Index Page 1 of 10 The Walrus magazine http://walrusmagazine.com/ Title game Theories http://walrusmagazine.com/article.pl?sid=04/05/06/1929205 On-line fantasy games have booming economies and citizens who love their political systems. Are these virtual worlds the best place to study the real one? By Clive Thompson Edward Castronova had hit bottom. Three years ago, the thirty-eight-year-old economist was, by his own account, an academic failure. He had chosen an unpopular field -welfare research-and published only a handful of papers that, as far as he could tell, "had never influenced anybody. He'd scraped together a professorship at the Fullerton campus of California State University, a school that did not even grant Ph D.S. He lived in a lunar, vacant suburb. He'd once dreamed of being a major economics thinker, but now faced the grim sense that he might already have hit his plateau. "I'ma schmo at a state school, he thought and since his wife worked in another city he was on top of it all lonely To fill his evenings, Castronova did what he'd always done: he played video games. In April, 2001, he paid a $10 monthly fee to a multiplayer on-line game called Ever Quest. More than 450,000 players worldwide log into EverQuest's"virtual world. They each pick a medieval character to play, such as a warrior or a blacksmith or a"healer, "then band together in errant quests to slay magical beasts; their avatars appear as tiny, inch-tall characters striding across a Tolkienesque land. Soon, Castronova was playing Ever Quest several hours a night Then he noticed something curious: Ever Quest had its own economy, a bustling trade in virtual goods Players generate goods as they play, often by killing creatures for their treasure and trading it. The longer they play, the more powerful they get-but everyone starts the game at Level 1, barely strong enough to kill rats or bunnies and harvest their fur. Castronova would sell his fur to other characters who'd pay him with"platinum pieces, the artificial currency inside the game. It was a tough slog, so he was always stunned by the opulence of the richest players. Ever Quest had been launched in 1999, and some veteran players now owned entire castles filled with treasures from their quests Things got even more interesting when Castronova learned about the"player auctions. EverQuest players would sometimes tire of the game, and decide to sell off their characters orvirtual possessions at an on-line auction site such as e Bay. When Castronova checked the auction sites, he saw that a Belt of the great turtle or a robe of Primordial Waters might fetch forty dollars; powerful characters would go for several hundred or more. And sometimes people would sell off 500,000-fold bags of platinum pieces for as much as $1000 As Castronova stared at the auction listings, he recognized with a shock what he was looking at. It was a someone was paying cold hard American cash for it. That meant the platinum piece was worth h eBay form of currency trading. Each item had a value in virtual"platinum pieces"; when it was sold something in real currency. Ever Quest's economy actually had real-world value He began calculating frantically. He gathered data on 616 auctions, observing how much each item sold for in U.S. dollars. When he averaged the results, he was stunned to discover that the everQuest http://www.walrusmagazine.com/printpl?sid=04/05/06/1929205
The Walrus Magazine http://walrusmagazine.com/ http://walrusmagazine.com/article.pl?sid=04/05/06/1929205 On-line fantasy games have booming economies and citizens who love their political systems. Are these virtual worlds the best place to study the real one? By Clive Thompson Edward Castronova had hit bottom. Three years ago, the thirty-eight-year-old economist was, by his own account, an academic failure. He had chosen an unpopular field — welfare research — and published only a handful of papers that, as far as he could tell, "had never influenced anybody." He'd scraped together a professorship at the Fullerton campus of California State University, a school that did not even grant Ph.D.s. He lived in a lunar, vacant suburb. He'd once dreamed of being a major economics thinker, but now faced the grim sense that he might already have hit his plateau. "I'm a schmo at a state school," he thought. And since his wife worked in another city, he was, on top of it all, lonely. To fill his evenings, Castronova did what he'd always done: he played video games. In April, 2001, he paid a $10 monthly fee to a multiplayer on-line game called EverQuest. More than 450,000 players worldwide log into EverQuest's "virtual world." They each pick a medieval character to play, such as a warrior or a blacksmith or a "healer," then band together in errant quests to slay magical beasts; their avatars appear as tiny, inch-tall characters striding across a Tolkienesque land. Soon, Castronova was playing EverQuest several hours a night. Then he noticed something curious: