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Role Playing (Games) The Almighty Buck

MMOG Economies Examined 73

Posted by Zonk from the i-love-people-with-too-much-time-on-their-hands dept.
Overanalyzed.com has an interesting (short) piece up on the Economy of World of Warcraft, discussing the way that goods and money flow into and out of player's hands. Commentary is available at Terra Nova. From the article: "Let me preface this by saying that I personally approach MMOs in a different way than most people. While most play for personal enjoyment, I come to them looking to make money. Obviously, while I do still enjoy the time I spend playing the games, I'm much more interested in crossing the boundary and selling my expertise and services in game for real life money."
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MMOG Economies Examined More

MMOG Economies Examined

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  • So basically... (Score:3, Insightful)

    by Cyclone66 ( 217347 ) on Friday December 17, 2004 @03:01PM (#11119148) Homepage Journal
    ...he's admitting to violating the WoW terms of service by selling items/gold for money?
    • Yeah that's what it sounds like. I posted a "burn in hell" comment that is likely to be deleted, but it doesn't matter.

      This guy is a professional capitalist; out to make a buck apparently regardless of ethics or consideration for others. I hope I meet him on a PvP server some day.

      Basically his statements on the economy in his responding comments essentially lead me to this conclusion:

      Isolated economies in games are bound to be destroyed because people have excess wealth outside the game and means of t

    • Blizzard should take a leaf out of this book... (Score:1, Interesting)

      by Anonymous Coward
      Blizzard should be making the money from the transfers, not ebay, ebayers etc. Then they would have to charge a subscription. That's what RedBedlam's doing with Roma Victor [www.roma-victor]
    • What pisses me of is that there are games that are designed for this sort of thing. Go on to Second Life or any of the other metaverse-style MMO's and there's a vibrant real-cash economy that the developers encourage. So why hack away in the black market on WoW?

      Oh well, it all just stems from this accursed obsession with continuity and levelling up. You can't make a game where success is based on days of tedium and the rewards are near-permanent and very valueable and expect people not to capitalise on
      • Why deal in illegal drugs when there is a perfectly legal system of commerce on the surface of the economy where you can deal in legitimate goods and services?

        Because when you go in violation of the rules, there's likely more money to be made due to the somewhat larger risk.
  • The write-up was *anything* but short.

    Highly interesting though. I do agree that WoW needs some more high-end entertaining money sinks, but since I'm only lv25 I don't need to worry that much :P

  • Terms of Service (Score:2, Informative)

    by jothaxe ( 822206 )
    The Terms of Service for the World of Warcraft indicate that all items in game are property of Blizzard (lame, yes.) They also ban accounts of users caught selling items for real money. I disagree with the policy, but thats how it is for now.

    • I completely agree with the policy and certainly hope they strictly enforce it.

      Gangs of lame no-life losers camping "stuff" or swamping the economoy with items is what spoils games. Go get a real job and leave the games to us gamers.

      • Not really sure which side I stand on here. But to counter your argument (cause it's fun to argue and that's what sladhdot's about!).

        If everybody thought like that there would be no market, since everybody does not why try to stop a market that's there. It's people's money they should be able to do what they want with it.

        If I wanted to but stuff I'd want to, but then I want to play the game but anyway!

        • Four words for you: tragedy of the commons.

          People who buy the virtual crap the farmers sell either:

          1. don't give a fuck or
          2. don't think about it or don't think what they're doing will have any effect: "I'm only buying one mana stone/51st level enchanter/$26000 island" or
          3. feel forced to do it because everyone else is: escalation.

          I'd be prepared to bet the majority fall into the middle category.

    • The Terms of Service for the World of Warcraft indicate that all items in game are property of Blizzard (lame, yes.) They also ban accounts of users caught selling items for real money. I disagree with the policy, but thats how it is for now.

      One reason it's like that because that makes things more inaccessible to players who don't earn a lot of money IRL, because if you could set a price on items less people would play because they would not realistically be able to afford to play. Another is to do with
    • >The Terms of Service for the World of Warcraft
      >indicate that all items in game are property of
      >Blizzard

      So how can your character have the item to start with? How can your character give the item to another character in the game? Since when is data "property" anyway? Since when is anyone taking the "property" away from Blizzard?

      I can agree that they have an agreement with their players not to sell though, but that is another thing and not much about "property".
  • Of course, you can't sell an item that belongs to blizzard.

    You are merely charging them a fee for transfering the item to their player.

