Word has it (thanks to a source who only uses her avatar name) that Lineage II's international server structure has opened up some arbitrage opportunities that are being ruthlessly exploited. One forum writer claimed that for-profit companies are recruiting 'adena-hunters,' people who do nothing but farm the game's money in return for RL pay. Ho-hum, I know. Here's what's different.
There are Korean, Chinese, Japanese, and English servers. The former three have been online for some time, but the English-language servers only opened recently. Nonetheless, where do you think much of the RL purchasing power resides? And on what servers would you find the lowest wage rates (and hence opportunity costs of time)? The source reports that players on Asian-language servers have invested much time to discover money and loot bugs during extensive uptimes there, and are now moving into the newly-opened English servers because the returns to exploiting the bugs are higher there.
In other words, in cyberspace, labor can move instantly from any one of Earth's economies into any other. More accurately, there isn't an American Labor Market and a Chinese Labor Market. There's just a Labor Market. The implications are occuring to more than a few people (i.e., see the April 27 post on Offshoring at Chris Yeh's blog). Wages will equilibrate.
Players on the English servers are expressing outrage at the adena-farmers. Is this because of the gameplay effects, or because of the inevitable downward pressure that the farming puts on the market value of their own time?
I have to agree this is fascinating stuff, and I think we are talking about something much bigger than just Lineage II, but the whole economic effect of cyberspace itself.
I would have to agree that even a small tear in the global economic fabric could lead to a trend of global wage normalization. This year it's Chinese Labor competing in MMORPGs with US teens that have tons of time, but over the years it will (most likely) spread to a much wider base.
Personally, I love this type of activity, it's what economics is all about, studying human interaction as the world progresses. At the same time, I think it will be a very scary time for many, who would rather not have their wages 'normalized' with the rest of the World. And so, it will be interesting to see how politics reacts over the upcoming years.
Also, I think the World is in for some huge advances in productivity, and I can hardly imagine that humanity as a whole will suffer too much from increased productivity. I often hear people talk about the 'ill effects' of globalization, but I think that prosperity rarely leads to poverty and it will be interesting to watch how each economy deals with its massive productivity increases like macros that farm virtual ore.
-bruce
Posted by: Bruce Boston | Apr 29, 2004 at 21:52
Bruce> I think it will be a very scary time for many...[though] I can hardly imagine that humanity as a whole will suffer too much.
Average wages will raise, but near-vicinity wage inequality will also rise. 'Near-vicinity wage inequality': the disparity between skilled and unskilled laborers in the same country or region or city. Imagine if US unskilled labor rates fall to somewhere near the global average, while high-skill labor stays roughly where it is (because we dominate that market). Yes, that will spur growth. But the social tensions it will touch off are formidable.
Yes, in the long run, we will be better off as a whole. What's scary is the turmoil involved in getting from here to there.
It's true that the industrial revolution made dental care available to all. But it also dragged us through revolutions and trenches and gulags and massed civilian bombing. Not every story with a happy ending was, on the whole, a happy story, one that one wishes to experience personally. From that perspective, I worry.
Posted by: Edward Castronova | Apr 29, 2004 at 22:08
it will be interesting to watch how each economy deals with its massive productivity increases like macros that farm virtual ore.
Hmmm, seems to me the real problem is that there is criminal activity goin' on in Gotham City... the effects on the economy are plain and real, but 2nd order. Traditional economies don't accept productivity growth at-any-cost, why should VWs?
To answer original Q: seems to me most of the forum comments were upset about gameplay impact... or was that just a proxy argument ;-)
Posted by: Nathan Combs | Apr 29, 2004 at 22:10
Thought I'd ask the folks in LineageII right now, seeing as I've been on it for the last two days since it went live...
As it turns out, the employees (aka 'bots') have already taken over a few areas & PK any leisure gamers that come by. Those who know about it are up in arms. Many have no idea - they just think its a squad of similarly named friends who like to PK (PKers are a core element in Lineage, so there's nothing unusual seeming about that). Many of the beta testers (yes, this started in beta), however, didn't go retail because of this.
