the economics of videogames

[mikedev10]

http://www.washingtonpost.com/blogs/...f-video-games/

this is quite an interesting article on economist involvement in simulated economies !

[jk]

Re: the economics of videogames

fun.

[davidstvz]

Re: the economics of videogames

I played Diablo 2 back in 2000 starting on the day it was released and easily logging 8+ hours a day for several months. The game had gold, but it was mostly worthless to use it in game so it had little value in trade for items. Hence a barter system developed. Eventually, one particular kind of item which was universally useful (each "character" could always use two of them and most gamers had several characters) became the coin of the realm. The item was a ring called "the stone of jordon" and it always abbreviated SoJ when discussing trades (soj by lazy people). A few items were useful but worth less than an SoJ. A single trade (enacted via a mechanism in the game) consisted of swapping the contents of a 4x10 grid of items (including empty spaces) hence you could not trade more than 40 SoJ at a time. The expansion pack (released a year after the original game) upended the economy and later patches also made big changes and added items. By the end of it, some very rare and powerful items were worth more than 40 SoJ. I found one such item toward the end of may days playing and traded it for exactly 40. It was a convenient number for the previously mentioned reasons and sometimes I wonder if it wasn't worth 10% to 50% more. Ah memories

[BadJuju]

Re: the economics of videogames

. Ah memories

I was right there at the time doing the same things!

[BadJuju]

Re: the economics of videogames

Here is another article on game economics of one of my favorite games of all time!

http://www.mine-control.com/zack/uoecon/uoecon.html

[davidstvz]

Re: the economics of videogames

After my experience with Diablo 2, I steered clear of anything similar... I've never played an MMO like World of Warcraft or anything else. I knew I would enjoy it too much... like a drug. I made an exception for Diablo 3 which had its hooks in me for 3 to 4 weeks solid. Fortunately for me, Activision ruined the long term prospects of the game by trying their hardest to find a way to make money off of it (via their real money auction house).

[BadJuju]

Re: the economics of videogames

After my experience with Diablo 2, I steered clear of anything similar... I've never played an MMO like World of Warcraft or anything else. I knew I would enjoy it too much... like a drug. I made an exception for Diablo 3 which had its hooks in me for 3 to 4 weeks solid. Fortunately for me, Activision ruined the long term prospects of the game by trying their hardest to find a way to make money off of it (via their real money auction house).

I certainly wish I had played Diablo 3 during the beginning, if only to make money off of the RMAH. People were pulling in ridiculous sum of cash in the beginning. I don't know what it is like now, though.

Ultima Online would have been an ideal game for you then. If you died, you could be looted, so you had to hope no one found your corpse or had been the ones to turn you into a corpse. Items weren't that big of a deal. Even the best items were not that removed from your standard item. It was much more skill-based.
Do you play any other games?

[davidstvz]

Re: the economics of videogames

Mostly I do co-op gaming on the 360 with an old friend of mine. We're playing Borderlands 2 right now. Resident Evil 6 hits on Tuesday and that should be solid fun. I've got a bunch of shrink wrapped games that I just can't seem to find any time for these days. I have a PC that could do some serious damage, but I rarely use it for games. I don't like gaming at the desk these days. When I played Diablo 3, I had the thing hooked up to my 50" plasma for the duration and I used a program to design a control scheme for my wired 360 controller. I ought to do some more of that and play some more PC games on the plasma. Or at least play some of the console games in style... my PC hardware is only as old as Diablo 3 and beats the pants of the 360. I am looking forward to see what Notch (the guy who made Minecraft) can do with his next game: "0x10^c".

[LazyBoy]

Re: the economics of videogames

I'm in the middle of "REAMDE" by Neal Stephenson.

Central to the book is a video game T'Rain, designed from the start to entice gold farmers (typically Chinese teenagers) and to support/allow buying virtual things with real money. An economy develops.

"REAMDE" is a encryption virus that gets on your computer, encrypts your data then asks you to (virtually) take 1000 gold somethings (worth ~ $73) to a certain spot in the game to retrieve the key to decrypt your data. The book claims that this style of virus existed already, but the sticking point was the exchange. By having a real, anonymous economy, this fictional game enabled the exchange.

But after players are forced to pay, they realize that they can hang around those locations in the game and rob others coming to pay...

[c1ue]

Re: the economics of videogames

The article is more than a little misleading.

Economics in a video game is a function of what people want. However, unlike the real world, it is trivially easy to create any and everything any one could possibly want.

Thus the only reason economists are being consulted is to try and gauge the ability to extract real world money (selling of virtual goods) while maintaining optimal gamer interest (subscriptions or new game sales).

You don't need Nobel Prize winning economists for that, all you have to do is look at how this situation was exploited in the past: TSR with D & D, card games like Magic The Gathering, etc etc.

