Explain the virtual gaming economy to me please ?

Ok, I keep reading these articles about the virtual economy in gaming and how you can buy skills and levels and houses and stuff.

I’m unclear on how this stuff works. Can someone explain the working ? I tried checking howstuffworks.com, but I guess they haven’t updated in a while :slight_smile:

I understand the general concept, but I’d like to understand it a bit more in depth.

  1. If I pay, say, by credit card, do I get the points by email ? Or some code that I can then key into a game screen ? Or do I pay trusting that the deal will be closed within the game between my player and the agent player ? How is the deal enforced ?

  2. How is the game economy controlled ? Is there limited wealth generation, or does it get generated indefinitely. I mean, let’s say I create 10 new players in the game, will I get a basic amount of game cash as default when I create these players and then can I just go and sell this game cash for real cash and discard these dummy players ?

  3. What factors within the game determine the exchange rate ?

  4. How do such games allow for new gamers to join and develop successful characters in the game ? What I mean is that can a new gamer join in and be as successful as the current top rung of players, or is that virtually impossible given the way the games are designed ?

Now, I haven’t played any of these games, so maybe my questions aren’t entirely clear. The answers are probably game specific, so feel free to take any game as an example.

I’ve played Age of Empires and Heroes to death, so if you want to offer analogies, use these games so I can understand you better.

Thanks.

There is no enforcement. The majority of games that deal in item trading do not condone it and some even forbid it. But it still happens. You have to trust the seller. I sold an Everquest account about 4 years ago for about $500 US. Basically the buyer trusted I would give him my account name and password after I recieved the money. Which I did. Most transactions are done via paypal these days. Back then I waited for a money order in the mail.

Again, most games have no economy. There is no limited wealth. You can do as you stated or you can kill monsters repeatedly. Monsters will always drop cash and you can collect it indefinately. But the system you described is not feasible, because the amount of “game cash” a new player starts with is worthless for real cash. You need many many multiples of game cash to equal one US dollar.

Rarity. The items that go for the most money are not “in game cash” but rare items. Such as swords, armor super-guns etc. These are usually items that take an incredible investment of time and effort to obtain. Also, inflation plays a big role in the exchange rate of in-game cash for real-world cash. Using Everquest as an example, I know the rate used to be something like 100 platinum = 1 US dollar… I have no idea what it is now… probably something like 100,000 platinum = 1 US dollar given the age of the game.

They don’t. Its impossible. The only way for new players to “catch up” is either spend the real-cash to buy items or invest the same amount of time as the top rung players.

These things apply mostly to MMORPGs, persistent worlds. Several academic studies have been done on the Everquest economy alone, but virtually at MMORPG that has rare items, levels etc has an “out of game” real-cash economy.

I believe there is even one game in the works called “Project Entropia” whose main focus will be the exchange of in-game items for real-world cash.

Regarding your questions about in-game economy, I would have to say it varies from game to game. One MMORPG that I’ve played, Star Wars Galaxies, has a rather unorthodox system (as I understand) that in some ways parallels a real economy. I can’t remember exactly, but the only way I remember that money could be generated is to do a mission. You go and either deliver a product or destroy a lair, then a certain amount of money is deposited into your account. SWG’s economy is almost entirely player-run, so if you want to buy something, you’ll have to purchase it from another player. These items are produced by mining resources by hand (a slow, but free process), or by using a harvester (a speedier method, but it requires money to keep working). This is one of the game’s several money “sinks”, which help to control inflation. The money goes into the maintainence of the harvester, and essentially taken out of game circulation. The same goes for purchasing tickets for shuttles- the money’s delivered to some “Galactic Travel Commission” and never seen again.

I realize that’s probably a bit hard to understand if you’ve never played the game, but the essential idea is this- there are ways that money is introduced into the economy, and ways that it is removed from play. If the amount coming in is more than the amount going out, then there will be inflation. The goal of the developers is to try to keep the inflation rate as close to zero as possible, because the costs of game-set services, like shuttles and harvesters, are not set by the players (obviously). Of course, with player trades, there’s a great deal of flexibility, so as a product’s value increases (such as the recent Holo craze) its price value will increase. It’s all rather complicated, and therefore very interesting to a geeky fellow like me, but I’ve got class in a few minutes and can’t quite go into more detail at the moment.

