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Nov 18, 2003



Back in September I made a post that included the following statement:

"It should be interesting to see how the economies progress, both inside and outside these virtual worlds. I wonder how long it will take before someone to realizes that for less that $2/hr (3rd world economy, equip included) you can hire someone work for you in Norrath creating $3 an hour worth of value? Does that work for a 10-person company? 100? 1000? I also wonder if we can still call it a game once this happens."

Julian is reporting that this is exactly what some Chinese companies have figured out.

"my wonder at learning that some of IGE's chief suppliers are mainland Chinese subcontractors running EverQuest-playing sweatshops in the hinterlands (at a level of production perhaps only hinted at in the famous but abortive Black Snow sweatshop in Tijuana)." -Julian 11/18/03

This is just the start of a very big opportunity for anyone that can figure out how to set-up the connections.

I think this will also raise some serious questions for traditional MMORPG. As they stand, they aren't designed to handle the production capacity of a 1,000+ group using professionally developed handbooks, patented macros, and HR policies that are able to maximize specialized talent.



The money involved in some of these outfits exceeds the amount spent developing most of the games they are parasitizing. It's only a matter of time before they decide to stop letting game companies control their oxygen supply and start their own, built from the ground up for their business model. Like Project Entropia, but not run like a fly-by-night, hopefully (MindArk has already shell-gamed themselves out from their debt once).



I spoke to Brock Pierce of IGE at State of Play, and was impressed to find that they had 65 people in Hong Kong doing their Customer Service alone. This is not a small operation!

I asked if they were thinking of developing their own virtual world, but they said no, at least not yet. Their next step is to develop their community, perhaps with an industry news site.

Much as VW designers may wring their hands over the existence of these companies, there's little they can do to stop them even if they had a tame judge make a ruling against out-of-game trading; the black market to be regarded as a fact of life. That said, I see 4 potential threats to this sub-industry:

1) Over-mining. If too many people get in on the act, the amount of sellable stuff extracted from the VW will affect the price it fetches.

2) If you can't beat 'em, join 'em. VW companies can produce stuff for their VWs with practically zero overhead. If they embraced the idea of selling stuff, they could pose serious problems for the service industry.

3) The price of goods depends on their being usable. I wouldn't pay a lot of money for an ice sculpture because it won't be around next week. VWs designed so that in the hands of an amateur stuff will fall apart would really cut back on trading. Classic example: in a world with permanent death, a level 50 character won't last long in the hands of someone who has only played up to level 10 previously.

4) Non-transferability. This only really affects character sales. If accounts can't be transferred, characters can't be sold very easily. Sure, I could sell you my account, but if the credit card being charged monthly is mine then that leads to a whole new layer of administration.

I'm sure there must be other ways to dampen down out-of-game sales, too, but these are the ones that spring to mind as the most likely to succeed. Whether the resulting VWs would be any better as a result is another matter, of course...



Brock clearly did a good job of making the rounds, since I also chatted with him for a while. What I found interesting (beyond the scale of their operation) was the fact that (according to him) very large numbers of EQ players (for example) were using IGE -- he said 25% at just one of their sites and a much higher percentage overall. It made me wonder, is this how people are playing EQ? Sony's legal counsel stated that this behavior was rare and shunned (to support Raph after Julian's funny and brilliant "how do you sleep at night?" question), but that would be at odds with IGE's statements and a look at the number of small sites handling EQ items.

In a separate thread, Richard makes the interesting point that There.com is attempting to more tightly integrate the real and the virtual while EQ is designed to be a parallel universe. It seems to me that players vote with their feet, so if the majority of players are leveraging the real world to improve their virtual world experiences, that should be telling us (and especially those of us that are creating these products) some very important things and makes me wonder if the choice between economics and fun that Ted spoke about in his paper even exists. After all, EQ would then stand as a proof point that hundreds of thousands of players can coexist and play in a world where most are also using real world wealth when they want to.