EverQuest had its own economy, a bustling trade in virtual goods. Players generate goods as they play, often by killing creatures for their treasure and trading it. The longer they play, the more powerful they get — but everyone starts the game at Level 1, barely strong enough to kill rats or bunnies and harvest their fur. Castronova would sell his fur to other characters who'd pay him with "platinum pieces," the artificial currency inside the game. It was a tough slog, so he was always stunned by the opulence of the richest players. EverQuest had been launched in 1999, and some veteran players now owned entire castles filled with treasures from their quests. Things got even more interesting when Castronova learned about the "player auctions." EverQuest players would sometimes tire of the game, and decide to sell off their characters orvirtual possessions at an on-line auction site such as eBay. When Castronova checked the auction sites, he saw that a Belt of the Great Turtle or a Robe of Primordial Waters might fetch forty dollars; powerful characters would go for several hundred or more. And sometimes people would sell off 500,000-fold bags of platinum pieces for as much as $1,000. As Castronova stared at the auction listings, he recognized with a shock what he was looking at. It was a form of currency trading. Each item had a value in virtual "platinum pieces"; when it was sold on eBay, someone was paying cold hard American cash for it. That meant the platinum piece was worth something in real currency. EverQuest's economy actually had real-world value. He began calculating frantically. He gathered data on 616 auctions, observing how much each item sold for in U.S. dollars. When he averaged the results, he was stunned to discover that the EverQuest Title Game Theories Index Page 1 of 10 http://www.walrusmagazine.com/print.pl?sid=04/05/06/1929205 10/28/2004
Index Page 2 of 10 platinum piece was worth about one cent U.S. -higher than the Japanese yen or the Italian lira. With that information, he could figure out how fast the Ever Quest economy was growing. Since players were killing monsters or skinning bunnies every day, they were, in effect, creating wealth. Crunching more numbers, Castronova found that the average player was generating 3 19 platinum pieces each hour he or she was in the game-the equivalent of $3.42(U. S) per hour. " That's higher than the minimum wage in most countries "he marvelled Then he performed one final analysis: The Gross National Product of Ever Quest, measured by how much wealth all the players together created in a single year inside the game. It turned out to be $2, 266 U.S. per capita. By World Bank rankings, that made Ever Quest richer than India, Bulgaria, or China, and nearly as wealthy as russia It was the seventy-seventh richest country in the world. And it didn't even exist Castronova sat back in his chair in his cramped home office, and the weird enormity of his findings dawned on him. Many economists define their careers by studying a country. He had discovered one I first met Castronova at a piano lounge last summer at the Caesar's Palace casino in Las Vegas, where he was attending a high-tech conference We talked over a few drinks though our conversation was soon drowned out by the bar's syrupy Frank Sinatra impersonator, belting out a version of"New York, New York " Castronova winced. "Where better in the world to talk about virtual worlds than las Vegas? he said. "This place invented the idea of virtual life Castronova is a natural role-player. He's a short, nebbishy guy with a neat goatee and horn-rimmed glasses. When he lectures he radiates charisma; he is the cool professor you wish you'd had when you were trying to grasp the dry mechanics of price theory. Until recently, he acted in a Shakespearean troupe, and in his spare time he explores the world of"multiple-user domains"-Internet chat environments where people assume different personae as they hang out together Castronova suspects his eclectic background is why he never made the powerful connections necessary to secure a good academic job. "Ive al ways been an outsider I've just been floating around outside communities, sort of flitting from topic to topic, he said With virtual worlds, he had finally hit upon a subject that was exploding into the mainstream Experimental online worlds had been kicking around for years, but they took a leap forward in 1997 when Ultima Online- a medieval fantasy world similar to Ever Quest-launched, and quickly amassed a hundred thousand users. The idea of having a second life on- line suddenly didn't seem so geeky, or, at the very least, it seemed a profitable niche; companies like Sony and Microsoft swarme on-line. Today there are more than fifty active games worldwide and anywhere from two to three million people playing regularly in the U.S. The games range from Star Wars Galaxies(where you can wander around as a Wookie and fight the Dark Side) to There. com ( where you can wander