Real Money And The Virtual Economy

Real Money And The Virtual Economy



Real money and​ ​ the​ virtual economy
In the​ world of​ Azeroth, life can be cheap but saving up for​ that much desired epic mount can take months of​ labour .​

Welcome to​ the​ World of​ Warcraft, currently the​ world’s largest MMORPG Massively Multiplayer Online Role Playing Game .​

In the​ World of​ Warcraft, the​ auction house presents the​ avid window shopper with a​ cornucopia of​ wonders, from fabulous swords to​ armour guaranteed to​ make you the​ hardest elf in​ your neck of​ the​ woods .​

To purchase such wonders, the​ player needs gold, something that requires quite literally hours, days or​ weeks of​ ingame labour .​

However visit Ebay or​ Eye on MOGs, a​ price comparison engine for​ virtual commodities, and​ ​ you have the​ opportunity to​ convert real life earnings into virtual gold, platinum, ISK or​ Credits, depending on the​ virtual world that you alter egos inhabits .​


The world of​ Real Money Trading has come a​ long way since its fledgling days when gamers departing from a​ virtual world would use websites like Ebay to​ convert their ingame assets into real world money .​

Today it​ is​ a​ multibillion dollar industry, with industry insiders like Steve Sayler of​ IGE estimating that as​ much as​ $2.7 billion will change hands within this secondary market during the​ course of​ 2018 .​

This lucrative industry is​ now catered for​ by companies like MMORPG SHOP, Mogmine and​ ​ MOGS, which have entire infrastructures set up to​ ‘farm’ for​ ingame gold and​ ​ valuable items .​

Not only can you purchase ingame spending power with real world money from such sites, but many are service driven, for​ example offering power levelling to​ fasttrack your avatar to​ new heights of​ maturity, turn you into a​ master craftsman in​ days rather than months, or​ boost your reputation within the​ world you inhabit .​

Sites like Mogmine offer specialised services like fruit picking, specified item farming, or​ will take your character through that instance that’s been weighing so heavily on your mind .​


What we are experiencing here is​ a​ whole new type of​ economy where the​ border between the​ real and​ ​ virtual world is​ blurring .​

There are currently hundreds of​ companies catering to​ this phenomenon, with some virtual items being sold for​ hundreds or​ even thousands of​ dollars .​

Virtual real estate is​ earning real world money, with people like 43yearold Wonder Bread deliveryman John Dugger purchasing a​ virtual castle for​ $750, setting him back more than a​ week’s wages .​

According to​ Edward Castronova, an​ economics professor at​ ​ Indiana University who has performed extensive research into online economies, Norrath, the​ world in​ which EverQuest takes place, would be the​ 77th richest nation on the​ planet if​ ​ it​ existed in​ real space, with players enjoying an​ annual income better than that of​ the​ citizens of​ Bulgaria or​ India .​

a​ visit to​ GameUSD indicates the​ current state of​ virtual currencies against the​ US dollar, demonstrating that some virtual world currencies are currently performing better than real world currencies like the​ Iraqi Dinar .​


Real Money Trading and​ ​ gold farming are met with mixed feelings in​ the​ gaming world, with some gamers criticizing the​ fact that real world wealth can affect ingame prestige and​ ​ capabilities .​

Critics of​ the​ secondary market believe that such activities within the​ virtual economies intrude on the​ fantasy and​ ​ provide the​ more economically empowered with an​ unfair ingame advantage .​

However this ignores the​ real world fact that earning money and​ ​ advancing one’s character within a​ virtual world takes a​ good deal of​ time, and​ ​ some gamers have more money than time on their hands .​

The average age for​ gamers is​ 27, and​ ​ approximately half of​ all gamers are in​ full time employment .​

For a​ group of​ friends playing together, it​ can thus be relatively easy for​ the​ cash rich to​ fall behind the​ time rich in​ terms of​ gameplay, as​ they are obliged to​ spend the​ lion’s share of​ their time working their real world jobs while friends are spending time levelling their characters .​

