In its latest report, Neilson reports that 10% of online time is spent playing games, second only to social networking which clocks in at a whopping 25% of time spent online. Email and instant messaging have a less predominant role in our time management since the same time last year.
And this makes a lot of sense given the way games and social networking are evolving. Facebook, the behemoth of social networking, has integrated both email functionality and IM-ing into it's site, allowing an all-in-one communication portal to known friends. Blizzard, the standard-bearer for the other rise in popular online usage, released RealID, allowing cross-game messaging between friends, status updates, basically all the staples of social networking.
Social networking and gaming are slowly coming to the same conclusion, that integration of more singular online mechanics into a social hub draws in more traffic than the summation of its parts ever would. And the two major competitors for our online attention will continue to mesh together as time goes on. Zynga's dominance of casual gaming attention should be a trigger to the computer gaming industry that the advertising (not to mention peer invites) have major potential to reel in new players to their games.
Imagine in the near future the current RealID facebook app links you into not only your RealID friends, but also all your facebook friends online, allowing you to IM and change your status while playing WoW. Achievements all pop-up on your status feed, with small bonuses (much like farmville and the likes) for your connected facebook friends who click the links, all the while advertising to your non-WoW playing friends all the benefits of logging in. Other big gaming companies, Valve and Bioware come to the forefront of my mind, could very well follow suit. If Google comes out with the rumored GoogleMe, there could be integration wars between them and facebook, much like the current console wars.
It may not happen to an extreme degree, but where social media sites are taking away from the more "classical" computer gaming industry's potential list of players, the onus is on the game companies to find ways to garner more interest, and involving themselves more heavily into the #1 online activity seems like the easiest solution. Cross-platforming between social media and online gaming means that the attention spent on both would sum up to about a third of our time spent online, and that is nothing to sneeze at.
Friday, August 6, 2010
Saturday, June 21, 2008
Zon!
When I posted about Metaplaces last week, I was reading their forums, and I was suprised to see about the idea that there could be a market for language learning MMOs, as there were a few people actively designing learning games for when they gained access.
Seems theres one already out there for Mandarin Chinese, called Welcome to Zon!. And what better timing, than before the summer Olympics to learn a little mandarin? Mind you, tell me when a Japanese translator game comes out and I'll be on it so fast it wouldn't be funny. All the games and manga I've missed out on over the years could finally be in my grasp, and I bet the market would be immense for people like me in North America.
Either way, I'll be loading this one up over the weekend to try it out, and to see how well it's developped for learning. Many countries may want to watch this, as it could turn out to be a great tourist incentive...
Seems theres one already out there for Mandarin Chinese, called Welcome to Zon!. And what better timing, than before the summer Olympics to learn a little mandarin? Mind you, tell me when a Japanese translator game comes out and I'll be on it so fast it wouldn't be funny. All the games and manga I've missed out on over the years could finally be in my grasp, and I bet the market would be immense for people like me in North America.
Either way, I'll be loading this one up over the weekend to try it out, and to see how well it's developped for learning. Many countries may want to watch this, as it could turn out to be a great tourist incentive...
Blizz's Copyright infrigment argument contended
Blizzard's Copyright infringement case got a pretty hefty counterargument the other week against the creators of Glider, a program that automates characters in WoW for the purposes of leveling and farming without player interaction. "Botting" has always, if not a legal matter, been a moral matter among players. By having competing players increase the value of thier own characters (as values in time invested) without investing the proper labour, it in a sense, lessens the value of their own accomplishments. As such, companies who fight against these programs are not only doing it in the effort to keep the intended gameplay relevant to all, but also for a fair and equitable playing field to those that are using the intended gameplay.
The argument boils down to the fact that glider can't be infringing on copyright rules, as it affects the legal copy of the game that is stored in the RAM of a user's computer. It's an interesting argument, one that I wonder is either going to open doors to more RAM copy tampering, or just a change in legal wording of EULA's...
If Blizzard fails to win the argument on this point, look for it to impose digital ownership of virtual goods as it's new standpoint. Botting is an illegal way of garnering digital property that is owned by blizzard, and as such, will be repossessed, for example. Much the way they do gold-farming. Gold selling has always been a rights issue. If you exert the time and labour to earn the items/money, shouldn't it be yours? I've been see-sawing on that issue. But when you Bot, you no longer invest the time...technically, the gold could be the software creators, as they hold intellectual property over the program. ...
The argument boils down to the fact that glider can't be infringing on copyright rules, as it affects the legal copy of the game that is stored in the RAM of a user's computer. It's an interesting argument, one that I wonder is either going to open doors to more RAM copy tampering, or just a change in legal wording of EULA's...
If Blizzard fails to win the argument on this point, look for it to impose digital ownership of virtual goods as it's new standpoint. Botting is an illegal way of garnering digital property that is owned by blizzard, and as such, will be repossessed, for example. Much the way they do gold-farming. Gold selling has always been a rights issue. If you exert the time and labour to earn the items/money, shouldn't it be yours? I've been see-sawing on that issue. But when you Bot, you no longer invest the time...technically, the gold could be the software creators, as they hold intellectual property over the program. ...
Friday, June 20, 2008
MMORPG Tycoon
Stumbled onto this over at Raph Koster's homepage. Apparently it was an indie game made far a game contest. Seems like a nice little representation of the marketing and production involved in launching a MMO. Check it out. Brag that you do better than real MMO devs.
MMORPG Tycoon
Little bit of fun on an otherwise word-heavy week of blogging.
MMORPG Tycoon
Little bit of fun on an otherwise word-heavy week of blogging.
Specialization of trades in MMOs
This originally was a dev board post for Star Wars Galaxies roughly 5 years ago. Digging through old documents, I found it, and thought of it's application for the landscape of todays economic engines for MMOs. Its still strongly applicable to anyone considering how to craft a virtual economy, as well as in crafting a new OWE document.
Some things have bee modified from the original in order to make more general sense, and others have been fixed up just for sensical purposes. And others just have been added to make a more complete understanding.
Consider this Setting:
A rich man sends three people to a remote island paradise. They are fully expected to turn this island into their home. Upon arrival, their shelter is made for them and knives is provided to cut up food and craft wood, but everything else is expected to be gained through their own labour. These three people arrive with exactly the same survival skills as one another.
The island itself is quite large, with a large abundance of flora and fauna available for consumption, as well as the sea to provide more food. Bamboo and other forms of wood are also plentiful.
The three residents discuss the basic needs that they will have to cover. Primarily, they agree that food is the main concern that they will continually face. Food could be hunted from an animal on the island. Each animal returns enough food to feed all three, but goes bad after a day.
To hunt, they need to have spears crafted to kill. The tool’s blades could be made from bone from animals hunted on the island (one animal returns two useful bones), and the shaft from the wood. An axe made with a similar bone blade and wooden shaft of the spear would harvest the wood. In this manner, the people have reduced their resource needs to two raw resources; Wood and bone. (ignore the chicken before the egg paradox. Assume all three contribute together to form thier first tools)
Skill Division
The next problem facing these three people is how to go about splitting up the chores. Imagine that initially, each person went their own way. Each would then harvest their own lumber, kill their own food, and craft the items needed to do so. With their abilities exactly the same, each would require the same amount of time on a task. The time and resources involved in the tasks would look something like this:
Task_______________|| Time_________|| Recources needed/expended
Gather 1 wood.............1/3 a day.......2 wood breaks an axe
Gather 1 animal...........2/3 a day.......1 animal breaks a spear
Craft 1 axe...............1/3 a day.......1 wood and 1 bone needed to make axe
Craft 1 spear.............1/3 a day.......1 wood and 1 bone needed to make axe
If each person harvested enough wood to make one of each tool, crafted the tools, and hunted an animal, the process would take them two full days to return the food needed to feed three people for a day, and every second day, food is being wasted.
After some discussion, it’s decided that each person should specialize in one of three areas; crafting tools, gathering wood, or hunting animals. But why?
If the process is continual, each person only holds 1/3 the responsibility he had before. Each day, he can do his chores towards the gathering of food, and be left with 1/3 of a day to do with what he pleases, whether it be further specialization or leisure.
These gains in productivity time profit each of the three people in terms of time. Each person has now profited 1/3 a day through specialization of skills. The specialization and flow of goods on a normal day would look like this:
.............2 wood ->.......<-2 bones
Gatherer-----------Crafter-----------Hunter
............. <- 1 axe ........1 spear ->
An exchange system has also been set in place between the three individuals now. Because each individual produces certain items, but requires others, a barter system has been initialized. The costs of the goods look as follows:
2 wood = 1 tool = 2 bones
If any one good were considered cheaper or more expensive, the people would stop specialization and return to doing everything themselves.
Specialization Returns
Consider if the crafter utilized his profited leisure time to further advance his skill, and in return crafted superior spears and axes – crafted in half a day instead of 2/3- that cut the time needed to gather and hunt sufficient supplies in a day to ½ a days time instead of two thirds, but need the experience known from previous usage of the basic tools to use them. This forces the specialization to be cemented into place to profit further over the long run, so that every day has now ½ a day of leisure time.
Issue #1: If a fixed money amount is introduced, will there be monetary profit for all?
After each person has settled into their specialization ranks and cannot change paths, the rich benefactor returns and hands each of the three people 100 dollars. Each person cannot change their course of actions as above if the price of a good marginally increases, so there is incentive to gain profit. But the question is, can there monetary profit for only one, two, all, or none?
The truth is, without any injection of money that everyone will break even. If the crafter charges a higher price once to the wood gatherer, he will in turn charge a higher price for wood back to the crafter to break even, and vice versa. The profit in a fixed monetary situation will always result in a break even monetary profit.
Issue #2: What would happen with an injection/leakage to the monetary system?
The first portion of the question really pertains to where such injections and leakages should occur, under the circumstance that information of such flows are globally known. Injections that occur on one end of the flow ( Either the hunter or the gatherer) will result in the crafter capturing the extra profit by charging the extra gain on sales of tools. An Injection to the crafter results, again, on him keeping the gain and keeping prices stable. An injection on both ends of the flow (both hunter and gatherer) would result in initial gains for both, with the crafter capturing the larger part of the gain.
So long as the profit captured by the crafter is less than the total gain on injections, everyone ends up with a monetary profit. The hunter and gatherer both sell at the previous price and earn extra profit from the injections, while the crafter can sell at a higher price than previously to earn profit and not worry about repercussionary price hikes that would balance out profit.
Leakages, such as taxes and imports, would help counterbalance the inflation caused by such injections. Inflation is healthy, so long as it’s a slow gain. When it becomes hyperactive, such leakages by the benefactor would staunch the speed in which the real value of a dollar falls, to the point that it could potentially level off, or even increase the value, dependant on the amount taken with respect to the amount injected. Such policies could vary depending on the wish of the benefactor. For further examples and issues, we’ll assume that the island is injected with money until there is 3000 dollars, and then held constant by balancing out the injections and leakages.