around Disneyfied islands as an attractive gap-style model and admire your hot new body In Korea, a single game called Lineage claims more than four million players To figure out precisely who was playing Ever Quest, Castronova persuaded thirty-five hundred users to fill out a survey. As one might expect, the average age turned out to be twenty-four, and the players were overwhelmingly male. The amount of time spent "in game"was staggering over twenty hours a week, with the most devoted players logging six hours daily. Twenty percent of players agreed with the cheeky (if alarming )statement"I live in Norrath but I travel outside of it regularly", on average, each of these"residents"possessed virtual goods worth about $3,000 U.S. When you consider that the average http://www.walrusmagazine.com/printpl?sid=04/05/06/1929205
platinum piece was worth about one cent U.S. — higher than the Japanese yen or the Italian lira. With that information, he could figure out how fast the EverQuest economy was growing. Since players were killing monsters or skinning bunnies every day, they were, in effect, creating wealth. Crunching more numbers, Castronova found that the average player was generating 319 platinum pieces each hour he or she was in the game — the equivalent of $3.42 (U.S.) per hour. "That's higher than the minimum wage in most countries," he marvelled. Then he performed one final analysis: The Gross National Product of EverQuest, measured by how much wealth all the players together created in a single year inside the game. It turned out to be $2,266 U.S. per capita. By World Bank rankings, that made EverQuest richer than India, Bulgaria, or China, and nearly as wealthy as Russia. It was the seventy-seventh richest country in the world. And it didn't even exist. Castronova sat back in his chair in his cramped home office, and the weird enormity of his findings dawned on him. Many economists define their careers by studying a country. He had discovered one. I first met Castronova at a piano lounge last summer at the Caesar's Palace casino in Las Vegas, where he was attending a high-tech conference. We talked over a few drinks, though our conversation was soon drowned out by the bar's syrupy Frank Sinatra impersonator, belting out a version of "New York, New York." Castronova winced. "Where better in the world to talk about virtual worlds than Las Vegas?" he said. "This place invented the idea of virtual life." Castronova is a natural role-player. He's a short, nebbishy guy with a neat goatee and horn-rimmed glasses. When he lectures he radiates charisma; he is the cool professor you wish you'd had when you were trying to grasp the dry mechanics of price theory. Until recently, he acted in a Shakespearean troupe, and in his spare time he explores the world of "multiple-user domains" — Internet chat environments where people assume different personae as they hang out together. Castronova suspects his eclectic background is why he never made the powerful connections necessary to secure a good academic job. "I've always been an outsider. I've just been floating around outside communities, sort of flitting from topic to topic," he said. With virtual worlds, he had finally hit upon a subject that was exploding into the mainstream. Experimental online worlds had been kicking around for years, but they took a leap forward in 1997, when Ultima Online — a medieval fantasy world similar to EverQuest — launched, and quickly amassed a hundred thousand users. The idea of having a second life on-line suddenly didn't seem so geeky, or, at the very least, it seemed a profitable niche; companies like Sony and Microsoft swarmed on-line. Today there are more than fifty active games worldwide, and anywhere from two to three million people playing regularly in the U.S. The games range from Star Wars Galaxies (where you can wander around as a Wookie and fight the Dark Side) to There.com (where you can wander around Disneyfied islands as an attractive Gap-style model and admire your hot new body). In Korea, a single game called Lineage claims more than four million players. To figure out precisely who was playing EverQuest, Castronova persuaded thirty-five hundred users to fill out a survey. As one might expect, the average age turned out to be twenty-four, and the players were overwhelmingly male. The amount of time spent "in game" was staggering: over twenty hours a week, with the most devoted players logging six hours daily. Twenty percent of players agreed with the cheeky (if alarming) statement "I live in Norrath but I travel outside of it regularly"; on average, each of these "residents" possessed virtual goods worth about $3,000 U.S. "When you consider that the average Index Page 2 of 10 http://www.walrusmagazine.com/print.pl?sid=04/05/06/1929205 10/28/2004