    It doesn't violate the TOS, and it doesn't infringe on Blizzards claim of item ownership.
    • I don't think they look at it that way though. From the world of warcraft site:

      "The World of Warcraft Terms of Use clearly state that all of the content in World of Warcraft is the property of Blizzard, and Blizzard does not allow "in game" items to be sold for real money. Accordingly, Blizzard Entertainment will take any and all actions necessary to stop this behavior. Not only do we believe that it is illegal, but it also has the potential to damage the game economy and overall experience for the many t

    • Of course, you can't sell an item that belongs to blizzard.

      You are merely charging them a fee for transfering the item to their player.
      They can simply change their TOS to say "you agree not to sell, or facilitate the transfer of..."

      If the MMOG companies don't want you to trade items outside of their virtual space, why do they build such facilities into the game in the first place? Why not allow transfer of items among players who actually meet up and are present, not via a messaging system that is easy
    • Try actually reading the TOS.

      H. You may not exploit World of Warcraft for any commercial purpose, including, but not limited to, performing "power leveling" services to other users of World of Warcraft for "real" money.

  • So what to do? (Score:1, Funny)

    by Anonymous Coward
    The end result of all this is that I stopped trading because fraud was too prevalent and made the practicality of making a living off of it impossible.

    So what to do

    How about getting a REAL job.
    • Come on.. Even when doing real work, you can be frauded the way he explained when you trade through Paypal.

      PayPal will retract payments made if they were reported as 'fraudulent', up to three months after the payment is made.
      (...)
      When the transaction involved a physically shipped good to a verified customer address, the seller can get the money back; but otherwise you're SOL. Obviously, selling virtual currency is not covered.
  • A 22-year-old gamer has spent $26,500 (£13,700) on an island that exists only in a computer role-playing game (RPG.)

    BBC News [bbc.co.uk]

    He plans on making the money back through selling mining rights and taxing the hunting and mining operations of other players on the land.

    Oh, and selling beachfront property.

    This makes my head hurt.

  • Boo Hoo (Score:4, Insightful)

    by jxa00++ ( 322387 ) on Friday December 17, 2004 @03:19PM (#11119360) Homepage
    So after having failed as a day trader this guy wants to make a living on selling items / trading currency guy on the latest MMPORG. He is pissed because Blizzard are aggressively shutting down the Ebay auctions.

    Ignoring the IP/Ownership issues, I have little sympathy for him. First and foremost it is meant to be a game, not a method for you to make a living. Why doesn't he go grind Lineage II or FF where this seems to be tolerated by the devs? (Though I understand FF has been cracking down on this a bit lately - maybe due to the arrival of WoW?)

    I think you can go ahead and argue the legalities of who owns what and whether they have the right to sell it all you want but if I was paying to play this game, the last thing I would want in it is a legion of professional grinders/sellers spamming the chat channels.

    Lastly, there have been a number of informative posts in games.slashdot over the last month or two describing what what effect the "gil sellers" in FF have had - camping items 24/7 basically monopolising level advancement to a certain point in the game. Fuck that.

    • Re:Boo Hoo (Score:2, Interesting)

      by Anonymous Coward
      Lastly, there have been a number of informative posts in games.slashdot over the last month or two describing what what effect the "gil sellers" in FF have had - camping items 24/7 basically monopolising level advancement to a certain point in the game. Fuck that.

      See, this is why Final Fantasy XI sucked. Because people blaimed a fundamental problem with the game on the gilsellers, instead of on the developers, where it belonged.

      The problem was never the gilsellers, it was always the ability to monopoliz

    • Re:Boo Hoo (Score:5, Insightful)

      by medeii ( 472309 ) on Friday December 17, 2004 @03:44PM (#11119615)

      Dude, you didn't even READ the article. The author talks more about economic theory than anything else, and his discussions on the topic are both cogent and coherent. It's not players that make economies inflate -- it's the developers not balancing the game correctly.

      Taking FFXI into account, as you mention: there are crafting recipes that generate more G when the finished product is sold to an NPC, than requires to make them. With an ever-increasing money supply like that, inflation is INEVITABLE. That's the article's point, and it's NOT whining about his eBay auctions.

      • Indeed, most MMORPGs cause their own inflation when there are certain ways to introduce 'new money' into the economy. FFXI is a huge offender of this, recently it was possible for players to sell fish to NPCs for up to 2000 gil (FFXI currency) each. To put this into perspective, for a level 1 player with no help with full knowledge of the game and quests beforehand, it would take him about 1 1/2 to 2 hours doing quests, killing monsters and selling things to make that much money. Considering that, which met
      • there are crafting recipes that generate more G when the finished product is sold to an NPC, than requires to make them

        This is what happens in the real world, too.

