The “economics of fun” are apparently that some guy in China has your fun for you and you pay cash for the privilege. Pass.
I thought it was fun that an article explicitly claiming that in-game money is as real as the real thing got published in The Economist. It means that no-one employed there knows enough about economics to understand the difference between currency and tokens.
Or they didn’t care enough to edit the piece, which is worse.
MMORPG virtual money is much closer to currency than tokens. MMORPG money can be (relatively) freely converted to and from other currencies and is the officially sanctioned money in one realm (albeit a virtual one). MMORPG money is just as spendable in the U.S. as foreign currencies.
I thought it was fun that an article explicitly claiming that in-game money is as real as the real thing got published in The Economist. It means that no-one employed there knows enough about economics to understand the difference between currency and tokens.
Or they didn’t care enough to edit the piece, which is worse.[/quote]
You should really think twice about currency before you talk down to the Economist. About economics.
[quote=“Nick_Walter”]
MMORPG virtual money is much closer to currency than tokens. MMORPG money can be (relatively) freely converted to and from other currencies and is the officially sanctioned money in one realm (albeit a virtual one). MMORPG money is just as spendable in the U.S. as foreign currencies.[/quote]
Also, WoW gold is worth exactly the same thing as US dollars or any other fiat currency: whatever someone thinks it’s worth.
I’m fairly sure it’s a point of fact: digital currencies are legally considered tokens for real money in electronic funds transfer systems.
Even if we look at it broadly, consider the poison damage statistic on a character’s magic broadsword. This, just as much as your MMORPG money, has a real-world value, and can effectively be sold for real money, but the fact that it can be exchanged for goods and services doesn’t make it real money.
What the economist glossed over, perhaps inadvertantly, is the same thing that is often glossed over when people do fluff pieces on PayPal: it ain’t money. In fact, it’s less than a token: legally, digital currencies are merely accounting mechanisms for Western Union-style wires. This is why you have so few legal protections when you get screwed by PayPal, and why they can operate their own bizarre self-serving system of dealing with fraud.
MMORPG cash isn’t backed by anything of tangible value, it can be arbitrarily frozen, removed or manipulated by the game operator (and might not even belong to the player at all), has no legal status as tender in the U.S., isn’t legal tender anywhere on planet Earth, isn’t acceted by licensed money exchangers, and so on. It’s a variable in a game.
So, unless we’re using some extremely broad definition of currency which amounts to “anything with exchange value,” what about it makes it more than a token in a video game?
I’m not not objecting to the idea that in certain respects digital cash is like currency, only that the idea that is is as real as the real thing. I’m pretty sure that’s what the economist said, but the article seems to be inaccessible right now.
And that remark about “you should really think twice” from Lizard is just unnecessary.
Rob’s right. Currency has to be backed in some way. In game money simply isn’t. It has no legal status whatsoever.
MMORPG cash isn’t backed by anything of tangible value
Neither are US dollars.
Well that’s where the whole argument gets fun. :)
Currency doesn’t have to be backed, governments abandoned that a long time ago. To be considered currency and not just a token it has to be officially sanctioned by some government.
In game money is the official sanctioned currency of a virtual realm. It isn’t officially backed in the U.S., but neither are yen and those are considered currency. So of course the whole question revolves around how much weight we should give the sanctioning of a virtual realm. Considering that most of the virtual realms are better run than some war torn third world countries that’s not as easy a question as it looks on the surface.
‘tangible’ wasn’t the best choice there, but US dollars are legally backed. They used to be backed by tangible goods (gold/silver), but that hasn’t been true for a long time. They are still backed by the govt. though, which makes them currency.
OK. The story is back up. Here’s the quote that I thought was interesting.
That’s pretty explicit. Far be it from me to talk down to the Economist about economics, but puh-leeze.
Well, “virtual realm” is hardly “government.”
Monopoly money has real world value and is the officially sanctioned currency within a game of monopoly’s virtual realm.
But I do get the point, and there are good examples of virtual realms that are more reliable in the real world than some governments. If I had to transfer something outside the dollar and I had a choice between World of Warcraft Gold or whatever floats around in 1000% inflation banana republic of the week, I’d pick WoW FTW!
But the government we’re really dealing with here is the U.S. one, and all the legal powers and guarantees which come with using its currency on its territory.
What your argument amounts to is that technological change has made it very easy to use tokens as currency – and therferore tokens have assumed a de facto position as a kind of almost-currency.
That’s fine, you know, but that article seemed to be saying that game cash is as real as U.S. Dollars, which is isn’t. Though I concede that “currency” might not mean a lot when real currency minted by a real government might be much less practical use in the real world than “fake” currency minted by a virtual realm.
Ok wait, now you’ve shrunk the argument to “using US currency on US territory”, which is a totally different thing. That doesn’t really have to do with the validity of the US dollar as a currency, so much as the steps the USA takes to keep its economy strong.
Folks overseas buy, sell, and do all kinds of things with US dollars not on US territory – the fact that they are not on US territory doesn’t make the US dollar an invalid currency.
