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Nov 21, 2006



Interesting. You may want to change the EQII money to Plat, which is worth 100 times as much as Gold, by the way.


Are these a single currency unit? As in, 5 monopoly monies to the Adena? Not going to get you very far. A far more interesting question might be, who can create wealth more quickly? The printing presses or the clans?


3 functions of money. 1) medium of exchange 2) unit of accounting and 3) means of storing values.

Monopoly money would do well for just 1). But, I think it may not fit well for 2) and 3). If it did, there are a lot of arbitraging around Monopoly money!

BTW, is there any symptom in Virtual Worlds for acts of arbitraging that are easily seen in the Real world? I'm really wondering.


So does this mean we will see a "big mac" index for virtual worlds?


Jun Sok,

If I understand your question correctly, you'd be able to detect arbitrage trade in a Virtual World by looking for a few things...

Most obviously, in an environment where there is an inelastic receiver market, an individual buying hundreds of units of a commodity, but refusing to go over a certain fixed unit price for it. Demand below this pricing point would be independent of the actual utility of the item*.

You could also create a "sting" in an environment where you can see who is buying your goods by making it known that you will pay $X for commodity Y and then selling some of it via a third party onto the market for less than $X. If the winning bidder comes around to sell it onto you for $X, they are performing an arb.

If you're asking though about arbitrage involving converting game currency to real world currency and then back via different games in an attempt to reap an arb, I don't know if there'd be any way to separate it out from regular game currency trading. It's a very interesting idea though.

If you're interested in arbitrage, I wrote a little article about how it worked out for me on my WoW realm. You can find it on my website, just search down for "economics".

* More accurately, its economic utility has overtaken its play utility.


What this table tells me is that it has taken me two years to accumulate a net earning* of World of Warcraft gold that is roughly equivalent to what it costs me for a three month subscrption to the game. If one could walk into an international bank and convert WoW gold to dollars just as one can convert pounds to dollars, then Blizzard would have taken in $360 from my account while paying out only $51, providing them with the tidy profit of $359** over two years or $14.95 per month. Is it coincidence that these equations work out to the "monopoly money" being equivalent to the cost of subscription?

*(meaning that gold possesed by my toons today, regardless of current inventory or past earnings)
**(including purchase price of the game)


It would be nice to see a comparison adjusted by purchasing power... :)

ISK, for example, looks very low-value here, but of course the fact that most items' cost is measured in thousands or millions is also a factor.

Purchasing power would, of course, be e.g. the earnings per hour (players purchase currency/assets with time expended in the game world.)



Thanks for notifying me of your article. As I meant 'arbitraging' for the second case in your comment, but your article of 'in-game' arbitraging is really interesting!


Thinking about it over night it would be interesting to normalize the table some how. A Big Mac, or as we have it over here a Mars Bar, index is an idea but there is no equivalent constant artifact across VWs (actully for the 'men (and womenn) in tights games maybe there is a slayage quotient based on something like the number of lvl 1 critters that one's sword of smiting might smite,,, then again) .

What is a constant (at least for our purposes) is time. I'd be interested to know if the hive mind have the data so we could tabulate average earnings per hour for each currency and then do a $ conversion on that.

Erm, hold on, we'd just be telling gold farmers the best way to min / max their business, hmmmm.

Actually, as they keep spamming us (thank you very much for the one above) how about contributing to the community gold farmers out there and tell us what the best $/hour rate is across virtual worlds - and if possible the smallest market size that's required to make it worth it as a full time job.


Raises some interesting questions about eventual currency exchanges between RL and these disparate worlds. I wonder what the core inflation of WoW is. Or its CPI using runecloth, apple pie, etc.

I wonder who's going to be the first to leave the Dollar (read: gold) standard? Whether or not a forex is in the works?


A unit of time is a good candidate for making Big Mac like index for virtual world. But, in this case, we should normalize the efficacy of the player for accurate accounting.

Might some hypothetical hacking "bots" having same efficacy among virtual worlds be ideal for this?


Ren>There’s nothing ‘just’ about Monopoly money

But its value is just $0.000231176! How low would it have to be before you would call it "just" Monopoly money?

In the case of Monopoly money, you're buying the cash directly from the manufacturer. Real governments do this with real banknotes. If you were the US Government, and you wanted to increase the US money supply by $1, it would cost you something. How much, though?

Well, the answer in the fiscal year 1999 was 0.022 cents (see footnote 2 of this document).

Eerily, this is almost the same as the 0.0231176 cents that Monopoly money costs.



