How Much for the Enchanted Mithril Broadsword?
By Rick Marshall

As online games and other virtual worlds become ever more popular, virtual economies are spilling over into the real world

Mr. Leatherman waits patiently in a shadowy alcove of the train station, his bare arms crossed, his mustached jaw clenched, his legs draped in digitized black chaps and planted shoulder-width apart. He casts an occasional glance from side to side as brightly colored figures pass by on the pathway overhead. Eventually, a thin, spandex-clad male darts up to him, halting only an arm’s length away.

The duo stare out at the terminal silently, neither figure reacting to this sudden reduction of personal space. After nearly 10 minutes, the spandex-clad figure streaks away without a word. Leatherman steps out from under the pathway, peers around, then (quite literally) bounds off, leaping over a nearby skyscraper.

“It’s funny because it really is a shady deal,” laughs Mike Carlip, the Albany gamer behind Mr. Leatherman, a character on the multiplayer video game City of Heroes. In the game, players are encouraged to create and develop their own digital superheroes and fight crime in an interactive world. Carlip began playing the game less than a year ago, and says his involvement in the game’s addictive world of superheroes and thugs has followed a fairly cyclical path: several months of binge gaming followed by a month or two of cold-turkey detachment, only to log in one rainy day and get a taste for the game all over again.

The “shady deal” he’s alluding to involves the purchase of 2 million credits of CoH currency at a cost of 10 real-world dollars, arranged via an eBay auction and delivered to his digital alter ego by the seller’s own, spandex-clad avatar. With characters able to give away their assets only in small increments, transactions involving such a large amount of currency can take several minutes of point-and-click activity on the respective gamers’ screens—hence the long period of time in which the two characters appear, to outside observers, to simply be staring at one another.

By exchanging some of his U.S. dollars into the game’s digital currency, Carlip says he’ll be able to bypass the hours of playing time necessary to earn that level of wealth in the game and afford a virtual arsenal capable of turning his “reject from the Village People” into a force to be reckoned with.

And while the rationale for such a financial undertaking probably won’t make sense to anyone who counts Pong or Space Invaders among their most recent video-game experiences, there’s no denying there’s big money to be made in the booming multiplayer online-game industry.

Yet, a big chunk of that money might not be coming from the places you’d expect. From computer-filled sweatshops where Third World workers “farm” virtual currency to games in which the real-world exchange of the game’s digital currency dwarfs the economies of several European nations, the business side of video games is no longer relegated to their manufacture and marketing.

In fact, some people have made a job out of playing games.

“There are people who make around $4,000 a month,” shrugs Mike Searles, a 25-year-old local gamer who says that during the six years he was a regular participant in Ultima Online, one of the industry’s oldest and most popular “massively multiplayer online games,” he made anywhere from $400 to $800 in a single month selling currency and rare items he accumulated in the game. What began as a game in which he and some friends could all interact, says Searles, eventually became a method for generating weekend spending money.

With most MMOGs charging users a monthly fee, and advancement through the games often depending upon how much time you’re able to spend engaging in repetitive activities like battling enemy after pixilated enemy, the pressure to make the best of your gaming time has led some to seek shortcuts—and others to be more than happy to provide them.

“Sure, I had a moral quandary about [paying for CoH currency],” says Carlip. “I asked the same questions of myself that anyone would who’s considering a shortcut—like a baseball player thinking about steroids.”

The opportunity to make such a decision, says Carlip, is a function of MMOGs’ “always on” status—even when you’re not playing, other players from around the world probably are, and passing you by. There’s not much fun to be found in paying a monthly fee to receive virtual beatings from kids on summer vacation or other people who can spend all day playing the game and improving their characters, reasons Carlip.

“In a weird way, [buying in-game currency or items] sort of levels the playing field,” he adds.

And in recent years, there’s been no shortage of people willing to sell their assets—or even their entire characters—for the right price.

While some MMOGs have done their best to dissuade such trading (Sony Online Entertainment, creators of the popular Everquest games, recently blocked all eBay auctions related to in-game assets), others have either grudgingly accepted the existence of such a practice (as in the case of Ultima Online and CoH) or, as is the case with some recent games, outright embraced the injection of real-world implications into their virtual environments. No matter what the game manufacturers’ reactions, however, the economies of video games have tended to function like their real-world counterparts—they develop wherever there’s demand.