Issue #3: Is there monetary profit after such injections/leaks?
If the money flow is held constant with consistant injections and leakages, there are two varying ways to show profit in the island economy. The first is the non-monetary form.
Each of the three individuals lose a fraction of their profits to imported goods. These goods, which have no concern with the main process of gathering food, are coupled together with the leisure time to calculate the gain possessed by each person. Their non-working time is devoted towards leisure, or towards new skills of value, and the imports support these habits. For example, the specialized hunter spends half his time hunting, the other half in leisure. That leisure time has a minimum value equal to the second animal he could hunt. Along with that, all goods purchased from the outside for use in the extra time can be added into that gain. The net value of all of this is the profit gained from specialization, and can be given a monetary value.
The second method is to consider leakages as sunken costs instead of final value subtractions. For example, if the hunter had 100 dollars, and gained 50 dollars from sales of bone, he would profit that 50 dollars. If he was also taxed at a later date for 50 dollars to keep the flow of money even, it would be considered a sunk cost, and start to calculate profits from 100 dollars again. (Many people subconsciously do such acts daily. When buying items at the mall, the mindset is the cost is that shown on the price tag. The taxes added at the register usually affect our next decision to buy instead. Another similar type of example would be Maritime Canadians who move out West for higher salaries, but do not consider the higher standard of living involved. The gain is compared to initial values of what that person has, and the losses calculate din the next cycle.)
Such behaviour still considers the purchase of goods as a cost when calculating profit gains, but the hidden tagged costs such as taxes sometimes are carried over. The difficulty is in the fact that such hidden costs are usually minute over time (Bank fees on ATMs, Sales taxes), and calculating where the threshold of tolerance is can be a hit and miss situation. But in such a manner, an economy can be kept at a slower pace, while still allowing for some profits to be held by all. Such considerations work well in closed economies.
How does this have to do with MMOs?
MMOs, as per the original OWE document based on Bartles discriptions of player abilities, can be broken down into the three professions mentioned above. There are people who gather, people who create tools, and those that hunt. The three divisions need to be separated. Crafters, for example, excavate mining projects as well as craft, instead of more gathering-aligned professions doing the same projects. When a person has the ability to do both, even after choosing a more specialized field, such flows of goods get messy...UNLESS there is a time reduction from specialization.
Bootstraps- Most MMOs bootstrap the economy at the beginning to help jumpstart it. The problem lies in the fact that so long as the injections remain constant, either the leakages need to be bumped up or the economy will face a large inflationary period. The above theory shows that everyone in an economy profits, even if money flow is held constant and their monetary values remain the same. Imports (NPC Purchases) add value to overall gain, while not diminishing the value of money.
Balance is needed between the injections and leaks ONCE the economy settles at the desired monetary level. A small amount of inflation is good and healthy, and helps to accommodate new players who join (Once someone new joins the increased money economy, the average balance each player holds is reduced, and counteracting inflation), but not to the extent that a bootstrap affects it. The easiest solution; reduce the money injected. Some players will complain, but it’ll balance the system.
Injections- These themselves need more balance. Hunters kill NPCs to gain injections. They also receive missions/quests/etc. The other end of the flow(the gatherers) should have some form of injections as well, to ensure that the profits don’t pass them by, or forcing them into other professions to capture the profit.
Specialization- Does it exist in terms of reduction in time? Or is it simply an increased level of skill and ability that makes entry harder once the advancement is achieved? One of them is good, both is better. Crafters, as far as I see it, have more trouble with productivity time gains than the other groups (Hunters increase in specialization, the same animal dies faster and more often). This is more an unsure notion than something of change……
Some things have bee modified from the original in order to make more general sense, and others have been fixed up just for sensical purposes. And others just have been added to make a more complete understanding.
Consider this Setting:
A rich man sends three people to a remote island paradise. They are fully expected to turn this island into their home. Upon arrival, their shelter is made for them and knives is provided to cut up food and craft wood, but everything else is expected to be gained through their own labour. These three people arrive with exactly the same survival skills as one another.
The island itself is quite large, with a large abundance of flora and fauna available for consumption, as well as the sea to provide more food. Bamboo and other forms of wood are also plentiful.
The three residents discuss the basic needs that they will have to cover. Primarily, they agree that food is the main concern that they will continually face. Food could be hunted from an animal on the island. Each animal returns enough food to feed all three, but goes bad after a day.
To hunt, they need to have spears crafted to kill. The tool’s blades could be made from bone from animals hunted on the island (one animal returns two useful bones), and the shaft from the wood. An axe made with a similar bone blade and wooden shaft of the spear would harvest the wood. In this manner, the people have reduced their resource needs to two raw resources; Wood and bone. (ignore the chicken before the egg paradox. Assume all three contribute together to form thier first tools)
Skill Division
The next problem facing these three people is how to go about splitting up the chores. Imagine that initially, each person went their own way. Each would then harvest their own lumber, kill their own food, and craft the items needed to do so. With their abilities exactly the same, each would require the same amount of time on a task. The time and resources involved in the tasks would look something like this:
Task_______________|| Time_________|| Recources needed/expended
Gather 1 wood.............1/3 a day.......2 wood breaks an axe
Gather 1 animal...........2/3 a day.......1 animal breaks a spear
Craft 1 axe...............1/3 a day.......1 wood and 1 bone needed to make axe
Craft 1 spear.............1/3 a day.......1 wood and 1 bone needed to make axe
If each person harvested enough wood to make one of each tool, crafted the tools, and hunted an animal, the process would take them two full days to return the food needed to feed three people for a day, and every second day, food is being wasted.
After some discussion, it’s decided that each person should specialize in one of three areas; crafting tools, gathering wood, or hunting animals. But why?
If the process is continual, each person only holds 1/3 the responsibility he had before. Each day, he can do his chores towards the gathering of food, and be left with 1/3 of a day to do with what he pleases, whether it be further specialization or leisure.
These gains in productivity time profit each of the three people in terms of time. Each person has now profited 1/3 a day through specialization of skills. The specialization and flow of goods on a normal day would look like this:
.............2 wood ->.......<-2 bones
Gatherer-----------Crafter-----------Hunter
............. <- 1 axe ........1 spear ->
An exchange system has also been set in place between the three individuals now. Because each individual produces certain items, but requires others, a barter system has been initialized. The costs of the goods look as follows:
2 wood = 1 tool = 2 bones
If any one good were considered cheaper or more expensive, the people would stop specialization and return to doing everything themselves.
Specialization Returns
Consider if the crafter utilized his profited leisure time to further advance his skill, and in return crafted superior spears and axes – crafted in half a day instead of 2/3- that cut the time needed to gather and hunt sufficient supplies in a day to ½ a days time instead of two thirds, but need the experience known from previous usage of the basic tools to use them. This forces the specialization to be cemented into place to profit further over the long run, so that every day has now ½ a day of leisure time.
Issue #1: If a fixed money amount is introduced, will there be monetary profit for all?
After each person has settled into their specialization ranks and cannot change paths, the rich benefactor returns and hands each of the three people 100 dollars. Each person cannot change their course of actions as above if the price of a good marginally increases, so there is incentive to gain profit. But the question is, can there monetary profit for only one, two, all, or none?
The truth is, without any injection of money that everyone will break even. If the crafter charges a higher price once to the wood gatherer, he will in turn charge a higher price for wood back to the crafter to break even, and vice versa. The profit in a fixed monetary situation will always result in a break even monetary profit.
Issue #2: What would happen with an injection/leakage to the monetary system?
The first portion of the question really pertains to where such injections and leakages should occur, under the circumstance that information of such flows are globally known. Injections that occur on one end of the flow ( Either the hunter or the gatherer) will result in the crafter capturing the extra profit by charging the extra gain on sales of tools. An Injection to the crafter results, again, on him keeping the gain and keeping prices stable. An injection on both ends of the flow (both hunter and gatherer) would result in initial gains for both, with the crafter capturing the larger part of the gain.
So long as the profit captured by the crafter is less than the total gain on injections, everyone ends up with a monetary profit. The hunter and gatherer both sell at the previous price and earn extra profit from the injections, while the crafter can sell at a higher price than previously to earn profit and not worry about repercussionary price hikes that would balance out profit.
Leakages, such as taxes and imports, would help counterbalance the inflation caused by such injections. Inflation is healthy, so long as it’s a slow gain. When it becomes hyperactive, such leakages by the benefactor would staunch the speed in which the real value of a dollar falls, to the point that it could potentially level off, or even increase the value, dependant on the amount taken with respect to the amount injected. Such policies could vary depending on the wish of the benefactor. For further examples and issues, we’ll assume that the island is injected with money until there is 3000 dollars, and then held constant by balancing out the injections and leakages.
Issue #3: Is there monetary profit after such injections/leaks?
If the money flow is held constant with consistant injections and leakages, there are two varying ways to show profit in the island economy. The first is the non-monetary form.
Each of the three individuals lose a fraction of their profits to imported goods. These goods, which have no concern with the main process of gathering food, are coupled together with the leisure time to calculate the gain possessed by each person. Their non-working time is devoted towards leisure, or towards new skills of value, and the imports support these habits. For example, the specialized hunter spends half his time hunting, the other half in leisure. That leisure time has a minimum value equal to the second animal he could hunt. Along with that, all goods purchased from the outside for use in the extra time can be added into that gain. The net value of all of this is the profit gained from specialization, and can be given a monetary value.
The second method is to consider leakages as sunken costs instead of final value subtractions. For example, if the hunter had 100 dollars, and gained 50 dollars from sales of bone, he would profit that 50 dollars. If he was also taxed at a later date for 50 dollars to keep the flow of money even, it would be considered a sunk cost, and start to calculate profits from 100 dollars again. (Many people subconsciously do such acts daily. When buying items at the mall, the mindset is the cost is that shown on the price tag. The taxes added at the register usually affect our next decision to buy instead. Another similar type of example would be Maritime Canadians who move out West for higher salaries, but do not consider the higher standard of living involved. The gain is compared to initial values of what that person has, and the losses calculate din the next cycle.)
Such behaviour still considers the purchase of goods as a cost when calculating profit gains, but the hidden tagged costs such as taxes sometimes are carried over. The difficulty is in the fact that such hidden costs are usually minute over time (Bank fees on ATMs, Sales taxes), and calculating where the threshold of tolerance is can be a hit and miss situation. But in such a manner, an economy can be kept at a slower pace, while still allowing for some profits to be held by all. Such considerations work well in closed economies.
How does this have to do with MMOs?
