Games and role-playing are as ancient as Mankind. Rome's state-sponsored
lethal public games may have accounted for up to one fifth of its GDP. They
often lasted for months. Historical re-enactments, sports events, chess -
are all manifestations of Man's insatiable desire to be someone else,
somewhere else - and to learn from the experience.
Last week, Jeff Harrow, in his influential and eponymous "Harrow Technology
Report", analyzed the economics of Massively Multiplayer Online Role Playing
Games (MMORPG). These are 3-D games which take place in comprehensively and
minutely constructed environments - a medieval kingdom being the favorite.
"Gamers" use action figures known as avatars to represent themselves. These
animated figurines walk, talk, emote, and are surprisingly versatile.
Harrow quoted this passage from Internetnews.com regarding Sony's (actually,
Verant's) "EverQuest". It is a massive MMORPG with almost half a million
users - each paying c. $13 a month:
"(Norrath, EverQuest's ersatz world is) ... the 77th largest economy in the
[real] world! [It] has a gross national product per capita of $2,266, making
its economy larger than either the Chinese or Indian economy and roughly
comparable to Russia's economy".
In his above quoted paper, "Virtual Worlds: A First-Hand Account of Market
and Society on the Cyberian Frontier", Professor Edward Castronova, from
California State University at Fullerton, notes that:
"The nominal hourly wage (in Norrath) is about USD 3.42 per hour, and the
labors of the people produce a GNP per capita somewhere between that of
Russia and Bulgaria. A unit of Norrath's currency is traded on exchange mark
ets at USD 0.0107, higher than the Yen and the Lira. The economy is
characterized by extreme inequality, yet life there is quite attractive to
Players - in contravention of the game's rules - also trade in EverQuest
paraphernalia and characters offline. The online auction Web site, eBay, is
flooded with them and people pay real money - sometimes up to a thousand
dollars - for avatars and their possessions. Auxiliary and surrogate
industries sprang around EverQuest and its ilk. There are, for instance,
"macroing" programs that emulate the actions of a real-life player - a
Nor is EverQuest the largest. The Korean MMORPG "Lineage" boasts a
staggering 2.5 million subscribers.
The economies of these immersive faux realms suffer from very real woes,
though. In its May 28 issue, "The New Yorker" recounted the story of
Britannia, one of the nether kingdoms of the Internet:
"The kingdom, which is stuck somewhere between the sixth and the twelfth
centuries, has a single unit of currency, a gold piece that looks a little
like a biscuit. A network of servers is supposed to keep track of all the
gold, just as it keeps track of everything else on the island, but in late
1997 bands of counterfeiters found a bug that allowed them to reproduce gold
pieces more or less at will.
The fantastic wealth they produced for themselves was, of course, entirely
imaginary, and yet it led, in textbook fashion, to hyperinflation. At the
worst point in the crisis, Britannia's monetary system virtually collapsed,
and players all over the kingdom were reduced to bartering."
Britannia - run by Ultima Online - has 250,000 "denizens", each charged c.
$10 a month. An average Britannian spends 13 hours a week in the simulated
demesne. For many, this constitutes their main social interaction.
Psychologists warn against the addictive qualities of this recreation.
Others regard these diversions as colossal - though inadvertent - social
experiments. If so, they bode ill - they are all infested with virtual
crime, counterfeiting, hoarding, xenophobia, racism, and all manner of
Subscriptions are not the only mode of payment. Early multi-user dungeons
(MUD) - another type of MMORPG - used to charge by the hour. Some users were
said to run bills of hundreds of dollars a month.
MMORPG's require massive upfront investments - so hitherto, they constitute
a tiny fraction of the booming video and PC gaming businesses. With combined
annual revenues of c. $9 billion, these trades are 10 percent bigger than
the film industry - and half as lucrative as the home video market. They are
fast closing on music retail sales.
As games become graphically-lavish and more interactive, their popularity
will increase. Offline and online single-player and multi-player video
gaming may be converging. Both Sony and Microsoft intend to Internet-enable
their game consoles later this year. The currently clandestine universe of
geeks and eccentrics - online, multi-player, games - may yet become a mass
Moreover, MMORPG can be greatly enhanced - and expensive downtime greatly
reduced - with distributed computing - the sharing of idle resources
worldwide to perform calculations within ad hoc self-assembling computer
networks. Such collaboration forms the core of, arguably, the new
architecture of the Internet known as "The Grid". Companies such as IBM and
Butterfly are already developing the requisite technologies.
According to an IBM-Butterfly press release:
"The Butterfly Grid T could enable online video game providers to support a
massive number of players (a few millions) (simultaneously) within the same
game by allocating computing resources to the most populated areas and most
The differences between video games and other forms of entertainment may be
eroding. Hollywood films are actually a form of MMORPG's - simultaneously
watched by thousands worldwide. Video games are interactive - while movies
are passive but even this distinction may fall prey to Web films and
As real-life actors and pop idols are - ever so gradually - replaced by
electronic avatars, video games will come to occupy the driver seat in a
host of hitherto disparate industries. Movies may first be released as video
games - rather than conversely. Original music written for the games will be
published as "sound tracks".
Gamers will move seamlessly from their PDA to their PC, to their home cinema
system, and back to their Interactive TV. Game consoles - already
computational marvels - may finally succeed where PC's failed: to transform
the face of entertainment.
Jeff Harrow aptly concludes:
" ... History teaches me that games tend to drive the mass adoption of
technologies that then become commonplace and find their way into
"business." Examples include color monitors, higher-resolution and
hardware-accelerated graphics, sound cards, and more. And in the case of
these MMORPG games, I believe that they will eventually morph into effective
virtual business venues for meetings, trade shows, and more. Don't ignore
what's behind (and ahead for) these "games," just because they're games..."
About the Author
Sam Vaknin is the author of Malignant Self Love - Narcissism Revisited
and After the Rain - How the West Lost the East.
Until recently, he served as the Economic Advisor to the Government of
Visit Sam's Web site at samvak.tripod.com.