Now, I'm ignorant as an economist so I can say little about the implications there. But as a cognition/culture whatever-you-call-it, I can say that its fueling a longstanding fire between asians and americans on the game. There is a history of discrepant gameplay that unfortunately falls along racial lines in Lineage with pledges self-segregating etc. NCSoft, who will ban you if you say 'ass' one time too many, has gone the 'no intervention' route so far (as they are often wont to do ~.o). I predict a natural balancing once the population rises, much like the natural balance in Lineage I between predator PKs who fed on n00bs and pledges who ('nobly' / 'honorably' / 'at arms for justice') fed on predator PKs in n00b areas. It actually worked out fairly well. Though people on the discussion boards hailing this the end of all real game play, I suspect it will simply become a functioning part of the ecosystem and, much like the noob-PKers in LineageI, will actually become fodder for more ingame incharacter story telling/building than much else.
Sucks to be one of the farmers though. Ouch. Terrible RL wages (12 hr shifts, 300K adena required per shift to get your pay), gaming reduced to farming, and everyone online wanting a piece of you.
Posted by: Constance Steinkuehler | Apr 29, 2004 at 22:45
I think the American players are outraged for two reasons.
1. American MMORPG players are always outraged about everything.
2. They are playing Lineage II.
Posted by: Mark Ashton | Apr 29, 2004 at 23:08
Mark: ROFL
Posted by: Edward Castronova | Apr 30, 2004 at 01:58
Mark's comment is interesting. Is it just Americans? (It does feel like there's a lot of truth to "American MMORPG players are always outraged about everything.") Every patch of SWG fuels outrage. Even though people are happy to see new content, per se, with it comes new bugs, new (bad) design decisions, new "balancing," and new outrage.
Is it due to (too much) changing of the "game rules" midstream? In what most of us normally think of as games, the rules are set before play commences and they remain set, often for ever. In MMORPGs, rules, or the universal laws of physics, can change at any patch. (In SWG suddenly furniture can move in 3-dimensions! If that isn't a change to physics...)
Posted by: Dan S | Apr 30, 2004 at 08:52
Not to be a party pooper but I have it on good first hand info (hehe), that there are no less than 3 ways to dupe money in that game currently. Apprently the upgrades in timeline they do meant that they would introduce all the old bugs of money duping that no longer worked on the asian servers because later patches fixed them.
So yes, they are taking advantage of this but "farming" money is a bad phrase of it, more like "creating small kingdoms of adena through extremely easy exploitable means" is more like it.
Posted by: Lee Delarm | Apr 30, 2004 at 08:58
Constance> natural balance in Lineage I between predator PKs who fed on n00bs and pledges who ('nobly' / 'honorably' / 'at arms for justice') fed on predator PKs in n00b areas
That's amazing. I got the impression from Raph that you couldn't get that balance to work in a way that subscribers could enjoy... I figure the difference must be the Lineage pledge system. Because the pledge system codes an effective sort of feudal politics onto the Lineage community, maybe it constructs a social structure that can effectively police griefing behaviors?
Constance> As it turns out, the employees (aka 'bots') have already taken over a few areas & PK any leisure gamers that come by.
Areas which are presumably more exploitable for some reason? Are they policing the borders with guards? Just how organized are the forces of the commercial military? (Any chance of a screenshot of one of these mercenaries?)
Back to RL -- one of the posts on the forum that Ted points to in turn points to a server in China with purported pictures of an adena-hunting company:
http://image2.sina.com.cn/gm/i/zg/2004-03-16/U168P115T41D7315F757DT20040316101959.jpg
http://image2.sina.com.cn/gm/i/zg/2004-03-16/U168P115T41D7315F757DT20040316101959.jpg
Anyone have a guess on whether that's a real picture of one of the fabled 30 cents per hour virtual sweatshops?