MMOs, as per the original OWE document based on Bartles discriptions of player abilities, can be broken down into the three professions mentioned above. There are people who gather, people who create tools, and those that hunt. The three divisions need to be separated. Crafters, for example, excavate mining projects as well as craft, instead of more gathering-aligned professions doing the same projects. When a person has the ability to do both, even after choosing a more specialized field, such flows of goods get messy...UNLESS there is a time reduction from specialization.
Bootstraps- Most MMOs bootstrap the economy at the beginning to help jumpstart it. The problem lies in the fact that so long as the injections remain constant, either the leakages need to be bumped up or the economy will face a large inflationary period. The above theory shows that everyone in an economy profits, even if money flow is held constant and their monetary values remain the same. Imports (NPC Purchases) add value to overall gain, while not diminishing the value of money.
Balance is needed between the injections and leaks ONCE the economy settles at the desired monetary level. A small amount of inflation is good and healthy, and helps to accommodate new players who join (Once someone new joins the increased money economy, the average balance each player holds is reduced, and counteracting inflation), but not to the extent that a bootstrap affects it. The easiest solution; reduce the money injected. Some players will complain, but it’ll balance the system.
Injections- These themselves need more balance. Hunters kill NPCs to gain injections. They also receive missions/quests/etc. The other end of the flow(the gatherers) should have some form of injections as well, to ensure that the profits don’t pass them by, or forcing them into other professions to capture the profit.
Specialization- Does it exist in terms of reduction in time? Or is it simply an increased level of skill and ability that makes entry harder once the advancement is achieved? One of them is good, both is better. Crafters, as far as I see it, have more trouble with productivity time gains than the other groups (Hunters increase in specialization, the same animal dies faster and more often). This is more an unsure notion than something of change……
Wednesday, June 18, 2008
Chartalism in MMOs, Part 2
This post is a continuation of the paper MMO Chartalism. The goal of this postis to take the observations from the previous paper, and to extract some general theories of development that can be applied to future MMOs.
The first and foremost problem with a MMO currency is the inflationary tendencies that arise from the nature of this game. A large reason for this is that the currencies to date have all been commodity currencies. That is to say, the players are able to extract and input the “good” from the world. As with almost all goods within a world, the supply is limitless. The faucet does not connect to the drain so to speak. And what happens is that faucet continues to flow faster than the drain can empty, leaving an ever-rising monetary level.
This, average income of a player will usually far outstrip that in which he pays out, because of this broken link. What will then happen is, because it is a commodity required for inputs, people will accumulate the good for said input as well as trade. The result is that the value of money deflates rapidly, and inflation soars.
I have argued many times before that this accumulation of currency and resulting inflation can be countered if the money becomes a fiat currency, and has a steady monetary supply, and have even proposed once a responsible central banking system to accommodate the current faucet-drain systems (Breau, 2003).
How can currency evolve?
The problem lies within eliminating the need for the current governing system to issue and collect currency, as well as eliminating the need for the currency to be also used as an input commodity for goods.
Lets take a look at the second condition first. There can be an argument said that the inputs that the currency is needed for can be considered as other tax collections systems for the game, it creates a double value for the good, which was mentioned above. The currency would now have a unit of account value, which is stamped upon it, and a value as an input for goods. In essence most of the gaming systems tax collections can be viewed as inputs towards finished goods, thus making the currency a commodity. Therefore we can say that gaming system itself changes a potential fiat currency into a commodity, just by the viewpoint of the players. In that sense, it is potentially the problem that the ruling body of collectors is wrong. In Online World Economies, I had described how the economic structure of the world was actually separated into two separate entities, the game and the players, that interacted between each other. The fact that the supplier and collector of the currency exists in the game economy, but the currency itself interacts in the player economy could be the digressing point. If, in fact, the players were the ones to issue and maintain currency, it would keep it’s value in a unit of account only. The currency would circulate through the one economic structure alone. This is much like the failed Trade note of ATITD, but can be avoided failing by structuring the currency to have similar laws in which the game systems enjoy now to keep their currency in demand.
Which brings up the first problem, of designing a way for the game system to not have to get involved after the initial startup. The reason that game system issued currencies has succeeded where player currencies failed was simple, the game system had the power of lawmaking and punishment, whereas players have not. Imagine that you have a loan at the bank. It is not the simple fact of your goodwill that will ensure that you pay your loan back, rather it is the negative effects of not paying it back. This includes bad credit, court action, and if taken far enough, jail. As it stands right now, there is nothing that permits players to collect owed loans. Some games, such as SWG, allow for player-cities to automatically collect taxes from citizens, but the framework is still primitive compared to the collection systems that are in place for the game system collections.
Solutions
There are a few general ways to tackle the problem and to make a currency that should run smoother than current situations do:
The Primitive “System” Solution
This approach is to basically sever any injections and drains from the currency that is deemed to be used by the game, while still enforcing all transactions to be paid through the system design to ensure that there are still demanded debts to be paid in the currency. Even without taxes, if players cannot create transactions to other players without involving the currency (via NPC vendors, etc.), the debtor qualification talked about in the earlier paper still exists, and the currency will simply float around the player economy only, never needed to be inputted into the game economy.
The easiest way to implicate this system is to imagine if the money supply already existed before the game began. In this way, every new player to the world would start with an equal endowment of currency to his or her name. Only jobs and/or goods made by other players would have payments in currency. Everything that the game pays to players would be in some form of commodity, which then could be exchanged to another player.
The stemming problem from this situation is a total loss of inflation. True, much of what went wrong has happened to games before and their economies was due to inflation, but small amounts of inflation is needed to spur growth in an economy.
There are many ways of approaching this to ensure a small trickle of cash is allowed in to continually boost the system up, but the safest would to probably have a game-run savings and loan banking system. It would just have to be a simple bank, mainly one that paid interest on savings held, but could also have a slightly riskier loaning system in place. The problem with the loans, of course, is how to punish those that cannot pay in such a way that it a) Deters cheaters from not paying loans and b) Doesn’t ruin the fun at the same time. The interest rate would also have to be well watched, as if the rate was too high, people would end up storing too much money and bartering goods instead.
The first apparent problem with this system is in the job circulation. At the beginning of the game, crafters need immense amount of inputs, usually from the hunters as they advance as well, later on in the game, the roles reverse, and crafters usually supply more to the high-end hunters. In a closed money system, there may be a large accumulation of wealth on either side of the jobs at given times. What would need to be done is balance the system such that there are still considerable inputs from hunters needed in the late stages of the game, and that new crafters have needed items throughout the games lifespan.
The Advanced Player Government & Banking Solution
This solution is a lot more complex and involving than that mentioned above, if only for the simple reason of the designing that would go into such a change of thinking. SWG has shown that player cities can be organized through the system and can involve taxation without displeasing the players involved. ATITD, while it didn’t completely work, had shown that players can and will at least try to make their own currency. This solution melds these things together, along with the observations of chartalism in an attempt to make a player-run fiat currency.
The first component to being able to make such a currency work is a running player government that encompasses a large area of play. It need not be the entire virtual world, but there needs to be a large enough population under the rule of the government such that the alpha variable from the previous paper is large enough.
Without going into much detail of how a government of such size should work (That’s another area altogether to talk about), I’ll try and cover the needs of such a government if it existed to be able to manage a fiat currency. For it to work, the government would need to be able to:
a) Create a money supply
b) Create Government Expenditures
c) Create Government taxes
d) Ensure enforcement.
Creating a money supply. - With a government in power, the state should be able to create a currency for use within it’s borders. However, at the same time, there should be some form of limitation designed within the system to ensure that the governments don’t overprint currency.
Creating Government Expenditures. - The government then needs a way to circulate the money. One way is to be able to create missions and jobs, much like those at mission terminals in SWG. Once a player signs up and completes a job, they are paid in the government’s currency.
Creating Government Taxes. - To keep the money demanded, the government must accept the same currency back in the form of tax dollars. This should ensure that any citizens of the area of the government’s rule would accept the currency in trade. The tax dollars are then recirculated into the economy via the expenditures mentioned above, creating a closed system.
Ensuring enforcement. - The game system needs to be able to graft the player currency on top of anything it enforces already within the game. If there are NPC merchants that work for players, those NPCs must be able to accept the new currency. If player-to-player transactions can include money, the new currency must be added as an option. Also, the game must automatically take the currency from players on a continual time basis for the taxes, and there must be punishment for not being able to pay (ie. if the player owns a house in the governments area, that house is re-deeded and unable to be built until taxes are paid).
The second part to the system would be a reliable player banking system. Much like the one mentioned above, but instead it is owned/run by the government or players under that government’s rule. The players could accept deposits and loans and set their own interest rate bands (High end of band is the rate to borrow, low end is the rate to save). The banks would only be able to loan out a certain portion of their savings (I would suggest a low rate to start), but this gives the ability to those that cannot attain the currency immediately to have access to it, and their debts to the bank will ensure that they have a continuing demand for the currency.
Player banks, again, would need enforceability. Once loans are due, the payment must be subtracted immediately from their account by the game system. If it cannot be paid, there must be a way for bankers to reclaim some of the lost wealth. Upfront collateral from loans is one way to soften this blow. Also, because most MMOs are combat oriented games, a bounty on a person’s head is not out of the question either.
The immediate con to this system is how would one arrive to this point from day one of a game? It obviously involves some development to get to the point of where a large government can rule over citizens. There has to be some form of bootstrap economy to begin with, or the whole community could face a situation of staying within a commodity currency, much like ATITD.
The easiest way to bootstrap would be to take the primitive solution from above, and then convert it to this current system, by demanding the initial currency as an input to print the player currency up to X amount (after that, they can print small amounts to inject to keep inflation rising slowly).
Optimal Currency Areas
Just as a little end-note to this paper, I wanted to tack on a definition of Optimal Currency Areas (OCA). This is more of a food for thought to anyone who considers creating a multi-currency world, maybe using the ideas above. Gregory Mundell came up with the OCA, and stated that it had 4 criteria:
1) Regions should be exposed to similar sources of economic disturbances.
2) The relative importance of these shocks should be similar across regions
3) Regions should have similar responses to common shocks
4) If Regions are subject to region specific shock, they need to be able to adjust quickly.
With that in mind, one could say that currency areas exhibit:
1) Free movement of labor within the region
2) An over-arching political regime
3) A single monetary policy
4) An agree-upon exchange rate
5) Common/similar industries in the region
The first and foremost problem with a MMO currency is the inflationary tendencies that arise from the nature of this game. A large reason for this is that the currencies to date have all been commodity currencies. That is to say, the players are able to extract and input the “good” from the world. As with almost all goods within a world, the supply is limitless. The faucet does not connect to the drain so to speak. And what happens is that faucet continues to flow faster than the drain can empty, leaving an ever-rising monetary level.
