2004/11/08

Anthropology meets economics

Edward Castronova continues his good work with the study of virtual economies, and what that tells us about real people, and economies that would still exist even if people didn't have far too much spare time and money.

Money laundering though virtual economies is something that was first suggested by Rusty on K5, and I've toyed with it a little since then. The basic problem is that each universe is too small to avoid distorting markets and bell curves when washing appreciable sums at an acceptable rate. The answer to this is per-game and eBay bots, or sweatshops MMPORGers.

Running an item-generation sweatshop would be perfect cover for this kinda thing.

Aside from my nefarious musings, what I'd like to see is an inter-game object description and exchange protocol. Having a +10 Vorpal sword in a sci-fi space-combat/trading MMPORG wouldn't give you many tactical advantages against entry-level plasma cannons, but it would retain some monetary value, modulo normal item depreciation. Also, as an antique, you could decorate your office with it.

The challenges are as follows:

1) The various providers (MS, Verant, Blizzard, etc.) all have a lot of proprietary stuff locked up in their respective knowledge/skill bases, and their own way of doing things like e.g. disbursing currency.

They don't want to share the "unique" knowledge they've built up over the years, despite the redundancy of MMPORG-running/administration talent within EA, MS, Verant and Sony being a tremendous duplication of effort, and a waste of time & money, not a competitive advantage.

Every piece of code that even approaches protocol-level interop with an MMPORG is stamped on, hard, with the +5 DMCA Jackboot of Stomping. Getting these people to co-operate on something that increases fluidity for a player transitioning to a competitor would be practically impossible.

2) Each provider uses their TOS to maintain the legal fiction that in-game objects are worthless. Of course, anyone with eyes in their head can see currency, real estate and commodities being traded on eBay. If 'worthless' in-game items are not being traded on eBay, then the game is dead in the water, doomed, lifeless.

The providers force this acceptance of worthlessness on users for two reasons.

2.a) They don't want to become liable for inventory, or for in-game fraud, etc. If $1M worth of imaginary items are being traded every day in EQ, a day's downtime suddenly becomes roughly as important as disruption to a small stockmarket. They'd get sued for dupeing bugs. If God was a legal entity, just like a large corporation, then lawyers would be suing him on behalf of people who think they got a bad deal out of real life, unless he asked each newborn baby to click yes on an EULA.

2.b) An acknowledgment of value for in-game cash means that there's a legal requirement that it be regulated like any other "non-cash means of payment". See the proposed EU directive, which almost definitely has UN and DoJ equivalents, and which would have been applicable to MMPORG currencies regardless in one of the early drafts, before someone fixed that.

3) Blizzard is no more likely to allow a WoW user to transition to EQ2 than MS would allow a Passport-totin' MSN IM user to transition to AIM.

Lock-in is still a fact of life in MMPORGs as it is in IM and other areas in IT, because established players have no interest in becoming the infrastructure and platform upon which a next-generation of players can disrupt or destroy markets at their expense.

What I mean is this: imagine that you could move your character between MMPORGs, or sell real-estate in UO to characters in EQ. Imagine that the money/credits you earn or make or win in your game could be kept in banks unafilliated with any in-game universe, or invested in shares of clans or guilds in other games, or used to play on the Forex markets with gold pieces and beryllium credits, or whatever.

This is the kinda thing that could happen if MMPORG providers loosened up a bit, and let money and property flow in between these systems. MS, Verant and Blizzard could find themselves running a confederation of systems hosting virtual worlds whose 'populace' would have a GDP comparable to that of a normal western country, instead of the half-dozen equivalents to Namibia that they have right now. That's a license to print money, compared to which owning a casino would be small change.

Lock-in prevents this from happening.

Other reasons this remains a distant dream are the real-world hurdles. For example, there's nobody who can get all these players at the same table. Also, as soon as virtual currencies become big enough, governments will insist on them being regulated just like normal currencies, and therefore declared and taxed, even if the user signs the "worthless" TOS.

Despite all this, I still think that contiguous 3D net-based realities are more likely to grow out of MMPORGs than anywhere else. We shall see.



2 comments:

AkoZ °om said...

ok, so far, not all is clear there. But just to nitfy that game: project-entropia (commented on http://akozoom.free.fr/b2e/index.php?blog=4&title=project_entropia_experiences&more=1&c=1&tb=1&pb=1 ): for traduction: http://babelfish.altavista.com/babelfish/tr
then next economy has begun: concept and modeling works... root of softwares and OS, but very fragile coz of electricity needing (for computer machines).
having one character in all mmporgs means being the same at all, that's not the way players wanted to be, more other than one but life trying could be miroring and experiences for reality.

Ian said...

Hey, thanks for commenting.

It's true the economy would be fragile compared to real lefe economies, which if course existed before electicity came along.

As for having the same character in all MMOGS, I don't imagine that would be necessary to be able to transfer assets betweem universes, although having a Jedi Knight in WoW would be interesting :-)