Banking and Finance

Banking and Finance  » Real life dollars buy virtual game money?

Real life dollars buy virtual game money?

Will people pay real dollars for in-game virtual money to help

their virtual characters buy in-game goods?

One gamer, who goes by the screen name Haylo, said he spent $10

to $20 real dollars a month on in-game platinum(all nonexistent,

of course) to buy weapons and other goods in Dark Age of Camelot

(DAOC), but would spend more if he could afford it.

Most video games have some form of currency. In many ways, the

in-game economy is similar to a real world economy - goods and

services are traded to mutual advantage and are mediated in

currency (platinum, gold, credit,etc.). "With all the things you

can buy in game," a gamer said, "it's hard not to want them,

just like real-life stuff."

The average Massively Multiplayer Online Role Playing

Game(MMORPG) player is 27-year-old -- a demographic drooled over

by marketers. Plus, nearly half of all players have jobs, which

often means they have more money than time and are the perfect

consumers of virtual assets. On the Internet, many gamers now

buy virtual money that only exist as data files stored in a

server run by a game company with real-world dollars, and the

buying and selling of virtual currencies may be off most

people's radar, but it is truly big business.

An online broker, who goes by the screen name Rolala, was not a

fan of online games until his 15-year-old son became interested

in Final

Fantasy XI. He then noticed that a large number of gils

which are the currencies used in FFXI were for sale on eBay.

"I started hearing about players leaving the game who were

selling their assets at cheap prices," he said, "so I figured,

buy low, sell high."

But Rolala found his moneymaking options in FFXI "very limited".

He switched to World

of Warcraft. There, he has leveraged his real-life

experience into an online business. He converts his game profits

into real money on sites like "eBay" and "buy wow gold" ,etc.

Earnings can be considerable. He said he was on track to earn

about $120,000 in real money in his first year in this

business.

Rolala's business is just one example of how increasingly

popular online role-playing games have created a shadow economy

in which the lines between the real world and the virtual world

are getting blurred.

"World of Warcraft", the world's largest MMORPG, boasts more

than 1 million paying users in North America.There are many

sites like wow gold free

strategics and world of warcraft

gold guide , teaching gamers how to earn wow gold in game

for free, however many players are still willing to buy gold and

weapons to help their virtual characters get a higher virtual

status more rapidly. Some virtual goods in World of Warcraft

have been sold for thousands of dollars. It obviously creates a

large real world market. 

Edward Castronova, an economics professor at Indiana University

who has written a book on the subject, calculated that if you

took the real dollars spent within "EverQuest "as an index, its

game world, called Norrath, would be the 77th richest nation on

the planet, while annual player earnings surpass those of

citizens of Bulgaria, India or China.

Go to GameUSD, an exchange-rate calculator for the virtual

worlds, and do a search for the latest rates of virtual

currencies against the U.S. dollar, and let your jaw drop open.

The rates of some virtual world currencies are even better than

that of the Iraqi Dinar! For instance, here is the recent

exchange rate of several popular virtual currencies: Everquest

Plat ($0.54/1K), EQ2 Gold

($0.17/gold), WOW Gold ( World of Warcraft Gold )

($0.098/gold), SWG Credit

($4.40/1M), Lineage 2

adena ($2.80/1M), Guild Wars

Gold ($0.12/1K), FFXI Gil

($17.89/1M), etc.

Right now, this business is one of the most hotly debated issues

on the internet. Many game companies such as Blizzard who run

World of Warcraft discourage profit from in-game properties,

though none have found a way to stop it.

Sony Online

Entertainment, on the other hand, encourages the practice

(albeit within the confines of their own "Station Exchange",

their own forum for the sale of in-game properties). It recently

announced the first month's figures from "Station Exchange".

According to SOE, over 45,000 characters from "EverQuest 2" have

been active on the exchange and have spent over $180,000 USD in

one month, half of which have been spent on in-game gold and

platinum.

Despite of different attitudes towards virtual currency trade,

Today's Popular Articles

• Financial Alchemy: How To Be a Money Maker & Manager

• When borrowing money is profitable

the number of people who are getting into such business is

rising, and the size of market has been expanding very

rapidly.The market also creates a competitive environment. We

could refer to sites like wow gold price comparison

, a price comparison site, to see the fierce price competition

between different exchange sites.

For some ordinary gamers, however, such a capitalist approach

spoils the experience. Nick Yee, a psychology researcher from

Stanford University, believes many players dislike virtual

currency traders because, by using real wealth to buy virtual

power, "they're breaking the fantasy-reality bubble, getting an

advantage in a way that other players can't".

According to a recent survey by IGN, an internet media focused on

the videogame markets, most gamers say they dislike and avoid

this business, believing that it gives players with more

discretionary income an unfair advantage.

But such attitudes are called into question by size estimates

for the virtual asset trading market, which is seen having a

value of $200 million to nearly $900 million in 2005.

One potential explanation for the disconnection between

attitudes and money spent may be that gamers are unwilling to

admit they use the services, IGN said.

In terms of the law's concern, another issue is, who owns the

virtual money? Many virtual world designers maintain that

anything created in the world belong to the company. They refuse

to recognise the rights of their players in the virtual property

for fear of attracting liability for its maintenance or

security.

But will this work in the long term? Players spend considerable

time and/or money acquiring such assets. In many cases they are

the creation of the player and even the intellectual property

ownership is questionable. "As we spend more time in these

worlds, it's not enough for companies to say that 'we own

everything and we can turn it off at any time,'" said a gamer.

"The question may soon be should we have recourse against a game

company for obliterating virtual assets?"

With the rapid growth of virtual currency exchange market,

should people accord virtual property the same protection as

property in the real world?

About the author:

Steven Golden have conducted research into Virtual Game Economy

for several years.You can read his recent articles at:

http://groups.msn.com/virtualeconomy