“Commerce is a natural consequence of these complex, exciting virtual worlds,” reads a passage of Internet Gaming Entertainment’s company mission. IGE’s sole function involves the buying and selling of virtual assets for more than a dozen MMOGs, and with offices around the world and levels of trading similar in scale to some of the real-world currency markets, the company is one of the biggest fish in the sea when it comes to farming dollars from the digital world. In addition to letting gamers buy in-game currency with real-world cash, the company also allows for the transfer of currency from one game to another according to current exchange rates—15 million “credits” from the sci-fi game Star Wars Galaxies for 500 pieces of “gold” from the medieval World of Warcraft, for instance.

“Gamers have assigned real-world value to virtual currency and other in-game commodities, creating a vibrant secondary market for MMOGs,” continues the IGE statement. “This secondary market represents one of the most successful forms of emergent behavior ever seen in entertainment.”

While the notion of paying real-world money for, say, Star Wars “credits” or a virtual enchanted sword might inspire some serious head-shaking among nongamers, those involved with trading such virtual assets often argue that real-world value isn’t applied to the items or currency for sale, but to the time it takes to collect it.

And though IGE is able to measure this new market’s “success” in millions of dollars of profit each year, that doesn’t mean that digital commerce hasn’t adopted a few of its real-world counterpart’s more undesirable qualities, too.

“Wage Slaves,” a July 2005 article in Computer Gaming World, explored the seedier side of this emerging market—and discovered that the same problems that plague real-world economies have infected the virtual variety, too.

“The Lineage II Chinese farmer gets about 56 cents an hour,” writes the story’s author, James Lee. Lee communicated with various companies—and their employees—in the business of buying and reselling online loot, and discovered a multibillion-dollar international industry. Some build up credits, others create powerful characters for resale. In one case, a manager at a Chinese game-farming center told Lee he earned around $180 each month overseeing a crew of lower-wage workers who repetitively point, click and horde virtual “gold” for 14 hours each day. The manager told Lee he lived in his office—a common practice that, he said, provides added incentive for employees to perform well for fear of losing their homes.

Yet, despite the low wages and long hours, the article goes on to state that many of the workers at these game-farming centers don’t mind the click-and-drag routine of their 12- to 16-hours-a-day jobs. In many cases, the working conditions are often far better than in other typical sweatshop industries—say, sneaker or jeans factories.

One American seller mentioned in the story, a part-owner in an Indonesian game-farming shop who claims to have made $700,000 in a single year selling video-game currency, rationalized the situation as such: “They get paid dirt. But dirt is good where they live.”

For all of the abuses that accompany emerging markets, however, some game creators have taken novel, and less familiar, approaches to incorporating the financial potential of both their real- and virtual-world businesses.

Kristian Cee, whose spiky-haired avatar in the MMOG Second Life goes by the name “Kristian Ming,” recently began selling fellow gamers in-game art created from snapshots he took with his digital camera—some from his travels, some of local Capital Region sites.

Second Life allows participants to purchase plots of virtual land, build on them and produce and sell items in the virtual world’s developing economy. Players are provided a weekly allowance of in-game currency in order to purchase building materials, buy items produced by other players, or take an active role in the game’s economy in any other number of ways. Players can also exchange their own, real-world money for Linden Dollars, the currency of Second Life, to supplement their weekly earnings or provide capital for a virtual business.

Gaming Open Market, an online company similar to IGE but devoted only to the trading of Linden Dollars, has logged nearly $2 million in currency exchanges—prompting the development of in-game ATMs linked to users’ PayPal accounts in order to make these type of transactions even easier.

In order to facilitate more sales of his artwork, Cee has begun constructing a gallery on a plot of land he purchased within the game to showcase his artwork and make it available to other gamers with single-click sales.

“I’m turning my original, real-world content into original, in-game art,” says Cee, who adds that he’s sold fewer than a dozen prints since joining the game in February, but expects that number to rise quickly once his in-game gallery opens. Before deciding to build a gallery, running his in-game business involved traveling throughout Second Life’s miles of virtual land—essentially, being a traveling salesman—showing off his handiwork to anyone he met along the way. With a gallery, he says, interested gamers will know where to find him and his art.

So far, says Cee, sales of his artwork have netted him 1,000 Linden Dollars, an amount that, according to current exchange rates, equates to about $4 in real-world cash. While it might not be enough to pay his real-world rent, it’s not too far from the monthly $5 to $10 Second Life requires from members who own land (wandering avatars have to pay only a one-time $10 fee)—making it quite possible that Second Life could become a self-funded hobby for Cee at some point in the near future.