        Ford takes a couple hundred dollars worth of raw material, adds a couple hundred hours of work by a lot of people, then sells a car for several thousand dollars. Ford profits and all the people who work for them have more money.

        I don't know enough about the economics of FFXI to argue about wether the rate of inflation is acceptable, but infla
    • Of all the days not to have mod points. I'd mod you through the roof for this, because you're exactly right. This guy is whining like a 12-year-old kid. He's been told he can't do something he wants to, and somehow he managed to get a front page slashdot article about it. He does write what should be some interesting and thought-provoking points, but I just can't take him seriously. The mental image I have of him is a 12-year-old that's been grounded.

  • Doesn't matter whether he agrees or not (Score:3, Interesting)

    by Zed2K ( 313037 ) on Friday December 17, 2004 @03:23PM (#11119402)
    You agree to a certain number of very specific rules in order to play games like this. One is no selling of in game stuff for real money. If you violate this rule they can and will ban you very quickly. He doesn't have to play the game if he doesn't want to, and it is not designed to provide a source of income to the player.

    The player does NOT own their character. They are basically renting space and time from the blizzard servers for the benefit of entertaining themselves. Thats basically all it boils down to. At any time in the contract Blizzard may ban the user and terminate the user paying Blizzard. The user really can't do anything except open a new account.
  • I equate people like this to spam. It's annoying and affects many. But like spam they flourish because there are a few morons who pay for this. Simply stunning.

    I'm all about making a profit. But not at someone else's expense.

  • People may complain that EBay is the chief cause of a MMO's economic collapse, but any hard look at the matter shows that not to be the case. These are very controlled economies that live or die by the decisions of the developers, and no one else. Pursuing red herrings like shutting down EBay auctions, while good for publicity and player morale in the short term, do not address fundamental imbalances in the economy.

    This is a great idea, except for one thing: People going into the game for the sole purpose

  • Good article, but it's a liitle moot for WoW (Score:2, Informative)

    by Anonymous Coward
    Blizzard has done a lot of work to prevent selling in-game content. Most equipment earned in instances (dungeons) can't be traded to other players. All equiptment earned from quests can't be traded once they've been equipped. This leaves you with equipment you win but don't want to sell, gold, and stuff crafted with a tradeskill. Also all items have a min. level, so if a low-level character buys an item, they won't be able to use it.

  • Easy money in FFXI... (Score:1, Funny)

    by Anonymous Coward
    I pick up a stack of feathers at the stables for 84 gil.
    I walk a few meters to the Auction House and put them on for 150.
    Some fletching-making crafter standing a few meters from me keeps buying them for 500.

    He doesn't try to bid lower, just pays the going rate he sees in the price history.
    He's too lazy to walk next door and buy them for 84.
    It was so sad that I stopped doing it after a while.

    What I've found out from all the online games I've been on?
    Many people don't care what it costs, as long as they can

  • No... Wrong.. (Score:5, Insightful)

    by BrookHarty ( 9119 ) on Friday December 17, 2004 @04:40PM (#11120142) Journal
    I am an attorney.

    The EULA is a contract. Contracts are binding. If you agree not to trade currency to play the game, that commitment is enforceable. Therefore, companies have the right to block trading of their currency because it violates a legally enforceable agreement.

    Contracts are flexible, and can change due to current legal conditions. Saying Contracts are like cement and never change is incorrect, they can be changed due to outside factors, missing conditions, or even if the contract was forced without consent.

    Also, EULA's have not been proven to be a binding contacts, since its one side saying you agree without your consent. A contract is mulitple parties agreeing, an EULA is forced consent.

    And before you say "Well you can walk away", No, you bought a product, then the contract comes into existence after the sale. There are lots of ways to get out of EULA's and forced contracts using this pay first, agree later contract. Paying for the product means you already had a binding agreement.

    The whole IP copyright fiasco and copyright limits is a bundle of crap that is hurting everyone.

    • Re:No... Wrong.. (Score:4, Informative)

      by NaugaHunter ( 639364 ) on Friday December 17, 2004 @05:47PM (#11120789)
      I'm not really certain what you're quoting, but the EULA is not what Blizzard would use. They would use the Terms of Service you have to agree to to play online. That is an enforceable contract, or all online business is unenforceable. The EULA mostly has points about the software, not the online service.

