Two Digital Cows: The Economics of MMORPGs

Capitalism: You have two cows. You sell one and buy a bull.

Socialism:  You have two cows. The government takes one and gives it to your neighbor.

Communism: You have two cows. The government takes both and gives you some milk.

MMORPG: You have two cows. The server is hacked and you lose both.

It’s strange to think of the space of an MMORPG (Massively Multiplayer Online Role-Playing Game) as having an economy, but it’s true. As a simulation of reality, their spaces have properties that emulate real world economies:

  • Individuals have private ownership of property and currency. They are competitive and all connected.
  • Property and currency can be “created” (e.g. loot drops).
  • Value can be added to property through improvement and customisation. Examples include making a weapon more powerful, or cosmetic enhancements.
  • Property can be bartered, bought and sold, both with in-game and real-world currencies.

The “property” in this case refers to the virtual goods in the game – weapons, gear, items, and so on. Yes, people buy these with real money! For example, the most expensive purchase in Second Life was a section of virtual land for $50,000. You might wonder why someone would pay for something that’s entirely virtual and has no physical presence or worth, but keep in mind that the same thing applies to video games themselves.

This isn’t just a rare occurrence with little impact. There has been serious academic research analysing these video game economies and their significance to real life. In 2011, the World Bank estimated that the virtual economy was worth a total of $3 billion USD. There are real businesses that profit solely from MMORPG goods, such as IGE (Internet Gaming Entertainment Ltd.) which exchanges virtual commodities for real money.

“Gold farming” (performing menial tasks to generate Gold, the currency in the popular MMORPG World of Warcraft) is full-time employment for some in China and Vietnam called “playbourers”. The idea is that gamers outsource their labour to cheap workers in developing countries, who generate Gold for them or play on their behalf to improve their in-game avatar. It is estimated that there are over 100,000 playbourers in China which has widespread electronic infrastructure and a large labour pool. Unfortunately, while Gold farming gives these unskilled workers opportunities and employment, they often work long hours for relatively little earnings.

Sound familiar? Gold farming sounds like descriptions of Third World labour, globalisation and serious economics (e.g. coffee bean farming) because it is exactly that. MMORPGs have grown beyond their role as entertainment and are now phenomena with worldwide economic and social consequences. In fact, you could even say that these games have grown beyond being games. For the traders, craftsmen and labourers, engagement with the game worlds have no sense of entertainment or play. Their actions are hacking, using both the rules of the game and real life, because they now form one cohesive whole.

Society is treating video games as pure entertainment and “just games” but now virtual spaces are blurring and MMORPGs are becoming as serious and significant as any other serious computer network. In some Chinese prisons, the prisoners are even forced to play World of Warcraft in 12 hour shifts to generate Gold for their superiors, and are physically beaten if they refuse to comply. Try telling them that it’s “just a game”.

Sources:

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