This, average income of a player will usually far outstrip that in which he pays out, because of this broken link. What will then happen is, because it is a commodity required for inputs, people will accumulate the good for said input as well as trade. The result is that the value of money deflates rapidly, and inflation soars.
I have argued many times before that this accumulation of currency and resulting inflation can be countered if the money becomes a fiat currency, and has a steady monetary supply, and have even proposed once a responsible central banking system to accommodate the current faucet-drain systems (Breau, 2003).
How can currency evolve?
The problem lies within eliminating the need for the current governing system to issue and collect currency, as well as eliminating the need for the currency to be also used as an input commodity for goods.
Lets take a look at the second condition first. There can be an argument said that the inputs that the currency is needed for can be considered as other tax collections systems for the game, it creates a double value for the good, which was mentioned above. The currency would now have a unit of account value, which is stamped upon it, and a value as an input for goods. In essence most of the gaming systems tax collections can be viewed as inputs towards finished goods, thus making the currency a commodity. Therefore we can say that gaming system itself changes a potential fiat currency into a commodity, just by the viewpoint of the players. In that sense, it is potentially the problem that the ruling body of collectors is wrong. In Online World Economies, I had described how the economic structure of the world was actually separated into two separate entities, the game and the players, that interacted between each other. The fact that the supplier and collector of the currency exists in the game economy, but the currency itself interacts in the player economy could be the digressing point. If, in fact, the players were the ones to issue and maintain currency, it would keep it’s value in a unit of account only. The currency would circulate through the one economic structure alone. This is much like the failed Trade note of ATITD, but can be avoided failing by structuring the currency to have similar laws in which the game systems enjoy now to keep their currency in demand.
Which brings up the first problem, of designing a way for the game system to not have to get involved after the initial startup. The reason that game system issued currencies has succeeded where player currencies failed was simple, the game system had the power of lawmaking and punishment, whereas players have not. Imagine that you have a loan at the bank. It is not the simple fact of your goodwill that will ensure that you pay your loan back, rather it is the negative effects of not paying it back. This includes bad credit, court action, and if taken far enough, jail. As it stands right now, there is nothing that permits players to collect owed loans. Some games, such as SWG, allow for player-cities to automatically collect taxes from citizens, but the framework is still primitive compared to the collection systems that are in place for the game system collections.
Solutions
There are a few general ways to tackle the problem and to make a currency that should run smoother than current situations do:
The Primitive “System” Solution
This approach is to basically sever any injections and drains from the currency that is deemed to be used by the game, while still enforcing all transactions to be paid through the system design to ensure that there are still demanded debts to be paid in the currency. Even without taxes, if players cannot create transactions to other players without involving the currency (via NPC vendors, etc.), the debtor qualification talked about in the earlier paper still exists, and the currency will simply float around the player economy only, never needed to be inputted into the game economy.
The easiest way to implicate this system is to imagine if the money supply already existed before the game began. In this way, every new player to the world would start with an equal endowment of currency to his or her name. Only jobs and/or goods made by other players would have payments in currency. Everything that the game pays to players would be in some form of commodity, which then could be exchanged to another player.
The stemming problem from this situation is a total loss of inflation. True, much of what went wrong has happened to games before and their economies was due to inflation, but small amounts of inflation is needed to spur growth in an economy.
There are many ways of approaching this to ensure a small trickle of cash is allowed in to continually boost the system up, but the safest would to probably have a game-run savings and loan banking system. It would just have to be a simple bank, mainly one that paid interest on savings held, but could also have a slightly riskier loaning system in place. The problem with the loans, of course, is how to punish those that cannot pay in such a way that it a) Deters cheaters from not paying loans and b) Doesn’t ruin the fun at the same time. The interest rate would also have to be well watched, as if the rate was too high, people would end up storing too much money and bartering goods instead.
The first apparent problem with this system is in the job circulation. At the beginning of the game, crafters need immense amount of inputs, usually from the hunters as they advance as well, later on in the game, the roles reverse, and crafters usually supply more to the high-end hunters. In a closed money system, there may be a large accumulation of wealth on either side of the jobs at given times. What would need to be done is balance the system such that there are still considerable inputs from hunters needed in the late stages of the game, and that new crafters have needed items throughout the games lifespan.
The Advanced Player Government & Banking Solution
This solution is a lot more complex and involving than that mentioned above, if only for the simple reason of the designing that would go into such a change of thinking. SWG has shown that player cities can be organized through the system and can involve taxation without displeasing the players involved. ATITD, while it didn’t completely work, had shown that players can and will at least try to make their own currency. This solution melds these things together, along with the observations of chartalism in an attempt to make a player-run fiat currency.
The first component to being able to make such a currency work is a running player government that encompasses a large area of play. It need not be the entire virtual world, but there needs to be a large enough population under the rule of the government such that the alpha variable from the previous paper is large enough.
Without going into much detail of how a government of such size should work (That’s another area altogether to talk about), I’ll try and cover the needs of such a government if it existed to be able to manage a fiat currency. For it to work, the government would need to be able to:
a) Create a money supply
b) Create Government Expenditures
c) Create Government taxes
d) Ensure enforcement.
Creating a money supply. - With a government in power, the state should be able to create a currency for use within it’s borders. However, at the same time, there should be some form of limitation designed within the system to ensure that the governments don’t overprint currency.
Creating Government Expenditures. - The government then needs a way to circulate the money. One way is to be able to create missions and jobs, much like those at mission terminals in SWG. Once a player signs up and completes a job, they are paid in the government’s currency.
Creating Government Taxes. - To keep the money demanded, the government must accept the same currency back in the form of tax dollars. This should ensure that any citizens of the area of the government’s rule would accept the currency in trade. The tax dollars are then recirculated into the economy via the expenditures mentioned above, creating a closed system.
Ensuring enforcement. - The game system needs to be able to graft the player currency on top of anything it enforces already within the game. If there are NPC merchants that work for players, those NPCs must be able to accept the new currency. If player-to-player transactions can include money, the new currency must be added as an option. Also, the game must automatically take the currency from players on a continual time basis for the taxes, and there must be punishment for not being able to pay (ie. if the player owns a house in the governments area, that house is re-deeded and unable to be built until taxes are paid).
The second part to the system would be a reliable player banking system. Much like the one mentioned above, but instead it is owned/run by the government or players under that government’s rule. The players could accept deposits and loans and set their own interest rate bands (High end of band is the rate to borrow, low end is the rate to save). The banks would only be able to loan out a certain portion of their savings (I would suggest a low rate to start), but this gives the ability to those that cannot attain the currency immediately to have access to it, and their debts to the bank will ensure that they have a continuing demand for the currency.
Player banks, again, would need enforceability. Once loans are due, the payment must be subtracted immediately from their account by the game system. If it cannot be paid, there must be a way for bankers to reclaim some of the lost wealth. Upfront collateral from loans is one way to soften this blow. Also, because most MMOs are combat oriented games, a bounty on a person’s head is not out of the question either.
The immediate con to this system is how would one arrive to this point from day one of a game? It obviously involves some development to get to the point of where a large government can rule over citizens. There has to be some form of bootstrap economy to begin with, or the whole community could face a situation of staying within a commodity currency, much like ATITD.
The easiest way to bootstrap would be to take the primitive solution from above, and then convert it to this current system, by demanding the initial currency as an input to print the player currency up to X amount (after that, they can print small amounts to inject to keep inflation rising slowly).
Optimal Currency Areas
Just as a little end-note to this paper, I wanted to tack on a definition of Optimal Currency Areas (OCA). This is more of a food for thought to anyone who considers creating a multi-currency world, maybe using the ideas above. Gregory Mundell came up with the OCA, and stated that it had 4 criteria:
1) Regions should be exposed to similar sources of economic disturbances.
2) The relative importance of these shocks should be similar across regions
3) Regions should have similar responses to common shocks
4) If Regions are subject to region specific shock, they need to be able to adjust quickly.
With that in mind, one could say that currency areas exhibit:
1) Free movement of labor within the region
2) An over-arching political regime
3) A single monetary policy
4) An agree-upon exchange rate
5) Common/similar industries in the region
Chartalism in MMOs
This was originally meant to be a lead in to my thesis paper for Economics. However, I learned fast that most professors frowned on linking games to "pure" economic theory. I hope it helps link "Money as a Medium of Exchange" to my metanomic research better"
In the long expanse of my playing history of Massively Multiplayer Online games (MMOs), currency has always been a frustrating existence to my way of thinking, even before ever studying economics. Money just didn’t work. Most of the time, it became hyper inflated, out of control, and to a point that convinced me that it was much better to barter for items needed for survival than to actually buy and sell. The acceleration in which currency accumulated made it worthless to hold, but yet, people still held onto it. It had an alternate worth beyond its monetary value.
And then, early 2003, I visited a MMO called A Tale In The Desert (the first telling, newer telling may have changed). It was unorthodox in many of the philosophies it took on for game play, and the money system was no different. The world started with raw resources, and nothing else. No imposed currency, nothing at all. The world quickly became a mix of a barter society and a valued commodity one, where the commodity shifted as needs grew with the evolution of the society. At some point, before I joined however, players were given the ability to print money. Multiple currencies arose, with one in particular, the Trade Note (TN) being widely accepted as a value.
And therein laid the problem. The TN was at most unit of account, and nothing more. It had failed as a modern currency, for it was never circulated wholly, used as a medium of exchange, or used as a store of value. The TN served only one of the three key properties assigned to money that could be found in any introductory textbook (O’Sullivan, 1998). The first real attempt by any MMO to have a fiat currency had underachieved.
When one first looks at it, it’s a problem that seems to defeat any notion of a forward advancement in the MMO systems. However, when the results of why and how current MMO currencies have failed or succeeded, it actually sharpens the view on how such a currency can exist. Implications of a fiat currency in MMOs can be immense, in comparison to the mainstream faucet-drain variations in place now (Simpson, 1999; Breau, 2002), the fiat system could allow for a steady monetary supply.
Examining the approach to money
Most approaches in MMO economies take the orthodox approach to money, called the M-form, or Metalist, taken from Charles Goodheart’s analysis of Money (Goodheart, 1989). M-form theory takes the approach that money was invented to facilitate a need for exchange. The value of money was also initially determined by the weight and value of the coined metal, and later the backing (usually in gold) against a paper money.
This is probably the most well-known and easily believed approach to how money came into existence. M-form theory begins with a society that existed solely on barter, and then moved towards commodity money, on the premise of reducing transaction costs. It was thus at some point that precious metals became the commodity of choice.
There is, however, a second theory of how money came into existence. Chartislism theory is based on the central idea of issuing authority, and not of backing value of metals. The central role for the evolution of money then comes from the state, and it’s needs. The states authority to issue taxation, and its power to spend creates a currency.
