How Game Economies Mirror Real Economies
The parallels between games and real-world systems have always been an area of fascination for gamers. Within a society, virtual or otherwise, an economy will inevitably form if there is a productive output and a means to trade. MMOs, specifically Massively Multiplayer Online Role-playing Games (MMORPG), are games which most frequently contain virtual economic systems. In these systems, users can exchange virtual assets.
An economic model within a game can have either a closed or open currency system. In the case of a closed system, the value of in-game currency is set. In an open system, the currency fluctuates relative to a market exchange rate. The economic model of a game depends on its genre, but a true “virtual economy” — an economic model with an open currency system — exists almost primarily in MMORPGs.
Game developers enter into dangerous territory once they attempt to infuse real money transactions (RMTs) into functioning virtual economies — Blizzard’s Diablo III auction house serves as a reminder to the possibilities of what can go awry in a game economy when real world money is involved. Rather than trying to spend additional hours and resources into stopping and investigating players making money on virtual items, Blizzard created an auction house in Diablo III which removed third party RMT websites from the picture while also giving them a cut of the profit. Developers sought to combat the multiple dangers of when real money and virtual assets (particularly non-cosmetic goods) in a virtual economy are involved.
CCP’s EVE Online is an often referenced example of a MMO with a thriving game economy. One may argue that the game is easily the most impressive of its genre for its beautifully complex economic system and player control over production and markets. In an open-ended economic system like EVE’s, new and potentially dangerous economic ideas can be safely tested in virtual space. Games with virtual economic simulations like EVE’s chip away at the boundary between the real and virtual world and teach us more about the fundamentals of real world systems. Despite the brilliantly designed economy of the game, EVE Online has never caught on amongst gamers. Due to large and powerful alliances reigning supreme and advanced players ganking newcomers, newbros are pushed down the New Eden hierarchical ladder.
The player base of old generation MMO games like EVE Online and World of Warcraft is mostly composed of veteran players while new game releases for the MMO genre have been stagnant in recent years. Even though there are still millions of players globally that are currently enjoying MMOs, with patches and expansions for older games like WoW, many doomsayers are skeptical of the genre’s pulse — are MMOs dying, or already dead? Some suggest that the technology of blockchain has the potential to influence the future of MMOs and the economies within them.
When dealing with microtransactions in games, you pay for items that "belong" to you and are transferred to some sort of inventory for you, but you don't actually own what you paid in-game or real currency for. Instead, your purchases are payment to access those "items" from the game company. Blockchain is a digital ledger, a kind of technology that records and traces data and player transactions which allows players to take ownership of digital assets. The idea of this is especially lucrative in games built on the value of currency, resources, and the robustness of an economy. While blockchain technology is still in it’s very, very early stages, and will likely not see it’s limelight in the games industry for the next several years, the idea behind digital asset ownership opens up many doors to discussion.
When game developers and economists work to build virtual economies for their users to interact and collaborate in, they are inadvertently creating a purchase experience as a game. Factor in blockchain technology, and the entire purchasing and owning experience has the potential to become something that is retentive, exciting, and another way for players to form social connections as stakeholders in MMORPG games they love.
A more radical games futurist might argue that blockchain technology could fundamentally redefine the concept of ownership several decades from now. It’s not that difficult to imagine a society in which automation has taken over and only the most specialized of humans are performing. Players may no longer accept the non-ownership of their digital assets, solely because those assets are now no different from resources in today’s economy— they have actual value and can be exchanged. Games with economic models sustained by blockchain could be an escape from modern economies, giving a sense of interconnectedness and purpose to players who are participating in the virtual economy.