Posted by: greglas | Apr 30, 2004 at 09:56
Offshoring is currently having an effect on the UK economy generally as more companies move work such as call centres to places such as India. As this is a market that has been established for some time it would be interesting to see what kind of wage uplift there is in the Indian IT sector.
Posted by: Ren | Apr 30, 2004 at 10:28
greglas:
I'd doubt it. Those look like they could be any one of the dozens of internet bangs in S Korea.
And if 'sweatshop' laborers can afford eye care, new clothing and snacks on $0.30/hr -- more power to them.
The design makes inevitable that secondary industries will rise to meet demand.
The only deplorable part of this story, is that NCSoft knowingly shipped a game to its US customers with known exploits it'd already fixed for its Asian customers -- and this third party is going to make piles of cash off it.
Posted by: weasel | Apr 30, 2004 at 10:30
DanS - Is it just Americans?
Predominantly, I think so. Having moved from AC -> AC2 :shudder: -> EVE, where there's a relatively high volume of European players, I've noticed that there's really a lot less toxicity in-game and boards with EVE.
The *serious* whiners are mostly American.
Fortunately, there are plenty of contract killers around (in-game, of course).
Posted by: Alexander | Apr 30, 2004 at 10:38
Here is some support for Mark's point from the Economist:
http://www.economist.com/displaystory.cfm?story_id=2615669
Basically they say that Americans get better customer service because we complain more.
On to the question: "Players on the English servers are expressing outrage at the adena-farmers. Is this because of the game play effects, or because of the inevitable downward pressure that the farming puts on the market value of their own time?"
I think the esteemed Doctor missed an important point here, the question is not either “game player effects” or “downward pressure….on the market value of their own time.” Game play effects are downward pressures on the value of a player’s time.
People value themselves most out of all they posses (you may love and value others more than yourself, but you do not posses them). If you force a person to choose between their posses and their life they will choose their life. There is very good evidence that players in virtual worlds also value their life, in the form of their avatars, more than anything else. To support this contention I will point out that the highest prices on the various auction sites are for avatar accounts, not for items.
Avatars are created by individuals using a combination of a small amount of money and a large amount of time. For a number of reasons, time invested, levels achieved, knowledge of the game, avatars acquire more value over time.
If the professional farmers are going to make the game less fun now and in the future they are reducing the value of the American players avatars. The owners are upset just as they would be upset if some one damaged their car or other possessions.
I do agree with Constance that some sort of equilibrium will be reached in the future. I also think that the Americans are reacting more to a perceived threat than to an actual reduction in value. But when we are looking for economic impact on player behavior look at the impact on the Avatar itself first, then look at the impact on the avatars possessions and earning power.
Posted by: Tom Hunter | Apr 30, 2004 at 10:50
Ted> Is this because of the gameplay effects, or because of the inevitable downward pressure that the farming puts on the market value of their own time?
Tom>I also think that the Americans are reacting more to a perceived threat than to an actual reduction in value.
I presume Ted was asking this as a tongue-in-cheek question.
Nate is right: they're obviously upset about the gameplay effects of adena farming, not about the depreciated market value of their time vis-a-vis non-American players. Most people who play MMORPGs are not doing it because they're so pleased with the market value of their time.
Posted by: greglas | Apr 30, 2004 at 10:58
You don't need an army of sweaty asians to farm the money, you merely need to open a transfer window with another character, drop all you gold in it, hit accept, go linkdead, have the other person click accept and walla, you get your money back and they get the duped money.
Last count that was TWO people, and if you follow the math, it can add up retarded fast =P
Posted by: Lee Delarm | Apr 30, 2004 at 11:08
P.S. (we need an edit button) I forgot to mention, NCSOFT however IS doing a good job of banning and catching hackers, exploiters, afk macroers, etc. I've had a report of an AFK macroer go through in 5 minutes and watched him vanish from the world as soon as the GM arrived, presumably banned. Although when you start getting enough money, accounts don't mean much (say if you make $1000 bucks a character before they get banned? pays for the char doesn't it?)