What this means is that the taxing body, or for that matter, any creditor in power, may command in what form that debtors (including taxpayers) must pay them in. Because the creditors demand a specific payback from the debtors, this creates a demand amongst debtors for that currency. This in turn makes payments by the state in that currency acceptable, since it is known that it is demanded among debtors. It matters not what the currency is, so long as those in power as an acceptable currency to pay in have decreed it. Wray explains clearly:
“If the state issues a hazelwood tally, with a notch to indicate it is worth 20 pounds, then it will be worth 20 pounds in purchases made by the state so long as the state accepts that same hazelwood stick in payment of taxes at a value of 20 pounds. And that stick will circulate as a medium of exchange at a value of 20 pounds even among those with no tax liability so long others need it to pay taxes.” (Wray, 2000)
The most important part of that quote may actually be the last sentence. “That stick will circulate as a medium of exchange at a value of 20 pounds even among those with no tax liability so long others need it to pay taxes.” This means that only a portion of the population needs to be indebted for a currency to actually circulate.
For example, assume the following equations for demand of money:
1) MDTP= T + b(Y-T)
2) MDM = b(Y)
3) MDTP= tY + b(Y)(1-t)
4) MDM = b(Y)
Where 1) and 2) are the money demanded by the taxpayers (TP) and the mediums (M) where there is a flat tax involved, and 3) and 4) are the money demanded with a tax rate (t). (b) is then the standard fraction of disposable income for each group that is paid to other taxpayers who need the currency. Adding the two equations together we get two functions for total demand for money:
5) MD= MDTP + (1-) MDM
6) MD= T + b(2Y-T)
7) MD= Yt(1-b) + bY
We can easily see that for either system that as the number of taxpayers increase, that there will be a positive change in the amount of money demanded, and as long as exists, the money is demanded to some extent. This of course makes intuitive sense, as if there are more people that need to pay the state in the currency, the more of that currency will be demanded/circulated.
Lerner states that nearly the nearly universal situation now is one where the nation state sets the unit of currency within it’s own borders (Lerner, 1947). This is hard to argue, as it has been noted that every time a nation gains independence, one of the first things it does is set it’s own currency (Wray, 2000). What it does bring to the picture though is the fact that the state does have a controlling power over the circulation of currency within its own borders by establishing laws as well as demanding payment in the currency.
Where did the TN fail?
The TN failed for a few, now obvious reasons. First and foremost, it failed because of the restrictions of the design in the game. The game itself fell back onto an M-form theory of how currency and economic exchanges evolved, and forced players to start in a barter society and try to change from commodity money into a paper money. The TN was even backed by a basket of goods equaling 100TN, but yet failed to even come close to any of the velocities or volumes of circulation in other games.
Secondly, it failed on the front of not having a large creditor, be it a state or a large bank. There was no central power that spent/credited and collected, thus, from the equations above, is such a low number that money demanded among the population was close to none at all.
Examining the situation a little closer, there is more to it than just saying “there was no bank” that created the problem of no central creditor. There were no enforcing punishments and rules to abide by either. Whereas nation states have the ability to enforce taxes to be paid through criminal punishment, ATITD had no such mechanism for those that skipped paying their debts. As such, the incentive to actually create such a system just didn’t exist.
Where does currency exist?
Currency was given a chance to exist in ATITD, but the rules to lead up towards it just didn’t allow it to happen. What’s the really amazing part isn’t only in the fact that the M-form theory didn’t work in practice, but the C-form has examples that run throughout, given the right context.
Nation states, or ruling governments for that matter, are not of the same sense that exists in real-world macroeconomics. As I have stated in previous papers, the ruling government is the game mechanics that are implemented by the developers of the game (Breau, 2002). The game mechanics itself has the power to control what can be accepted currency. The mechanic is simple really; under the faucet drain systems that most games use for their currency circulation. Payments to the players from the “faucet” are determined by the game, and payments of all things that enter the “drain” and return to the mechanical void are in identical currency as to that which is paid out. In this sense, it becomes a commodity currency that has an input value for other final goods, so that it has it’s own value accordingly. A more direct way to look at it would be that, if there was an ulterior currency than voided the circulation of the current on, the current currency would still have sellable value as a production input.
Most major Pay to play MMOs are a really great example of how this comes into effect. The mechanics of the game are such that players are given contract jobs/Quests, and paid in money for completing the contract. These moneis are also the only legal tender allowed for use in the auctions that transpire in an Ebay-like system in game. As well, in sandbox games where housing exists, there are taxes for player cities collected in credits, and maintenance (input) costs that are drained from the system in credits. And to top off the cycle, all sales from non-player characters (NPCs) are done in the money currency, as well as transaction costs for bank transfers done in credits. The NPCs can be considered as tax collectors for the system, accepting the payment of issued government currency back at equal value.
These games have a total different environment when it comes to money than that of ATITD. Currency actually is used to make the community transactions more efficient. The trades happen on a daily circumstance. In my own playing experience of being a weapons crafter and resource miner in Star Wars, for example, I had multiple sales daily, and purchased almost as much and as often as I did sell. Growth and inflation both were positively increasing over the weeks and months of play, apparent by the increased number of goods for sale on the auctions, and their increased prices. These trends mimic those seen in real world economies, giving light to the idea that the economic situation may actually contain elements that create human behavior to mimic real world behaviors. (I am in the midst of trying to attain statistical data of some form from the game about it’s trends to try and prove or not that the trends do actually mimic common economic theories)
The only immediate difference between ATITD’s currency woes and SWG’s successes in circulating and using a common currency is in the fact that the governing body assigned a currency that was paid out and collected, and under it’s use of power and lawmaking abilities used other avenues of trading to only accept the currency. Without the issuing and collecting by the governing body, SWG would have a barter system much like ATITD does, relying on the players to agree on a commodity currency, or a common unit of measure of some sort.
A third example of the power of the governing body to issue the trading currency comes from Ultima Online (UO). UO is a much older, more economically primitive game than SWG, WoW, and AoC are, but the premises are somewhat the same. Gold coins were issued by the game mechanics for killing monsters, and was the only accepted currency by the mechanics when it collected for the large, durable items used as drains for the economy. From the start of the game, much like SWG was/is now, gold was the traded currency, as players needed that currency to return to the system in order to gain the items. However, as time passed, players soon accumulated all of the durables, and had no other items to pay for to the system.
The result was a failing of the currency. Gold was no longer the accepted medium of exchange between players for larger goods, such as the durables purchased (which included houses). Instead, the currency of choice became real world money, as players sold durables on Ebay. Because the players no longer needed to pay the system in gold, and neither did no one else, gold became a near-worthless commodity. However, as real world money was needed to pay real world governments, such a currency was accepted as a medium of exchange. It was a twisted jump from the virtual to the reality, but it happened nonetheless. SWG seems to have learned from the previous failings of the game, and are trying to control the flows in and out of money constantly so that there is always a need for the virtual economy.
Conclusions
Primarily, the main conclusion that can be drawn from this paper is the observation that even in an experimentally simple setting, devoid of all other externalities, trade is not the only motive to how a currency becomes circulated and used. However, when a currency is handed down, and then demanded as payment of debt, the currency circulates much more. This is not to say that this is the only motive to the demand for a currency, but there is a strong observational showing from above to be at least a factor.
Secondly, it gives some weight to my idea that the MMO environments can be used as an observational tool for some economic theory. It may be all fun and games to look at these MMOs from the viewpoint of what real-world economic theory stands up in a virtual setting, such as Castranova did while studying inflation in EverQuest (Castranova, 2001) but to me, it’s a lot more interesting to see it the other way around. In examining virtual world behavior, one may be able to extract real-world behavior as well.
Human behavior remains a constant, what changes is the amount of variables involved. To an experimental economist, a MMO is a giant laboratory playground. Each game has its different rules that cannot be observed in the real world, where thousands of people interact daily. It’s not to say that you would always find the same behaviors exhibited, but even so, one could analyze why the behavior differs.
In the long expanse of my playing history of Massively Multiplayer Online games (MMOs), currency has always been a frustrating existence to my way of thinking, even before ever studying economics. Money just didn’t work. Most of the time, it became hyper inflated, out of control, and to a point that convinced me that it was much better to barter for items needed for survival than to actually buy and sell. The acceleration in which currency accumulated made it worthless to hold, but yet, people still held onto it. It had an alternate worth beyond its monetary value.
And then, early 2003, I visited a MMO called A Tale In The Desert (the first telling, newer telling may have changed). It was unorthodox in many of the philosophies it took on for game play, and the money system was no different. The world started with raw resources, and nothing else. No imposed currency, nothing at all. The world quickly became a mix of a barter society and a valued commodity one, where the commodity shifted as needs grew with the evolution of the society. At some point, before I joined however, players were given the ability to print money. Multiple currencies arose, with one in particular, the Trade Note (TN) being widely accepted as a value.
And therein laid the problem. The TN was at most unit of account, and nothing more. It had failed as a modern currency, for it was never circulated wholly, used as a medium of exchange, or used as a store of value. The TN served only one of the three key properties assigned to money that could be found in any introductory textbook (O’Sullivan, 1998). The first real attempt by any MMO to have a fiat currency had underachieved.
When one first looks at it, it’s a problem that seems to defeat any notion of a forward advancement in the MMO systems. However, when the results of why and how current MMO currencies have failed or succeeded, it actually sharpens the view on how such a currency can exist. Implications of a fiat currency in MMOs can be immense, in comparison to the mainstream faucet-drain variations in place now (Simpson, 1999; Breau, 2002), the fiat system could allow for a steady monetary supply.
Examining the approach to money
Most approaches in MMO economies take the orthodox approach to money, called the M-form, or Metalist, taken from Charles Goodheart’s analysis of Money (Goodheart, 1989). M-form theory takes the approach that money was invented to facilitate a need for exchange. The value of money was also initially determined by the weight and value of the coined metal, and later the backing (usually in gold) against a paper money.
This is probably the most well-known and easily believed approach to how money came into existence. M-form theory begins with a society that existed solely on barter, and then moved towards commodity money, on the premise of reducing transaction costs. It was thus at some point that precious metals became the commodity of choice.
There is, however, a second theory of how money came into existence. Chartislism theory is based on the central idea of issuing authority, and not of backing value of metals. The central role for the evolution of money then comes from the state, and it’s needs. The states authority to issue taxation, and its power to spend creates a currency.
