David Speidel - Essay #3 - Economics of the Gaming World

Economics of the Gaming World

            While online games continue to grow and spread, players find more and more ways with which to experience them.  In many of these interactive games, users build characters that grow and develop with the worlds they live in growing internet economies.  While these worlds are virtual economies and not real, they have the ability to transfer over as players buy and sell in game possessions for real life money.  As the use of real money affects these games, many players in other countries, in particular China, use this to augment their yearly income in the real world.
             The transfer of real life funds for gaming purposes has continued to grow towards extreme levels.  As people continue to play these games at higher and higher rates worldwide, the desire to trade with others has become more apparent.  While playing a game their may be an item: a house, weapon, clothes, or a character itself; which someone else is interested in having.  In some of these games this trade is regulated through the game, and some frown upon it.  As such people will sell characters over internet sites such as EBay or websites designed specifically for the sale of virtual things.  In large games where this transfer is frowned upon such as World of Warcraft or Everquest 2, characters can regularly sell anywhere from $300 to over $1000.  As such, this is a sum of money that can have a strong effect on real income.  
             Perhaps the strongest influence of real life money is in the world of Second Life.  This world not only promotes spending real life money, it is an integral part of the game itself.  People design and create items that they sell to others for virtual money that is bought with money from the real world.  In the last day alone, as of this essay, there were over $1.6 Million worth of transactions.  A small number of these players, roughly 140, are now making over $5000 a month just from selling items in this game to others. (Linden Research Inc., 2007) A huge portion of real life income that could sustain a person in the United States let alone a poorer nation.
              As this phenomenon continues to grow, it can undoubtedly have an effect in a nation such as China.  Their communist government continues to liberalize their stances on capitalism and has not been seen to regulate the income people can build online.  The limitations are, of course, that those people must have the ability to access these games in the first place, which as seen by internet use in my previous article, is not a huge number as of yet.  China still has over 200 million people in poverty just in rural areas alone (Khan, 1998, p. 12).  The income that is evident from these games, even on a small scale, can have a huge impact on these people?s lives.  As stated by Hardt and Negri, goods and money ??move with increasing ease across national boundaries; hence the nation-state has less and less power to regulate these flows and impose its authority over the economy? (2000).  These movements continue to affect these people and can have real influence on the world we live in.
              As the spread of real world economy is evident in these games, their influences on players real lives have grown and could be used to affect poorer nations.  Of course it is difficult to see exactly how other cultures will treat this phenomenon, like Tomlinson said, based on their dependency on capitalism (Tomlinson, 2003).  While it is hard to place exactly how many players actually use these incomes as their sole incomes, it is a strong possibility in a game such as Second Life.  This trend has shown little signs of slowing and will more than likely continue to grow as more virtual communities are created and more people worldwide have access to them.  Perhaps in the future we may see governments regulate or tax this income but, for now, it is a free market with very little limitations for the world.

References:

Hardt, Michael, and Negri, Antonio (2000). ?Preface? (pp.xi-xvii) and Part I (pp. 1-66), Empire. Cambridge, MA, and London, England: Harvard University Press.

Khan, A.R., 1998, ?Poverty in China in the Period of Globalization. New Evidence on Trend and Pattern?, Issues in Development Discussion Paper No.22, ILO: Geneva.

Linden Research Inc., (2007, June 7). Economic Statistics. Retrieved June 7, 2007, from Second Life Web site: http://secondlife.com/whatis/economy_stats.php

Tomlinson, J. (2003). Media imperialism. In L. Parks and S. Kumar (Eds.), Planet TV: A global television reader. Pp. 113-134. New York and London: New York University Press.

Posted at 12:32PM Jun 08, 2007 by SPEIDEL, DAVID in General  |  Comments[3]