Video Games - China - Money - Online Games - New York Times
While most are familiar with the whole massive multiplayer online game market I have been rather fascinated by the economies they produce. This article blows me away for so many reasons.
I first gained an appreciation for the economies behind the massive multiplayer online (MMO) game Everquest in an article in Utne Magazine (given to me by an airplane friend). The one page or so article suggested that the GDP of Everquest ranked 60 or so internationaly, some where around Switzerland. That much money changing hands. You can only imagine how it has grown.
The premise is simple, some players make the virtual currency for the game by slogging though the "grind" (killing monsters, making potions, etc.) and sell it to those who would rather do other things. While I have never found myself immersed in a MMO I certainly know people that have. This is addictive stuff. I remember a cousin of mine excited for his buddy coming in for the weekend and was going to buy some gold. In essence, he was going to spend real money to be able to do more interesting things in the game. Simple class structure, burger flippers and the white collars.
So enter all the crazy globalization questions. Are these really sweat shops in China? Is playing games for 12 hours a day that bad of a way to scratch out a living? If you say they are sweat shops because of the low pay, long hours, etc. why to the Chinese choose to do it? Given all this exchanging of real money (of many international denominations) how are the deals brokered? Sure you have the big sites that the article discusses, but think about that for a second. International currency flow, then the virtual money has to be delivered in the game to said character. So that means someone out there is piloting a character that has a bunch of money that is doling out payments. He can't have all the big money distributors money, because it has to get dolled out all over, etc. Enter banking and accounting concepts, and remember this isn't just play money, there is real currency attached to everything. Contemplate cooperate efficiency, distribution costs, etc., all driving the bottom line. And finally, why doesn't the game maker just sell the currency directly, easier to distribute if you build it into the game, all the profits stay at home?
Simply fascinating to study and it would be very interesting to read an economists analysis. I wonder if there are inflation concerns in World of Warcraft and what the effect of a currency devaluation would have on another game. Will there ever be virtual accountants? There probably already are.