What this means is that the taxing body, or for that matter, any creditor in power, may command in what form that debtors (including taxpayers) must pay them in. Because the creditors demand a specific payback from the debtors, this creates a demand amongst debtors for that currency. This in turn makes payments by the state in that currency acceptable, since it is known that it is demanded among debtors. It matters not what the currency is, so long as those in power as an acceptable currency to pay in have decreed it. Wray explains clearly:
“If the state issues a hazelwood tally, with a notch to indicate it is worth 20 pounds, then it will be worth 20 pounds in purchases made by the state so long as the state accepts that same hazelwood stick in payment of taxes at a value of 20 pounds. And that stick will circulate as a medium of exchange at a value of 20 pounds even among those with no tax liability so long others need it to pay taxes.” (Wray, 2000)
The most important part of that quote may actually be the last sentence. “That stick will circulate as a medium of exchange at a value of 20 pounds even among those with no tax liability so long others need it to pay taxes.” This means that only a portion of the population needs to be indebted for a currency to actually circulate.
For example, assume the following equations for demand of money:
1) MDTP= T + b(Y-T)
2) MDM = b(Y)
3) MDTP= tY + b(Y)(1-t)
4) MDM = b(Y)
Where 1) and 2) are the money demanded by the taxpayers (TP) and the mediums (M) where there is a flat tax involved, and 3) and 4) are the money demanded with a tax rate (t). (b) is then the standard fraction of disposable income for each group that is paid to other taxpayers who need the currency. Adding the two equations together we get two functions for total demand for money:
5) MD= MDTP + (1-) MDM
6) MD= T + b(2Y-T)
7) MD= Yt(1-b) + bY
We can easily see that for either system that as the number of taxpayers increase, that there will be a positive change in the amount of money demanded, and as long as exists, the money is demanded to some extent. This of course makes intuitive sense, as if there are more people that need to pay the state in the currency, the more of that currency will be demanded/circulated.
Lerner states that nearly the nearly universal situation now is one where the nation state sets the unit of currency within it’s own borders (Lerner, 1947). This is hard to argue, as it has been noted that every time a nation gains independence, one of the first things it does is set it’s own currency (Wray, 2000). What it does bring to the picture though is the fact that the state does have a controlling power over the circulation of currency within its own borders by establishing laws as well as demanding payment in the currency.
Where did the TN fail?
The TN failed for a few, now obvious reasons. First and foremost, it failed because of the restrictions of the design in the game. The game itself fell back onto an M-form theory of how currency and economic exchanges evolved, and forced players to start in a barter society and try to change from commodity money into a paper money. The TN was even backed by a basket of goods equaling 100TN, but yet failed to even come close to any of the velocities or volumes of circulation in other games.
Secondly, it failed on the front of not having a large creditor, be it a state or a large bank. There was no central power that spent/credited and collected, thus, from the equations above, is such a low number that money demanded among the population was close to none at all.
Examining the situation a little closer, there is more to it than just saying “there was no bank” that created the problem of no central creditor. There were no enforcing punishments and rules to abide by either. Whereas nation states have the ability to enforce taxes to be paid through criminal punishment, ATITD had no such mechanism for those that skipped paying their debts. As such, the incentive to actually create such a system just didn’t exist.
Where does currency exist?
Currency was given a chance to exist in ATITD, but the rules to lead up towards it just didn’t allow it to happen. What’s the really amazing part isn’t only in the fact that the M-form theory didn’t work in practice, but the C-form has examples that run throughout, given the right context.
Nation states, or ruling governments for that matter, are not of the same sense that exists in real-world macroeconomics. As I have stated in previous papers, the ruling government is the game mechanics that are implemented by the developers of the game (Breau, 2002). The game mechanics itself has the power to control what can be accepted currency. The mechanic is simple really; under the faucet drain systems that most games use for their currency circulation. Payments to the players from the “faucet” are determined by the game, and payments of all things that enter the “drain” and return to the mechanical void are in identical currency as to that which is paid out. In this sense, it becomes a commodity currency that has an input value for other final goods, so that it has it’s own value accordingly. A more direct way to look at it would be that, if there was an ulterior currency than voided the circulation of the current on, the current currency would still have sellable value as a production input.
Most major Pay to play MMOs are a really great example of how this comes into effect. The mechanics of the game are such that players are given contract jobs/Quests, and paid in money for completing the contract. These moneis are also the only legal tender allowed for use in the auctions that transpire in an Ebay-like system in game. As well, in sandbox games where housing exists, there are taxes for player cities collected in credits, and maintenance (input) costs that are drained from the system in credits. And to top off the cycle, all sales from non-player characters (NPCs) are done in the money currency, as well as transaction costs for bank transfers done in credits. The NPCs can be considered as tax collectors for the system, accepting the payment of issued government currency back at equal value.
These games have a total different environment when it comes to money than that of ATITD. Currency actually is used to make the community transactions more efficient. The trades happen on a daily circumstance. In my own playing experience of being a weapons crafter and resource miner in Star Wars, for example, I had multiple sales daily, and purchased almost as much and as often as I did sell. Growth and inflation both were positively increasing over the weeks and months of play, apparent by the increased number of goods for sale on the auctions, and their increased prices. These trends mimic those seen in real world economies, giving light to the idea that the economic situation may actually contain elements that create human behavior to mimic real world behaviors. (I am in the midst of trying to attain statistical data of some form from the game about it’s trends to try and prove or not that the trends do actually mimic common economic theories)
The only immediate difference between ATITD’s currency woes and SWG’s successes in circulating and using a common currency is in the fact that the governing body assigned a currency that was paid out and collected, and under it’s use of power and lawmaking abilities used other avenues of trading to only accept the currency. Without the issuing and collecting by the governing body, SWG would have a barter system much like ATITD does, relying on the players to agree on a commodity currency, or a common unit of measure of some sort.
A third example of the power of the governing body to issue the trading currency comes from Ultima Online (UO). UO is a much older, more economically primitive game than SWG, WoW, and AoC are, but the premises are somewhat the same. Gold coins were issued by the game mechanics for killing monsters, and was the only accepted currency by the mechanics when it collected for the large, durable items used as drains for the economy. From the start of the game, much like SWG was/is now, gold was the traded currency, as players needed that currency to return to the system in order to gain the items. However, as time passed, players soon accumulated all of the durables, and had no other items to pay for to the system.
The result was a failing of the currency. Gold was no longer the accepted medium of exchange between players for larger goods, such as the durables purchased (which included houses). Instead, the currency of choice became real world money, as players sold durables on Ebay. Because the players no longer needed to pay the system in gold, and neither did no one else, gold became a near-worthless commodity. However, as real world money was needed to pay real world governments, such a currency was accepted as a medium of exchange. It was a twisted jump from the virtual to the reality, but it happened nonetheless. SWG seems to have learned from the previous failings of the game, and are trying to control the flows in and out of money constantly so that there is always a need for the virtual economy.
Conclusions
Primarily, the main conclusion that can be drawn from this paper is the observation that even in an experimentally simple setting, devoid of all other externalities, trade is not the only motive to how a currency becomes circulated and used. However, when a currency is handed down, and then demanded as payment of debt, the currency circulates much more. This is not to say that this is the only motive to the demand for a currency, but there is a strong observational showing from above to be at least a factor.
Secondly, it gives some weight to my idea that the MMO environments can be used as an observational tool for some economic theory. It may be all fun and games to look at these MMOs from the viewpoint of what real-world economic theory stands up in a virtual setting, such as Castranova did while studying inflation in EverQuest (Castranova, 2001) but to me, it’s a lot more interesting to see it the other way around. In examining virtual world behavior, one may be able to extract real-world behavior as well.
Human behavior remains a constant, what changes is the amount of variables involved. To an experimental economist, a MMO is a giant laboratory playground. Each game has its different rules that cannot be observed in the real world, where thousands of people interact daily. It’s not to say that you would always find the same behaviors exhibited, but even so, one could analyze why the behavior differs.
Monday, June 16, 2008
Free to play has revenue
Virtual World news reported the other week that even free to play online games tended to average positive revenues. On average, most tended to garner 1.40$ USD from each player. Certainly not the 10-15$ that pay to play commands, but revenue is revenue, and given that most free-to-play are much less cost involved, their profits may be as favorable or just slightly less than than some of the less successful pay-to-plays, and actual revenue estimates allow startups to budget accordingly, and expand if more successful.
But it also brings up a good point from an economic standpoint. There is a differentiation of consumers of MMOs in their preferred style of consumption. Those that prefer to pay upfront for an all-inclusive experience (Take going to Disney world and paying the park entry fee to go on all the rides, for example) versus those who would rather experience the content and pay for the extra if they invest into it (your local fair, where you buy tickets that are expended at each ride). The goal of free-to-play isn't just to attract players based on the low entry cost, but to snare revenue out of those that enjoy and invest time and value into the game.
If you can snare people into the game, such they have invested enough time to place value on their experiences, many will invest further to enchance thier experiences. (Some offer cosmetic changes, others offer unique content - Hattrick and Adventurequest are two variations I've personally experienced.). While Ad streams are a source to attach to the free player base, these mini-subscriptions tend to be where much of the rest of the revenue is captured.
And if its good enough, well presented and enough people become to place value in thier avatars and the world, the game may see revenues like second life, which had a reported average revenue of over 9$/user. Thats near pay-to-play, for a free, lower budgeted game.
But it also brings up a good point from an economic standpoint. There is a differentiation of consumers of MMOs in their preferred style of consumption. Those that prefer to pay upfront for an all-inclusive experience (Take going to Disney world and paying the park entry fee to go on all the rides, for example) versus those who would rather experience the content and pay for the extra if they invest into it (your local fair, where you buy tickets that are expended at each ride). The goal of free-to-play isn't just to attract players based on the low entry cost, but to snare revenue out of those that enjoy and invest time and value into the game.
If you can snare people into the game, such they have invested enough time to place value on their experiences, many will invest further to enchance thier experiences. (Some offer cosmetic changes, others offer unique content - Hattrick and Adventurequest are two variations I've personally experienced.). While Ad streams are a source to attach to the free player base, these mini-subscriptions tend to be where much of the rest of the revenue is captured.
And if its good enough, well presented and enough people become to place value in thier avatars and the world, the game may see revenues like second life, which had a reported average revenue of over 9$/user. Thats near pay-to-play, for a free, lower budgeted game.
Wednesday, June 11, 2008
Six Years Later: Groundwork for OWE v 2.0
It's hard to believe that for myself, its been six years since I started down the road that I follow now. It was my first year of undergrad, and I wrote the OWE as a way to help comprehend concepts in my Macroecoomic course. It was during my time working with stratics as an editorialist, so I took the extra step in polishing it into a paper-style presentation for others to view. It was very well recieved and it did get a few references here and there, which surprised me. It also grabbed the interest of my economic professors, who convinced me to change majors into Econ.
