Interview w/Edward Castronova

scubacuda writes "/.ers interested in the recent editorial on real $ in MMORPGs might also be interested in a GrepLaw interview I just conducted with Edward Castranova (expert witness in the recent Black Hat Hacker Court) about how his work on synthetic economies affects larger law and policy issues on the Internet. Ted has some interesting thoughts, particularly how online game-based economics (Star Wars Galaxies, EverQuest, Lineage, etc.) will eventually serve as the bases for "real governments." Should mainstream economics journals take his work on gender and virtual economies seriously, Ted promises to eat his virtual hat."

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Wikipedia entry on synthetic economies

[scubacuda]

From Wikipedia:

Synthetic economies perform useful resource-allocation and entertainment roles within MUDs. They also interact with the Earth economy. US dollar markets for synthetic-economy goods, currency, and services may be observed at online auction sites such as Ebay (search "Ultima Online", or "DAoC" for Dark Age of Camelot) and PlayerAuctions.com (search "EQ" for EverQuest).

According to standard conceptions of economic value (see the subjective theory of value), the goods and services of synthetic economies are endowed with real value. The value of a good is determined by its users, and is measured by their willingness to give up resources to obtain it. MUD users are willing to devote both time and Earth currency to obtaining synthetic goods, making these digital assets as real as any assets on Earth.

Aw mom, I don't want to play EQ!

[Sage Gaspar]

I have mixed reactions about analyzing MMORPGs as microcosms of the real world. First thing, half of the people playing them are below the age of 25 and a significant amount below 18, and almost all are drawn from middle to upper class backgrounds. The account names given with the credit card numbers might say otherwise (how often do kids under 13 check the "I'm a kid under 13" box?), but I'm not buying it. Secondly, the MMORPG market is still one specific sector of gamers, despite their success. The pool of players behind the characters does not include a proportionate amount of elderly people, non-technophiles, and the less nerdy. Yes, there are a lot of examples to the contrary, but in general you're drawing your players from the nerdy youths of the populace. So any speculations made about society based on MMORPGs can only really be used to accurately predict how a stereotypically (and in reality) more socially inept and fiscally sound portion of the population will react in a given situation. Additionally, I would hate to see MMORPGs turned into work. They're already moving that way with account and character selling, plus the leveling treadmill already in place to hook in addicts. I can see this going in a bad direction. "Billy, your sister made $500 selling her Dark Elf Cleric on EQ2 last week! Why aren't you working as hard as she is?" "Aw, mom, I just want to go outside and play! Don't make me go on EverQuest again!"

None have worked

[mao che minh]

After three years of playing different MMOGs, if there is any one thing that I am certain of it is that all virtual economies are faulted by a common flaw: programs and systems have flaws that can and will be exploited, and that the artificial adjustments demanded to repair them never work, because at the very moment an artificial adjustment is required the naturalality of the economy ceases.

For an example, just look at the dismal failure that each "fix" was to Ultima Online's economy. As soon as the developers started "fixing" things, the economy ceased being a natural evolution, and instead a predictable system that the cheaters began to utilize. Anyone that did not make full use of each new exploit could not compete. Everyone left, and all UO is left with is about thirty or so thousand people engaged in an never ending cycle of beating the system. If Origin had just started booting the cheaters than they would still have a viable product.