virtual-economy
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Guild Wars 2: The state of the economy
Guild Wars 2 has been out for a while, and now that it's trading post is up and the window for saying that we can't judge the economy because the game is brand-new is closing, ArenaNet's John Smith is here to grace you with some insight and knowledge. In a new Guild Wars 2 news post, Smith takes a look at the state of the economy in the game. Between the rough start that the trading post had and the veritable flood of crafting items created as players raced toward mastercraftsman status, several markets are more than a little out of whack. Smith said that adjustments are being made to bring markets "closer to non-vendor based equilibrium" (praise be!) and that to help clear up some of the excess supply, limited-time Mystic Forge recipes will be implemented for players to use up some of their heaping piles of butter overloaded items. He also addressed the problem of exploits and their effect on the market. For all the painstaking details and a nifty chart, hit up the official news post.
Neal Stephenson talks MMORPGs and virtual economies
"The virtual reality that we all talked about and that we all imagined 20 years ago didn't happen in the way that we predicted. It happened instead in the form of video games," says Neal Stephenson, nerd icon and noted author of Snow Crash and The Diamond Age. In a new interview at Forbes, Stephenson talks up his latest sci-fi opus, Reamde, and also offers his opinion on everything from the Metaverse to gamer stereotypes to players converting their in-game labor into real money. "It's undoubtedly happening right now on an informal level all over the place. A huge amount of money is changing hands, and the thing that prevents it from coming out into the open and working the way it's depicted in the novel is a number of legal and regulatory hang ups," Stephenson says. He also mentions his own gaming experiences as well as his new novel's tendency towards adventure in place of the brainiac speculative fiction he's famous for. Head to Forbes for the full report.
World Bank report finds selling virtual goods in games more profitable than 'real' economy
A report commissioned by the World Bank's infoDev unit has cast fresh light on one of the more fascinating aspects of our brave new interconnected world: the virtual economy. The "third-party gaming services industry" -- where wealthy but impatient players have someone else grind away at online games for them in exchange for monetary reward -- is one of the focal points of the study, chiefly owing to it having generated revenues in the region of $3 billion in 2009 and now serving as the primary source of income for an estimated 100,000 young folks, primarily in countries like China and Vietnam. What's encouraging about these findings is that most of the revenue from such transactions ends up in the country where the virtual value is produced, which contrasts starkly with some of the more traditional international markets, such as that for coffee beans, where the study estimates only $5.5 billion of the $70 billion annual market value ever makes it back to the producing country. The research also takes an intriguing look at the emerging phenomenon of microwork, which consists of having unskilled workers doing the web's version of menial work -- checking images, transcribing bits of text, bumping up Facebook Likes (naughty!), etc. -- and could also lead to more employment opportunities for people in poorer nations. To get better acquainted with the details, check the links below or click past the break.
BBC suggests gold farming may bolster poorer economies
Who says gold farmers are devilspawn and deserving of a fate worse than death? Well, a lot of MMO gamers say that, but a news blurb on the BBC's website suggests that some virtual currency farmers may have a higher purpose after all. Citing a report at InfoDev.org, the BBC posits that gold farmers are simply filling a role in the global supply and demand economy. "Western players who have limited time for gaming are buying game cash, gear and high level characters from people in China and Vietnam that are paid to play as a job," the article states. The BBC also notes that the most recent global virtual sales estimates put the total market worth in the neighborhood of $3 billion. Approximately 30% of that is generated by legit players, 50% comes from bot farms, and the remaining 20% is pilfered from compromised accounts. Whether or not you tremble in anger at the thought of MMO gold farming or dismiss it as a modern-day reality, it seems as if it's here to stay, and according to the BBC, it might even provide economic aid to poor nations. "The virtual economy can have a significant impact on local economies despite its modest size," according to the article.