And now, with a lot more education under my belt on the subjects, I look back and realize that the OWE is very basic and simplistic, and that it needs an overhaul, a second version. At the same time, the groundwork is solid. Concepts may have gotten glitzed up and polished over the past 6 years, but the mechanics still have the same roots.
But, it still needs an update. As a blog series, I'll cover the different sections of the original OWE, and point out some changes, thoughts , etc. on the paper, in an effort to lay groundwork for a V 2.0.
I suggest, if you haven't yet, to read the original paper linked to the left.
First up:
Changes in the General Analysis:
The Online World Population:
Populations have grown over the years. Ultima Online and EQ measured itself in hundreds of thousands. World of Warcraft shattered everything before it, measuring over 10 million subscriptions now. But there is two sides to the extreme. Smaller niche games tend to have a hundred thousand or less. Virtual worlds inside communities (such as facebook) tend to fluctuate. There is more choices out there for virtual worlds than ever before, and more people who play them as well.
But the mechanics still remain the same. Most MMO's tend to follow the Combat/Crafting/Gathering trifecta of activities and abilities for bothe NPCs and PCs. A fourth can be argued as a minimal group of PCs, that of Profiteers. With the addition of Auction house-style areas, there are some players who tend to manipulate markets in order to make a profit. These players tend to fall into one of three subcategories:
1) Arbitrageurs - Players who skim markets for below average cost items to resell for profit at the higher, average price listings
2) Mass Marketers - Exert Market force over a facet of the economy by selling items en masse, and either undercutting competition, or buying out cheaper product in order to maintain price levels.
3) Value Added Crafters- Partially a crafting ability, but it requires the use of the auctions. Players tend to use abilities to change cheaper items on the market into higher value items through construction or deconstruction. Much of the items are easily attainable through a network of friends and thier abilities, but the ease and availability of the auctions drives the price up (as the alternative is to spend time collecting and finding people to create the items).
The Player Characters:
The type of players most MMOs attract hasn't changed much over the years. Most of the players are attracted to a growth based system of conflict, whether that be economical or warfare. The tools in which such players gather have altered somewhat. Combat tends to be more socially orientated than it ever was. Many dungeons, or PvP encounters group people together in teams to achieve goals. "Raids" consisting of a large group of players have become a staple of many MMOs as one way to play out endgame scenarios, and the increased availability of high-speed internet has allowed for much larger encounters, more sophisticated ways of communicating, and increased populations to compete against for ranks amongst all abilities (Best crafter, Best raid, Best business, etc).
It isn't surprising then, that Bartle's player types still stand up strong. While things have gotten bigger and subdivisions are more profound, the players are still the same people as they always were. Theres just more of them, which allows to divide further ("Pro" Gamers, PvP Tounament players, Raiders, Auction-house players, etc come to mind and new types).
What's interesting to note is when games tend to exploit this subdivision, much in a way that politics plays voters. My home country of Canada is a great example to pitch, as theres multiple political parties. Most voters tend to go and vote in a two party system. One party is slightly left wing of the centre, and the other is just right of the central poltical line (Liberal and Conservative respectively), but there's always "fringe" parties that cater to those further away from the central politics. By being focused on certain groups, they tend to draw voters away from the central parties, mainly those nearer to thier view than that of the center. Its not a majority, but its enough to keep them alive and running. And the beleif is, if they last long enough, the median that is central politics shifts in thier favor, and more voters sign on to thier ideals (NDP are a prime example in Canada).
Niche games work the same way. A Tale in the Desert, Puzzle Priates, and other various games tend to focus on a particular player style, and while being profitable, the aim is to sway the median in thier direction as well. Economically, this is a form of Hotelling's Law in a theoretical game. The bigger the population of the distribution, the more effective niche markets become, as more identifiable player-types become apparent.
Given the population of Warcraft, it can be assumed that this is the median player now. If you take Bartle's player types, you develop not a linear Hotelling model, but a plane of interests, which is also included in the paper found here:
Now, if Wow is the median, try and imagine different online games and how far away they deviate in any direction. I won't do it here for lack of using technology correctly to place games, but I bet if you do it yourself, you'll notice that those games closest to the center mark tend to have more subscribers, while further out garner less. Also, any games close to one another will tend to fight over the same market, and reduce thier user base. Thus, prime markets for games tend to be in areas of the map where there is the least like games (while still being near the median as possible), or at the median and try to exert dominance.
In this article I mentioned the other day, it talks about new MMOs facing population declines after gamers switch back to WoW. This mainly shows that the games near the median haven't swayed the general populace enough to become the median, but still attempt the takeover. I tend to disagree with the fact that making WoW-like games isn't the best idea, you just need confidence in the ability to capture and keep the market. Once the tides turn, so to speak, a critical mass effect can occur, and a new game can become the median, and the new population topper. But because of the large gamble with big-budget MMOs and the potential downfall, becoming fringe may actually be more profitable. And enough fringe companies take on the big WoW Machine,it may chip away at its dominance.
Hostile takeover may not work, but divide and conquer could at this point.
And now, with a lot more education under my belt on the subjects, I look back and realize that the OWE is very basic and simplistic, and that it needs an overhaul, a second version. At the same time, the groundwork is solid. Concepts may have gotten glitzed up and polished over the past 6 years, but the mechanics still have the same roots.
But, it still needs an update. As a blog series, I'll cover the different sections of the original OWE, and point out some changes, thoughts , etc. on the paper, in an effort to lay groundwork for a V 2.0.
I suggest, if you haven't yet, to read the original paper linked to the left.
First up:
Changes in the General Analysis:
The Online World Population:
Populations have grown over the years. Ultima Online and EQ measured itself in hundreds of thousands. World of Warcraft shattered everything before it, measuring over 10 million subscriptions now. But there is two sides to the extreme. Smaller niche games tend to have a hundred thousand or less. Virtual worlds inside communities (such as facebook) tend to fluctuate. There is more choices out there for virtual worlds than ever before, and more people who play them as well.
But the mechanics still remain the same. Most MMO's tend to follow the Combat/Crafting/Gathering trifecta of activities and abilities for bothe NPCs and PCs. A fourth can be argued as a minimal group of PCs, that of Profiteers. With the addition of Auction house-style areas, there are some players who tend to manipulate markets in order to make a profit. These players tend to fall into one of three subcategories:
1) Arbitrageurs - Players who skim markets for below average cost items to resell for profit at the higher, average price listings
2) Mass Marketers - Exert Market force over a facet of the economy by selling items en masse, and either undercutting competition, or buying out cheaper product in order to maintain price levels.
3) Value Added Crafters- Partially a crafting ability, but it requires the use of the auctions. Players tend to use abilities to change cheaper items on the market into higher value items through construction or deconstruction. Much of the items are easily attainable through a network of friends and thier abilities, but the ease and availability of the auctions drives the price up (as the alternative is to spend time collecting and finding people to create the items).
The Player Characters:
The type of players most MMOs attract hasn't changed much over the years. Most of the players are attracted to a growth based system of conflict, whether that be economical or warfare. The tools in which such players gather have altered somewhat. Combat tends to be more socially orientated than it ever was. Many dungeons, or PvP encounters group people together in teams to achieve goals. "Raids" consisting of a large group of players have become a staple of many MMOs as one way to play out endgame scenarios, and the increased availability of high-speed internet has allowed for much larger encounters, more sophisticated ways of communicating, and increased populations to compete against for ranks amongst all abilities (Best crafter, Best raid, Best business, etc).
It isn't surprising then, that Bartle's player types still stand up strong. While things have gotten bigger and subdivisions are more profound, the players are still the same people as they always were. Theres just more of them, which allows to divide further ("Pro" Gamers, PvP Tounament players, Raiders, Auction-house players, etc come to mind and new types).
What's interesting to note is when games tend to exploit this subdivision, much in a way that politics plays voters. My home country of Canada is a great example to pitch, as theres multiple political parties. Most voters tend to go and vote in a two party system. One party is slightly left wing of the centre, and the other is just right of the central poltical line (Liberal and Conservative respectively), but there's always "fringe" parties that cater to those further away from the central politics. By being focused on certain groups, they tend to draw voters away from the central parties, mainly those nearer to thier view than that of the center. Its not a majority, but its enough to keep them alive and running. And the beleif is, if they last long enough, the median that is central politics shifts in thier favor, and more voters sign on to thier ideals (NDP are a prime example in Canada).
Niche games work the same way. A Tale in the Desert, Puzzle Priates, and other various games tend to focus on a particular player style, and while being profitable, the aim is to sway the median in thier direction as well. Economically, this is a form of Hotelling's Law in a theoretical game. The bigger the population of the distribution, the more effective niche markets become, as more identifiable player-types become apparent.
Given the population of Warcraft, it can be assumed that this is the median player now. If you take Bartle's player types, you develop not a linear Hotelling model, but a plane of interests, which is also included in the paper found here:
ACTING
Killers | Achievers
|
|
|
|
|
PLAYERS -----------------WoW------------------- WORLD
|
|
|
|
|
Socialisers | Explorers
INTERACTING
Now, if Wow is the median, try and imagine different online games and how far away they deviate in any direction. I won't do it here for lack of using technology correctly to place games, but I bet if you do it yourself, you'll notice that those games closest to the center mark tend to have more subscribers, while further out garner less. Also, any games close to one another will tend to fight over the same market, and reduce thier user base. Thus, prime markets for games tend to be in areas of the map where there is the least like games (while still being near the median as possible), or at the median and try to exert dominance.
In this article I mentioned the other day, it talks about new MMOs facing population declines after gamers switch back to WoW. This mainly shows that the games near the median haven't swayed the general populace enough to become the median, but still attempt the takeover. I tend to disagree with the fact that making WoW-like games isn't the best idea, you just need confidence in the ability to capture and keep the market. Once the tides turn, so to speak, a critical mass effect can occur, and a new game can become the median, and the new population topper. But because of the large gamble with big-budget MMOs and the potential downfall, becoming fringe may actually be more profitable. And enough fringe companies take on the big WoW Machine,it may chip away at its dominance.
Hostile takeover may not work, but divide and conquer could at this point.
Tuesday, June 10, 2008
Metaplaces
Ok, I'll admit it. Im jealous. Envious and jealous. And a bit sad.
It was a few weeks ago that I stumbled over this article on MMO population crises . It made sense. It was well written (which I find hard to come by sometimes when it involves games and social behaviour), and it brought up valid points on both the mammoth machine and industry standard WoW has become, and how the industry can't seem to shake it. But here's the thing, by the end of it, I couldn't even keep the subject on my mind.
Why? Simply because of the mention of Raph Koster and his new little endeavour, Metaplace.