"It seems to me that players vote with their feet, so if the majority of players are leveraging the real world to improve their virtual world experiences, that should be telling us (and especially those of us that are creating these products) some very important things and makes me wonder if the choice between economics and fun that Ted spoke about in his paper even exists."

This is an excellent point. True, most players would probably prefer to make use of eBay and would complain if Ebaying were controlled. That's the tragedy of the commons argument. Players will vote with their feet and dollars and turn every world into a commodified world (to use Balkin's term). At each decision point, each player will say "it's more fun for me to pierce the veil of this world and use my money to buy stuff." at each decision point, each entrepreneur will say "it's more profitable for me to pierce the veil of this world and arbitrage its markets."

All very true.

1. But is it still true when, after the veil is irrevocably pierced, all of this trade becomes subject to taxes and regulations?

2. I live in a city where no one paid attention to issues of the commons during the five decades of its tumultuous development. the end result is an urban horror of unparalleled dimensions. There was once something beautiful in Southern California, but the person-by-person decisions of developers and consumers have completely and utterly destroyed whatever beauty there was here. The clock can't be turned back, and now we all have to suffer the consequences.

These lost-commons issues really do matter - even though every individual person prefers to take a bite from the commons, the end result is a world that does not nearly live up to its potential.


Thx for starting the thread Dan – sorry to request and run I was flying home. Have now landed so despite serious jet lag here are my 2p’s worth:

I guess this has been a year for _moments_ in what is forming itself into games studies. Level Up in Utrecht was just big, and I mean big, Whereas State of Play was, well, I’m not sure what it was in the end.

I think my take home feeling was that I am glad that somewhere like NY Law School is taking this sort of stuff seriously as I personally believe that the issues raised by the intersection of Virtual Worlds and current laws are a touch point in the way that civil society will operate in the new millennium .

However with such a mixed crowd: From Raph and Richard to people who had possibly never played a video game let alone and MMO. There were bound to be some ‘doh’ moments. But what both this and Level Up indicated to me is that games studies really is establishing a body of work that one just expects other people to have read - though of course they might not agree with it. Without wanting to embarrass people here I really do expect that these days someone wanting to write about games would have read at least _something_ by everyone of the Terranova’s, plus Sutton-Smith, Jesper etc (depending on what field one is focusing on).

And the fact that I can point at a body of work I take to be a good thing.

Lastly, as a general point: why were we all (yes me too) so polite – was it being in a law school that did it to the IANAL crowd, was it indeed the presence of Raph, Richard, Dave, Cory, Eric et al that did it to the IANAGD crowd? What ever it was I want to do a similar even again, get over the: oh it’s so great we are having the _debate_ and actually do the debating.

I’ll pass over that utopian: we-have-a-plan-for-a-game-but-were-not-telling-you-what-it-is-but-its-not-gong-to-be-fascist-and-don’t-mention-fun presentation, and my lingering confusion about the Democracy Design event (though I take it I’m less confused than the government people) and say that all the content was certainly interesting in its own unique ways



Ted Castronova>The clock can't be turned back, and now we all have to suffer the consequences.

No you don't, you can go somewhere with better civil planning laws (in the same way that players of commodified virtual worlds who don't like it can go to some uncommodified world with better legal protection for its status quo).



It did seem strange to me that most of the theorists at State of Play had no idea what these worlds were really like but were nevertheless beamingly hopeful about the utopian possibilities of games. Ren's comment about the Tate-funded I-have-a-plan-towards-a-procedure-for-a-perfect-world, and-it'll-take-ages-and-an-enormous-amount-of-funding-to-create-and-it-STILL-won't-be-fun made me laugh.

I'm firmly in the IANAGD crowd, and it was great to meet Raph, Ren, Richard, and the others who knew what they were talking about. They were all startlingly polite. Ren is right, though -- with less explaining to do, maybe next time we can be a little less polite.

It's also right that lawyers tend to wreck things unless educated (and sometimes even when educated), and it's a good idea to be present to set them straight. So it's good that we're talking about having another conference once the non-specialist theorists, at least, have gotten more of a clue.



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