(Via Wired News)
When Raph Koster posted a report last week in the Star Wars Galaxies forums that painted a picture of the nuts and bolts of the massively multiplayer online world’s economy, it was one of the first times the public has been allowed to see behind the scenes of such a game.
In doing so, Koster, chief creative officer of Galaxies publisher Sony Online Entertainment, opened the door to a public discussion about whether the health of virtual worlds depends on their economies functioning like those of stable real-world countries.
To Ed Castronova, an associate professor of economics at Cal State Fullerton and a leading expert on virtual economies, the Star Wars Galaxies data showed, more than ever, that the health of such economies doesn’t have to meet real-world standards in order for the games themselves to be strong.
“The tone of the (Galaxies report) is that, basically, all is well with the economy,” wrote Castronova in Terra Nova, a collaborative blog that covers issues surrounding virtual worlds, gaming and economies. “Two years ago, I would have disagreed, but now I’m more convinced than ever that virtual-world economies are such strange beasts that we (meaning academic economists) don’t even know what ‘health’ would be.”
To Koster and others in the industry, the answer to that is clear: A virtual economy has only to be healthy enough to ensure that players stay entertained.
“If the economy is too painfully (dysfunctional), then the players won’t have fun,” says Koster. “You don’t get to ignore the economy, but absolutely, the goal is the fun, not Berkshire Hathaway.”
Anthony Castoro, producer of Ultima Online, agrees.
“The way that we try to evaluate if the economy is good or not is based on the general player experience,” he explains. “We don’t treat the economy as if it’s a real economy, like a government would. It’s just a function of how players can have fun.”
Yet there is no denying that the economies of games like Star Wars Galaxies, Ultima Online and others are complex systems that require constant attention lest they get out of the producers’ control.
The most important factor, say many people involved in MMORPGs, is the state of the games’ virtual currencies.
“If too much money is entering the system, then players tend to have more stuff than they should be able to afford,” wrote Koster in his Galaxies report, “and that makes the game easier, which then can make it kind of dull.”
Thus, he continues, Galaxies “uses what is called a faucet-drain economy. You can visualize a spigot of cash coming into the game, a big ol’ sink where the money sloshes around, and a set of drains where the money goes out the bottom. When money comes in from the faucet, it’s actually being ‘minted’ — it’s being created by the game system. The sink is basically the whole game. It’s the bank accounts, the player inventories, all the money that is used for trades and transactions among players…. When money goes out the bottom, it’s deleted from the system, rather than circulating back to a central bank.”
In fact, Koster told Wired News, due to a “duping” exploit — in which players counterfeited game credits — the game’s producers have been implementing a monetary policy designed to reverse what amounts to an inflationary trend.
Another interesting measurement in the Galaxies report concerned wealth distribution.
Castronova, in his Terra Nova posting, noted that the report showed 95 percent of the wealth in Star Wars Galaxies was owned by as few as 6 percent of the players.
“The wealth distribution is not just unequal, it is incredibly unequal,” Castronova wrote. “Raph says it is similar to the distribution of wealth in (real-life) economies, which it is, but even the worst robber-baron economies were not this bad.”
Koster responds that while “the truly obscene amount of money is in the hands of a few,” the situation is not as bad as it sounds. And that, he says, is because there are tens of thousands of what he terms “try me out” Galaxies characters lying dormant that skew the distribution numbers.
“They are dirt-poor,” Koster says, “and they really distort the statistics.”
Bruce Boston, the in-house economist for the metaverse There, says that it too has its share of hyper-wealthy players.
But There — which spends a significant amount of effort studying its economy — works differently from Galaxies, Boston says.
There’s economy is based on a system in which players spend U.S. dollars on goods and services created almost entirely by fellow members.
The distribution of wealth is “much more dispersed,” says Boston. “You do have top developers with large amounts of currency, but most of that gets redistributed back through the secondary markets.”
In fact, he explains, There’s currency, Therebucks — which have an official exchange rate of 1,787 to the U.S. dollar — circulates through its economy in about three to four weeks as members buy Therebucks and then quickly pay other members for new clothing, vehicles or other items for their avatars.
In another metaverse, Second Life, the economy may also more closely resemble the real world than a fantasy world.
Philip Rosedale, CEO of Second Life publisher Linden Lab, says his company is set to begin in a couple of weeks regularly publishing economic trend data — something even Star Wars Galaxies isn’t planning on.
Rosedale says the company has worked out a consumer price index for Second Life that measures the average sales prices for the more than 20,000 transactions that take place in its virtual world each week.
But where typical MMORPGs are often inflationary, Rosedale says Second Life’s economy is stable. As its member base grows — at about 20 percent a month — so too does the amount of money and land in the system.
Thus, he explains, members should not see inflationary effects in their areas of the world.
“We think the CPI will stay constant,” says Rosedale, “because (land) supply, content base and the member base will stay constant…. You can’t build a scalable system unless your local conditions remain constant.”
Koster says the Galaxies team put up its economic data as part of a regular series of postings to “sanity-check our impression of how the game was doing from the statistics point of view and compare that to the gut check of players.”
But games like Ultima Online and even Sony Online’s own EverQuest tend not to publicize their economic data because they feel that as long as players are enjoying their time in the games, there’s no point.
Rosedale, however, believes otherwise.
“We’re doing it because we believe increased transparency is the key to a stable economy and economic growth,” he says. “Those economies that have the most transparency and the most information are the ones that grow the fastest.”
And Rosedale, like There’s Boston, thinks the economy of his metaverse transcends pure fantasy.
“I’m not building a game,” he says. “I’m building a new country.”