For one, I grew into MMO's under Koster's creations. I was weaned on Ultima. I learned how to analyze game structure in Galaxies. I read his site, his philosophies, everything, which in turn molded my view on gameplay. I've always had a gamer crush on anything he touched. The EQ style of gaming won in the end with WoW, but still...there was more to Koster's games. And metaplace is no exception.
Metaplace is a potential melding pot of many different subjects of study. Its a community, much like MySpace or YouTube, but its a community that makes metaversal communities. In that sense, it's not only reactionary to it audience, but its audience potentially has reactions based on what it interacts with, since that audience is also creators of like media. Other members may end up developing games differently through learning and interacting through the community. As such, it not only is a community that grows and feeds on itself, but it might prove to be a lucrative testing/learning center for larger MMO firms in development philosophy.
It's low budget, with easy entry into an otherwise cost-prohibitive market. which opens up the market further. Much like opening beta-testing of games to gamers is a cost-saving module for developers, Metaplace can be a like savings grounds for games development. You have gamers developing games and ideas free of startup cost to companies. It not only allows for pretty open testing on a focus group, but it also gives companies a screening method to find new talent for developing all sorts of games.
And to top it off, it'll be a hotspot for intellectual property debate. Because, if a game gets good and has a big following...who's the owner? Who reaps the rewards? If a game makes enough followers in a focus group such as metaplace would be, it may be financially viable to look at expanding it into a subscription based game. With most games asking 15$USD a month to play, a small grassroots game can gain a profit fast if it catches on.
But thats only one (albeit the one with the most money at stake) facet. Gold farming is rampant in major MMOs, while some cope by selling in-game money to beat third party sellers and capture the market. If one or both become apparent in any of the games, will it be legal? Or for that matter, who decides if its legal?
But all this has nothing to do with my jealousy or sadness mentioned above, only my interest in the matter. The former all stems from "why didn't I think of that?" (which always is one of my gut reactions to anything I think is overly interesting and/or addictive...it's my admission that something in the gaming world is outright great in my mind) and the much more important "Dammit! I missed alpha signups!" . The whole idea plagues me now, because I'm on the outside looking in, wondering. In due time however, I have a feeling I'll get to see a lot more and analyze what happens, because this looks too promising to fall off the face of the planet any time soon.
It was a few weeks ago that I stumbled over this article on MMO population crises . It made sense. It was well written (which I find hard to come by sometimes when it involves games and social behaviour), and it brought up valid points on both the mammoth machine and industry standard WoW has become, and how the industry can't seem to shake it. But here's the thing, by the end of it, I couldn't even keep the subject on my mind.
Why? Simply because of the mention of Raph Koster and his new little endeavour, Metaplace.
For one, I grew into MMO's under Koster's creations. I was weaned on Ultima. I learned how to analyze game structure in Galaxies. I read his site, his philosophies, everything, which in turn molded my view on gameplay. I've always had a gamer crush on anything he touched. The EQ style of gaming won in the end with WoW, but still...there was more to Koster's games. And metaplace is no exception.
Metaplace is a potential melding pot of many different subjects of study. Its a community, much like MySpace or YouTube, but its a community that makes metaversal communities. In that sense, it's not only reactionary to it audience, but its audience potentially has reactions based on what it interacts with, since that audience is also creators of like media. Other members may end up developing games differently through learning and interacting through the community. As such, it not only is a community that grows and feeds on itself, but it might prove to be a lucrative testing/learning center for larger MMO firms in development philosophy.
It's low budget, with easy entry into an otherwise cost-prohibitive market. which opens up the market further. Much like opening beta-testing of games to gamers is a cost-saving module for developers, Metaplace can be a like savings grounds for games development. You have gamers developing games and ideas free of startup cost to companies. It not only allows for pretty open testing on a focus group, but it also gives companies a screening method to find new talent for developing all sorts of games.
And to top it off, it'll be a hotspot for intellectual property debate. Because, if a game gets good and has a big following...who's the owner? Who reaps the rewards? If a game makes enough followers in a focus group such as metaplace would be, it may be financially viable to look at expanding it into a subscription based game. With most games asking 15$USD a month to play, a small grassroots game can gain a profit fast if it catches on.
But thats only one (albeit the one with the most money at stake) facet. Gold farming is rampant in major MMOs, while some cope by selling in-game money to beat third party sellers and capture the market. If one or both become apparent in any of the games, will it be legal? Or for that matter, who decides if its legal?
But all this has nothing to do with my jealousy or sadness mentioned above, only my interest in the matter. The former all stems from "why didn't I think of that?" (which always is one of my gut reactions to anything I think is overly interesting and/or addictive...it's my admission that something in the gaming world is outright great in my mind) and the much more important "Dammit! I missed alpha signups!" . The whole idea plagues me now, because I'm on the outside looking in, wondering. In due time however, I have a feeling I'll get to see a lot more and analyze what happens, because this looks too promising to fall off the face of the planet any time soon.
Starting Over and Ramblings
I've decided to revive this blog. I'll leave the earlier posts here, but apparently, its been a lot longer than I thought it was since the last time I posted anything involving Metanomics. Heck, even the term is relatively new to me, newer than the posts here. It's been nearly a year, but between work and a lack of direction in my academic life, I gave it up after working on the blog for a month. The ideas still flowed forth, but I found I didn't have the time to actually put what I wanted into the blog. Work stole about 10 hours a day from me, and playing MMOs took most nights while I immersed myself in the metaverses.
I've scaled back since then. Less online play, not less work, but more focus on academics again. Im hoping to persue my PhD this fall, and if I learned anything yet in university, its that writing down my ideas tends to steer me in a direction that's much more concise that if I don't. It's how I stumbled on metanomics years ago, so I figure...its how I should end it as well.
I wrote a synopsis for my research a few weeks back, but not before it was a rambling explanation of where I was coming from. I'd like to share it here, as a new beginning to this blog:
I've scaled back since then. Less online play, not less work, but more focus on academics again. Im hoping to persue my PhD this fall, and if I learned anything yet in university, its that writing down my ideas tends to steer me in a direction that's much more concise that if I don't. It's how I stumbled on metanomics years ago, so I figure...its how I should end it as well.
I wrote a synopsis for my research a few weeks back, but not before it was a rambling explanation of where I was coming from. I'd like to share it here, as a new beginning to this blog:
Metanomics is a term that was just recently introduced to me. Oddly enough, it was by one of my fellow gamers in World of Warcraft. Metanomics, as described on the collaborative webpage (http://metanomics.net), is as follows;
“Metanomics” refers to the study of the business and policy aspects of the “metaverse” of virtual worlds. Metanomics can focus on issues arising within virtual worlds, such as how developers manage the economy of a game world (like World of Warcraft), or how residents of virtual worlds manage and regulate business. Metanomics also includes the study of how real-world businesses can use virtual worlds as part of their strategy, and how real-world law and regulation might apply to virtual-world activities. Finally, metanomics includes the use of virtual worlds as laboratories in which to study real-world business or policy issues.
It may not mean much to most people, but its been a driving force of research for myself for 5 years now. It’s just uncanny that others have finally tapped into the potential and organized such studies under a classification of its own.
I’d like to consider myself someone who actually was a part of the Massive Multiplayer history. It may be a minute ripple, but I still have had a participation in occurrences throughout the past ten years, rather than just an observer that can recount the history of a certain niche group of individuals and how their society reflects more mainstream. It may skew my own opinions of events, but at the same time, it can give meaning and understanding to them otherwise may be missed.
I grew up a Nintendo Kid in the eighties. I also owned a Tandy 1000, and played the Sierra Adventure games that were dominant at the time. Video Games were always (and probably will always be) a part of my life. The existence of stories that played out somewhat like movies, but with user interaction, captured my imagination in a way those same movies couldn’t. I was hooked. When I began French Immersion in grade seven, I convinced my mother that buying me the French version of Zelda for the SNES would help my language comprehension (it did, but it of course wasn’t the driving force of buying the game). I’ve owned just about every platform gaming system available.
When the internet became available to me, about when I was 13, I constantly wanted to play, to explore, to learn. I played with anything online available to me, learned of chat groups, instant messaging, and making a websites and communities on the early Geocities homepages sites. Needless to say, I had a lot of spare time on my hands to experience the new media frontier.
However, the breaking point was in 1997, around Christmas, when everything I ever loved to play finally tied into one package. Ultima Online, the first mainstream market Massively Multiplayer Online Game, was dropped into my hands, and the next ten years of my life, whether I wanted to admit it or not, revolved around online gaming.
By the time I had finished my first few years in university, I had been accepted into the seer program, (otherwise known as digiteers, or players with creative powers to make event-stories in game for other players) becoming their youngest volunteer/employee in the seer program. I had also beta-tested almost every single first-generation MMO and their expansions - including Everquest, which would vault MMO’s from just barely mainstream gaming to the media limelight with its subscriber base. I was discovering and learning about the digital landscape, certain basics that were predominant in all online games and gamers.
I gave up on my first foray into university, finding pure sciences were not my strengths. At the same time, UO made a historic move, severing ties with its volunteer corps when it was sued over its work scheduling. I was online at the time, and watched with confusion and sadness as the dismantling of something that I wholeheartedly believed was a community-building experience, and something that marked me with a desire to examine the hows and whys of the so-called metaverse better. However, at this point, I moved home, unsure of both my direction in school and online existence.
I went back the next year to university, closer to home, learning business administration to work in the family owned business. I became a development board regular for Star Wars Galaxies, posting design ideas, arguing player psychology becoming more and more involved with just not playing, but with those why’s and how’s involved. Dev board activity also gave me a break into my final choice for a degree, as to help with remembering my intro economics class theories, I wrote a pseudo-paper that explained how each theory worked into online world development. I showed it to my professor. He got me to switch fields, wanted me to write more on the subject. I have yet to go back directly and address gaping holes in the paper, but somehow it still gets referenced more in other’s works than anything else I have worked on up to and completing my master’s degree. My paper on Online World Economies, as well as my work on political/urban foundations in online worlds for SWG (which, whether they like to admit it, was copied directly into the game) is referenced now and then. These two papers created a bond between my research and my gaming that still exists today.
More online games have come and gone since. The desire to connect research in a meaningful way to gaming hasn’t left however. With my current levels of education, I am looking back to the beginning. I want to translate what I have done in the past ten years especially, into something that can be understood, and built upon. Political Economics, and more specifically this take on metanomics, has taken the forefront now for research angles; a mix of both my university education and my gaming pastime.
There’s still a part of me, the inner gamer that goes “I want to design a game”. I can’t help it, it’s ingrained into my very being. More than likely, the attitude permeates any paper I could write on the subject of digital media more than I would like it to. However, it is my hope that the desire to portray such mediums as a meaningful example of human behavior, in such a way that we can further understand ourselves in one way or another, shines through stronger and connects with you the reader.
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