The best $/hour rate exclusively comes from dupes, and the location moves about relatively switfly.

Ditching dupes the second best options come from the higly complicated game systems which exist in the games with the worst monopoly$/gamemoney exchangerate. In Anarchy Online it used to be easy to print your own money by running group missions really fast and running all the (6) clients yourself. :P

Nice to see that my WoW gaming has generated more wealth than it has cost, about 2:1 for me. But once we reach level 70 and need to buy epic flying mounts my poor profit will need to be reinvested in the system. o.O


Aaaargh, is it really all just about the gold farming?


The EVE Online Chinese server has apparently ceased to function as a detached virtual world at all and has effectively been "bought out" by real money.


It seems like the paper it's printed on would be worth more than 0.000231176$ ... not true for the virtual currency.


At the risk of looking like spam, I do think this might be interesting to some TN readers and is appropriate for this topic. I just finished adding graphs to my site that show the value of virtual currency over time. The most interesting thing to me is that most games show a constant decline in prices. However WoW has actually seen an increase in price over the past year.



Some data that I have gleened from a few of the gold farmers I met in the last few years playing WoW -- before they all were banned (though I am sure they have been replaced on my server by now).

All are averages, and all are based on legitimate work (no dupe bug exploits). Also, all assume 100% productivity, which of course, can't actually exist. However, the daily total gained is lower than what is probably attainable (variations in drops, AH prices, etc) to compensate for this.

World of Warcraft, US servers, using a level 60 mage.


Average worker can bring in 300g in a 12 hour shift
This worker plays 30 days a month, or 9000g generated per account

9000g / 360 hours = 25 gold per hour per worker on average

Labor Costs

Cost of employment is about 1000 CNY per month, or approximately $125 (at a 8 CNY : 1 USD converstion rate)

So that $125 per month breaks down to $0.34 per hour

25g generated for that $0.34 is ~$0.014 per gold.

Additional Costs

Account @ $14.95 per month, $0.041 per played hour
Proxy @ ~$5.00 per month (just guessing, at 10 accounts, for say $50 a month for a private proxy), $0.014 per played hour

There are probably other costs, but if you just look at the labor, monthly account fees, and possibly proxy fees, you get a real value of $0.395 per hour per employee, or a per gold cost of $0.0158


So with your listed rate of $0.17 per gold on average for retail sales, a farmer would be happy to see $0.10 per gold from a wholesaler (the people that actually run sites like IGE or Guy4Gold). That leaves you (the farming company) with a $0.084 per gold profit, or $2.105 per hour.

(Not taking into account anything right now for computer use at your company, original cost to buy each instance of the game, "loss" on a monthly basis averaged to the rest of the company for each account shut down permanently by Blizzard, SoE, etc.)

I too would be interested to see how much a typical farming company would make in DAoC, EQ2, or UO on an hourly basis playing "fairly".

I have no idea how this works into other games though, and feel free to nuke any information in this post that would let the terrorists win! :)


At the risk of looking like spam, I do think this might be interesting to some TN readers and is appropriate for this topic. I just finished adding graphs to my site that show the value of virtual currency over time. The most interesting thing to me is that most games show a constant decline in prices. However WoW has actually seen an increase in price over the past year.



Interestingly, I just had a glance at this site, and unfortunately I found it mostly wrong in terms of data, especially when it came to IGE prices (On my server, and 3 others I checked, that website had the price of gold listed as double what it's actually selling for on IGE's website)

Unfortunately, poor quality data leads to a very poor ability to create graphs and analyse (as I repeatedly tell my students, not that they listen...)

It is a great idea to keep a constantly updated graph of online gold prices, and this might even allow for the use of event studies, the most cruical event in the short term future of WoW being on 16/1/06; will prices jump up as demand soars? or will everyone buy gold now, in anticipation of increase in prices (as WoW gold now is actually comparitively cheap)

Indeed, does the current "cheap" prices of gold now indicate that their is predictable peaks and troughs in the market? If so, market efficiency would seem to be pretty low, and a speculator could possibly start buying cheap gold now, in anticipation of selling expensive gold at a later date.


Opps, 16/1/07 I mean!


Here is an idea...

Why not the game company would ask Real money for monthly subscribtion fees and virtual money for additionnal days... This would help reduce the amount of money in games.

If the Virtual money needed to buy days of playing stays high enough, no one could play freely, but anyone with spare money could reduce the monthly cost of is subscription. To some extent, players could beg for Virtual $$$ to keep playing a game.

