Multi-User Avatars: MMORPG Economies May Soon Exceed Entire US GDP

World of Warcraft has just announced a new player race: two-headed ogres (thanks Slashdot and MMORPGDot). The official info page indicates that two players will cooperate in running the avatar. There's probably a precedent of this within text-based MUDs, but with the scale of current graphical worlds, these shared-ownership avatars create a very interesting and potentially extremely lucrative value proposition.

Economic theory says that when two people become joint owners of an asset, they each share the value as common property. For example, if I own a 30-acre park and derive $100 of beneift from it, the park produces $100 of economic value. But if I make it a public park, so that my 9 neighbors can enjoy it, the park now produces $1000 of value. That's almost ten times as much value, created just because of a change in ownership rules.

The potential for value creation through multi-user avatar ownership in MMORPGs is, well, staggering. EverQuest has 450,000 accounts, and the average value of an account on eBay is about $300. If an account owner can jointly control the avatars on another account, that adds $300 to the value of the owner's total EQ holdings. If she can also control the avatars on a second account, it adds a further $300. If V is the value of an account, N is the number of accounts, and M is the number of other people's avatars you can jointly operate, then total value for the system VxNxM. If every EQ user could be allowed to share every other avatar, total value in the EverQuest economy would rise to (300)(450,000)(450,000) = $60.75 trillion. US GDP in 2003 was only $10.99 trillion, a figure that is unquestionably not as big as the previous figure. On a graph, the difference would clearly be visible.

Implications? The growth potential of virtual world economies has already been made clear. But now we see that growth in user base and transactions, when accompanied by innovations in ownership rules, can create truly staggering increases in value. Some modifications in intellectual property regimes would undoubtedly be necessary, and it's not quite apparent how accounts would be handled on eBay. But perhaps more important, this value proposition in these allegedly 'toy' worlds once again have major implications for real life. If value can be created so easily through joint ownership in virtual worlds, why not have similar institutions on Earth? Share all, and all will be richer. Perhaps this is a deeper economic reasoning behind the strange attraction between Silicon Valley's Haight-Ashbury veterans and the CopyLeft movement: If I share my house, accounts, and even my physical body with others, the value of our joint holdings rise exponentially. We have nothing to lose but our poverty!

Comments

[Ren]

1.

I think that there is a time component here. While the rise in a joint holding may be exponential at first; I think that rate of change of the holding may decay over time, even if it the case that one of the holding parties is changed or indeed if 3 or more parties are involved. I think that empirical studies are desperately required to substantiate the theory.

[Nathan Combs]

2.

I think there is also an incentive component that will be undermined. Communistic avatars, say an entire guild of players locked into a single vast god-like millipede, will likely discourage power players from its membership, for example. Or so I speculate. But I like the idea of shaking a god-like millipede's leg for a day in some VW...

-nathan

[F. Randall Farmer]

3.

On Second Life, I dress as "Brak" - the Space Ghost Coast to Coast version. I have uploaded dozens of sound-quotes to share at pithy and funny times during online chats. There's a perfect one for this situation:

"What day is it? Could you please tell me? What day is it? I'm confused you see..."

Two headed PCs? When pigs fly!

Oh ... AC2/SL/whatever has flying pigs? Nevermind. :-)

Randy

[Archon]

4.

Uh...guys...check the date of that press release.

[DivineShadow]

5.

Playing games/simulators where you are part of a team controlling a single 'entity' such as a tank or a futuristic craft was *very* fun (and a lot of shouting) and very 'bonding'. They should make more publicly-available games like that.

Well, finally we know where the heads form Ultima's "Headless" creatures are... In WOW. Too bad the date is what the date it is.

[Peter]

6.

Ted, why do you assume that as soon as an avatar is a shared resource it doubles in value? If I time-share a condo or other RL resource, it doesn't exponentially increase in value, why would avatars be different? In fact, it is arguable that the $300 avatar, shared between 2 players, only has a $150 value for each of them...

[ludlow]

7.

Me thinks Ted is doing an April fools on us.

[Jayce]

8.

"Uh...guys...check the date of that press release."

I think he did. At least Edward did.

Though it somewhat does sound similar to current US economic policy... ;)

[Peter]

9.

Thanks. Try to get my head around economic theory only to miss the most obvious...

[magicback]

10.

I think the theory is valid for many digital content that cost very little to reproduce.

However, in the dual-ownership Avatar, separate subscription fee and other factors works to cap the max. value.

Upon first glance, the design appears to provide an insanely frustrating experience (=low value). But upon second glance, this is a new form of gameplay for the graphical MMORPG group, so potential economic value is unlocked.

The value proposition appears to be similar to a merger. Either the two merged corporations will create synergy and increase the theoretical value out of the merger or fail as a bad merger. But the value from the synergy is lost when you sell your half as the synergy appears to be primarily based on effective interaction with the other half.

Hmm, now I'm wondering how does one sell out of a guild and realize the value associated with guild membership? There is a certain value associated with a uber-guild, but if I sell my character, will I only get only what the character of that level and skill is worth and lose the value associated with the guild membership?

Whether or not this is an April's Fool joke, the design did scream "cool, why not!" and got me to think about intrinic value of avatars.

Frank

[Sourtone]

11.

Personally I think a dual player avatar would be a great feature for a game... albeit with some obvious problems (like if your other half decides to delete or simply stop playing his head - perhaps forcing random pairing wouldn't be the best course of action).

It's probably an April Fools joke... but I'm still baffled at this belief people have that they own their avatar.

[Nicole Wyatt]

12.

Its certainly an April Fools joke -- Blizzard is well known for them. They also announced in a press release that 0.9999... = 1 today (http://www.blizzard.com/press/040401.shtml )

That said, you might surprized how many people on various gaming boards I haunt have said what a cool idea this is. For experienced gamers only I think though -- the learning curve for new players would be unbelievable.

[Nathan Combs]

13.

cool idea this is. For experienced gamers only I think though -- the learning curve for new players would be unbelievable.

I think it would be interesting at least. On the plus side the idea that you are "joined at the hip" and "sink or swim" together is fun (used to play B-17 team in air sims - real fun). On the downside the idea of permanently being bonded to someone in such a fashion represents a huge risk. Furthermore, such a bonding would have to open up some unique play advantages/opportunities to be worth it, IMO.

[Nick Douglas]

14.

Remember the Pandaren race? Blizzard's great at punking.

[greglas]

15.

They're apparently turning people into chickens now.

http://www.worldofwarcraft.com/thread.aspx?FN=wow-general&T=10565&P=1&ReplyCount=2#post10565