Economics of Online Gaming

PGillingwater writes "The Walrus has a nice article up about the economics of on-line gaming communities. Starting with the original 2001 paper which shows that Everquest has a GNP greater than India, Bulgaria and China, and going on to the billionaires of Ultima Online and the Mafia takeover of The Sims. "He began calculating frantically. He gathered data on 616 auctions, observing how much each item sold for in U.S. dollars. When he averaged the results, he was stunned to discover that the EverQuest platinum piece was worth about one cent U.S. -- higher than the Japanese yen or the Italian lira. With that information, he could figure out how fast the EverQuest economy was growing. Since players were killing monsters or skinning bunnies every day, they were, in effect, creating wealth. Crunching more numbers, Castronova found that the average player was generating 319 platinum pieces each hour he or she was in the game -- the equivalent of $3.42 (U.S.) per hour. "That's higher than the minimum wage in most countries," he marvelled.""

Comments

I 'skin the bunny' every day too

[Anonymous Coward]

But it doesn't affect my economic situation at all. Should I use more lotion?

Creating Wealth

[ajakk]

If each platinum piece on Everquest == 1 cent real life, then the programmers should create 1,000,000,000,000 platinum pieces in the game and give it to themselves. Then they would be rich!!!

Great another reason

[WordODD]

Just what the EverCrackHeads need, another reason to stay glued to the computer. While I have never played the game myself, other then for a few minutes just to see what it was all about, I have had friends literally stay in the house for weeks so they could play the game. It is amazing what a hold it can have over some people. My friend honestly did not want to stop playing because he feared he would miss out on something going on within his "clan". How ironic that he missed out on so much that happened in the real world with his "friends" and "family".

Re:Great another reason

[ajs]

While I have never played the game myself, other then for a few minutes just to see what it was all about, I have had friends literally stay in the house for weeks so they could play the game. It is amazing what a hold it can have over some people.

Let's turn that around to something a bit more apropos of Slashdot....

While I have never had sex myself, other than a few minutes looking at a magazine just to see what it was all about, I have had friends literally stay in the house for weeks so they could play with each other. It is amazing what a hold it can have over some people.

Ok, so you get the rather obvious point, here. Folks get involved in activities or communities and become engrosed. This is human nature. EverQuest is NOT a video game (a fact which Sony continues to this day to fail to understand). EverQuest is a community, much like Slashdot or the local coffee house. Just as people enjoy those activities and get more involved, they do so with EQ.

When I was a teenager I spent weeks in my room working on a rubick's cube.... which is worse, that or chatting with an old friend from college while whacking on an evil dragon?

At least there's some social contact in the EQ option, which is more than many people in my field get on a regular basis.

Too much time...

[leandrod]

> Perhaps I am taking this too seriously, but some people sure do have too much time in their hands.

The article fails to take into account that those EQ platinums aren't conversible. Meaning, you can auction them off in eBay, but only a minority will ever be. If they were a real currency, not necessarily the US dollar, then they would be convertible and these measurements and comparisions would make sense.

In that case, the value of the EQ platinum as a commodity would be much, much lower.

Re:Too much time...

[Little Hamster]

> The article fails to take into account that those EQ platinums aren't conversible. Meaning, you can auction them off in eBay, but only a minority will ever be.

How is that not conversible? How many people holding the US dollar or the Japanese yen are selling their money on the foreign currency market?

>If they were a real currency, not necessarily the US dollar, then they would be convertible and these measurements and comparisions would make sense.

The exchange rate depends on the supply and demand of a currency, not on some arbitrary conversion factor (well unless you are talking about non-floating currency such as China's RMB). If there are a lot of a particular currency on the market (eg if some big finicial inventment company decides to sell due to falling interest rates), its price will fall against other currencies in the market.