Index P f 10 real-life income in America is only, like, thirty-seven thousand, "Castronova tells me, "you realize these people have a non-trivial amount of wealth locked up inside the games When he finished his research, Castronova assembled it in a paper called"Virtual Worlds: A First-Hand Account of Market and Society on the Cyberian Frontier. "He submitted it to an academic Web site, the Social Science Research Network, that distributes working papers, free for anyone to read The site has 43,982 papers, by more than 37,000 authors. He didn ' t expect too much. "I thought maybe seventy-five people would read it, he recalls, "and that'd be great He was wrong. The paper sent a shock wave through the on-line world. Ever Quest players pounced on it and wrote up excited descriptions on game-discussion boards. That led to a flurry of posts on popular blog sites. Soon, academics and pundits in Washington were rushing to read it. Barely a few months later, Castronova's paper became the most downloaded paper in the entire database-beating out works by dozens of Nobel laureates. Today, it's still in the top three Why the rush of interest? What can a game filled with elves and warrior dwarves tell us about the real world? Quite a lot, if you believe the economist Edward Chamberlin. In 1948, Chamberlin admitted that all economists face a critical problem: they have no clean"laboratory"in which to study behaviour. The social scientist. cannot observe the actual operation of a real model under controlled circumstances he wrote. Economics is limited by the fact that resort cannot be had to the laboratory techniques of the natural sciences. Instead, classical economics tries to predict economic behaviour by theorizing about a completely fair marketplace in which people are rational actors and all things are equal The problem with this -as plenty of left-wing critics have pointed out-is that all things aren't Some people are born into rich families, and blessed with great opportunities. Others are born into poor neighbourhoods where even the most brilliant mind coupled with hard work may not forge success As a result, economists have warred for centuries over two diverging visions. Adam Smith argued that people inherently prefer a free market and the ability to rise above others; Karl Marx countered that capital was inherently unfair and those with power would abuse it. But no pristine world exists in which to test these theories-there is no country with a truly level playing field with pt, possibly, for EverQuest, the world's first truly egalitarian polity. Every one begins the same way E hing. You enter with pathetic skills, no money, and only the clothes on your back. Wealth comes from working hard, honing your skills, and clever trading. It is a genuine meritocracy, which is precisely why players love the game, Castronova argues. It undoes all the inequities in society. They're wiped away. Sir Thomas More would have dreamt about that possibility, that kind of utopia, he says Virtual worlds have produced some surreal rags-to-riches stories. When the on-line world Second Life launched, the players were impressed to see a female avatar industriously building a sprawling monster home. An in-game neighbour stopped by to say hello only to discover she was a homeless person in British Columbia, logging on using her single remaining possession, a laptop. Penniless in the real world. she belonged to a social elite in the fake one Not all social inequities are absent, of course. For instance, Castronova discovered that women in the game are worth less than men, in a very measurable way: when he compared the sale of male and female avatars, he found than female characters sold for 10 percent less than male ones at precisely the same power level. Players with female avatars also say it's harder to advance in the game, at least initially even though the female characters are often being played, in real life by men. (a study by the game http://www.walrusmagazine.com/printpl?sid=04/05/06/1929205
real-life income in America is only, like, thirty-seven thousand," Castronova tells me, "you realize these people have a non-trivial amount of wealth locked up inside the games." When he finished his research, Castronova assembled it in a paper called "Virtual Worlds: A First-Hand Account of Market and Society on the Cyberian Frontier." He submitted it to an academic Web site, the Social Science Research Network, that distributes working papers, free for anyone to read. The site has 43,982 papers, by more than 37,000 authors. He didn't expect too much. "I thought maybe seventy-five people would read it," he recalls, "and that'd be great." He was wrong. The paper sent a shock wave through the on-line world. EverQuest players pounced on it and wrote up excited descriptions on game-discussion boards. That led to a flurry of posts on popular blog sites. Soon, academics and pundits in Washington were rushing to read it. Barely a few months later, Castronova's paper became the most downloaded paper in the entire database — beating out works by dozens of Nobel laureates. Today, it's still in the top three. Why the rush of interest? What