A Picture Worth Too Many Words

Since ancient times, humanity has looked to charts to help make sense of the world around it. The seafarer's navigational chart, to take one iconic example, provides a clear, objective picture of what lies beneath and beyond the inscrutable surface of the waters. The astrologer's astral chart, to take another, provides an ambiguous, open-ended image of what lies beneath the inscrutable surface of the soul and its fate.

Today I started publishing economic charts on my weblog, which is devoted to understanding (and ultimately 0wNz0ring) the eBay market for virtual items from Ultima Online, and I still haven't decided whether they function more like the navigational or the astral variety. Consider my chart of weekly market sales totals, which goes back to mid June:

Note the gentle but steady decline. What does it mean? Is this the smoking gun confirming Dan's hypothesis that Star Wars: Galaxies -- which launched right at the start of this downward slope -- is eating UO's lunch? (Decline or no decline, SWG's sales line will soon cross UO's; at $114,000-per-fortnight, it's just 12% shy of UO and gaining fast.) Or is it just a picture of what the venerable UO trader Markee Dragon assures me happens every year like clockwork: the summer slump?

And even if the line keeps drooping through the fall, how exactly, short of massive ethnographic inquiry, could we be sure that the droop reflects an exodus to SWG and not the terminal cooldown of a six-year-old game or the deflation endemic to MMORPG economies or, for that matter, a cultural revolution leading the UO player base to reject the cash markets once and for all?

Michael Froomkin and others are bold indeed to hope virtual worlds might tell us important things about the real world. I'll be happy if I can figure out what these deeply complex, overdetermined places are trying to tell us about themselves.

Comments

[Edward Castronova]

1.

Welcome to the world of Wall Street analysts, who have huge incentives to say things but have, in fact, not much to say. I've already gotten calls from reporters: "What do you make of the fact that currencies seem to be selling at a lower price this quarter?" Well, um, either the supply has increased or the demand has decreased. Lower volumes suggest declines in demand or supply or both. The intensifying competition in this sector could explain it. But there's not much more we can say; the numbers are, in a sense, irreducibly interesting: trade volume for UO goods has softened. That the trade has a pattern worthy of contemplation - something more than mere noise - is the most interesting about it.

[Dave Rickey]

2.

I'd say it's pretty clear that demand is softening for the summer. Average play time per week also drops in the summer, although play time per session doesn't change much (implying that people are more likely to skip a session in summer). Since prices don't soften much compared to the reduction in volume, either the sellers are remarkably disciplined or supply is also somewhat reduced.

Yeah, your chart is definitely more of a sea chart than an astrological forecast. Only problem is, it's a 15th century chart, it's not what it says that's the problem, but the fact that we know it is missing a lot.

[Raph Koster]

3.

You gonna post the graphs for all the games? :)

[Edward Castronova]

4.

I'm a doctor, Jim, not a programmer!

If someone can rig up an auction crawler that aggregates sales by game title, and also can be applied to playerauctions.com, then we could post weekly trade volume and average prices by game.

Unfortunately, I don't have the funds to contract for something like this myself. Maybe some kind-hearted coder could help us out.

[Dan]

5.

I am finding this whole project fascinating. It's cutting into my work. Well, not exactly, but it COULD be if I had that much work.

EVE isk sales, after freefalling from around $4 per mil to about $0.50 per mil, appear to have firmed up a bit in the $1.5 per mil area. I'm averaging slightly better at about $2 per mil. I'm learning ebay marketing! There are definitely impulse buy zones that combine well with ebay fees scheduling and Buy It Now.

I'm still a producer rather than a trader. I sell what I produce in game, rather than playing the arbitrage game (which is a wee bit risky in this market in any case, maybe if the trend line turns positive).

I'm not at all sure SWG is cannibalizing UO. Well, the player base might be shifting, but by eyeball I don't see that much trade activity happening in SWG vgoods yet. I may be missing something. I hope so.

[Dan Hunter]

6.

Ted: "I don't have the funds to contract for something like this myself. Maybe some kind-hearted coder could help us out."

What about we head over to lazyweb and asked them to do something for us? I'm happy to make the request if we can work out the specifics of what is needed.