15 Minutes of Fame: Cory Doctorow on gold farming
From Hollywood celebrities to the guy next door, millions of people have made World of Warcraft a part of their lives. How do you play WoW? We're giving each approach its own 15 Minutes of Fame. digg_url = 'http://wow.joystiq.com/2010/08/04/15-minutes-of-fame-cory-doctorow-on-gold-farming/'; A conversation with Cory Doctorow plunges into the matter at hand so quickly that it's almost impossible not to imagine yourself falling through an internet-era rabbit hole of pop culture and technology. Doctorow is all about synthesizing ideas and spitting them out in as accessible a fashion as possible, and the ground he manages to cover in a single stride can be mind-boggling; he's a science fiction author, activist, journalist and blogger, father, gamer ... A former WoW player and husband of gaming standout Alice Taylor (also previously profiled here in 15 Minutes of Fame), he's widely known as the co-editor of Boing Boing and author of the bestselling young adult novel Little Brother. Doctorow's latest young adult novel, For the Win, pries open the seams of the shady scene behind MMO gold farming. Its young protagonists are gold farmers and gamers themselves. Doctorow has woven his own experience and sensibilities with focused research to outline a world of gold farming that sprawls far beyond the lines of cartoon-image gold farmers that most of us have painted in our heads. We chatted by phone with Doctorow for this lengthy conversation on gold farming and game economies, plus a companion piece at our sister publication Massively.com on gaming culture and his recent fiction.
15 Minutes of Fame: Cory Doctorow on gold farming, part 2
Cory Doctorow: Well as practical matter, I think that you can't not. At the same time, here in World of Warcraft, we have the dungeon finder system that some people say may be actually helping to break down some of the server communities and relationships that exist in the game.
EVE Morning Report provides news-style daily snapshot of game's economy
EVE Online is a game that can be different things to different people. While some players are intent on the destruction of their fellow capsuleers, others prefer to focus on other aspects of the game like trading and mass production. After all, EVE's setting of New Eden is one largely dominated by megacorporations. For those involved in the complexities of the game's economic side, having frequent snapshots of New Eden's virtual economy would be a boon. The game's would-be tycoons now have this, thanks to EVE Online player Utemetsu and the EVE Morning Report -- short, 5-minute audio recordings released daily that convey information about major commodities traded on the open market in New Eden. EVE Morning Report with Erik Mumm is presented in the style of NPR or the Marketplace Morning Report. It also provides players with the graphed price history of major commodities, captured from the in-game tools. The sponsors of the EVE Morning Report are other players whose various services are mentioned each day in exchange for their patronage. Although Utemetsu's program has only been running for a few days, EVE Morning Report is already expanding to include interviews with New Eden's marketeers. Individual EVE players, corporations, or alliances interested in sponsoring EVE Morning Report can contact Erik (Utemetsu) via email or let him know in the program's thread on the official EVE forums.
EVE's Quarterly Economic Newsletter focuses on impact of anti-RMT operation
One of the strengths of the sandbox game EVE Online is its player-driven economy, which developer CCP Games monitors through a small team of researchers headed up by Lead Economist Dr. Eyjólfur Guðmundsson (aka CCP Dr.EyjoG). They observe all manner of player interactions and sift through a tremendous amount of data to track how EVE Online's economy changes over time. Their findings are presented to the playerbase (or to anyone curious about virtual economies) in the form of Quarterly Economic Newsletters (QEN). CCP released the 3rd Quarter 2009 report this week, which gives us a look at player demographics and the most popular ships flown by those players. (It's interesting to note that the most popular ship in the game is now the Hulk, a mining vessel which has usurped the Raven battleship as EVE's most flown ship, while Black Ops battleships are EVE's least flown ships.) This latest QEN also gives various price indices and Market Snapshots, which chart the volumes of a number of popular items traded on the open market. CCP also shows the impact "Operation: Unholy Rage" -- their anti-RMT initiative -- has had on EVE Online's economy with over 18,000 (paying) accounts banned to date. Dr.EyjoG writes, "Unholy Rage taught us a great deal about RMT operations in EVE. We now have a much clearer picture of the extent of operations and the tools and methods they use."
CCP's Ryan Dancey on keeping EVE Online compelling
CCP Games Chief Marketing Officer Ryan S. Dancey recently spoke with Gamasutra's Christian Nutt about the state of EVE Online and what makes the sci-fi title unique. EVE has traits that many MMOs don't, such as player governance, a dynamic virtual economy, and slow but continual subscription growth. CCP does face problems in tandem with that growth however, namely from RMT operations. There is also the issue of balancing developer control over aspects of the game's economy (mission rewards, salvage and loot drops, ISK sinks) with the ideal of allowing EVE's economy to be as player-driven as possible, explains Dancey. Among other things discussed in the interview, Gamasutra asks how White Wolf has changed following the merger with CCP Games nearly three years ago. Dancey tells Gamasutra: "It's just an imprint... White Wolf used to have a fairly large staff. It doesn't anymore. It's focusing primarily on the World of Darkness RPG products. It's not doing some of the things it used to do; board games and other card games and things. The focus of the company [CCP] is on making MMOs and our legacy table top business is a legacy business."
