Playing With Virtual Money

Riding The Virtual Stock Markets

It can be difficult to get your head around at times, but massively multiplayer online role playing games (MMORPGs) generate billions of dollars in revenue for items that do not actually exist, and provide no tangible service in the real world. The fact that people are willing to invest so much in buying items, virtual currency and even whole characters requires a mental leap of faith in itself. What’s really amazing, though, is that they do it successfully in a thriving marketplace in what is essentially one of the most unstable economic platforms in the world. We wrote about this phenomenon earlier this summer in our article on the virtual games economy .

These virtual markets have exploded in the last couple of years, fuelled by a high-octane mix of expanding always-on Internet access, and open marketplaces such as eBay where the items can be bought and sold. Indeed, some virtual economies are now purported to be worth more than many 3rd world countries in terms of GDP.

For many years the operators of the games themselves have been highly opposed to the trading of items, even if there was not much they could do about it. Their reasons for opposing the online markets generally had more to do with being unable to get a slice of the pie than any concerns about players being able to gain unfair advantage in their games through online purchases.

Sony Online Entertainment was the first company to leap into the pan, launching their Station Exchange system, where users can buy and sell items in a much more secure arena than other 3rd party websites. On Station Exchange the marketplace and the mechanics of the game are monitored by the same teams, so manipulation is much more difficult.

Other MMORPG operators, such as NC Soft, are watching Sony’s test closely to see how it works out. Some, such as Blizzard, remain totally opposed to the trading of items, stating that they will actively seek to root out the practice in their games.

I’ve been somewhat torn when it comes to the issue of buying and selling items for a role playing game with real cash. On the one hand, it does make the actual gameplay a bit redundant when someone with a bit of money can simply buy their way to the top, and it is a rather underhanded method of getting along in a game. On the other hand, as the saying goes, if you can’t beat ’em, join ’em. The fact is that the trading of items does go on an awful lot. Market forces have had their say, and the consumers have made their choices using their feet.

If the operators of online games step in, as Sony has over the last while, then as well as getting in on the financial action, there will be increased security for everyone. The online markets may be lucrative, but they contain hidden pitfalls that can make them unstable, particularly when there is real money at stake.

Unlike in the real world, a crafty programmer can work his or her way into the code of an MMORPG and do things such as manufacturing money or goods out of thin air. He or she could then sell them online, and the result would be just as in a real economy - an economic crash.

This was demonstrated in Star Wars : Galaxies , where a group of crackers managed to flood the markets with virtual currency, causing massive inflation and putting many players out of pocket - both in the game and on the virtual marketplaces. This affected both folks who trade items and those who garner them in the traditional manner through the game itself.

This happened again in Everquest II not so long ago. A hack allowed nefarious users to manufacture money almost at will, causing a massive 20% increase in inflation over a 24 hour period. Fortunately, Sony regained control over both the game and the online market. They were able to spot the inflation quickly, stop the hacks, ban the users involved and return everything to normal before the next week began.

This is one of the real advantages of operators embracing market forces. It provides security for everyone, be they online traders - some of whom depend almost exclusively on this kind of work for their income - or the squeakiest clean of players, who have never before even browsed a listing of items for their game on eBay.

Yes this does mean that players with money will be able to make their way to the top far too easily. But then MMORPG communities are becoming mirrors of modern society set in fantastical worlds anyways, so there’s not much out of place there.

If online trading is going to go on, with massive amounts of virtual stock changing hands every day, then operators should be the ones to provide a stable and secure marketplace where it takes place. All credit to the likes of eBay, but that site can be bandit country at times, and there is no crossover between the game and that general market.

As we go forward, we should see more Station Exchanges from operators of MMORPGs, which will provide a stable and regulated marketplace in which all this trading can continue. Some players will make money and some will gain an unfair advantage over others, but at least they will be doing it in a controlled manner.