Posted by: Lee Delarm | Apr 30, 2004 at 11:11
Looking at things on a grand scale but analyzing the events objectively, what is happening is not too different than what ends up happening in other hugely popular games, give or take the perceived 'advantage' of the Asian players. After all, farmers, sellers and their effects are in many other games.
What seems to be different this time, though, is the message received by players. It is no longer a pristine world that 'grows a side-effect' and copes with the side effect as it progresses, in this case the growth of the side effect would seem to outpace the development of the community and population mindset of the game. I believe this ties back to something I mentioned here http://terranova.blogs.com/terra_nova/2004/02/why_are_ingame_.html which is about the expectations you have when you buy the game; the box leads you to believe you will be immersed in an alternate reality where you can be whoever you choose to be, unbound by your earthly limitations - nowhere does it say "Buy Lineage II, its great because if you don't have time to play it, or you suck, you can pay someone to play it better for you, or you can just buy the game stuff on eBay and get ahead.".
In the end I believe there is a potentially huge mismatch between the players that were attracted for beta and the players a game that has an established full-blown out-of-game-economy may attract.
Posted by: DivineShadow | Apr 30, 2004 at 12:09
Edward> Imagine if US unskilled labor rates fall to somewhere near the global average, while high-skill labor stays roughly where it is (because we dominate that market).
It seems to me that the vast majority of unskilled employment requires physical proximity. Day laborers in Georgia aren't threatened by laborers in China willing to work for 5% of the pay...If anything, as the recent (and overblown) IT offshoring issue in America has indicated, the new possibility is not that unskilled labor rates will homogenize, but that skilled labor--which doesn't require physical proximity--will.
As for what VW farming is, it seems like neither. It doesn't require a university degree, but nor can Joe Farmer walk in off the streets and fill the position. There is a certain level of technical and social literacy required. I don't think this represents a threat to global labor rates--it's good old fashioned small-scale entrepreneurship. On the other hand, with the Internet, middle class individuals anywhere in the world can add and subtract captial from global stock markets instantly.
Tom> Basically they say that Americans get better customer service because we complain more.
That's probably true, but here's a amusing anecdote:
A friend I met a few years ago, who had just moved to the US from Sweden, often commented on how "weird", even irksome, the level of customer service here was. She compared Sweden's standards rather favorably by explaining that store attendants and such "left you alone", didn't greet you, kept chatter at the counter to a minimum, etc.
Ironically, she ended up in a management job with a lot of customer service. 2 years later, she returned from a long visit to Sweden complaining about how horrible the service over there was :) Now she's the first person to critique poor customer service. She's not bitchy about it; she's well-mannered, reasonable, and always polite--but her expectations have risen considerably. It seems infectious.
Posted by: Euphrosyne | Apr 30, 2004 at 14:08
Whoops, didn't mean to imply that American MMORPG players complain more. It's just that my experience is predominantly with Americans, and the original post mentioned the American players being outraged about the adena farming.
Posted by: Mark Ashton | Apr 30, 2004 at 17:39
Whoops, didn't mean to imply that American MMORPG players complain more.
LOL, Mark, it made better print the other way ;-) Is it that bad, anyway? As The Economist pointed out in their print edition article "A complaint is a gift" (Apr 22nd 2004 ) - Americans get better service than Brits because of precisely our complaining ways (based on work by Chris Voss of the London Business School).
Posted by: Nathan Combs | Apr 30, 2004 at 20:28
Ted> It's true that the industrial revolution made dental care available to all. But it also dragged us through revolutions and trenches and gulags and massed civilian bombing. Not every story with a happy ending was, on the whole, a happy story, one that one wishes to experience personally. From that perspective, I worry.
