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 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.
...
Posted by Book (Member # 5500) on :
That's oddly impressive.
Posted by kaioshin00 (Member # 3740) on :
I wish you would paraphrase the quote - its too long!
Posted by Dan_raven (Member # 3383) on :
As a mid to high level player I will have you know that I don't make near to 300plat an hour.
In fact, if you add in the costs of bi-annual expansion packs, if I sold all my plat for 1 cent each, I would still come out losing money.
But hey, what else is an addiction for?
Posted by Ryuko (Member # 5125) on :
That's really cool!!! It's always interesting to see free economies online. There's an example of that same thing on a forum I frequent called Gaia Online.
You get gold by posting, and then you can buy items and clothes for your avatar to wear. It's really quite interesting to see what kinds of things become sought-after. There are certain items that you can only get by paying donation money for letters that have the items in them. Each letter costs 2.50, and at the start most retail for about 4000-5000 gold.
The letters that came out farther back can be really expensive. The first donation item was a halo, and it's nearly impossible to find. People spend tens of millions of gold on them.
Posted by Alexa (Member # 6285) on :
kaioshin00,
He did truncate the entire article--it was VERY long.
I think everyone should read the article. The part that impressed me was how the military was buying land on an online game to conduct military excersizes. WOW!
Posted by St. Yogi (Member # 5974) on :
Well, as they say, the free-market only works in the world because everybody is "born" equal. Everybody has the same opportunity to succeed in "life".
But that's really cool Posted by Godric (Member # 4587) on :
Also, I find it incredible that there are people making their entire living off of selling virtual cash and items.
I gotta hook myself up with one of those gigs...
Posted by katharina (Member # 827) on :
Okay, is there real money exchanged for virtual property here?
<-- has never played Everquest, and has only heard of it on Hatrack
Posted by Godric (Member # 4587) on :
kat,
Yes. See the third paragraph quoted above.
Posted by Hobbes (Member # 433) on :
That is truly amazing.
Posted by Dan_raven (Member # 3383) on :
Hobbes-- "I checked. They don't own a river." I bet they will soon enough.
Posted by mackillian (Member # 586) on :
Wow. So cool.
Posted by KarlEd (Member # 571) on :
If you haven't read the whole article, you should. This is fascinating beyond measure, and raises some pretty good real-world questions, especially as these communities become places where real-life activities take place. Wow! It never ceases to amaze me how people will take a invention and use it in a dozen ways never intended. Even something as "lowly" as the paperclip. People use them in lots of ways besides clipping papers together. I've got one right now taking the place of a broken link on the chain inside my toilet.
Posted by aspectre (Member # 2222) on :
Ain't particularly new though: eg there is only ~2% difference between owning an Everquest property and owning a CarreraGT. A Kia Rio'll getcha from here-to-there just as well, so 98% of the cost of the Porsche is for pure fantasy.
[ May 14, 2004, 05:39 PM: Message edited by: aspectre ]
Posted by mackillian (Member # 586) on :
Boy, would I rather drive the porshe.
Posted by KarlEd (Member # 571) on :
2 years ago?? Damn! How have I fallen so far behind the times?
Posted by Godric (Member # 4587) on :
Well, gosh... I guess I won't feel too bad about bringing up this topic since it was already discussed -- since it was before I was around. Posted by Alexa (Member # 6285) on :
If I am not planning on selling, I would rather have the MMORG. I could see myself spending more time appreciating the MMORG.
Posted by aspectre (Member # 2222) on :
Sorry, Godric. Really. Didn't mean to imply that this topic shouldn't have been brought up. Just poor wording on my part.
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