The Economist on video games

Bah, my bad.[/quote]

There’s a Penny Arcade strip waiting to be written in all this, somewhere :)

A currency was still a currency before international laws were created to define what is an acceptable currency for use in international trades. If the world disolved and we were left to trade only using shells and beads for currency, they’d still be currency even without written laws to support their worth.

Currency is defined by the guns of the people printing it, if you ask me.

This is one of those rare occasions that Jason and I are in 100% agreement. Well said, sir.

So if necessary, Blizzard can create an arbitrarily high number of epic guns to secure their gold.

That’s pretty explicit. Far be it from me to talk down to the Economist about economics, but puh-leeze.
[/quote]

I’m pretty sure The Economist has a fine understanding of economics. Maybe they simply meant that it’s real in the sense that people subjectively value them just like conventional money in bank accounts, regardless of legal status?

Seems to me like you’re overthinking their choice of words, but perhaps you were just looking to stir up a discussion on the subject? :twisted:

Hey, no-one was replying to my wonderful topic! ;-)

You went from

to “they might have been a bit glib”.

And that remark about “you should really think twice” from Lizard is just unnecessary.

Were your feelings hurt? I’m sorry if that’s the case, but I was really surprised to see you be so condescending towards one of my favourite rags, e-version or not. The print Economist even came out of its traditionally stodgier fortes a few issues back and published an indepth dissection of the violence in gaming controversy, eventually concluding with thoughts very much in line with my own and what I would see as, for instance, the Qt3 position if such a thing could be presumed.

Generally speaking, I find their now unconventional approach of using solid economics to take apart many world issues a refreshing view of things.

More power to you for sparking the conversation you probably sought. But if you start off throwing stones expect a few to get chucked back.

to “they might have been a bit glib”.

And that remark about “you should really think twice” from Lizard is just unnecessary.

Were your feelings hurt? I’m sorry if that’s the case, but I was really surprised to see you be so condescending towards one of my favourite rags, e-version or not. The print Economist even came out of its traditionally stodgier fortes a few issues back and published an indepth dissection of the violence in gaming controversy, eventually concluding with thoughts very much in line with my own and what I would see as, for instance, the Qt3 position if such a thing could be presumed.

Generally speaking, I find their now unconventional approach of using solid economics to take apart many world issues a refreshing view of things.

More power to you for sparking the conversation you probably sought. But if you start off throwing stones expect a few to get chucked back.[/quote]

Not upset at all. I just wanted you to elaborate.

It’s only reasonable that the Economist takes an interest. There’s an enormous amount of real money being paid for stuff that exists only in games: the $25k sale of an island in Second Life (And its current appraisal at 100k, IIRC!) is just one example.

I think it’s time for someone who knows their economics to write an article about how, on how the “money” – and goods – in video games is a very dangerous and intangible form of property for the bearer, who may not even own their virtual possessions in any legal sense, even as they buy and sell them for real-world profit, etc. But which, on the other hand, can quack so much like a duck it becomes unreasonable to consider it anything but a legitimate currency.

I would like to read such an article, but I don’t have the authoritay to write one. I might, however, like to write a short story about a virtual land speculator who sues an MMORPG operator for his assets after they close shop and finds a bit more than he is looking for.

Or maybe, a virtual syndicate operating in a virtual realm that makes an amazing takeover bid for a major South Korean bank, because most of the shareholders play and will accept game gold.

All currency is based on a gamble; those 20$ US bills are completely worthless in and of themselves. At some reductionist/fundamental level all that matters is having some plot of land for a farm or mine.

The biggest difference is volatility. The US economy might well tank in the near future but it will require the combination of several different disasterous events which require thousands if not millions of people’s involvements. And even if it were to tank, the dollar might depreciate to near nothing - but probably not nothing. But most of all, world economies are collections of individuals with, at some point, tangible goods and services and there is a great deal of self interested support that helps real economies ‘virtual’ paper money retain some value.

The biggest problems with ‘virtual’ economies in comparision to real economies are
a) barriers to entry (the subscription fee)
b) liquidity and volatility of assests
c) absolute control over economy by publishers
d) open or incomplete economy (ie, if everyone playing WoW quit work in real life and played it full time, the economy would collapse because no one could afford the subscription fees).

I think a better historical analogy would be the Dutch tulip trade in the 17th century. Tulips are, like MMORPG money, valueless in and of themselves, but if the market sustains their price they can become a “real” commodity market for some time. But just as the tulip market crashed, there will at some point be a ‘virtual’ crash when players leave and the game ceases to make money for the publisher. For a Blizzard game, this might take 10 years, but it’s inevitable.

IIRC, a few months ago The Economist published an excellent article on airlines’ frequent flyer miles which they noted behaves in many ways like “real money” in the sense that they are in theory at least redeemable for real goods and services. The results of their investigation was that the volume of issued frequent flyer miles is so great that the airlines issuing them could not possible redeem as promised and indeed the airlines will need to rely on the fine print of their agreements to dodge out of honoring them.

It’s a diferent issue than MMORPG money of course, but there are enough parallels in my opinion that looking that up might make for an illuminating read.

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]
You would be surprised at how much acutal Economists critisize magazines like the Economist and Businessweek etc.

Many of them would beg to differ with the claim of 'anylizing the real-world with solid economics"