      It really has nothing to do with IP or copyright. It states clearly you will not attempt to make money off of your online playing in any manner. It's the same as a contract to use a golf course that has a clause saying you can host your own tournament.
  • The article brings up some excellent points. While I understand the antipathy that many MMOG players feel for purchasing in-game items for real-life money, the author of the article makes some striking observations about WoW's economy. I am interested to see if gold becomes so readily available during the higher levels of the game.

    A more subtle point in this article is that MMOG economies are command economies, like the economy of the U.S.S.R. These game economies are not truly driven supply and demand. T
    • You get plenty of gold at higher levels, but you will need to spend 100 gold on your mount at lvl 40, then 1000 gold at lvl 60 to get the elite mount.

      That is the only real money sink though at this time for higher levels (though repair equipment gets expensive). Bliz has said they plan to offer player housing in the future so that should relieve the economy somewhat once they implement this.
    • A more subtle point in this article is that MMOG economies are command economies, like the economy of the U.S.S.R. These game economies are not truly driven supply and demand. The easiest solution, but the author does not touch on this idea, is to limit the amount of currency in the MMOG world. If new currency is constantly being created, then inflation is the inevitable result.

      Actually to their credit games are not really full on Soviet styled planned or command economies, though it's true that WoW has m
  • Alright, look closely at the URL and then tell me how eager you are to click on the link.

    http://terranova.blogs.com/terra_nova/2004/12/da y_trader_anal.html

  • Kick+Ban the luser (Score:3, Interesting)

    by @madeus ( 24818 ) <slashdot_24818@mac.com> on Friday December 17, 2004 @04:50PM (#11120244)
    From the WoW EULA "You may not exploit World of Warcraft for any commercial purpose".

    It's not rocket science, DON'T DO IT, and don't encorage or tacitly condone it with articles like this. What next, posts from lusers along the lines of 'I keep trying to steal from my work but I find it's not profitable' and hints on 'How to get rich stealing office supplies'?

    Contrary to what this luser is claming, Blizzard have said NOT to do it from the outset (and do note, this guy WAS selling things on eBay, this is NOT just 'research into economic theory'). To quote from his web site "Some of you may know at one time I tried my hand as a professional day-trader." - a day trader, GTG, does his greed and stupidity know no bounds?

    He appears to be a useless article that's unable to find a job that he enjoys and that pays reasonbly well and that actually contributes something to society. Apparently unable to compete in a legitimate market (e.g. in a game like Entropy or There.com where it's perfectly acceptible to sell virtual items for real world money) he's left trying to eek out a living by illegally selling items in other games under the counter, with no regard for the cost to others of his own actions.

    I would note that you can easily obtain information about the real world value of a curreny from eBay and the various sites that also illicitly sell in game currency.

    There is some interesting information in the article but the truth is you don't need to actually break a legally binding contract (which is exactly what this guy has done) in order to do this level of research.

    What's laughable is it's not even in depth nor even that accurate. He states 'I personally believe that the next big thing in MMOs will be tighter integration of real-life cash with in-game property. Game like Second Life, Roma Victor, and Project Entropia are just a few that are paving the way.And while each has significant flaws, I believe the first to get it right (or more realistically, right enough) will be the first to break into the mass market.'. Good Fucking Greif - if that's likely, why then has WoW (which has taken the hardest line yet of any recent MMO on the enforcing it's ban on reselling) just spanked their subscription figures into the next decade?

    People don't want micropayments for items in a fantasy game, most people don't want to be constantly reminded of their already huge credit card bill and people are already tetchy enough about spending money on subscribing to games as it is (just look at the gap Guild Wars has been made to fill).

    While I do there still exists an excellent oppertunity for a Virtual World that isn't a badly implimented pile of crap (like Second Life of there.com - both of which are stunnlingly retarded and apparently written by someone who's never written any software for humans, just in case you've not tried either of them) and that in such an environment I think you could conceiveably have micropayment system, that sort of system is more social activity (where most of the goods being bought are mere 'virtual bling' and the rest unlock specific features and sub games for a given length of time) and is a very distinct from a fantasy game people play to have fun in (like WoW or CoH) where the items themselves are tools (and rewards) for fun, not usually 'fun' in themselves.

    In fantasy games (from SWG to WoW to L2) items such as weapons and armour represent something very different. They represent dedication to the game and a certain level of knowledge of, and achivement within the framework of the game , as opposed to say to there.com which is for virtual Chavs with little money but who like to spend what they do have on virtual clothing and bling to make people think they are not the hoop-earring wearing, council house dwelling virtual chavscum they so clearly are.