Oh, and, by the way- don’t spend real money on fake money. You’re already spending $15 or so to play, there’s really no reason to increase that amount just to get ahead.

in short, people pay real money so they don’t have to invest the time to climb up the game ladder. in other words, they pay real money so they don’t have to play as much.

IMHO it’s all pretty inane, since one would think playing the game would be the whole point. then again, there are plenty of idiots who use cheat codes or third party software to rig gameplay. probably a power/teenage thing.

Yes and no. (And the rest of this isn’t directed entirely at you, shijinn, as I’m sure you know what I’m talking about.)

In pretty much any MMORPG (I’ll generalize as I’ve played about half a dozen, so someone please chime in if I’m speaking too broadly) character advancement gradually slows over time. When you first start playing, you’re willing to spend an hour killing rabbits or running errands for NPCs to get a pittance of experience or money. As you keep playing, it eventually requires more and more effort to reach the next goal. Say, 30 minutes to get to level 2, 45 to get to level 3, all the way up to hundreds of hours to get from level 29 to level 30.

For some players at that point, they want to play the game in an enjoyable fashion, and not sit and kill the same monster over … and over … and over. If they reach this point, they may spend real-world money to gain in-game items, or gold, or experience, because they want the game to feel more like fun than a chore.

(Let’s not get into how if you feel obligated to play a game, maybe you should stop giving them $15/mo…)

Buying equipment or in-game advantages isn’t necessarily indicative of powergaming or teenage insecurities. Someone who spends hundreds of dollars to get a super-character is one person, someone who gets sick of killing the same monster over and over hoping it’ll finally leave behind the Super Sword of Coolness and just buys the damn thing on eBay is another.

All that being said, I’ve never bought or sold any in-game items for real-world cash in my years of playing.

The EverQuest guys got eBay to pull and thenceforth forbid the sale (or auction, as the case may be) of virtual items for real-world cash long ago, as it promotes a behaviour that - while natural - is not one they wish to make a part of the EQ experience. That, and they maintain the sale of actual character accounts violates the end-user license agreement; which I’m sure it does if you can swallow all the legalese they like to put in those kinds of things.

I know in the case of selling other, somewhat more tangible things (like Warhammer 40,000 miniatures) that there exists a network of trust that works very much like eBay’s feedback system; Bartertown’s Internet Trading List is a good example of one such system.

Depends on what you mean by “catch up”. I can only use Diablo II as an example, since that’s the only online game I play. But I have a couple of characters in DII which are very nearly the equal of the no-life 20-hours-a-day characters. Most of the extreme high end items are only marginally better than the respectably high but attainable items, or even the mediocre, everyone who wants one has one, items. As an example, my fire sorceress can do about ten thousand damage with a fireball. If I got perfect equipment (either by laying down the dollars on Ebay, or by spending every waking hour in game), I could raise that to maybe twelve thousand.

As for starting many new characters and harvesting the wealth from them, in Diablo II, a new character starts with equipment valued at between 1 and 3 gold pieces, whereas a mid to high level character can easily find individual items worth 35000 gold each. Not that gold is worth anything at all in DII in the first place.

The MMORPG Ragnarok Online has an interesting player-based economy. In that game, you can buy stuff from an NPC, but you are limited as to what you can buy. Also Merchants can sell you items at a discount and still make a profit (using job skills). This has good points and low points.