can a game filled with elves and warrior dwarves tell us about the real world? Quite a lot, if you believe the economist Edward Chamberlin. In 1948, Chamberlin admitted that all economists face a critical problem: they have no clean "laboratory" in which to study behaviour. "The social scientist . . . cannot observe the actual operation of a real model under controlled circumstances," he wrote. "Economics is limited by the fact that resort cannot be had to the laboratory techniques of the natural sciences." Instead, classical economics tries to predict economic behaviour by theorizing about a completely fair marketplace in which people are rational actors and all things are equal. The problem with this — as plenty of left-wing critics have pointed out — is that all things aren't equal. Some people are born into rich families, and blessed with great opportunities. Others are born into dirtpoor neighbourhoods where even the most brilliant mind coupled with hard work may not forge success. As a result, economists have warred for centuries over two diverging visions. Adam Smith argued that people inherently prefer a free market and the ability to rise above others; Karl Marx countered that capital was inherently unfair and those with power would abuse it. But no pristine world exists in which to test these theories — there is no country with a truly level playing field. Except, possibly, for EverQuest, the world's first truly egalitarian polity. Everyone begins the same way: with nothing. You enter with pathetic skills, no money, and only the clothes on your back. Wealth comes from working hard, honing your skills, and clever trading. It is a genuine meritocracy, which is precisely why players love the game, Castronova argues. "It undoes all the inequities in society. They're wiped away. Sir Thomas More would have dreamt about that possibility, that kind of utopia," he says. Virtual worlds have produced some surreal rags-to-riches stories. When the on-line world Second Life launched, the players were impressed to see a female avatar industriously building a sprawling monster home. An in-game neighbour stopped by to say hello only to discover she was a homeless person in British Columbia, logging on using her single remaining possession, a laptop. Penniless in the real world, she belonged to a social elite in the fake one. Not all social inequities are absent, of course. For instance, Castronova discovered that women in the game are worth less than men, in a very measurable way: when he compared the sale of male and female avatars, he found than female characters sold for 10 percent less than male ones at precisely the same power level. Players with female avatars also say it's harder to advance in the game, at least initially — even though the female characters are often being played, in real life, by men. (A study by the game Index Page 3 of 10 http://www.walrusmagazine.com/print.pl?sid=04/05/06/1929205 10/28/2004
Index Page 4 of 10 academic Nick Yee found that male players"cross-dress"as female characters at least one-third of the time.)Men play as women characters partly for the kinky thrill, but also because female characters are given random presents of free stuff by other players, a chivalric custom known as"gifting. Personally, you receive a lot more stuff when you start out as a female, "as one male cross-dresser wrote to Yee. Ultimately, Castronova says, EverQuest supports one of Adam Smith's main points, which is that people actually prefer unequal outcomes. In fact, Ever Quest eerily mirrors the state of modern free-market societies:only a small minority of players attain Level 65 power and own castles; most remain poor. When game companies offer socialist alternatives, players reject them. They' ve tried to make it. It seems that we definitely do not want everybody to have the same stuff all the time people find/ o games where you can't amass more property than someone else, "says Castronova, "but everybody hate boring. It is a result that would warm the heart of a conservative Yet progressives, too, have been drawn to Castronova's research. Robert Shapiro, formerly an undersecretary of commerce for Bill Clinton, views the economist's findings as nothing less than a liberal call-to-arms. Ever Quest players tolerate the massive split between the virtual rich and the poor Shapiro tells me, only because they know that this is a level playing field. If you work hard enough you' ll eventually grow wealthy. In Shapiro's view, Castronova's research proves that the only way to create a truly free market is to support programs that give everyone a fair chance at success, such as good education and health care. " This may provide the most important lesson of all from the EverQuest experiment, he wrote in an essay "Real equality can obviate much of a democratic government's intervention in a modern economy If EverQuest is any guide, the liberal dream of genuine equality would usher in the conservative vision of