CONCLUSION

This chapter has reviewed the history and development of virtual economies, as well as the small subfield of economic research that has grown up around them. Virtual economies have existed in various video games since the late 1970s, but they grew in size and scope substantially, beginning with the 1997 release of the MMO Ultima Online.

This system is susceptible to interference from the real-money trade, where players trade real money in exchange for virtual assets. In extreme cases, this can lead to virtual economic collapse or hyperinflation. Much of the last five years of development in virtual worlds and games that have virtual economies has been spent trying to find ways to get RMT under control so that revenues from it are directed back to the virtual world operator. Many different strategies have been deployed to combat RMT, and the free-to- play revenue model is probably the most important development that resulted from the phenomenon.

The academic interest in virtual economies began with the recognition that, under certain conditions, the worlds could be used to perform policy experiments that would be either unethical or too expensive to run in the real world. Though there have been some developments in this area, most research is retrospective in nature, and deals with the effect that a game’s structure has on the value of RMT in the secondary market.

The exigencies of virtual economies are perhaps obscure issues, but we are reticent to dismiss them out of hand because virtual worlds contain a substantial and increasing amount of economic value.

NOTES

1. In 2012, some 251 million people on Facebook played games on that platform, including free-to-play games with virtual economies. See ‘1/4 of Facebook users play games, up 11% to 251m this year as it fights spam and genres diversify’, TC, 25 October, accessed 18 June 2014 at http://techcrunch.com/2012/10/25/ facebook-games/.

2. That is, characters controlled by the computer that the player interacts with using his or her ‘player character’.

3. Much of our knowledge about this issue comes from reports by industry insiders. For an example see Koster (2007).

4. Actually, the developers of UO had originally established a much more intricate game economy that recy­cled currency and materials. That this system was an abject failure is a very interesting story in itself, and readers are encouraged to see Simpson (2000) for details.

5. Readers interested in a much more in-depth discussion of early RMT may wish to read Dibbell (2007).

6. These stipulations remain in all modern EULAs. See, for example, http://us.blizzard.com/en-us/company/ legal/wow_eula.html (accessed 18 June 2014), which is the EULA for Blizzard-Activision’s World of Warcraft: ‘All title, ownership rights and intellectual property rights in and to the Game and all copies thereof (including without limitation any titles, computer code, themes, objects, characters, character names, stories, dialog, catch phrases, locations, concepts, artwork, character inventories, structural or land­scape designs, animations, sounds, musical compositions and recordings, audio-visual effects, storylines, character likenesses, methods of operation, moral rights, and any related documentation) are owned or licensed by Blizzard’ (emphasis added).

7. See ‘The grey economy: MMOs, RMT and credit card fraud’, accessed 18 June 2014 at http://www. mmorpg.com/blogs/UnSub/022008/1233_The-Grey-Economy-MMOs-RMT-and-Credit-Card-Fraud.

8. We are also ignoring the options game operators have to change other mechanics of the game to balance the RMT problem. For example, making the game easier to play could reduce demand for RMT, but it will also affect how attractive the game is to current and prospective players.

9. See ‘The evolution of Habbo Hotel’s virtual economy’, accessed 18 June 2014 at http://sulka.net/2010/03/ the-evolution-of-habbo-hotels-virtual-economy/.

10. See https://secure.eveonline.com/plex/, accessed 18 June 2014, for more information.

11. See ‘Global games market report infographics 2013’, accessed 18 June 2014 at http://www.newzoo.com/ infographics/global-games-market-report-infographics/.

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