Monday, August 29, 2005


Economics is a fascinating study for me, and with the birth of massively multiplayer games, economics becomes both more fascinating and easier to study.

Here is a post about SecondLife's recent charity walk, which raised several thousand dollars for cancer research.

I'm fuzzy on how the whole thing worked, but I guarantee that a good chunk of that cold, hard, American cash was from Linden dollar donations.

Several THOUSAND US dollars worth of FAKE MONEY. Made in ONE DAY, although I'm sure the set-up took months.

You want to tell me this stuff is a game? SecondLife is one of the smallest successful MMORPGs out there, and that drive rivals many real-world organized drives.

To some extent, this doesn't scale the same way a real-world drive does. A virtual world connects its inhabitants differently than the real world does, and it may be that such a world can only support a fraction of the number of drives that the real world can with the same population. So, it might be easier to raise funds once, but harder to raise funds twice.

Another difficulty is that you're selling in-world cash for out-of-world cash.

I love real-money transactions in games: buying fake money or characters. I think it's a fabulous thing. I also think games should rely less on "power gained by spending unending hours", which is really the only thing which makes those transactions "bad" in the eyes of the players.

But the fact of the matter is, NO GOODS ARE CHANGING ECONOMIES. There is no cross-economic trade. This isn't like importing cars. Nothing from the Linden economy reaches the US economy, and nothing from the US economy reaches the Linden economy. Every player lives seperate economic lives. Therefore, the economy is no stronger than it was, because no actual "trade" took place.

Or is it?

Although the economy has had nothing imported, it has rewarded players for their drive. This, in turn, will make them more likely to do this sort of thing again. Because the players exist in both economies, a reward in either one (weighted, of course) will please the player. Although the game world is not enhanced, it is in a stronger position.

Also, Linden Labs is unique because they BUY AND SELL CASH. They aren't the primary buyer and seller, but they set a core level of actual exchange between the real world and the fake world. The actual cash barons, buying and selling Linden dollars, they are effectively performing the same kind of "actual exchange" by removing cash from the system and keeping it out of the system until they receive real money. Functionally, this means they translate real dollars into fake dollars and visa versa at a marginally stable rate of exchange.

Still, we're just talking MONEY. Again, we're not talking importing cars. The actual economy isn't directly made stronger or weaker by the movement of cash. It might be excited, but not actually made stronger.

In order to make an economy stronger, you have to increase the wealth of the economy. The "worth" of an economy's standard of trade is largely based on the relative wealth of the economies. That's why Linden dollars are pennies ($3.50 per 1000 L$). There's no strength to the SecondLife economy.

Sure, the living standards are high, but it has no exports or imports save for tourism capital.

How would you connect a virtual world economy to real world economies? How can you export something into the real world, or import something from the real world? Something more substantial than cash.

I'm thinking... but I haven't come up with anything solid, yet. I'm open to suggestions.

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