truly limited government "In other words, maybe the best way to save the real world is to make it more like Ever Quest A few months ago, a powerful warrior showed up on Ever Quest. He was at Level 50, an indication that he was an experienced player. But when he tried to join a group of other similarly powerful players on a quest to kill a dragon, they quickly realized he had no idea what the hell he was doing. He didn,'t understand teamwork or even the basic language of the game. Then they discovered his secret: he was a thirteen-year-old kid whose parents had gone to Player Auctions. com and bought him the character for He kept getting killed over and over and over again. People were like, Who is this idiot? says Sean Stalzer, a thirty-three-year-old who is a five-year veteran of Ever Quest. Stalzer runs The Syndicate, one of the game's most respected"guilds. Guilds are groups of powerful characters who co-operate to defeat the deadliest monsters(which provide the richest loot). The most elite guilds generally have a no buying ethic. They accept only players who have"levelled up"their characters the old-fashioned way "They put hours and hours into it, "Stalzer says. So when someone comes along to make a profit or buy a character, it makes a mockery of what they do. Why should you be better than me because you have into Pa money? " His disdain is like that of a hardscrabble kid from the projects who works for years to get le-only to watch George W. Bush sail in because his daddy is a rich donor This culture war underscores the big irony of Ever Quest politics. Sure, most players love a level playing field -but they love a leg up even more. Adam Smith might smile at Ever Quest's booming marketplace, but beneath the surface, Marx's bleaker vision of capital might be winning the day Of course, many people buy"pre-levelled "characters not to cheat at the game, but to save time. They're usually busy professionals who can't waste six numbing hours a day killing bunnies to make their warrior elf more powerful. Game companies frown on the selling of characters because they feel it destroys the meritocratic feel of their worlds. But because so many millions of players clearly want to buy their way to power, the companies have mostly turned a blind eye to the on-line auctions. Last year, http://www.walrusmagazine.com/printpl?sid=04/05/06/1929205
academic Nick Yee found that male players "cross-dress" as female characters at least one-third of the time.) Men play as women characters partly for the kinky thrill, but also because female characters are given random presents of free stuff by other players, a chivalric custom known as "gifting." "Personally, you receive a lot more stuff when you start out as a female," as one male cross-dresser wrote to Yee. Ultimately, Castronova says, EverQuest supports one of Adam Smith's main points, which is that people actually prefer unequal outcomes. In fact, EverQuest eerily mirrors the state of modern free-market societies: only a small minority of players attain Level 65 power and own castles; most remain quite poor. When game companies offer socialist alternatives, players reject them. "They've tried to make games where you can't amass more property than someone else," says Castronova, "but everybody hated it. It seems that we definitely do not want everybody to have the same stuff all the time; people find it boring." It is a result that would warm the heart of a conservative. Yet progressives, too, have been drawn to Castronova's research. Robert Shapiro, formerly an undersecretary of commerce for Bill Clinton, views the economist's findings as nothing less than a liberal call-to-arms. EverQuest players tolerate the massive split between the virtual rich and the poor, Shapiro tells me, only because they know that this is a level playing field. If you work hard enough, you'll eventually grow wealthy. In Shapiro's view, Castronova's research proves that the only way to create a truly free market is to support programs that give everyone a fair chance at success, such as good education and health care. "This may provide the most important lesson of all from the EverQuest experiment," he wrote in an essay. "Real equality can obviate much of a democratic government's intervention in a modern economy. . . . If EverQuest is any guide, the liberal dream of genuine equality would usher in the conservative vision of truly limited government." In other words, maybe the best way to save the real world is to make it more like EverQuest. A few months ago, a powerful warrior showed up on EverQuest. He was at Level 50, an indication that he was an experienced player. But when he tried to join a group of other similarly powerful players on a quest to kill a dragon, they quickly realized he had no idea what the hell he was doing. He didn't understand teamwork or even the basic language of the game. Then they discovered his secret: he was a thirteen-year-old kid whose parents had gone to PlayerAuctions.com