People want economy and they will pay any price to get it.
— Lee Iacocca, New York Times, October 13, 1974 edition.

While Iacocca was obviously making a tongue-in-cheek reference about economy in the sense of cost-efficiency, the quote has a sideways application to persistent world gaming; we’re still looking for a working in-game economy and we’d probably pay a hefty price to have one that did work as advertised.

Much has been made in the press and on fan sites of the economies found in – and out – of persistent world games. Most of the press attention has been given to the out-of-game economies, as typified by auction site sales of game characters and inventory items, probably because the exchange of real money makes more sense to most people than the exchange of reagents, platinum or broadswords. Earlier this year, Edward Castronova, an associate professor of economics at California State University at Fullerton, looked at eBay and other auction site sales derived from one game and made the claim in a research report that, by his calculations, Sony Online’s EverQuest was comparable to the 77^th richest economy in the world, based on per-capita gross domestic product.

Such speculations are all well and good and they certainly reveal some interesting statistics about the lengths players are willing to go to acquire ‘uber’ characters and in-game possessions. Heck, I’ve always found that fascinating; the practice has been around at least since 1989 or 1990, when I was first became aware of a transfer of ownership of a game account on GEnie that had been sold for $2,000 in cold, hard cash. That was back when $2,000 meant something besides two-thirds of one month’s rent of a seedy, bug-ridden hovel in Silicon Valley. Considering that Islands of Kesmai, MUD I and British Legends started charging for access in 1984, there is no doubt in my mind that there was some surreptitious sales happening long before my first acquaintance with the practice.

All social rules and all relations between individuals are eroded by a cash economy, avarice drags Pluto himself out of the bowels of the earth.
— Karl Marx, Das Kapital (1867)

And that’s nothing compared to the largest amount paid for a persistent world account that I know of: $10,000 for a Kingdom of Drakkar account, sold under the table in the mid-1990s by an MPG-Net employee after he’d used privileged gamemaster commands and tweaked it to be maxed out in attributes, weapons, armor and other possessions. As a generous afterthought, the employee reportedly tossed in a copy of the source code. Or maybe the code was the sale and the tweaked character was the afterthought (ya think?). This may also be the first recorded instance of an employee selling in-game items from a persistent world for cash. When finally detected and fired, it was estimated that this enterprising young capitalist had generated a second income of over $30,000 per year for a number of years by selling tweaked accounts and rare items to fanatic Drakkar players. Reportedly, he was caught as are most criminals nabbed, through sheer stupidity on his part: he was slow once in delivering the goods after having received payment, the buyer became impatient to get his copy of the source code and called the general office number to inquire when it might be forthcoming. Oops.

Considering that the employee in question came to MPG-Net from one of the other pioneering online game developers and is reputed to have brought the source code from one of their games with him (something for which I have no official confirmation), it may be that he was supplementing his income in this manner as early as the mid to late 1980s. This is now becoming an issue worldwide, as an article about NCsoft banning 200,000 accounts for such activity demonstrates.

It also goes to demonstrate that some players and developers recognized early that virtual lives have an intrinsic real-world value to the players. The concept is getting widespread notice only now due to the increased number of persistent world players and the advent of public auction sites on the Internet. There is probably a column here about the near impossibility of trying to enforce such prohibitions (hey, it didn’t work for alcohol and has pretty much backfired for illegal drugs), but I’ll save that for another time.

A creative economy is the fuel of magnificence.
— Ralph Waldo Emerson (1803-1882)

We’re all familiar with such market economies, if only because most of us have direct, daily experience with buying and selling goods. Trying to implement something similar in a persistent world has never quite worked out, however. The general feeling is that there isn’t a true ‘working’ in-game economy in any of the current persistent worlds, and I suspect the developers would be the first to admit it. The reason is simple: Market economies are hard, to paraphrase Scott Jennings of Mythic Entertainment. Among the reasons they are hard to implement include:

1. Persistent worlds are complicated buggers and tend to have bugs that allow unscrupulous players to exploit the economy and debase the currency, much like a counterfeiter can destroy a national economy by flooding the market with enough bogus dollars, marks, won, euros, what have you;

2. Market economies are influenced by the scarcity or plentitude of goods, and that is influenced by a wide range of factors, including weather, geography, profiteering, governmental needs and influence, the inflation rate (i.e. debasing of the currency), war and so many other factors it would be tough to list them in a 2,000 word column. Just thinking about trying to code all those variables to work correctly together to make a market react properly by design can cause piteous whimpering and grey matter to start leaking out of one ear;

3. Persistent world developers aren’t economists (nor do they pretend to be). They don’t understand market economies beyond the simple buy/sell level, don’t clearly understand the role of local and national governments in influencing a market economy and don’t know how to design and implement the tedious checks and balances that might serve to keep an in-game economy stable and useful for the players. They see the transaction portion, which is a necessary component, but there it ends.