Geekonomics: A Blog on Bling

With massive-multiplayer games blooming to big business, and bringing in the big bucks, much more media attention has been bent towards understanding the economics of these behemoths.

Alliterative!

This attention only make sense. Once a successful business model has emerged from a volatile market, it's simply bad business not to know how the model works. For example, when I came over to Florida as a young but optimistic Cuban immigrant, and clawed my way to the top of the 1980's cocaine boom, everybody wanted to know how I did it. My secret? Don't get high on your own supply.

First I got the money. Then I got the power. Then I got the weeeeeeemon.

An exceptional amount of work has been devoted to understanding the real-world economics of such systems. Over at GigaOM, Wagner James Au breaks down the top earners in the market. A lot of the data he reports is not what you'd expect, much of it owing to the boom of Korean MMOs, which operate under the principle of Free-to-play-but-I-guess-you-can-pay-for-some-stuff-like-maybe-a-shirt?-why-don't you-go-get-your-mom's-credit-card-and-we'll-figure-it-out gaming. To be fair, it was a really nice shirt.

Fashionably black is the new black.

Things complicate, however, when you begin analyzing the internal economies of these games, and the ways in which virtual economies meet and affect real ones. Lines become blurry, and definitions become softer. Where some MMOs are designed with commerce in mind - Second Life operates through the continuous investiture and circulation of Lindenbucks, And EVE Online is based upon the very premise of a functioning in-game economy - not all MMOs are devoted to such a maintained system. Most operate under a “dealer” principle, which controls how money flows from, and back to the game. Consider the act of “grinding,” where monsters are killed repeatedly. Upon their bodies, gold or valuables are found.

This is pure van Helmont stuff happening here: The valuables didn’t ‘come’ from anywhere, so much as sprung into existence from the aether. This can approximate a rough time-to-money system well enough, but things get squirrely when trade between players in introduced.

Look at the difference: A player pays another player hundreds of gold for a valuable or rare item, and that money stays in circulation, and can be further invested. But if a player purchases an item from a non-player character vendor, that money vanishes - sometimes to the tune of thousands of gold for the most expensive articles.

Enter the goldsink: the various sites introduced to any functional MMO operating in this system, in which hundreds of thousands of virtual moolah vanish every day. In this way can the value of in-game currency be controlled, even manipulated towards inflation and deflation. People’s purses a little too light, and you can introduce new quest lines that provide players with faster ways to accrue goodies than ever before. If there’s too much money clogging down the system, the introduction of a few new vanity items can suck all that troublesome cash out of the system in a matter of weeks.

Pictured above: Troublesome Cash

This needn’t be done to simply manage the economy - it can also be done to maintain a play environment. As a case in point, consider Blizzard’s management of World of Warcraft in the months preceding their second expansion. Knowing that players of their game would have to be given new ways to occupy themselves in the doldrums between their first expansion and the next, a new location was introduced: One that contained, in addition to a new 5-player dungeon “instance” and a new 25-player “raid” dungeon, a plethora of daily quests that provided gobs of easy cash to players - far easier, in fact, than previous environments had allowed.

In addition to these additions, if players spent enough time grinding “reputation” with a factions associated with these new quests, they could invest their hard-earned virtual cash on.. a title. For one thousand gold, a player can be “NAME of the Shattered Sun.”

To be fair, that is pretty impressive-sounding. I wouldn’t even know how to begin to go about shattering suns.

So: To keep real customers from spending their real time elsewhere and thus stop forking over real money, Blizzard introduced a new virtual place where they could spend their virtual time, amassing virtual wealth to currying virtual favour with some virtual people, to the point that one is given the elite privilege of spending all that virtual money on something that has purely aesthetic value to impress other (real) folks in a virtual space.

Compare that to a virtual mount, which at least helps you cover virtual terrain, or virtual gear, which has direct applicability in interfacing with a virtual environment (read here: pwning). One thousand gold gets you a bunch of virtual letters, stapled to your virtual face, approximating Ozymandias-level posturing. “Look on my works, ye Mighty, and despair!”

Not this guy. But, close enough.

This may be the central difference between economies like those found in traditional MMOs and virtual trade experiments like Second Life and EVE. In the case of the former, at the end of the day, any changes applied to the system in place are may not be to facilitate commerce, but to keep people on the teat.