EVE Online: The taxman cometh
When EVE Online developer CCP Soundwave isn't entertaining fans of internet spaceships with his wit during the EVE Alliance Tournament, he's apparently finding new ways to ... impose taxes on players? His dev blog today explains that CCP Games will tax the earnings of players in NPC corps and their reasons for introducing this taxes. This won't apply to those in EVE's player corporations or those enlisted with a militia for factional warfare. "Service guarantees citizenship and all that, so keep on trucking," he writes. (Note: For those less familiar with EVE Online, this deals entirely with in-game currency of course, InterStellar Kredits or ISK. No real world taxation is involved.)After all these years, why impose taxes on players in NPC corps? CCP Soundwave explains it all in "I Bring Gifts! (By Gifts I Mean Taxes, Sorry)". NPC corps have a few advantages over player corps in that they cannot have wars declared against them by player corporations; immunity to wardecs is perhaps a key reason some players don't move on to player corps. In addition, members of NPC corporations don't have taxes subtracted from their NPC bounties and mission rewards, which most player corporations impose.
New EVE quarterly economic newsletter
Dr. Eyjólfur Guðmundsson from CCP has released another quarterly EVE Online economic newsletters, this time for the 1st quarter of 2009. Despite the quarterly name this is the first report since the one for Q1 2008. This time the PDF weighs in at 48 pages of editorial, graphs and images. The first graph in the document show the number of active paying accounts that the game has had from launch up until March 2009, ending shortly before the point at which CCP announced they have passed 300,000 subscribers. Interestingly although the graph shows strong growth from November 2008 onwards, which is when CCP released the Quantum Rise expansion, the actual numbers before that showed a slight decline in subscriptions that is not addressed in the commentary.There is also an extensive analysis of skill points, with the difference in the number of points in each skill point group for each race showing correlation between the race of the character and the skills trained. Interestingly Gallente characters tend to have more points in drone skills, while Caldari characters have the highest missile skills. This seems to indicate that players are following their racial ship choices for their skill training, which is not something that the game enforces. There's a lot more information in the report itself, including detail on ship prices over time, Tech 3 production for the first month and mineral trading. You can read the full document at the dev blog, and follow the comments from players on the EVE Online forums.
Massively interviews EVE Online Lead Economist Dr. EyjoG
The sci-fi game EVE Online is unique amongst the other massively multiplayer online titles on the market. One major aspect of the game is that its far future setting of New Eden functions as one server, where players can build up empires -- or topple those of their rivals -- across more than 5000 solar systems. Beyond its scale, what distinguishes EVE Online from other games is that it has a player-driven virtual economy, the backbone of the game. EVE's economy has been a major draw for players interested in market and crafting sophistication generally unseen in an online game. EVE's creators, CCP Games, have fostered a setting where players can do what they want in the 'sandbox', a setting where the tools are in place for players to use as they see fit. Nearly every ship, module, and item used by a player in the game was produced by another player in New Eden at some point. Fight for military dominance and control vast regions of space, or corner the market as part of an industrial conglomerate -- it's all possible in EVE. In fact, the game's warfare and industry are very much intertwined, making EVE's virtual economy a dynamic one. Monitoring and researching this economy is important to CCP Games, and to further that goal, they've hired real world economist Dr. Eyjólfur Guðmundsson (aka CCP EyjoG). Massively recently caught up with Dr. EyjoG, who told us about his rather unique position at CCP Games, and what he's learned about virtual economies along the way.
LGJ: Regulating Virtual Currency
Each week Mark Methenitis contributes Law of the Game on Joystiq ("LGJ"), a column on legal issues as they relate to video games: We're seeing quite the economic turbulence in the United States as of late, and financial problems lead to two things: 1) further regulations on the issues that caused the problem; and 2) people seeking out new sources to exploit to make a quick buck. Plenty of people have written article upon article about all of the various economic tools that have been exploited to bring us to this point. I, however, would like to talk about one of those potentially exploitable areas people may move toward, that being the currencies that exist in virtual worlds and MMO games. I figure it's only a matter of time before what I'm about to describe occurs in one manner or another, which could very easily turn the tide of regulatory scorn from Wall Street to Azeroth or Second Life.I guess the best place to start is from something I hope most people are familiar with on a basic level: insider trading. In short, insider trading is when people with non-public information trade stocks to their benefit. It's regulated as a combination of a breach of fiduciary duty to the company or a misappropriation of information. In short, it's an unethical way to profit from inside information, and generally frowned upon (though some economists disagree with regulating insider trading). But insider trading is about stocks and securities, so where am I going with this?