The good point about it is that if you want a particular item, you can shop around. Or you can ‘bid’ for it, find maybe 5 people that are trying to dump that item and buy it off the person willing to sell it for the cheapest amount. If you have a particularly rare item you do not need, you can similarly sell/trade it for a good deal as the population is sufficient you’ll always find someone willing to take it off your hands. Selling items to newbies is fun because they are poor (so much so that the streets are literally crowded with BEGGARS :eek: ) and because most career merchants don’t bother with low-end items which yield very thin profits. Thus if you have +2 Newbie knife of stabby, you’ll probably find some guy who will buy it off you for more than what you would get from an NPC, and have an extremely grateful player who might return the favor sometime in the future (in a perfect world, that is)

The bad point about it is that merchants can be the scum of the earth when it comes to price fixing. Some time ago, a cabal of merchants got it in their heads that they were going to fix the price of red potions. Red potions are the backbone healing potions of lower level players, particularly newbies. EVERYBODY sold them at the exact same price. If a canny merchant was trying to undercut the competition by selling them a few Zenny cheaper, rival Merchant guilds would blacklist the merchant, and make it a point that he got ostracized by damn near every townsperson in a 3 mile radius, effectively ‘running him out of town’. This pissed me off so much I wanted to start my own guild which would make it a point to sell rare items/price-fixed items dirt-cheap to run the other guilds out of business.

While there are still lone players selling items, the big dogs of the industry are companies dedicated to the harvesting and selling of coins and items in Everquest. While unconfirmed, I’ve heard of some companies paying Indian players dollars a day to play EQ and just farm equipment or camp the in-game auction houses and wait for deals to show up.

Someone mentioned that in Everquest platinum coins (the standard money) used to sell for 100 pp per 1 US dollar. Now it’s 1000pp per 1 US dollar with discounts if you buy in bulk. This has ruined the ingame economy as items that used to cost 10,000 pp now can cost 10 times as much because of the availability of platinum for real cash. Before the inflation a casual player like myself may have had a chance of getting the item by saving and working for a month, but now I have no chance of getting that same item in a reasonable amount of time without buying my platinum online.

Once the transaction is complete, how does the virtual item change hands?

Ive never played one of these games before, I find this whole world facinating.

Pash

Thank you. Excellent answers. That mostly clears it up for me.

A couple more:

Why would new players join if they are up against such hurdles ? Is this one of the things that concerns the gaming companies ?

Do the gaming companies adjust the in-game prices over time to factor in the inflation ?

Please feel free to continue discussing other points, I find this very interesting.

perhaps this might be interesting?

lno (my post is also not directed at you. ^^)

that makes sense. i’m trying to imagine myself working nine hour days, coming home tired… squeezing that two to three hours of ‘wide awake on crack’ game time to adventure in a distant land… where 13 year olds speaking in a familiar but alien language totally bust your guts… not because they are so much more skillfull than you (maybe, but irrelevant dismissive wave)… but because they have that much more time to play. in that world, they are the experienced veterans, and you are the noob… Not so! they may have the time, but you have the dough! muahahahahahaha!!

however, if i read your post correctly, you are simply giving the reasons how one might want to use ‘cheat codes’, or in this case a similar way to get the uber item immediately. i still think that is inane (those people who cheats, not you). getting that uber is the reward for playing the game. cheating spoils the game. cheating is like a 13 years old teenager using a GrowOldNow[sup]tm[/sup] concoction to become 23 years old. you don’t gain 10 years, you lose them.

they are hurdles only in a pvp environment where the higher level players can kill the lower level ones with impunity. blizzard has promised to make world of warcraft a place where everyone is free to roam and not be subject to player killing by higher leveled users if they don’t want to. furthermore, one of their main goals "is to ensure that players can enjoy World of Warcraft without having to invest huge amounts of playtime. " so i guess it’s a matter of concern.

it also depends on your intepretation of ‘successful’. whether it’s getting more loot and experience points than everyone else in the world or having fun on your way up.

does it matter? even if there isn’t any specific ways to trade items i suppose one can always meet someplace and drop it on the ground…

hmm, i don’t want to kill this thread as the OP is interesting to me as well… so do allow me to ask another related question.

How is the game ‘character level’ economy controlled? Is there limited experience generation, or does it get generated indefinitely. i mean, does everyone get to level 99 eventually and become gods or something so long as they have the time (as opposed to skill) invested? that sounds boring.