    In short, it's clear people don't want to play fantasy games and pay for items in them with real world money. They have made that patently clear, it's mind boggling that the evidence for this seems to have eluded some people.
    • Oh my gods in heaven READ THE ARTICLE BEFORE YOU COMMENT ON IT! The summary text on /. is misleading in that it features the quote he made about being a MMO item/char trader. That was meant to demonstrate his experience with MMO economies, not to be a statement of purpose for the whole article. If you had taken the time to RTFA you would have seen that it is a rather insightful analysis of MMO economies with a focus on the strengths and weaknesses of WoW's. As far as it's value as an article goes, a gam
      • If you had taken the time to RTFA you would have seen that it is a rather insightful analysis of MMO economies with a focus on the strengths and weaknesses of WoW's.

        If you'd read my post (and the article more clearly) you would clearly see that I have and understood it and that it has a nod towards some elements of merit. How on earth do you imagine I managed to pull quotes and make references to it if I hadn't read it?

        It's not purely some act of innocent reseach he's doing here. Anyone who thinks tha
  • ... this appeared in a strip on Penny Arcade [penny-arcade.com] a while ago; the site is awfuly slow today and i can't find the exact link.

    "I just want to talk to all the ****** out here. So, you spend real money in order to get pretend money (or items) in your online games. Then, for the privilege of spending (or using) that pretend money (or item) in a pretend world on pretend things (or trading for other pretend items), you pay more real money, every month.

    What a bunch of ******* brain surgeons."

    I don't have
    • Buying items saves time for people to do other things. Think about it, if I'm rich do I really want to spend hours grinding in a game to get the best weapons, or do I spend my excessive wealth on ways to skip the boring parts of the game to experience the best parts with the best stuff?

      There are always people who have the means and will pay for it. There are over a million rich people and I'm sure there are plenty of middle class people who work regular hours who dont have time to sink into MMO's and are
      • Well, this is what i don't get. If grinding to get best weapons and items is so tedious and boring, why doing it on the first place? Weren't games supposed to be fun? What's the sense of "winning" something in a game if you had to pay to get it instead of earning it yourself?
        • Games are supposed to be fun, but many people find extended play not that fun.

          As a hardcore gamer myself I can play a fun game for hours on end straight for entire day, but most normal people do not think that way. People have priorities in their life above gaming and above even *gasp* fun! As gamers we put fun on a pedestal but its not the ultimate in what appeals to people of different psychologies, everyone prioritizes things differently.
  • I suppose MMORPGs have economies, but they are ultimately controlled by the developers. The company can turn rare items into common items in a matter of moments, and with those games, it really ticks you off when they do that to you.
  • The problem with long-lived adventure games is all the loot you find in them. Because players love loot, the game authors usually supply it, and because loot gets collected over time, it has to be regenerated. Because most games also have regenerating money stock in stores, the total amount of money in the game keeps going up, resulting in runaway inflation. This happens in the real world too, as the mercantilist policies of the sixteenth century demonstrated by importing lots of gold and silver from the Am
  • Why does a game like WOW have to behave like a well balanced economy? All of his points about inflation and ending up with an abundance of currency after sufficient time make sense. I agree that at a certain point people will be running around with effectively infinite money, what's the big deal?

    This is a social game. If you were to start playing in six months, the smart thing to do would be to join a guild with some high level characters and get them to finance your new character. It would be idiotic
  • So this guy did some "analysis" and discovered that inflation happens when more money is created than is destroyed. Anyone with a degree in anything could tell you that.

    The reason this happens in games is that game developers are reluctant to introduce money destroying mechanisms because it is inherently unfun to have your money destroyed. Heck, in the real world, if buildings, machinery, everything didn't decay we'd have the same problem too.

    The only way to fix these problems is just to introduce some

  • Everyone seems to be jumping on the fact that this guys wants to make a living buying/selling in game items. While I applaud Blizzard for wanting to prevent this, we don't have to lynch the article's author for this single point.

    Some good points of the article:

    1. WoW is so much fun to play that it is not clear if anyone would _want_ to pay for items/levels. Even if buying/selling were allowed it's possible that there would be no buyer demand.
    2. WoW has a severe lack of money sinks for the high end conte
  • he claims that high level players have nearly no expenses. simple solution (which worked well on several MUDs) is to make repair costs for high level items very, very expensive.

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