A look at virtual banking in EVE Online
EVE Online is set apart from most MMOs out there in that players find ways to establish and run large financial ventures within the game. What's interesting is that although such initiatives aren't developer-supported, players still put together banks, IPOs, and other types of investments peripherally to EVE and its game mechanics. The sandbox nature of the game paired with EVE's API allow for ventures of this sort. Dynasty Banking is one choice that players have that's been turning heads of late, but EBANK is the focus of a recent EVE-Tribune piece. EBANK has accrued over one trillion ISK and over 2750 customers, making it -- according to their 2007-2008 annual report -- "the largest financial entity ever seen in EVE." EVE Tribune had a chance to interview EBANK's LaVista Vista (real name: Charlie Eriksen), who is also a newly re-elected delegate of EVE's player representative body, the Council of Stellar Management. The EVE Tribune piece written by FinnAgain kicks off with one hell of a caveat in the form of a direct quote from one of their staff writers, but it's a good way to begin, particularly given the problems that have been seen in the past with banks in EVE Online. The interview focuses on the policies and safeguards in place to keep any individual working at EBANK from absconding with vast amounts of player-invested ISK, but LaVista Vista also discusses how EBANK puts all that isk to use, and their future plans to establish a stock exchange. If you're interested in the economic side of an MMO, the EBANK interview at EVE Tribune is a good look at what players can accomplish on their own within a virtual economy.
China legislates 20% tax rate on virtual currency profits
While much of the world's gold farming activity is based in mainland China, the black market industry operates in violation of the law. Despite this, a large part of the problem in curbing illegal activities in China is that there's a substantial divide between what the law states is illegal and the actual enforcement of those laws. This may well be the case with the law passed last week by China's State Administration of Taxation, which will impose a personal income tax rate of 20% on profits made from virtual currency.Juliet Ye at The Wall Street Journal's "China Journal" blog reports: "The policy would cover China's legions of online gamers, who can use online virtual currency to buy better equipment and new powers for their online warriors. But it also affects millions of others who use virtual currencies on instant-messaging services and Web portals." The widespread use of virtual currencies in China spurred last year's restrictions on exchanging virtual currency into RMB. If the new law becomes a reality rather than a technicality in the lives of China's internet users, it will be a substantial change in virtual economics in the country.
Real world economic impact on MMOs and virtual worlds?
Given the drastic real world economic shifts of late, is it unreasonable to assume that there will be repercussions in virtual worlds and MMOs? That's the gist of a question posed by CBBC, a longtime commentator at the Terra Nova blog, but specifically he asks: "What now for virtual economies? What happens to EVE now that Iceland's economy is collapsing?... Will my WoW gold be worth more or less? Will games go under taking their value with them? Will we see a run on games the same as a run on banks?" While his questions aren't focused solely on EVE Online, and are more of a general inquiry, CCP's title is not surprisingly the main example cited by both the CBBC and Terra Nova's readers. As expected, the responses to the question are intelligent and shed some more light on how real world economics might affect MMO economies, namely that of EVE Online. Some speculate that real world issues will result in increased escapism, imbuing virtual worlds and their economies with greater significance. Others related financial scenarios that affect CCP Games and its virtual economics. If you're interested in the economies of MMOs and virtual worlds, you might want to get involved in the discussion of "Whither MMO economies?" over at Terra Nova.
Should your GM be able to tax you?