Everquest and Money

[MandoSKippy]

I played EQ for a year and a half, averging 20 hours a week. (Quite a bit as I look back) When I "got out" I sold my character on a auction site and got 800 dollars for it! I couldn't believe it I thought that it was awesome money. Then I realized if I averaged out my time and what I got for my character, it was only like 50 cents an hour. That being said, my average was more like a "minimum" every week with some weeks being > 35 hours of game play. The other thing this study doesn't take in account for is that Sony ACTIVELY (when I played, things may have changed) fights out of game transactions, and selling in game money and items for real money. So your "PLAT" may be worth a cent each, but good luck cashing in!

isnt this

[Dr.Knackerator]

like valuing every ticket in a theatre based on the price the touts are charging outside the event?

Uh huh

[Dark Lord Seth]

Castronova found that the average player was generating 319 platinum pieces each hour he or she was in the game -- the equivalent of $3.42 (U.S.) per hour. "That's higher than the minimum wage in most countries," he marvelled.

Not bad, however... You do need to pay for a constant internet connection, ( EQ here, so some light form of broadband ) a PC, electricity and one EQ account. I don't think that with these constant costs substracted, EQ will be a very good job...

Outsourcing...

[Lostie]

http://www.juliandibbell.com/texts/blacksnow.html It's already been tried - see link above. Some enterprising guy ran a China Everquest sweatshop where the employees played Everquest all day, and whatever they collected was sold for profit.

Deepanalysis

[Moo Moo Cow of Death]

Since I can't reach the page, I don't know why he only used 616 auctions (or however many he used). But you can use a tool obtained HERE for about $100 or so that will analyze Ebay listings for the past 2 weeks or so. Using this data you can get a MUCH more accurate reading that a measly 616 listings, which aren't even close to being correct since something around at least 80% of the business goes through IGE/Yantis these days. And don't forget Playerauctions which I can't access here at work due to the proxy but they don't get mentioned hardly at all nowadays despite the large amount of traffic going through them. If you want to read through more reliable reports you should instead roll around HERE (terra nova blogs) where doctors, lawyers and all sorts of other people that have been analyzing this stuff before you created your first level 1 female elven monk, lurk around.

Yes. At both ends of the game

[Tangurena]

There are quite a few characters who spend 24 hours a day at certain spots that drop above average amounts of platinum. Those teams/contractors sell their plat to IGE/Yantis who then sell it to the other players. The people playing the toons are getting paid a couple dollars per day.

The guides in the game (who are unpaid volunteers) are starting to get replaced, along with most of the GMs (who are employees of Sony, and used to be located in San Diego and UK) with GMs working in India.

Shadowbane economy was just as crazy

[brxndxn]

I never did play Everquest. But, I played Shadowbane, an Everquest-like game - where players completely controlled the economy, built cities, and created nations and guilds and fought among one another..

The first two months the game was out. One million gold pieces went for ~$100 on Ebay. It took my brother's farming character about 5 hours to earn $100. He made about $500 on Ebay when I decided to get the game. Twenty bucks an hour isn't bad for playing a video game..

Soon after I got it, gold quickly lowered in price. After about six months, 100 million gold went for $100 on Ebay. The economy was completely flooded. Any remotely valuable in-game item sold for millions of gold - or an impossibly-long farming time for a new player.

I read that some new MMORPGS that are coming out are actually going to try to take advantage of the players' willingness to pay for an advantage. Supposedly, people will be able to buy uber items that are impossible to get in-game.

Re:Outsourcing.

[Phekko]

Just in case you're even remotely serious: It takes a few months of serious gaming before you get to the point where you can earn several hundred platinum in an hour. I should know, I was hooked on the game for like 5 months. So before you get to earning it will cost you the monthly fee and a lot of time. If you'd play anyway is another story, but I can imagine a few more lucrative businesses than playing EverCrack

Making money fast

[91degrees]

Of course,m the problem here is you have to play the game to make money. One guy tried a scheme in Star Wars galaxies to automate this. Here's how well he did.

What about the UT2004 economy?

[eap]

I'm hatching a plan to steal Unreal Tournament 2004 vehicles from the other team and then sell them back on Ebay. You want that tank back, blue? It'll cost you!