- Rook

A virtual affair to remember

Recently I’ve been noticing a story about Second Life buzzing about a number of news outlets. For those keeping track of reportage on gaming and virtual interactions, it represents more of the same: A “Tales From the Wired” parable that serves up online misbehavior at its most titillating. Broken down simply, this tragic tale of lust and betrayal plays out as follows:


- A man and woman met virtually on Second Life. They began a virtual relationship (This may have been in virtual spring, when a young man’s eFancy turns lightly to iLove).

- The virtual couple met in real life, and got Honest-to-God actually married.

- One day, the woman caught her actually husband virtually canoodling with some hussy. (That is, an actually hussy, virtually, as opposed to a virtual hussy, actually, which would be one of those inflatable ones).

- Because of the man’s virtual philandering, the couple has gotten Real-Life No-Take-Backsies divorced.

All clear? Virtually?

I read the story originally at The Times, where the story was headlined with “Second Life affair leads to Real Life divorce…” In skimming the dozen or so other news outlets that have taken up this story, the telling has generally been the same, focusing on the ‘real life’ consequences of this gent’s ‘virtual affair.’

Like so many of these types of tech culture reports, the tone is one of restrained incredulity. “Can you imagine… Two people who took a game so seriously that they got married? Gosh, you couldn’t do that in ‘Frogger! And then, because of some play-pretend affair, now they've called it quits. Maybe instead of their ‘Second Lives,’ they should have focused on their normal ones like the rest of us!”

What fascinates me of how the story is reported is the wide divide maintained between the virtual and the actual. In the articles detailing the behavior of the two, the point is driven home that in this case, the result of something purely virtual has spilled out, messily into the ‘real world’. Some headlines carry the terms in quotations, as if picking up something odious with a pair of tongs. The Telegraph claims that “Woman divorces husband over ‘virtual’ affair..”, where the Sydney Morning Herald states that “Couple divorce after virtual-world ‘affair’”.

All told, does a ‘virtual’ affair differ from a virtual ‘affair’? The former suggests that for all its virtuality, something tangible did in fact occur… where in the latter case, it isn’t an affair at all, but the ghostly semblance of one, meted out in some pixilated Candyland. The result of all this ambiguity is a real mess, one hinging upon conflated meanings of the virtual.

Yes, the virtual is unreal, but in a different way than unicorns and leprechauns. When it comes to the already-messy world of human interaction, a rose is a rose is a rose, even if it happens to be a cyber-rose plucked fresh from the inter-dirts.

This rose is The Matrix.

If there is a semantic point to be made here, it’s that in these cases 'virtual' is not equal. What was one once a fanciful term relating to the specific realm of simulation (i.e. the vaguely paradoxical ‘virtual reality’), the term has come to be a catch-all phrase for action and interaction on the internet.

In the most concrete cases, ‘virtual’ simply means done via a computer: Consider such mundane tasks as virtual banking, or virtual shopping. You aren’t transferring virtual money or buying virtual goods, you are making actual decisions in a virtual context.

On a singularly abstract level, ‘virtual’ denotes relation, dealing in essences and almosts. If you were to log onto a real estate website and receive a virtual tour of a prospective house, you would be getting an approximation of the house’s look and space, represented virtually.

Finally, on the other end of things, we have virtual as the antonym of actual - something that is defined by its illusory or false nature. Thus a ‘virtual’ death in an online game is not death in any actual sense, and does not relate to anything outside of its own context.

These divisions aren’t cut and dry, but they show a real range in what we might consider to be virtual conduct. And its no accident that the most concrete representations of virtuality skew towards the serious business of finances and transactions, where more fully abstract interactions often fall within the realm of play.

So imagine a woman divorces a man because he is addicted to pornography - we can understand that there is something tangible there, something of consequence and weight. Yet catch a man fiddling around with another woman online, a circumstance in which there is an actual other woman on the other end, and suddenly it becomes farcical.

In no other circumstance could the ‘realness’ of this type of infraction could be called into question - say, in the case where a man is caught sneaking calls to 1-900 numbers: “Well, sure, I was having sex with women over the phone… but none of that was real, you see? It happened in the magical realm of my imagination. The $3.50 a minute, on the other hand? Disturbingly real”.

So this isn’t a case of a virtual affair, but rather of a real affair, committed virtually. The infraction is a real one, and it should be no surprise to anyone that its consequences have played out in reality. Of course, anyone still skeptical that this woman had no actual reason to divorce her husband might look no further than their now-well-publicized wedding photo for further proof:



As you can see, dude looks bad in a bow tie.

- Rook