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MMO Economics

October 20, 2010
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This is an old, but interesting article that summarises the echoes of real-world economics in the virtual world of World of Warcraft:

At one point in time, gold was incredibly rare and individuals often used silver to complete transactions. Large amounts of gold were only held by the most skilled of players and individuals who had been saving up funds since the release of the game. Yet in time the supply of gold began to dramatically increase, and with it, the price of all goods in the game. Hence, because of the constant increase in the quantity of gold (e.g., inflation), prices began to rise. Though the quantity of virtual gold has increased, it is not as a consequence of any Federal Reserve or monetary authority but due to the labor of individual players. The supply for gold has been increased by individuals called “farmers,” whose job is to kill the most “profitable” (i.e., will give up the most gold) beasts and sell the virtual currency they have acquired in the real world. If one were to look up “World of Warcraft Gold” on most online auction houses, they would find a variety of farmers selling their newly acquired in-game currency. At the beginning of this “farming” trend the price of gold in real life online auction houses were quite high but as individuals began to enter the field, the price of United States dollars per virtual World of Warcraft gold piece dropped significantly.

If this interests you, then I’d recommend the novel by Charlie Stross, Halting State which takes these ideas and runs with them (can’t say much more as I’ll spoil the plot!)

Charlie Stross’s latest novel Halting State starts out as a hilarious post-cyberpunk police procedural, turns into a gripping post-cyberpunk technothriller, and escalates into a Big Ideas book about the future of economics, virtual worlds, the nation state and policing, while managing to crack a string of geeky in-jokes, play off a heaping helping of gripping action scenes, and telling a pretty good love story. Here’s the gimmick: Halting State opens when a virtual bank in a distributed, multiplayer world is robbed by a horde of orcs who march in and clean it out of all its prestige items and other loot, a direct frontal assault on the game-economy’s integrity. The losses run to millions…

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