We the Avatars

Mark Wallace | 20 Sep 2005 08:04
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Not many gamers I know get too hopped up over the subject of MMOG economics. Sure, we complain about high prices at the auction house, we lament the waiting lines for our chosen servers, we disparage real-money trade, we blather on about "inflation." But when was the last time you checked the Consumer Price Index for your favorite virtual world, or looked to see whether your guild was actually turning a profit these days?

I'm betting never. Not because gamers are too lazy to look, but simply because that kind of data just doesn't exist.

Boring, you say. There's a reason economics is called "the dismal science." How is that gonna help me ding?

In fact, it could help a great deal, because like it or not, virtual economics is about to reach into both your wallet and your games in a big way.

Right now, MMOG gameplay doesn't feel very involved in virtual economics unless you're in a place like EVE Online, Ultima Online or a non-game world like Second Life, where the economies float more freely. In the big worlds like World of Warcraft you can go on about your business, buying from NPCs and beating mobs, and never have to worry about it.

In the new worlds, though, that's changing. Real-money trade (RMT) has become a hot-button issue with many gamers and game designers. The practice of buying and selling virtual-world items (and services) for real money can lead to lots of things that lots of people view as problems: Low-level characters get twinked with powerful equipment they couldn't possibly have earned yet; gold-farmers suck up all the loot in a region, leaving nothing for innocent adventurers just trying to earn an honest level; characters appear, wordlessly level up under the control of a paid power-gamer, then wander around without a clue once they're back in the hands of their inexperienced owners; developers have yet another obstacle to design their way around while trying to keep their games fun and engaging.

Game developers have been taking RMT into account for some time, but it's only just lately that they've started to make more overt choices in designing for it. And those choices will not remove the issue of economics from our online lives, but get us more deeply embroiled in it than ever.

Sony Online Entertainment's Station Exchange service, which helps EverQuest II players on certain servers auction their virtual goods for real money, is only the most visible recent example of a company designing for RMT. The overly shiny MMOG Project Entropia has addressed RMT by doing away with monthly fees and creating an economy that's explicitly tied to the dollar. Project Entropia's PED currency is exchangeable at a fixed rate, and players can buy it from the game company with a credit card (or sell it back to them) without even leaving the game. They can also earn PED from other players' activities.

Other worlds are trying on similar revenue models. The forthcoming Roma Victor will also have no monthly fee, and will allow similar earnings and purchases (reportedly only up to a certain amount each month). From the sound of things, Roma Victor's designers at Red Bedlam are busy making sure you're going to have to buy some game currency if you want to get much out of the game. But Roma Victor's currency, the Sesterces, will have a variable exchange rate against real-world currencies. And while prices of most things in-world will be determined by player-driven supply and demand (not unlike UO and EVE), Red Bedlam, like all game companies, will be free to tweak the economy in an endless number of ways in order to satisfy the gods of gameplay balance.

These kinds of models may sound like an unnecessary complication of things and a way to let game companies micro-manage the economies of their games, but the truth is they're anything but. If new revenue models like Roma Victor's and Project Entropia's take hold, it will actually put more economic influence in the hands of players. It also means we're going to have to start paying a lot more attention to how our virtual worlds are governed.

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