So a guild could keep a player with low income playing for a while! :)


LEKO: On EVE Online, you can buy game time codes from the company or a reseller, and you're allowed to sell the codes in-game in exchange for ISK, the game's currency. There are rules to avoid scams and if you followed them and still get scammed, your ISK gets reimbursed and the scammer gets banned.
Recently inflation has been climbing, but GTCodes are still cheap. 30-day code for about 180 million, 90-day at somewhere over 400 million.

I work weekdays and on a full week of EVE on freetime I manage an average of 100 million and I'm a relatively new player.

Best "guaranteed" average income gauge would probably be stripmining the best ore(s) found in high security (PvP is restricted by ever-vigilant police) systems. Safe from ganking and if you dual box a hauler, you can eliminate most of the risk of ore thieves.
Not sure if this is what the chinese farmers do exclusively, they might also venture into low security space for higher value ores, teamed up with some combat vessels for protection from other players.


Yeah, and if I can get Sean Connery to sign a piece of paper -- regardless of whether it's a real dollar bill or a piece of Monopoly money -- it's all of a sudden worth a whole lot more.

Great Caesar's Ghost... EVERYTHING is worth SOMETHING! If you put enough of it in a pile, you can compost it and turn it into fertilizer. A Monopoly Money dollar isn't worth $.0002 because it has a monetary value of that... it's simply a replacement cost for the piece of paper. We all get that, right? Am I restating the obvious? Am I the one being dense? I have had a lot to eat and am in a food-fugue...

Ren's calculation is half-baked; the cost to replace a $1 Monopoly bill is the same as a $1,000 bill. You don't divide by the total denominated sum, but by the number of pieces of paper. If, for some reason, our good friends at Hasbro decided that the game should have 10x the amount of "value currency" (ie, get rid of the $1 and make it a $10, etc.), but the same number of bills... the price to replace them would be the same.

Traders in game-gold had better watch out that an update-pack doesn't have a war that includes, as part of the role-play, a massive inflationary period. That happens in real life, eh? Check the pics of Germans with wheelbarrows full of money going to buy loaves of bread after WWI. If you're playing the RMT game and that expansion pack comes out... whoops.


Unfortunately, in a virtual world, without sufficient money sinks (perishable goods, services, limited edition items, taxes, fees, etc.), over time, the net amount of money increases with no cap. Eventually, the community will hit a point where new players are no longer joining. This is when the economy will collapse. The amount of gold in the economy will be so far increased that it will have no real value anymore.

In a virtual world, unlike real life, having a billion dollars does, in fact, buy you pretty much everything you could ever want. Food, water, shelter, teleports, mounts, you name it! After a certain point on a server, any game will have players with so much money, buying a potion of the highest quality from an NPC will be like taking a grain of sand out of the planets' beaches.

Virtual dollars only have value to people who don't have them or can't get enough of it in their own play schedule. You will find in most games that most players, given enough time, will eventually get what they want. Those that are impatient are the ones that purchase the in-game money. So, as long as there are new players in an online community, there is always value to the currency.

Does that make sense? Keep playing new games, in other words!


So in effect, the economies of Virtual Worlds are ponzi schemes, relying on a steady stream of new money to prop up the system for the existing players...

Money sinks delay the effect of this, and if the right equilibrium is found, the game can survive, however as time goes on, you need to find more sinks, or introduce something like an inflationary war (as mentioned above).


It seems that SPAMMERS have found an easy target here!

Too Bad, Terra Nova will probably have to restrict anonymous posting! :(


@James and Santo et al:

James said: "...the net amount of money increases with no cap." and, "...a billion dollars does, in fact, buy you pretty much everything you could ever want."

In my case, while playing WoW, *ZERO* dollars (beyond my monthly service fee, which is required) bought me *EXACTLY* everything I wanted in Azeroth.

These discussions of MMO "economies" labor under the absolutely false assumption that the "money" in these games is actually money, because we call it money in the games themselves, because they are trading tokens in the games, and some people are willing to pay for it using real money that enters and exits the games. It is fetishistic and, I think, somewhat distracting to the more important conversations about the real value of games, play, socialization, content, etc. etc. Trying to equate what happens to/with/between various "in game currencies" is like the "my dad can beat up your dad" arguments between playground kids. You might be able, using some twisted logic, to draw a line back to reality (yes, Kenny's dad really, probably could beat up Chris' dad...), but it isn't an actual "real" study. Because the "money" in MMOs is, in some ways, even *less* money than Monopoly money. It is simply another point system.