[lektrode]

Re: the economics of videogames

Caught in the Net
by Bill O'Reilly

When I was kid back in the Paleolithic Age, we used to play sandlot football after school. My group of thug friends chose sides, and the mayhem began. We played tackle without equipment - accompanied by bloody noses, bruised knees, and bumps on the head. It was a blast.

If you did that today, the law firm of Greed, Deceit, and Extortion would be on the sidelines, eagerly waiting to sue the municipal locale, the property owner, and the parents. So, after school these days, many playing fields are largely unused, the children kept safely away from any dose of reality. And where are the urchins parked? In front of the computer - that's where.

It's all so easy. No sweating, no losing, no angst. Just clicking. Presto, there's your fantasy world. Why face uncertainty outside when you can idle away your time in a climate controlled electronic world of your choosing?

The world's growing addiction to high tech is doing two pernicious things: it is sapping ambition and it is fostering escapism. When I suggest to my children that we explore a nature trail, they look as if I am ordering them to a gulag. A nature trail? Why? It's dirty and there are bugs. I can look at nature on my PC anytime I want.

The escape scenario is even worse. Surveys show that for the first time ever, more Americans turn on the PC than the TV when they come home from work or school. At least on television you can watch a news program. On the net there are headlines but most of the reportage is shallow and slanted. When The Huffington Post becomes your primary news agent, you're in trouble.

I submit that's why President Obama is running ahead of Mitt Romney right now. Many voters simply have no idea what's going on. In this brutal economy, Mr. Obama should be running way behind. But he's not. His mixture of charisma and confidence is keeping him competitive because many voters don't know a deficit from a donut. They do know, however, how to play X-Box.

You can tie many of the nation's problems into the tech age. Obesity is certainly driven by sitting around looking at various screens. Your fingers may be in great shape but your butt is threatening to visit your ankles.

And how about speaking the language? LOL! U r kidding me. OMG! If you don't know what those letters mean, say a prayer of thanks. Many Americans today have trouble putting two grammatically correct sentences together - and that's not a laughing matter.

So, it's safe to say that we are living in a rapidly changing world where a few folks will rule, and many others will sit passively by not even watching as crucial events unfold. There's simply too much going on in tech-land where achievement and face-to-face human interaction don't really matter.

OMG, indeed.

[reggie]

Re: the economics of videogames

Ah ha, virtual simulacra created to hide the real simulacra that we "live" in.

[davidstvz]

Re: the economics of videogames

The article is more than a little misleading.

Economics in a video game is a function of what people want. However, unlike the real world, it is trivially easy to create any and everything any one could possibly want.

Thus the only reason economists are being consulted is to try and gauge the ability to extract real world money (selling of virtual goods) while maintaining optimal gamer interest (subscriptions or new game sales).

You don't need Nobel Prize winning economists for that, all you have to do is look at how this situation was exploited in the past: TSR with D & D, card games like Magic The Gathering, etc etc.

Clue, you're way off base here and it sounds like you have little idea of what you're talking about to me. It's trivially easy for the game developers to create anything, but it's not trivially easy for the players. Meanwhile, trading Eve Online items or currency for real money is not supported by the game and in fact it is explicitly banned. The developers do not and cannot make real money on the transactions. Hence, the only way the developer and publisher make money is from the monthly subscription paid by players enjoying the game. They hired an economist for the sole purpose of ensuring that the economy stays healthy in order to ensure that the game remains fun and players keep paying the subscription. The developers can in theory create anything they want, but in practice they must be careful not to disrupt the flow of the game and whatever intangibles make it fun.

Magic the Gathering is a whole other ball of wax. That is game where you directly purchase the elements of play from the game maker and the goal is to duel other players. It is not a self contained game that one can play alone if one chooses (fighting AI controlled enemies and enjoying a story, music and other things that make for a self contained experience).

If a video game developer tried to make a game that functioned like MTG, it would be recognized as such and those who are interested or not interested in that kind of game would or would not play it. I see little relation between Magic and Eve Online or even Magic and Diablo III which has an integrated real money auction house (to make up for lack of a subscription model).

[BlackVoid]

Re: the economics of videogames

"I submit that's why President Obama is running ahead of Mitt Romney right now. Many voters simply have no idea what's going on. In this brutal economy, Mr. Obama should be running way behind. But he's not. His mixture of charisma and confidence is keeping him competitive because many voters don't know a deficit from a donut. They do know, however, how to play X-Box."

And you think it matters who is elected?!? OMG, indeed.
BTW, the majority of Americans know that there is no difference and they do not even vote.

[Adeptus]

Re: the economics of videogames

Ah ha, virtual simulacra created to hide the real simulacra that we "live" in.

Pretty much, and you can go one level deeper. Even if you realize the external physical world simulacra which you call "real", most are not aware of the internal simulacra (of their own mind).