Animadversions.

The weblog of Joshua Drescher

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May 27th, 2003 · No Comments · Politics, Technology

Ah, yes. Mythic Entertainment vs. Blacksnow Interactive: The Story that Refuses to Die. From this Sunday’s Washington Post, another article mentioning your favorite game company (and their stalwart, dashingly handsome anti-hax0r fella) and its never-ending battle for truth, justice and the breaking up of digital sweatshops:

How the Game is Played

Sunday, May 25, 2003; Page B05

From Unconventional Wisdom, by Richard Morin

“For sale a level 65 High Elf Male Enchanter on the Antonius Bayle server with 33aa’s… Staff of the Serpent-Epic…… Shaded Shield….. Crypt Master’s Conjuring Stone….. Dazzling Boots…… Dazzling Gloves……. Dazzling Arms…… Dazzling Helm…… Dazzling Legs……. Oakleaf Girdle.”

– Playerauctions.com offering for an EVERQUEST online game character

After a furious round of last-minute bidding on Tuesday, the playing rights to the High Elf Male Enchanter sold at an online auction for $610 — one more example of how the virtual economy continues to turn nothing into millions of real dollars, asserts economist Edward Castronova of California State University at Fullerton.

Video and online games generate an estimated $9 billion a year in sales, ranking them ahead of the movie business and behind gambling and pornography among industries competing for your entertainment dollars. And a burgeoning black market has proven to be lucrative for game players who buy and sell characters and other elements of established games such as Ultima Online, EverQuest, Asheron’s Call and Dark Age of Camelot, according to Castronova’s research.

Bewildered? That’s understandable, if you’ve never been to the cyberspace countries where Elf Male Enchanters hang out. Here’s a Castronova primer on virtual game economics: Players pay a monthly fee to the game developer to compete. Subscribers to the most popular games typically pay $10 a month and number in the hundreds of thousands; on any given night, tens of thousands of players are matching skills on each of the bigger games.

Players select a character to be their game alter ego. Over the course of the game, a character can become more powerful by completing certain tasks. The character — or “avatar” in gaming parlance — is then rewarded with an item such as a sword, a special tool, money or a special attribute, such as the ability to fly. These powers, in turn, make it easier for that character to accomplish other tasks, gain more strength and move up to higher levels of the game. Players within a game also can trade with each other, exchanging an extra shield or surplus money for a tool or weapon they don’t have.

As a player’s character becomes more powerful, it also becomes more valuable as an online auction item. Sites such as playerauctions.com have sprung up around these games. They offer the highest bidder everything from complete characters to individual items such as the “Blade of Carnage,” which sold for $460 on Wednesday. For a lazy player, buying a fully mature character or a missing accessory is a shortcut to the highest levels of a game.

Castronova has tracked how much characters in the most popular games sell for at online auctions, as well as the going price for the various fanciful currencies. When you add together the potential market value of the currency and existing characters, the estimated per-capita gross national product of Norrath, the mythical land in the EverQuest game, would exceed the comparable per-capita figure for India and China, according to Castronova’s calculations. And the value of the currency of some cyber-nations would be higher that of the yen, among others.

It’s also created a target of opportunity for all manner of cyber-scam artists and hustlers. Mark Jacobs, president of Mythic Entertainment, the Washington-area company that created the popular game The Dark Age of Camelot, described how one such group organized what amounted to a sweat shop in Mexico to churn out characters for its game. (Full disclosure: The Unconventional Wiz’s son works for Mythic.)

“They got people to work for little or no money to build up the characters and even gave them ways to cheat, then sold the characters” for hundreds of dollars, Jacobs said he was told. The company also has been offered a cut of the action if it would make changes in the game that would have allowed the hustlers to make money off other online players. “We told them to stuff it,” Jacobs said.r />So far Castronova’s work has generated big buzz among economists. His recent working paper estimating the value of the Norrath economy — as well as the exchange rate for the Norrath “plat,” as the virtual country’s currency is known — is the single most popular downloaded study from the leading economics Internet library and easily outpaces the works of every Nobel laureate, according to economist Robert Shapiro, a Brookings Institution fellow who wrote about Castronova’s study for the online magazine Slate a few months ago.

Still, Castronova acknowledges he has yet to find a scholarly journal willing to publish his work, though it’s caught the attention of the Rockefeller Foundation, the Social Science Research Council and Lawrence Lessig, a Stanford law school professor and Internet deep thinker.

“Too applied,” he said. “No one has disputed the numbers or methods. They just do not feel this is an appropriate topic for academic economic journals. Most academics in the games research area encounter similar attitudes in their home disciplines — games are not ’serious business.’ “

The Marriage Money Gap

Financial matters traditionally rank at the top of things that married couples fight about — but these spats occur for even more basic reasons than you might think.

It seems that husbands and wives don’t even agree on how much money they have, researchers at Ohio State University learned after questioning married couples about their finances.

They found that husbands typically say the couple earned 5 percent more income and has 10 percent more total wealth than wives report. And wives typically report $500 more in debts than their husbands acknowledge. “There’s quite a gap between husbands’ and wives’ reports of their financial status,” said Jay L. Zagorsky, a research scientist at OSU’s Center for Human Resource Research, in a summary of the study released last week. “These differences may have significant impacts on everything from a couple’s relationship to national reports of economic statistics.”

Some of these discrepancies are chasms, not gaps. Half of all couples stated income values differing by more than $5,000 a year. And 10 percent of the couples’ income figures differed by more that $15,000 a year. Usually it was the men who thought the couple earned more — on average, about $1,000 to $2,500 higher, Zagorsky found.

The study is published in the May 2003 issue of the Journal of Socio-Economics. It is based on data from five different groups who participated in the National Longitudinal Surveys, which the OSU Center for Human Resource Research conducts for the U.S. Department of Labor.

Zagorsky used data from 1,195 couples who answered questions over many years concerning income and wealth. The groups in this survey were interviewed periodically over nearly three decades on topics that included health, education, training, finances and marital history.

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