and bought him the character for $500. "He kept getting killed over and over and over again. People were like, Who is this idiot?" says Sean Stalzer, a thirty-three-year-old who is a five-year veteran of EverQuest. Stalzer runs The Syndicate, one of the game's most respected "guilds." Guilds are groups of powerful characters who co-operate to defeat the deadliest monsters (which provide the richest loot). The most elite guilds generally have a nobuying ethic. They accept only players who have "levelled up" their characters the old-fashioned way. "They put hours and hours into it," Stalzer says. "So when someone comes along to make a profit or buy a character, it makes a mockery of what they do. Why should you be better than me because you have more money?" His disdain is like that of a hardscrabble kid from the projects who works for years to get into Yale — only to watch George W. Bush sail in because his daddy is a rich donor. This culture war underscores the big irony of EverQuest politics. Sure, most players love a level playing field — but they love a leg up even more. Adam Smith might smile at EverQuest's booming marketplace, but beneath the surface, Marx's bleaker vision of capital might be winning the day. Of course, many people buy "pre-levelled" characters not to cheat at the game, but to save time. They're usually busy professionals who can't waste six numbing hours a day killing bunnies to make their warrior elf more powerful. Game companies frown on the selling of characters because they feel it destroys the meritocratic feel of their worlds. But because so many millions of players clearly want to buy their way to power, the companies have mostly turned a blind eye to the on-line auctions. Last year, Index Page 4 of 10 http://www.walrusmagazine.com/print.pl?sid=04/05/06/1929205 10/28/2004
Index Page 5 of 10 Ultima Online caved in and began to sell"pre-levelled"characters to new players; demand was so hig on the first day that their phone banks crashed Even the most stoic guild members are tempted by the booming market. Stalzer's guild was once offered $50,000 for all of its characters and loot. The members declined. But, sometimes, when individual guild members run into financial difficulties in the real world, they quietly pawn off virtual goods on the side One guy had an Enchanter and he sold it for two thousand dollars, Stalzer tells me. " That happens a lot. You get a guy who says, Dude, I just graduated and I can't find a job, so I gotta sell this thing. But I don 't mind it when it's real financial need Guild members hesitate to sell their goods in part because they do not feel they are the sole owners When a guild vanquishes a monster, it divides the loot among the members. Each player's booty winds up feeling more like a piece of communal property. At the Las Vegas computer conference, Castronova and I ran into a blue-haired nineteen-year-old who plays Ever Quest as a Level 55"cleric"in a powerful guild. " I've got dozens of reagents, these magical potions, she said. "And some of them are probably worth, like, a hundred bucks apiece. I could totally sell them. But I al ways think, damn, I only have this stuff because of how other people helped me get it. So they sort of own it, too. It's not my right to sell it "In EverQuest, even socialism finds a home Within months of Ultima Online's launch, in 1997, the game spiralled into a currency crisis. The developers woke up one morning to discover that the value of their gold currency was plummeting Why? A handful of sneaky players had discovered a bug in the code that allowed them to artificially duplicate gold pieces(called"duping"). The economy had been hit by a counterfeiting ring. Inflation soared, and for weeks, players would log in each day to find their assets worth less and less Ultima programmers soon fixed the bug. But then they had a new problem: How do you drain all the excess gold out of the economy and bring prices back to normal? They hit upon the idea of creating a rare type of red hair dye and offering it for sale in small quantities. It had no real use, but, because it was rare,it became instantly popular and commanded an enormous price- which leached so much gold out of the system that inflation subsided. But the programmers had to meditate for hours on what possible side effects their " fix"might ha Game desiencom ruining the lives of their"citizens "In essence, they face the political question that devils real-life politicians everywhere: How much should a government meddle in the marketplace In Ultima Online, players pick jobs and produce goods: blacksmiths make iron tools; tailors make shirts In the early days, the players were forced to find other players to buy the stuff. They had to act like entrepreneurs and, as it turned out, few people really wanted to do that; they just wanted to do their jobs and get paid. So the game designers created"shopkeepers, "robot characters that would automatically buy whatever goods the