FDR 1933> “the only thing we have to fear is fear itself” http://historymatters.gmu.edu/d/5057/
Like every other period in the history of the World, the World today continues to change. The undetermined results of that fact are closely dependent on humanities ability to adapt to those changes. I see no evidence that attempting to slow the rate of change will be any more successful than it has been in the past.
As such, I have am inclined to conclude that the key to lessening the 'ill' effects of change is in humanities ability to learn. As such, I think the studies of Economics / Politics / History / Sociology / etc are truly the only tactics that have shown any sort of record of success in the past, and I tend to assume that this correlation will hold true for the future.
No, it's not going to be a fun story, but yes, this chapter is better than the last, and yes, it is the one we have been called to write. May it say, that because of higher educational levels, humanity was able to avoid many of the costs that it paid in previous chapters.
For this very reason, I have been quite excited to see that the effects of these changes are first appearing in small, relatively-controlled, international, boarder-less communities called MMORPGs where the leaders of tomorrow are learning the economics / political tactics / etc that they will need in the future, at very young ages.
-bruce
Posted by: Bruce Boston | Apr 30, 2004 at 20:36
I have actual been speaking with many of the major workshops in China. Currently I am speaking with a group that has over 700 employees farming adena 24/7/365. They would take care of all my deliveries and supply an endless amount of Adena for a fraction of what it sells for. Now all I need to do is get them working on Everquest and Final Fantasy XI... this is a very very real thing and will be the next step in the online gaming industry, it is total inevitable, so I figure why deny the fact and try and compete, instead hook up with a major player over there now and get myself set up for the long haul. I know many people are against it and all that but I see no problem with it what so ever.
Posted by: Jon | May 06, 2004 at 08:46
I discount the L2 whiners as being people who just have not seen the full picture yet. They know they dont like something, but they are not sure what they dont like yet.
There is a deep divide in intention and practice between the "players" and the "adena farmers". For the asian adena farmers, L2 isnt a game, its a job. In most cases they share no language with the "players", and each farming account is presumably operated by more than one person. So they are cut off from the social community of the players, yet due to their permanent activity they are richer and more powerful in-game than the rest of the players.
In the short term, the effects of the adena farmers on the economy are small: they exclusively occupy a few choice farming locations; their ebay customers enjoy an early dominance as their $$ are translated to ingame uber items.
But the longer term may be harsher. The endgame of L2 envisages the player leaders (or "princes") controlling the world including its economy, with tax setting capabilties, based on 5 seats of power (castles). Much has been made in NCsoft's marketing of the flying dragons that only castle owners will be able to create.
These luxury acquisitions will be rare and sought after. One might guess that control of the 5 castles could be a strategy objective for the commercial business operators in L2. What chance has a casual gamer got against the 24/7 dedication to wealth acquistion of the adena farming companies? The game wont look nearly so attractive to customers if the ONLY way to get a dragon is to buy it on ebay.
Maybe a watershed approaches, where its finally in the interest of the VW manufacturer to prevent trade between virtual and real currency in their VW?
Posted by: Estariel | May 07, 2004 at 10:34
Estariel> Okay, If how you explained the situation in Lineage2 with the farmers were accurate, then the players would be happy as could be. However, the system discribed is nowhere close to reality. "A deep devide between 'players' and 'adena farmers'" is no longer there. In open beta and in Prelude, the farmers were an annoyance, simply because we knew what they were up to; In the now, the farmers arnt just farming the in-game monsters, they are farming the players. Everyone knows that when you die there is a chance of droping an item in your inventory; the farmers are taking advantage of this, and constantly ruining a players time by killing them off and stealing their gear. This is just one of the things that the Farmers do to the players. There are very few places a player can level up in lineage, because places are occupied with hundreds of farmers. Its gotten out of control, and with NCsoft not doing anything about it, I don't see the game lasting much longer.
Posted by: Jordan | May 04, 2005 at 11:27