MMO games have a TOS determining what you can do in the game – which includes use of gold pieces or whatever – which would seem analogous.
I just wanted to accept that some currencies are crap, while MMORPG gold might actually be worth something. I didn’t mean to move the goalposts, just to get back to the point: game gold is a kind of token, not the exact same thing as currency – remember that “no less real” Economist quote – and especially not the same thing as a strong currency with well established legal backing. I’m basically making the “PayPal isn’t money” argument in a different context, which is a quite well accepted argument.
So, yeah, I think I was wrong to imply that MMORPG gold can’t be used just like money. I just thought it was amazing that the economist would openly accept it as such without even touching on all the things the differentiate it from real currency. Such as the fact that it might not even belong to you and isn’t actually legal tender!
MMO games have a TOS determining what you can do in the game – which includes use of gold pieces or whatever – which would seem analogous.
Analogous, maybe. But it’s a bit glib to equate a video games TOS – enshrined by the locomotive-like legal power of a shrinkwrap EULA – with all the legal safeguards of the U.S. financial system.
I don’t think the economist really thinks that game gold is “no less real” than the U.S. dollar. I just thought it crazy that they’d put it in a story as hyperbolic fluff. I should probably have written what I meant instead of a one-liner about how dumb the economist was, but hey, I didn’t expect to be taken seriously.
As real as–not as stable as, or as valuable as.
The US dollar is exactly as real as the Argentine peso. (But one of them might be a better choice to keep your savings in.)
What exactly is backing the US dollar? Nothing tangible at all… so what? Just the word of the US government? Ok, fine, but what is that worth in Mexico? For that matter, what is the Mexican government’s word worth in the US? Is the Mexican Peso not a currency?
What exactly is backing the US dollar?[/quote]
Nothing tangible. But there are laws for the dollar, as with other currencies, concerning the proper and legal exchange of goods and services for legal tender. Customs laws, currency exchange laws, the currency act all sit behind our arbitrarily and otherwise meaningless “real currency.” Fraud laws specify what currency is, and online cash systems are explicitly are not it. You’re unlikely to get anywhere trying to sue PayPal, or Blizzard, for your “money” if they decide the remove your access to it. The best you might get is, say, an order to change how they do business, a la the class action filed against PayPal in 2002 when they started dancing around calling themselves a bank.
There’s also the legal traditions and history behind the dollar, which is, I admit, not a logical defense, but you take in stuff like the controversy over the US Aldrich-Vreeland Act, which let banks issue temporary currency and established the National Monetary Commission, and that controversy still informs how “real currency” came to be understood, even if it is an arbitrary way of looking at it.
None of these actual laws and none of these vague traditions support WoW gold. Nothing stands behind my MMORPG money apart from its transient exchange value on ebay and the EULA that came with the video game. The only thing I can imagine covering it is the Electronic Funds Tranfer Act, which covers tokens used to represent wire transfers, (which is what PayPal is, legally, and which I am arguing MMORPG money is if you use it outside the virtual realm, to buy goods and services or exchange for other currencies.)
Nothing tangible at all… so what? Just the word of the US government? Ok, fine, but what is that worth in Mexico? For that matter, what is the Mexican government’s word worth in the US? Is the Mexican Peso not a currency?
Of course. I was wrong to infer that currency isn’t real if not backed by tangible assets, when I listed that as a reason to not consider game gold as a currency. However, I wouldn’t assume that there is no effective international cooperation when it comes to currency controls and exchanges. There is established international practice and law, but I don’t know much about it. All I want to argue is that if someone says game gold is “no less real” than minted currencies, they’re taking journalistic glibness too far and are just plain wrong.
Yes, but you’ll never see an auction on eBay for a hotel on Park Promenade. It’s this “meta-game” phenomenon of virtual currencies/items being traded and given real world value that gets the attention of economists and writers for mags like The Economist.
As probably everyone is aware, Edward Castronova – an Associate Professor of Economics at California State University – wrote an article called Virtual Worlds: A First-Hand Account of Market and Society on the Cyberian Frontier that analyzed on-line auctions of Ultima Online items and characters for real-world dollars, and discovered that Norrath had a per capita GDP of $2,266, making it equivalent to the 77th richest real-world country.
This number was later reduced to $390 by others, who noted that Castronova used a figures based on the average number of simultaneous players, not total population. But it remains an interesting number in terms of virtual to real-world currency exchange rates.
That was an interesting paper – reading it was what got me interested in the subject to begin with. It’s was actually about EverQuest. Interesting here might be Sony’s response to the paper, which went something like so: “The game gold is our property, not the players’, and any attempts to use it in any sense whatsoever outside the game is a violation or our IP and theft.”
I know what you’re all getting at. It looks like a duck, it quacks like a duck, so it is a duck. Maybe it is. But all that arbitrary currency-defining crap is there for a reason, even if it boils down to which arbitrary currencies mean anything when you need the law to arbitrarily back up your economic activity.
Bah, my bad.