players made. This forced the designers to behave like Soviet central planners micromanaging every aspect of the marketplace with arcane algorithms of supply and demand. How much would a chair be worth, compared to a rabbit skin? If horseshoes were suddenly in low supply, how would that affect the price of magical healing potions? How much inflation is too little, or too much? Citizens, too, began to complain that the economic system was bafflingly arbitrary. One irate player ointed out that a spool of thread could be bought for two gold pieces, then instantly transformed by a tailor into a shirt worth twenty gold pieces-a profit margin that massively overshot any other activity for no apparent reason. Eventually the game designers mostly gave up, and built a system in which http://www.walrusmagazine.com/printpl?sid=04/05/06/1929205
Ultima Online caved in and began to sell "pre-levelled" characters to new players; demand was so high on the first day that their phone banks crashed. Even the most stoic guild members are tempted by the booming market. Stalzer's guild was once offered $50,000 for all of its characters and loot. The members declined. But, sometimes, when individual guild members run into financial difficulties in the real world, they quietly pawn off virtual goods on the side. "One guy had an 'Enchanter' and he sold it for two thousand dollars," Stalzer tells me. "That happens a lot. You get a guy who says, 'Dude, I just graduated and I can't find a job, so I gotta sell this thing.' But I don't mind it when it's real financial need." Guild members hesitate to sell their goods in part because they do not feel they are the sole owners. When a guild vanquishes a monster, it divides the loot among the members. Each player's booty winds up feeling more like a piece of communal property. At the Las Vegas computer conference, Castronova and I ran into a blue-haired nineteen-year-old who plays EverQuest as a Level 55 "cleric" in a powerful guild. "I've got dozens of reagents, these magical potions," she said. "And some of them are probably worth, like, a hundred bucks apiece. I could totally sell them. But I always think, damn, I only have this stuff because of how other people helped me get it. So they sort of own it, too. It's not my right to sell it." In EverQuest, even socialism finds a home. Within months of Ultima Online's launch, in 1997, the game spiralled into a currency crisis. The developers woke up one morning to discover that the value of their gold currency was plummeting. Why? A handful of sneaky players had discovered a bug in the code that allowed them to artificially duplicate gold pieces (called "duping"). The economy had been hit by a counterfeiting ring. Inflation soared, and for weeks, players would log in each day to find their assets worth less and less. Ultima programmers soon fixed the bug. But then they had a new problem: How do you drain all the excess gold out of the economy and bring prices back to normal? They hit upon the idea of creating a rare type of red hair dye and offering it for sale in small quantities. It had no real use, but, because it was rare, it became instantly popular and commanded an enormous price — which leached so much gold out of the system that inflation subsided. But the programmers had to meditate for hours on what possible side effects their "fix" might have. Game designers are, in a sense, the government of their worlds, continually tweaking the system to try and keep it from ruining the lives of their "citizens." In essence, they face the political question that bedevils real-life politicians everywhere: How much should a government meddle in the marketplace? In Ultima Online, players pick jobs and produce goods: blacksmiths make iron tools; tailors make shirts. In the early days, the players were forced to find other players to buy the stuff. They had to act like entrepreneurs and, as it turned out, few people really wanted to do that; they just wanted to do their jobs and get paid. So the game designers created "shopkeepers," robot characters that would automatically buy whatever goods the players made. This forced the designers to behave like Soviet central planners, micromanaging every aspect of the marketplace with arcane algorithms of supply and demand. How much would a chair be worth, compared to a rabbit skin? If horseshoes were suddenly in low supply, how would that affect the price of magical healing potions? How much inflation is too little, or too much? Citizens, too, began to complain that the economic system was bafflingly arbitrary. One irate player pointed out that a spool of thread could be bought for two gold pieces, then instantly transformed by a tailor into a shirt worth twenty gold pieces — a profit margin that massively overshot any other activity, for no apparent reason. Eventually the game designers mostly gave up, and built a system in which Index Page 5 of 10 http://www.walrusmagazine.com/print.pl?sid=04/05/06/1929205 10/28/2004