For such individuals, for​ whom time translates into money, a​ few dollars is​ a​ small price to​ pay to​ ensure virtual survival the​ next time they enter an​ instance with their high level friends .​


Companies set up to​ farm virtual commodities are furthermore criticised as​ being little more than sweatshops, an​ attitude encouraged by the​ fact that many of​ these companies reside in​ low wage economies like China .​

However, pay and​ ​ work conditions in​ such companies, where workers are paid to​ spend their days playing enjoyable, stimulating games, cannot compare to​ that of​ their compatriots who spend their days mindlessly producing the​ components that go into our computers, or​ the​ trainers that we wear while playing .​

Essentially the​ objection is​ a​ moral one, with many Westerners objecting to​ low wage economies catering to​ this type of​ leisure activity .​

Often workers are paid partly in​ kind, with food and​ ​ accommodation included in​ remuneration packages, with the​ pay received thus presenting largely surplus .​

While pay may not equate to​ Western standards, this type of​ economic activity reminds us that we are living in​ a​ continually globalising economic environment where quality of​ life and​ ​ spending power should be taken into account as​ much if​ ​ not more so than say a​ straight dollar for​ yen exchange rate .​

Companies like Mogmine provide their staff with health benefits, holiday pay and​ ​ share options, along with the​ chance for​ advancement within the​ organisation .​

Brian Lim, CEO of​ Mogmine, comments that ‘many mid and​ ​ highlevel management started out as​ gamers and​ ​ now they have equal or​ more pay than respectable managers in​ more conventional businesses.’ Within these lower wage economies, these thus represent desirable jobs .​


Other complaints centre around the​ negative effect of​ such farming activities on ingame economies .​

at ​ Mogmine, Brian Lim’s gamers play the​ game as​ it​ is​ meant to​ be played, but hone good techniques for​ gold generation along the​ way, thus ensuring that the​ work remains interesting to​ staff .​

Jonathan Driscoll comments that competition for​ resources has always been a​ feature of​ gameplay, and​ ​ points out that his World of​ Warcraft farmers do their work within instances, and​ ​ thus do not impact on others’ gaming experiences in​ the​ least .​

Complaints that farmers are responsible for​ ingame inflation smack of​ sour grapes when compared to​ common factors like players with high level characters acting as​ benefactors for​ their lowlevel alts, and​ ​ thus facilitating the​ unrealistic ingame spending power of​ such low level characters .​

While some developers do not condone real money trade on their servers, others like MindArk, with their game Project Entropia, have included the​ secondary market as​ a​ part of​ their services .​

Even Sony Online Entertainment, who until recently stood staunchly against real money trade, have jumped on the​ bandwagon with the​ release of​ their Station Exchange service, actively facilitating Real Money Trading in​ Everquest 2 .​

Other games, like the​ upcoming Roma Victor, embed the​ secondary market as​ part of​ their financial model rather than relying on the​ common subscription model, with players purchasing Sesterces to​ play and​ ​ advance in​ the​ game .​


Such trading of​ virtual goods for​ real world money is​ potentially just the​ tip of​ the​ iceberg for​ the​ development of​ virtual economies where people come together within virtual worlds to​ promote and​ ​ trade real world products .​

Games like the​ Matrix Online already sell advertising space to​ real world companies to​ promote their products to​ gamers who spend their leisure time within the​ world .​


We are thus embarking on an​ entirely new type of​ economic activity, where real and​ ​ virtual worlds are meeting within an​ economic sphere .​

as​ a​ fledgling economy, it​ is​ difficult to​ chart where this phenomenon may take us, but the​ sheer weight of​ currency being spent and​ ​ earned within these economies and​ ​ the​ development of​ services to​ monitor real to​ virtual exchange rates and​ ​ market prices indicates that they are here to​ stay.




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