We've seen that some people are willing to pay real world dollars for in-game "stuff." Whether that's leveled characters or equipment or gold (which is then exchanged for equipment) isn't the point... yes, real world money is traded for everything with perceived value. Everything from tickets to concerts I'd shoot myself to get out of to works of art I'd love to have to food I need to have to live to massages to advertising time to dental surgery. Money is a medium of exchange that while not perfectly understood, is at least well documented.

What we are calling "money" in games is not money. It does not behave as money. There is *value* in games, yes. There is value in character leveling, in objects, in armor, etc. etc. But all the mitigating "stuff" that happens concerning real economies is not in any way impinging on MMO "gold." It's a picture of gold. Actually, it's a description of a picture of gold. That some people agree to pretend they see more of than other people.

All of which is highly cool. Games are great. Andy love games. But all this talk of arbitrage and stock exchanges and the value of WoW vs. EVE vs. SL vs. Everquest currencies continues to make me wince because they are not currencies. They are scoreboards. You might as well talk about arbitraging touchdowns.

Yes, yes... I know. People can trade orange juice futures and folks have fantasy football leagues and bet large money on whether a particular dog will do his biz on the front lawn or the back. Yes. *Anything* can be a medium of exchange. And, yes, there are probably real currencies in meat-space that are fundamentally more volatile in terms of how well they match up to the US dollar in terms of purchasing power than the WoW gold piece.

But that doesn't, I think, absolve us from remembering that these "currencies" are issued not by governments, but by companies. That they are not in any way tied to any system of exchange that has a balance on the *other side* of a scale. If I give you a US dollar for an orange, you can take that dollar and (many places) use it to buy an apple. If I give you 100 pieces of WoW gold for anything... it is ONLY spendable in WoW, or through a 3rd party willing to trade it back for another dollar.

WoW gold is not gold. It's not even soylent gold. It's not even Monopoly Money, because at least a Monopoly dollar can be used as a bookmark, or folded up as a wee paper airplane.

It's important to think about these things, yes. I'm really not trying to diminish the scale of the importance. Ever since the Wired cover article, "Nation of Everquest" (I think that was the title), I've been fascinated by virtual economic issues. But it's also important not to treat game tokens like real money in ways that they aren't.


Andy Havens > Ren's calculation is half-baked; the cost to replace a $1 Monopoly bill is the same as a $1,000 bill.

I imagine the a $1,000 bill would cost less to replace because of the scale of production, but I was not looking at the artefact cost I was looking at the relationship between the in-game face value and the RMT value. Artefact cost is interesting as one could ask for each of the items in my table what the artefact cost was and there would be an interesting argument over how you cost account the service to work that out.

What struck me as interesting was simply the kinds of thoughts that comparing in-game value with RMT value, as in-game value is very debatable (actually much of the notion of value is), there is what we might call the in-game face value, and then the in-game utility-value; the former is not meaningless but I'm not sure what impact holding thousands vs millions of currency units has. Plus, however rough an non-normalized the cross-world comparison is, I still thing it’s interesting to see how units stack up against $, a plot of all of the above over time would be even more interesting though I’m sure it would just plot tap-sink interventions against mud-flation, though when such issues kick in might be a thing of interest.


Ren > There’s nothing ‘just’ about Monopoly money

Richard Bartle > But its value is just $0.000231176! How low would it have to be before you would call it "just" Monopoly money?

In terms of $, I think what I wanted to point out is that even Monopoly is not completely valueless.

But what I find more interesting is the $ value : face-value : in-game utility value ratio.

One way to look at is it is, if you believe that RMT is ok, then buying virtual currency might one of the best $ : added fun purchases you can get. Which perhaps adds another data point to the rational for getting into RMT. Although many may point out that the supposed ‘added fun’ element is a serious false economy – in just about every way you can interpret those terms.


LEKO > It seems that SPAMMERS have found an easy target here!

not /that/ easy.


@REN : Sorry, I'm French Speaking.


To Andy,

If EQ2 brought back /pizza, and they allowed you to order a pizza and pay for it with in-game plat, would that plat be 'money' as you define it?



No. Not just that. Because I have friends who will go get me pizza, and for no more of a transference of value than "good will."

For "money" to be "money" it has to be responsible to all kinds of market and economic forces that have been defined and refined over the past couple hundred (in some cases thousand) years. Can I put it in a bank? Is it protected by governmental oversite in any way? Is it backed up by any kind of assurance besides that of a single corporate entity? By specie of any kind or, lacking that, an economic base that is "rich" in some kind of produce and/or service model that would serve to assure me that this money is genuine?

