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Edward Castronova and the Economics of Games
Tuesday, 20 July 2010 11:35
Written by Meredith Woo
(4 votes, average 5.00 out of 5)

MMORPGManymenonlineroleplayinggirls

 Living dual lives – yes, this counts too
Source: MotivatedPhotos.com

So you've been gaming since you're 5 years-old, or you hit that gaming rig 10 hours a day... but you may know next to nothing about the cutting edge of games research and development. In the next few weeks, IAHGames.com brings you the most tumultuous achievements and the most prolific people who make games better, and use games to improve our lives.

We start by match-making games and... economics. NO RLY?? More after the click...

Ever feel you live dual lives? Firstly, there’s your usual mundane human life which involves well, actually, you can’t remember any of it now. That’s because right now you’re living THE life: swinging your +10 Sword of Invincibility at unsuspecting level 999 mobs, selling your 1337 wares on the market and reaping a decent wage (in game currency) in addition to hawking your much sought-after crafting skills.

Now, you can go a step further and swap some of that cool game cash for cold, hard Real World currency (they have sweatshops in China that actually do this!) or you can write an entire study based on your experiences in a game of your choice, analyse the economy and even the socio-political structures that govern that world.

CHH_Ring_Castronova

Here’s Prof. Castronova as seen in the virtual world
Source:
BÜRO X Media Lab / Campus Hamburg

That’s exactly what Professor Edward Castronova did, after he started playing EverQuest some time back in April 2001. The economics PhD holder naturally stumbled upon something nearly a decade ago that has become commonplace in the modern culture of gaming – the bustling economy that exists within the game.

The professor did not stop there. He analysed the exchange rate of EverQuest’s currency as compared with the US dollar though online auctions. This he combined with the amount of platinum pieces the players could farm in a year to find out how wealthy EverQuest’s economy was. For you budding economists out there, he found the Gross Domestic Product (GDP) of EverQuest to be on par with the Southern African nation of Namibia.

 LOLcatMoney

EverQuest was richer than 76 real world countries back in December 2001
Source: Lol Cats Fan Club – Toon Platoon!

In the groundbreaking report he published online about EverQuest’s economy, his results created a stir that started with the excited EverQuest fanbase and quickly exploded out to envelop fellow academics and even the media. With his PDF in hand, Prof. Castronova was talent-scouted by the Department of Telecommunications at Indiana University Bloomington where he could live out every avid gamer’s wet dream – to eat, sleep, work, live and play games.

 castronova

And now, Prof. Castronova as seen in the real world
Source: Indiana University Bloomington

As part of his work, he set up a joint blog that dishes up fun yet serious blog posts on game research. Check out his latest post on Plants Versus Zombies. To date, he has about 18 reports available online that touch on topics that analyse game avatars, gender, policies that govern our favourite fantasy hideouts and even results of a random survey which was conducted entirely within the virtual world.

Prof. Castronova has also gone on to publish two books: Synthetic Worlds: The Business and Culture of Online Games (2005) and Exodus to the Virtual World: How Online Fun Is Changing Reality (2005). His other projects include the development of two games, Arden and Greenland, and the research of game production and design. He is also the Director of the Synthetic Worlds Initiative at Indiana University Bloomington.

 insanerubixcube 

Even. More. Mind. Boggling. Than. This.
Source: Elder Cannon on Live Journal

His body of work on virtual worlds is indeed mind-boggling, and I guarantee you won’t ever see games or online worlds the same way again. The next time you’re haggling for the best prices in the auction house, interacting with your guild mates, choosing an avatar or even reporting to the quest-giver, consider the invisible forces that resemble real world life too, too much.

Except, according to Prof. Castronova, it’s like a “Petri Dish Approach to Social Science”.

 mariopetridish 

Mario. 100% grown and cultivated in said Petri dish.
Source: NewScientist

 

Comments  

 
+1 #1 2010-07-22 10:28
anyone ever measured the economy of wow? Bet its better than the US now!
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