Real money and the online economy

Real money and the online economy

Life on Azeroth can be cheap, but it can take months of hard work to save up for that amazing mount you really want. Welcome to World of Warcraft, the biggest MMORPG (Massively Multiplayer Online Role Playing Game) in the world right now. In the World of Warcraft, the auction house is a great place for people who want to look at things. It has everything from amazing swords to armor that will make you the toughest elf in your area. To buy these amazing things, the player needs gold, which takes a lot of work in the game, like hours, days, or even weeks. But if you go to Ebay or Eye on MOGs, a pricing comparison site for virtual goods, you can turn your real-life money into virtual gold, platinum, ISK, or Credits, depending on the virtual universe your alter ego(s) lives in.

after Real Money Trading first started, gamers would utilize sites like Ebay to turn their in-game items into real money after they left a virtual world. Today, it's a multi-billion dollar business. Steve Sayler of IGE, who works in the industry, thinks that as much as $2.7 billion may change hands in this secondary market in 2006. Companies like MMORPG SHOP, Mogmine, and MOGS now cater to this profitable sector by setting up whole systems to "farm" for in-game gold and other valuable commodities. You can buy in-game money with real money from these sites, and many of them are service-oriented. For example, they can help you level up your avatar quickly, make you a master craftsman in days instead of months, or improve your reputation in the world you live in. Mogmine and other such sites offer specific services like picking fruit, cultivating specific items, or taking your character through that instance that has been bothering you.

We're living in a completely new kind of economy where the line between the actual world and the virtual world is getting blurry. There are now hundreds of businesses that sell virtual goods, and some of them cost hundreds or even thousands of dollars. People are making real money from virtual real estate. For example, 43-year-old Wonder Bread deliveryman John Dugger bought a virtual castle for $750, which was more than a week's pay for him. Edward Castronova, an economics professor at Indiana University who has done a lot of research on online economies, says that Norrath, the world where EverQuest takes place, would be the 77th richest country in the world if it were real. Players would make more money each year than people in Bulgaria or India. GameUSD shows how virtual currencies are doing compared to the US dollar right now. It shows that some virtual world currencies are doing better than real world currencies like the Iraqi Dinar.

Some players don't like that real-world wealth might effect in-game prestige and powers, while others like. This is because of real money trading and gold farming. Critics of the secondary market think that these kinds of activities in virtual economies ruin the fantasy and provide people who are better off in real life an unfair advantage in the game. But this doesn't take into account the fact that it takes a lot of time to make money and level up in a virtual environment. Some players have more money than time. The average age of gamers is 27, and around half of them work full-time. Because they have to spend most of their time working their real jobs, the cash-rich players can fall behind the time-rich players in terms of gameplay. This is especially true when they are playing with friends who are leveling up their characters. For people like these, who make money by spending time, a few dollars is a modest price to pay to make sure they survive the next time they go into an instance with their high-level pals.

People also say that corporations that farm virtual goods are like sweatshops, and this is made worse by the fact that many of these enterprises are based in countries with poor wages, like China. But the pay and working conditions at these companies, where people get paid to play fun, challenging games all day, can't compare to those of their coworkers who spend all day making the parts that go into our computers or the trainers we wear while we play. The main reason for the criticism is moral; many people in the West don't like economies that pay low wages to people who want to do this kind of leisure activities. Many times, workers are paid partly in kind, with food and housing included in their pay packages. This means that the income they get is mostly extra. Even though the pay may not be up to Western standards, this kind of economic activity reminds us that we live in a world where the economy is always getting more global. We should think about things like quality of life and spending power as much as, if not more than, the exchange rate between dollars and yen. Companies like Mogmine give their employees health benefits, paid time off, and the ability to buy shares in the company. They also give their employees the chance to move up in the company. Brian Lim, the CEO of Mogmine, says that "many mid- and high-level managers started out as gamers and now they make the same or more money than good managers in more traditional businesses." In these economies with lower wages, these jobs are desirable.

Some people are upset because these kinds of farming operations hurt the economy in the game. Brian Lim's gamers at Mogmine play the game the way it was designed to be played, but they also learn good ways to make gold along the way, which keeps the task exciting for the staff. Jonathan Driscoll says that competition for resources has always been a part of gaming, and he points out that his World of Warcraft farmers work in instances, so they don't bother other players at all. When players with high-level characters serve as benefactors for their low-level alts, they make it possible for those low-level characters to spend money in the game that isn't realistic. This is a prevalent problem that isn't the fault of farmers. Some creators don't allow real money trading on their servers, but others, like MindArk with their game Project Entropia, have made the secondary market a feature of their services. Sony Online Entertainment, who used to be quite opposed real money trading, has now joined the bandwagon with the launch of its Station Exchange service, which aggressively promotes Real Money Trading in Everquest 2. Roma Victor and other games that are coming out soon use the secondary market as part of their business plan instead of the usual subscription approach. Players buy Sesterces to play and go forward in the game.

Trading virtual goods for real money is probably just the beginning of the rise of virtual economies, where people meet in virtual worlds to promote and trade actual commodities. Companies in the real world can already buy ad space in games like The Matrix Online to reach players who spend their free time in the gaming world.

We are starting a whole new kind of economic activity, where the real and virtual worlds are coming together in an economic space. It's hard to say where this trend will take us since the economy is still new, but the fact that so much money is being spent and earned in these economies and that services are being created to keep an eye on real-to-virtual exchange rates and market prices shows that they are here to stay.

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