Two Wharton undergrad honors students, Evan Schneyer and Justin Nash, saw a presentation I gave on the economics of virtual worlds, and decided to study Final Fantasy XI:Online. FFXI is a tough world to study, coz the data is not out in the open like some other worlds: all auctions take place in game-hosted auction houses. So, for anyone who wants to try to do this, here is the process you have to follow:
1) Build an eleborate screen-capture-OCRing system to gather the data.
2) Collect a mass of data about the prices that objects sell for in the world, making sure you account for the different auction houses, nations, and the like.
3) Create a series of meaningful charts to understand what was going on.
Of course you don't have to do this, because they've done it and written up a report on the economics of the world, which I'm hosting here.
Some highlights of the report:
1) It's trivially easy, once you collect this data, to arbitrage prices across nations. Various places have wildly different prices for the same object, and transfer between places is a one-click process.
2) There is a pricing differential in exactly the same object depending on the time of day. This corresponds with the times that Japanese and North American users log on.
3) Certain objects are susceptible to supply shock, where an individual can easily corner the market in economically significant assets (à la the Hunt Boys and silver).
4) There's much more. Read the paper...
I don't know if Square-Enix are aware of these sorts of economic problems with their world, but they surely should be. Eventually every developer is going to have to have a better idea of what is going on in the economics of their worlds, otherwise smart young guys like Evan and Justin will start taking them for all their worth, without having to use sploits or dupes to do it. For any game developers out there who are starting to realize that they need to deal with the economics of their worlds, I happen to know that Justin and Evan are looking for jobs. Graduates with majors in Finance and Computing don't come along every day, especially ones who know gaming, and can do economic modeling of MMOGs. I'd suggest you send them an email. They do really really good work, as you can see for yourself.