I can, if I spend some time, probably set up a system to trade just about anything for pizza. On the Web, that kind of system might even end up being trivial. I send you a CD from my collection that you want, you send me pizza. I send you an essay I write for your class, you send me pizza. Does that make CDs or essays money?

Money isn't just about being a place-holder for value. It hasn't been for quite some time. The entire system/s that back up the reliability and extended functions of those placeholders are what makes "real money" more "money-like" than simply something that allows for the purchase of pizza.

And when you get into game tokens -- gold pieces, let's say -- that are place-holders for value within a fictional world... where the only people who "understand" the value of the tokens themselves are the players, and the value *must* pass outside of the game-world for it to behave as money rather than as a game-token... yoiks. Not the mama! Not the mama!


Nobody will ever agree on what a reasonable amount of gold per hour in game will be. It varies by level, person, luck, exploits, patch level, and plenty more. Why not start with something simple like starting cash? A level 1 character might start with 100gp in one game and 1 million credits in another. We know that both values are relatively low value in each game. Normalize the real-world value against those starting values to compare.

It's obviously not perfect, but it can be determined quickly and seems better than trying to compare ISK (a currency which has only 1 denomination) versus DAOC plat (where plat is the highest denomination of a mulit tiered currency and is worth 10mil of the smallest unit). And even if you always compared the smallest unit, you still don't know if 1cp is more valuable IN GAME than 100 credits in another.


When I began playing MMOGs, and merchanting within them (not RMT, just entirely within the game system), what hit me was how "unreal" all money is, including meatspace money.

A nation's money is only real, because collectively as human beings, we all agree to play the money game with each other. Thus I can walk into a store, give pieces of paper with numbers inscribed, and walk out with real stuff. Cool.

All this stuff about governments guaranteeing the funds, or banks, or exchanges ... it's all fluff. It's a thin layer that reassures people (hopefully) that we're all playing the same money game, and that we can be collectively expected to follow the rules.

How real is a nation's money, if that nation fails? For example:

a) Civil war (Confederate greenbacks anyone?)
b) Economic mismanagement and depression (Germany soon after WWI)
c) Catastrophe that unties our social network and reliance upon one another. (Hypothetical "Day After Tomorrow", or Katrina x 1000)

To me, money is primarly a lubricant, facilitating the exchange of goods and services, within a specific context, using a uniform token.

As long as a meatspace nation, or a virtual world, continues to function, then that definition of money will likely apply to either.

Taken from another direction, if enough humans agree that a given token (real or virtual) is money (valid for the exchange of goods and services), than it is. Money is in the eyes of the beholder, so to speak.


You left out YPP's doubloons, which cost between US$0.1999 and US$0.245833333 (depending on how much bulk you buy them in). In M$, this is between 865.0984531 and 1063.403352 (putting them ahead of everything except Camelot plat), making them a significant omission from the chart as it stands at time of posting.


@Andy: I'm with you part of the way, but I think you have to look at money a bit more flexibly. When I wrote about the rollout of the euro in Greece several years ago, I went into it with the standard theory of money that recognizes how fictitious money is; it is a peculiar institution that relies on an enormous degree of shared trust over a wide range of people and institutions. But the case of the euro upends some of our received ideas about the centrality of state institutions in that process, and once they're out of the way, the door opens widely for lots of new kinds of currencies (like frequent flyer miles, for example).

You wrote:

The entire system/s that back up the reliability and extended functions of those placeholders are what makes "real money" more "money-like" than simply something that allows for the purchase of pizza.

But it seems that you're saying that the limited range of VW-money's exchangeability makes it qualitatively different from other money. You pointed to state institutions in particular, but it's worth remembering that paper money began as an innovation of networked (in the ship and horse sense) financial institutions, and only later did the nation-state become the institutional guarantor of paper money. When we look at the euro, we see a very different picture, one where no single state backs up the currency and, in fact, its legitimacy as a currency was first established virtually, two years before coins and notes were rolled out. It was created as a currency that was available for international networked financial institutions to buy and sell, but it was not on the street, as it were.

The lesson is that we're back to a time where networked financial institutions and individuals (through use) establish the "realness" of a currency. Virtual world currencies are well on their way to fitting the bill, even if they're not there yet to the practical degree you're thinking of. That is, I can't arrive at Athens airport, walk over to the currency exchange counter, and change Linden $ for euros, but I can do that with a little less convenience, and that's because the institutions that matter see them as equivalently liquid to a sufficient degree that those transactions are possible. That affordance paves the road to monetary legitimacy.

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