This idea's been floated before, but a few people on the forums have responded pretty enthusiastically to the notion of introducing a "guild income tax." Others...not so much so. Basically, there was a proposal made in the Beta forums that Blizzard give GM's/officers the ability to levy a percentage-based tax on members' earnings. Jeff "Tigole" Kaplan responded, saying that it "was an interesting idea" and they're considering options for improving guild administration, but there was no way they could program a change like this in time for Wrath. Bear in mind that the original tax being suggested would apply to your toon both inside and out of raids (although no one was seriously suggesting that the tax should apply to non-raiding members of the guild).I have to admit that I'm not too keen on the idea of a broad-based "income tax" on players, if only because the game's current mechanics make it all but certain that the main beneficiaries will be people who either can't (due to class/spec) or won't put much gold into the guild coffers. Moreover, the taxation idea acts as an incentive for people not to guild their alts, thus avoiding taxation entirely on toons that are usually the real means of support for a raiding main (someone remind me to go reserve a hunter named Swissbank). As an herbalist/alchemist, I farm a lot for friends and have been known to chuck the guild bank a few hundred gold from time to time. Maybe I'd save time and money under a system that required me to hand over 2-3% of my income, but still. Being taxed removes an element of individual responsibility, and it certainly takes away the nice feeling you have for voluntarily helping others.If nothing else the idea's given rise to a few nice jokes (Cacora of Hellscream: "Do I get money back at the end of the year if I claim multiple alts as dependents?"), but the final word may well belong to Grig from Whisperwind: "So, Blizzard is considering taking one of the most universally loathed concepts from real life and adding it to a game. Why, they'd be silly not to do it."
Curing mudflation before it starts
For many players, the mysteries of a virtual economy are best left as that -- a mystery. The numbers, the abundance of terminology, it all conspires to create an environment where players generally don't want to know why the economy works, they just know that they'd rather it did than it didn't. Is that really too much to ask?Steve Williams of Living Worlds proposes some potential solutions for curbing mudflation -- that seemingly unstoppable inflation that occurs at the endgame when players accrue large amounts of currency and the once high price of rare goods comes tumbling down. He proposes that it's actually possible to limit the amount of currency available in the economy by allowing players to use alternative currencies like vendor trash to barter for basic services like armor repairs. It makes sense, since repairs and vendor trash generally exist in limitless supply and don't actually need to be a part of the economy proper. This is only Part One of Williams' proposed system, so we'll have to check back again soon for his full set of ideas.
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Taxing your virtual economy
Logging into World of Warcraft to check the mailbox for a new treasure trove of gold is pretty normal. Logging into WoW and seeing Taxman102 spamming the trade channel about new tax laws is not very normal. In fact, some people find that more frightening than an angry raid leader deprived of sleep. The real scary thing is, two governments are actually talking about it. The US Congress sat down on the 1st of April and, despite the nature of the day, had a serious discussion on turning copper, isk, lindens, and doubloons into cold, hard, cash. Sweden also had some interesting things to say on taxing virtual transactions. What the heck is going on? Are W-4s going to start arriving from Blizzard addressed to Sirtradesalot of Destromath?Luckily, the issue is not a problem for the players who deal solely in virtual property. For example, buying x item on the auction house for x gold. The issue affects those MMOs that utilize microtransactions as a part of their content or subscription methods. For each silver bought, there might be a small sales tax attached if the talk ever becomes reality. Make sure to keep those sales receipts next year or you could get an unpleasant knock on your door!
Lawsuit claims IGE dug too greedily and too deep
Out of sunny Florida comes a storm ready to rain on the parade of gold sellers everywhere. Gold seller IGE has found itself sinking deeper into a stack of complaints thanks to one concerned gamer. Antonio Hernandez is fed up with the spam, inflation, and annoyance that stems from gold selling and has decided to do something about it. He has filed for a class action lawsuit that claims inflation in the virtual economy, thanks to gold sellers, forces players to spend more time behind their keyboard in an attempt to makes virtual ends meet, thus costing them more money. "This loss of time, conservatively, amounts to hundreds of thousands of hours of subscriber time and causes the irreparable harm of driving subscribers away from World of Warcraft." Since the announcement was made, Antonio has already been flooded with letters of support from the WoW community. The reason for the support is not only because Antonio is trying to end gold selling, but because he is an active member of the virtual community he feels has been wronged. "The lawsuit," says case consultant and professor Greg Lastowka, "has more of a feel of a community trying to enforce its rules rather than a game company trying to enforce its power over the participants." The community is a strong one, and to add to the power players wield, the game companies are taking a stand with them. Blizzard has announced that they support the lawsuit and stated that gold selling is a very serious concern of theirs.The case dives headfirst into a world with no clearly defined boundaries. The Florida justice system, having issued a subpoena to IGE demanding their transaction details, accepts that the subject of virtual law is real enough for concern. This is a good sign for players since their rights are also what are at stake. As Hernandez's lawyer, C. Richard Newsome, asks, "what are the rights of the [virtual world] community members when they go online?" The community members supporting Antonio have made one thing crystal clear concerning that question. They desire a fair game and hope to collapse IGE's virtual gold mine right on top of IGE's head.
