Virtual economies are not so dissimilar to their real-world counterparties

Virtual or real, capital is king in a capitalist society. Unsurprisingly, therefore, we are seeing a range of competing currencies. But beyond the world’s dollars, pounds, yuan and Euros, there are countless virtual currencies that many of us use every day. The biggest and most interesting examples of this currency come from MMOs that make up living, breathing economies that are not dissimilar to those we are used to in the real world. Let’s take a dive into the world of virtual economies.

Before looking at some examples, we need a definition. For the purposes of this article, we will define a virtual economy as an emerging economy in a virtual world, which depends on the exchange of virtual goods and currency.

In this way, it can be seen that true virtual economies have five factors that can also be found in real-world economies.

1. Competition: Resources are limited to one (or a few) people per item.
2. Persistence: The economy continues across and between user sessions.
3. Interconnection: Other users affect resources.
4. Secondary Markets: Virtual resources can be created, traded, bought and sold.
5. Consumer added value: The economy is enhanced by consumers adjusting or changing the value of resources.

By considering these five factors it is easy to see how virtual economies directly reflect their real-world counterparts.

While most of this currency only facilitates fun, and promotes someone’s in-game experience by buying new gear, upgrades or cosmetic items, some players use this currency for real economic benefits. ok ”. To do so players can be found selling in-game merchandise or items for real-world currency.

Back in 2001, Edward Castronova published a landmark paper which went on to become the most downloaded paper in the history of the Social Sciences Research Network. He claimed that the diminished world of Norrath – at the time home to less than a million inhabitants – had a stronger currency than Japan’s Yen.

This world of Norrath is the platform for the legendary MMO EverQuest, released in 1999.

Castronova’s analysis of EverQuest’s economy found that the game’s platinum piece was priced at around US $ 0.01072 – about 1 percent. At first glance, this may seem insignificant, but after calculating the total value of currency and in-game items accrued by hourly players, Castronova concluded that players earned the equivalent to $ 3.42 an hour. To adjust that for inflation, that’s about $ 5 an hour.

In 2001 the game already had an enthusiastic fan of players who would certainly be willing to sink hours into the game. Castronova noted that some users spend up to 80 hours a week in the game. Calculating a weekly wage from here lands us at $ 273.60 which, when converted into an annual salary at $ 1200 – pushes our hypothetical winner over the official US poverty line.

Of course, given it’s 80 hours a week, such a salary would be unlikely. However, a conception that it would be possible for an individual to earn so much by playing a game alone was a Castronova revelation.

Taking EverQuest as a whole, Castronova also calculated the game’s gross national product – its total value – placing it at around $ 135 million. Not only that, but divided equally among all its users, GNP per capita was $ 2,266. In theory, this ranked EverQuest as the 77th most prosperous economy on Earth in 2001.

While the world has come a long way since EverQuest and major MMOs from EVE Online to Final Fantasy XIV and Elder Scrolls Online provide players with an incredible array of economies to participate in.

However, as early as 2001 it has become apparent that Virtual Economies not only operate in the same way as their real-world counterparts but can interact directly with real-world currencies quite skilled.

To get ahead in your video game economy, take a look Eldorado to buy and sell anything that ranges from Runescape GP i Temtem Pansun and anything in the middle.