Albania? Nepal? Try Lebanon, noob.
Very soon after the New York Times Magazine published my account of life in the gold farms of China, I received an email informing me of a ghastly factual error in the second paragraph. “I’m not quite sure who you are targeting with the article,” the message began, “but if it was any of the ‘8 million’ players of World of Warcraft they all stopped reading at ‘night-elf wizards.’” I was mortified, of course (everyone knows night elves can’t be mages, for God’s sake), but there was an upside. If all those WoW players were bailing at paragraph two, that meant 8 million fewer chances I’d be busted for the even more horrific cock-up several paragraphs below: My butchering of world geekery’s most vital economic statistic, the total gross domestic product of all known virtual economies.
The offending passage follows. It is a scene of wanton, unadulterated factual imprecision, but if you think you’ve got the stomach for it, read on…
“In 2001, Edward Castronova, an economist at Indiana University and at the time an EverQuest player, published a paper in which he documented the rate at which his fellow players accumulated virtual goods, then used the current R.M.T. prices of those goods to calculate the total annual wealth generated by all that in-game activity. The figure he arrived at, $135 million, was roughly 25 times the size of EverQuest’s R.M.T. market at the time. Updated and more broadly applied, Castronova’s results suggest an aggregate gross domestic product for today’s virtual economies of anywhere from $7 billion to $12 billion, a range that puts the economic output of the online gamer population in the company of Bolivia’s, Albania’s and Nepal’s.”
Longtime Terra Nova readers will recognize that “$7 billion to $12 billion” figure from a calculation I posted here in April 2005, and if you’re satisfied with two-year-old economic statistics, I suppose it will do. But even at the time, my calculus rested on a fairly wobbly foundation: a very rough estimate of worldwide RMT revenues (somewhere between $540 million and $880 million), which I multiplied by a presumed constant of 13.5 to get my total GDP. Since then, the hardworking folks at the Virtual Economy Research Network have come up with a much more reliable assessment of total RMT, and since I cited their figures elsewhere in the article, I have no excuse—none!—for not having plugged their superior data into my GDP formula and recrunched the numbers.
Forgive me if you can, econ geeks, and while I know there’s no making up for my failure to get the correct number into the pages of America's newspaper of record, please accept the following recalculation as a token of my regret:
So: Take VERN’s final calculation of $2.09 billion for total RMT, multiply by 13.5, and voilà. The official total worldwide virtual GDP now stands at $28.215 billion—several ranks higher than Albania and Nepal, all the way up in the lofty precincts of Lithuania ($29.784 billion), Sri Lanka ($26.794 billion), and Lebanon ($22.622 billion).
And you can take that to the bank.