Sunday, January 6, 2008

Online Games Economy - Part 1

Players of online games, especially the MMORPG types, would recognise that there is some form of economy among players. While there could some non-player characters in the game which act as shopkeepers, there is still some form of trade among players for the simple reason that each player could possess items of sort that are more valuable to other players. trade may also take the form of service, where a player performs some action in exchange for gold, items or other services.

Such trade among could be done via facilitation, example, an auction house in the World of Warcraft, or via provision of a market place, e.g. the Free Market in Maplestory where players could set up their own shop. More basic function of a trade among player would be the offer of trade goods that are announced to other players, e.g. the marketplace function of Travian (browser game). Travian picture shown below.

The interesting thing about such in-game trade is that it is almost like a free economy, where the price of an item / service fluctuates wildly in response to supply and demand. Weekend prices of items in the game of World of Warcraft could vary significantly from the weekday prices. This resulted in people doing arbitrage, i.e. buying of the items when the price is low, for re-sale at other times. Picture of the WoW auction house shown below. Third-party software like Auctioneer could be used to track the prices and calculate profitability.

For games like Maplestory, the player could set up a 'shop' in the Free market and use a bot to help sell its items. This requires real cash to buy the 'shop permit' from the game company. Picture of the Maplestory free market shown below.

The fact that players need to spend time to collect items / golds that are for use in the game spawn a new industry / gaming support service where players could spend real life money to buy in-game items, gold or other services (including player characters). One such website / company that is pretty well-known is the IGE.

Whether these trades are allowed or encouraged depends on the game company and the players. Would blog more about it soon.

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