to take something fun (a game) and try to assign real life value to it?
"Value" is simply what somebody is willing to pay for something.
Obviously, people are willing to pay to play the game. They value the enjoyment they get from playing more than they enjoy spending that money on something else (or holding on to it). So they purchase a game subscription, trading real money for access to the game.
Some people value the status (or the ease, or whatever) that comes with a more capable "avatar", more than they value having real money, so they're willing to trade real money for game money (or experience points, or "lore" or "fungi tunics")
Recently a forty year old can of an artist's excrement was bought for several thousand dollars by a museum. It was "valuable" not for its potential use as fertilizer, but as "art".
A original copy ("original copy"? An oxymoron or not?) of the American Declaration of Independence was sold for over eight million dollars, despite the fact that anyone can download the exact text -- or a photo reproduction -- for free. Are the words valuable then? Not, apparently, as much as the context they are in.
Even real money is simply a social convention: its utililty for any use other than trade (its "intrinsic value") is virtually (pun intended?) nil. Real money is useful only insofar as people will trade goods and services for it. When real money is perceived as not being as useful for trade, its value collapses, and we have the super inflation exemplified by Weimar Germany or present-day Argentina.
Which is more valuable to you, a dollar or a month of game play? What if it's your only dollar, and you're hungry? Which is more valuable, a million dollars or a month of game play? What if you could only buy cans of artists' excrement with that million? What if you know you'll be dead in a month? What is more valuable, a million dollars or the Declaration of Independence? What if it's an electronic copy? What if it's the only remaining copy (electronic or not) remaining in existance? What is more valuable, the single remaining copy of the Declaration, the single remaining copy of the Bible, the single remaining copy of Moby Dick, the single remaining sequencing of the human genome?
What's the value, to me, of the last letter you even got from your high-school sweetheart? How much money would you charge me (i.e., what's the value of it to you) to sell me that letter, if I told you I planned to burn it?
"Value" changes with circumstances, with the surplus or scarcity of what you have and what can trade for, and with your, uh, "values". "Value" is what you can get for something, less what it's worth to you not to part with something.
Opinions on the Twiddler2 hand-held keyboard?
The economic model in Earth & Beyond is an interesting change from games like EverQuest. It's closer to DAOC's model, as I understand it (I'm not very familiar with DAOC though).
Basically, the best items are player-made versions of loot-only items. Players can make better-quality items than the NPC merchants sell, but the best overall items aren't sold by merchants at all, but rather are dropped off NPCs that you have to go out and kill. So player crafting is important, because it yields the best items; but hunting is also important, because in order for the crafters to make those items, they (or others) have to go out and kill monsters to get those items in the first place. A big problem with EQ's economy is that *all* the best items are dropped off creatures. The best player-made items are pretty good, but do not compare to loot items.
"Destroy science and religion. Science would re-emerge exactly the same; but not religion." - Penn Jillette, paraphrased
What is real, when we're talking about economics and communities? Is the community of baseball card collectors real? Are the economics of fine art auctions based on rational decisions?
People "live" in these worlds. They have friends, lovers, rivalries, and the *emotions* are certainly indistinguishable from "real". You may smugly sneer at the inconsequentialness of it all, but what would your ancestors of a few hundred years ago think of you? How many of you make a living directly producing something you can hold in your hands? How many of you have jobs you can't quite get your grandparents to understand?
How many people who read /. routinely hunt and kill their own food, or till the soil to grow the wheat for their daily bread? How few people actually make things *essential* to daily life in this modern age?
The worlds I build are virtual. The communities that appear in them are real.
--Dave Rickey
When I first started playing Ultima Online, 10,000 gold pieces was a considerable amount of captial, and real estate of the lowest kind ran one roughly 55,000 gold pieces. Even with a considerably large user base, supply and demand of the various core resources (wood, cloth, ore) of the game was in a remarkable state of acceptable flux. Inflation was well controlled. The demand of "rares" (items that varied in degrees of difficulty to obtain) drove their prices high, but never to unreasonable levels.
This all ran smoothly, much like a real world economy of small nation might run. But then came factors that real world economists do not have to fret much over, factors that only exist in the virtual world. The most significant was that people started cheating. Specifically, a considerable amount of people found clever ways to mass produce gold by the tens of millions.
You might ask "why didn't the admins just remove all of the excess gold?". Well, they didn't know exactly who cheated, and therefore could not effectively enforce an across-the-board gold removal without losing valuable customers (where the real $$$ comes from). I stopped playing for a short period of time, and when I came back it was a new UO. Houses that were once 55,000 gold were now 1.5 million. Much sought over rares sky rocketed to values of 10 million gold (or more, I am told). New players (and long time players that decided not to cheat or purchase wealth off of Ebay) were now rendered "impoverished" for the duration of their UO life. Basic materialistic goals that players could pursue, goals that were promised to new players on the back of the box, were simply unattainable.
OSI, the company that runs UO, tried a plethora of schemes to make the economy bearable again. They failed utterly, and UO subscriptions continue to dwindle. What differentiates a make believe economy from a real one is the fact that people can do make believe things in a game. No one can dupe 1.5 million dollars out of thin air in the real world.
Danse writes:
...but this qualifies for oil too. Or electricity. Or or orange juice or porkbellies. These are commodities. And they're regulated because if you do not, it is possible to manipulate the environment which will result in profit with no risk for the manipulators and assured loss for those not "in on the deal." Hence 'insider trading.'
"The only commodity being sold is the time that it takes someone to gather the plat to sell on ebay. Since the vast majority of us sell our time (and expertise or muscle as well in most cases) to make a living, this doesn't seem very different."
You are 100% correct
Whether the item in question is lawfully obtained by the sweat of your brow has nothing to do with the problem. Everquest isn't regulated. An admin could, conceivably, give themselves or others plat. Yes, there might be internal safeguards in place, but are they adequate? Can someone code a script to do that work automagically? Or even worse, can the system be hacked outright?
The result of "printing script" (ie, money) is that it devalues the legitimate money and this leads to inflation and relative devaluation. In other words, if there exists 1,000 units of money in an environment and we both have half, if you can print yourself 5,000 units, we now have 6,000u of money in circulation and my lot is significantly devalued.
Granted, this is an extreme example, but it is only provided to illustrate the point.
My
Limekiller