Massively Multiplayer Online games (or
MMOs) have gotten HUGE in the past few years, with
World of Warcraft being the most popular one to date (goddamn you, Blizzard...). But more and more, these MMOs are moving away from their purely online roots and entering real life, either physically or (more prominently) financially.
On Tax Day, the Market Design blog (which everyone should read, it's incredible) did a post on
real money trading in MMOs. This is an incredible phenomenon that's so wide-reaching that entire business models have sprung up
dedicated solely to creating and selling World of Warcraft gold and a
simple ebay search reveals a slew of options. Eurogamer recently did a four-part investigation on so-called "
gold-farming" epidemic in online gaming. It turns out that gold farmers are a hugely organized group of people, with some of the larger companies
raking in millions of dollars each month, in some instances. And the people who buy it are just regular people all around the world who simply don't have the time to do the gruntwork that these companies will do for them (for a fee, of course).
The companies behind these MMOs are fighting back, to some extent, by introducing not only new anti-trading and hacking mechanisms, but by rolling out
real-world trading systems of their own, in a sort of "if you can't beat 'em, join 'em" mentality. These officially-sanctioned versions have so far been at least moderately successful in stemming the tide of real-world trading in these online games.
However, while gold farming may be the best-publicized way that online goods make it offline, it's by no means the only one. Free-to-play MMO
Second Life has been making waves with their business model which flies in the face of most conventional games. To be honest, Second Life isn't really a "game" at all. There are no objectives, no game-play mechanics, no real rules, no goals, and no way to win or lose. What it does have, however, is an incredibly extensive world that users can explore to their hearts' content, and money. Lots and lots of money.
In-game currency is called the
Linden dollar, and this currency is explicitly tradable with US dollars. The economy is almost purely a free-market system, and the GDP of the game was estimated at between $500 million and $600 million in 2007. One of the few exceptions to the free-market system is that each account receives a starting balance of money and used to receive a small stipend, but other than that, users are free to find jobs, start businesses, buy and sell real estate, create in-game "products' and sell them, or do pretty much whatever else they please.
This is where the genius of the game really shows, in its users' creativity. Users can do anything from design clothing to cars to houses to pretty much anything they want, but people are drawn to what they know. In one of the most incredible cases, an actual bank was created (
Ginko Financial) which offered users up to 40% interest on their in-game currency deposits. After Linden Labs enacted new restrictions on in-world gambling (which was being used to make bets on real-world events), a huge number of investors made their way over to the Ginko Financial in-world ATMs- and
found that they couldn't. Ginko Financial ended up with over 200 million Linden dollars in obligations (translating to about $740,000 in real-world money) and had no way to pay it back except to convert depositors into bond-holders on an exchange which may or may not actually exist or be profitable. $740,000 up in smoke! Linden Labs responded by outright banning any in-game banks which paid interest (after users began protesting en masse for financial institutions to be regulated), and analysts have pointed to this event as the precursor to our own financial crisis.
This isn't unique to Second Life, either.
EVE Online, another MMO known for its in-game financial dynamics, was hit in 2006 by a massive scam where a player started an investment bank, let it run for a while, and then
ran with the profits (LINK:) These amounted to over 700 billion in in-game currency, or around $100,000 if sold. Making matters more hilarious, he spread rumors about himself dying real-world just to throw investigators off the scent.
It's not just scamming going on in these games, either. The Second Life
real estate market is
alive and vibrant and entrepreneurs are a
dime a dozen. Actual real-world real estate brokerages are entering the market, such as
Coldwell Banker, which hopes to compete aggressively on price and "bring real estate to the masses. In EVE Online, the virtual corporate world is intensely competitive and the markets are so realistic in some aspects that they're regarded as a
decent way to learn the ropes.
And then there's research. Economics maybe, but nobody would have thought that MMOs could provide viable case studies for legitimate medical and sociological research. Enter Corrupted Blood.
The
Corrupted Blood plague was really nothing more than an in-game glitch gone horribly horribly wrong. It was meant as a spell used by one of the in-game bosses which was supposed to be confined to a certain area. Eventually, it
got out and spread like wildfire,
depopulating cities within hours and killing hundreds of thousands of characters. Researchers used the data about the plague transmission and player responses to
create real world models of what would happen in the event of a pandemic, using the online data to fill in hard-to-model gaps in their knowledge about human behavior. One blog looked at the behavior of players and went so far as to label those intentionally spreading the plague as "
in-game terrorists." Researchers were able to recognize factors they had not even considered when making previous models, including the aptly-named "
stupid factor," where someone runs in for a look thinking they'll be fine, gets infected, then spreads the plague before dying.
All of these things come together to point to a massively increased role in the real world for "online" games. As well as being an immense opportunity for profit they point out flaws in our regulatory systems by mirroring them in their own, can act as "test tube societies" useful for modeling behavior not normally seen, and are often just a whole lotta fun. Running off with $100,000 in real money for nothing? Sheeeeeiiiit, I gotta get in on that.
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