Com 125 Assignment 11- Virtual Economies, Real or Fake?

Today, virtual gaming has reached an entirely new level of existence. With "Massively Multiplayer Online Role-Playing Games, or MMOs," virtual worlds like World of Warcraft, Ultima Online, EverQuest and Second Life have expanded to now having a significant presence in our real-lives. Particularly, the economies of the games are finding ways to become prevalent in our own real life economy.


In his article, Julian Dibbell contrasts the virtual economy’s original intention to solely exist in the virtual world compared to its actual evolution into something more significant. The proposed virtual economy was meant to be "a realm of atomless digital products traded in frictionless digital environments for paperless digital cash." According to this proposal, money and wealth in the virtual world would have no real value in the real-world. However, as Dibbell explains, our modern economy is actually a breeding ground for "paperless digital cash" to have actual worth. He says, "For years, the world's economy has drifted further and further from the solid ground of tangible: Industry has given way to postindustry, the selling of products has given way to the selling of brands, gold bricks in steel vaults have given way to financial derivatives half a dozen levels of abstraction removed from physical reality." He argues that people are now more comfortable with the idea of money being in a nontangible form. Therefore, the presence of physical money and wealth is no different from that of digital wealth.


MMOs differ in their acceptance of real money playing into financial gain in their games. On two ends of the spectrum are Second Life and World of Warcraft. Second Life has a very open approach to the virtual economy and encourages the buying and selling of property with real money. Conversely, World of Warcraft is a game that actively discourages this practice. With the open economy, a variety of digital goods are sold for real money. They include houses, swords, suits of armor, iron ingots, lumber, piles of hay, tables, chairs, potted plants, and magic scrolls to name a few. In fact, it has been estimated that the sum of transactions for these items has reached $3 million of real money per year. Ebay is an active player involving the transaction of digital goods. There are people who have actually made a full-time job out of being a seller of digital products for virtual games on ebay. For example, a 43-year-old delivery man named John Dugger bought himself a house in the fiction world of Britannia for $750 in real money to feed into his Ultima Online addiction.


There are a few major issues with putting actual money into virtual worlds: problems both for the sellers and buyers of virtual goods. For the buyers, it's the concern that the goods they're buying aren't in a tangible form. These goods only exist in a fake world and go away when the computer is turned off. When it comes to reality, these buyers are losing actual money and gaining no physical goods for their loss. On the other hand, the issue for sellers is that their profits depend on the virtual games so therefore, the owners of these games have ultimate control over their profits. Bob Kiblinger, someone who trades Ultima items for a living says, "It's scary to have that much cash tied up in the business, when Ultima could just say, 'We deem this outside the rules. You're done.'" As soon as these companies make the decision that they don’t want people to profit from their digital goods, these sellers are subject to losing everything, and this is something that companies actually do. For example, Sony announced a ban on the EverQuest auction market and got ebay to enforce the ban.


In my opinion, World of Warcraft’s closed economy is the best approach to the virtual economy of online gaming. This is because it gives the best of both worlds by allowing for an economy without players having to give up any of their own real money. In the World of Warcraft, one can virtually work for and earn virtual money, much like one works for and earns real money in the real world. Therefore, people have the opportunity to advance in the game and generate wealth, without the loss of real money. I believe it is very important to keep virtual and real-life money separate. If money is circulated in and out of “reality,” this blurs the line between the virtual and physical world, which can have many psychological repercussions for avid gamers.



Sources

Dibbell, J. (January 2oo3). The Unreal Estate Boom. Retrieved 4 November, 2008, from Wired Web site: http://www.wired.com/wired/archive/11.01/gaming.html


Levy, S. (2008). World of Warcraft: Is It a Game? Retrieved 4 November, 2008, from MSNBC Web site: http://www.msnbc.msn.com/id/14757769/site/newsweek/page/3/print/1/displaymode/1098