In some ways, the virtual world that is Second Life actually defies the typical classification as a “game,” having no defined goal or advancement system other than simply learning how to create new and unique items—much like Cee is beginning to do. Programming tools provided by Second Life creator Linden Lab allow participants to construct just about anything they can imagine, even in defiance of the real-world’s laws of physics, as long as they’re willing to figure out how to write the code that makes it possible. With more than 20,000 players subscribing to Second Life in just over a year of the game’s existence, and more than $200,000 of real-world transactions logged within the game each month, the appeal of Second Life’s “virtual home away from home” theme appears to be catching on.

In creating this virtual world, Linden Lab founder Phillip Rosedale said in a February 2005 interview with CNET News that a central part of developing a robust economy inside and outside the game involved motivating players to create something of value.

“We looked at the history of developing Western countries, and the motivator to get people to create things . . . has always been that there’s a sense of intellectual property,” he explained. “You own something of value, and you can do something with it. Creativity and Intellect wants to be expressed in some form of currency.”

That sense of ownership—along with its legal implications—is one of the things that sets the worlds of Second Life and similar games apart from those of their peers.

In recent court battles related to real-world trading of virtual goods, the creators of Everquest and several other MMOGs argued that their players aren’t allowed to make money off in-game assets because they sign away their ownership rights when they install the game software (courtesy of that long string of text new users are asked to read before clicking on the “Yes, I Agree” button—commonly known as the End User License Agreement). In most cases, the EULAs—and the game companies—have prevailed.

But in Second Life, users retain ownership rights to anything they create. This has led to some interesting money-making opportunities for the game’s participants, including one player who sold the rights to a simple puzzle-game he created within Second Life to one of the nation’s leading cell-phone companies. A player in Project Entropia, another MMOG similar in style and content to Second Life, recently paid more than $26,000 for his own in-game island after the game’s developer, MindArk, put the land up for sale. The buyer, an Australian who goes by the name “Deathifier,” now collects payments from other players for hunting rights and other land-use fees, and intends to sell off the land for housing once an upcoming game update allows him to bring in the bulldozers.

“Just like in the real world, the virtual world has its share of land barons, too,” shrugs Cee, alluding to the small number of players in Second Life who have begun buying up large portions of in-game land and raising the asking price. According to Cee, one such player supports her entire family, including her parents and children, with the money she earns in the game from land acquisition and other projects.

So why isn’t everyone quitting their 9-to-5 gigs and plugging in to the latest MMOG?

That’s the question Julian Dibbell, a contributing writer for Wired magazine, wondered last year when he decided to find out if he could earn more money selling virtual goods on Ultima Online than in his best month as a writer. Dibbell provided a chronicle of his one-month experiment in digital commerce via Play Money, his online diary, including tales of late-night trading binges that carried over into the early morning, and hours paying close attention to the daily events of a pixilated world while ignoring those of the real world—and sometimes vice versa.

“I’m cringing now thinking of all the ways I betrayed the enterprise in the last few days,” he wrote in an entry dated April 6, 2004. “Going to see a movie with my mom and my sister and her wife . . . while inventory went untracked and unreplenished. . . . Talking with my wife and daughter and far-flung friends and family on the phone when my focus should have been nowhere but on this laptop stationed on the dining-room table in the middle of my sister’s house.”

In the end, Dibbell fell short of his goal, earning a total of $3,917 in 31 days as a virtual merchant. According to Dibbell, the $47,000 that monthly tally equated to over a full year was “nothing to sneeze at, of course, but nothing I haven’t achieved as a professional writer.”

Yet Dibbell wrote that it was factors other than supply, demand or salesmanship that played the most significant role in his financial shortfall.

“If you’re good at reading between the lines, you may have guessed that things are not going well for my marriage,” wrote Dibbell on April 10. He described his decision to fly home to see his daughter go on her first Easter-egg hunt as a sign that he had “chosen that opportunity over the chance to meet my financial goal.”

“It wasn’t a very hard choice, to be honest,” he continued.

According to Dibbell, doing business in the virtual world requires the same sort of sacrifices one must make in the real world. A short peek through Play Money is all it takes to see that job addiction in either world can have some dramatic effects. From strained relationships to estranged friends and family, both Cee and Carlip admit they’ve seen the perils of game addiction, and they understand exactly how Dibbell could lose himself in a virtual world—especially when it becomes his job.

Seated next to Cee at a local bar, his girlfriend, Christine, rolls her eyes when he claims that he “sees the value of unplugging.” While she admits to the occasional gaming binge of her own, she says she has trouble getting past the notion of paying a monthly fee to play.

“I guess I don’t really understand why people are willing to spend that much money on a game,” she shrugs.

And even after spending a month immersed in virtual commerce, Dibbell wrote that he’s not quite sure he understands, either. Pondering what motivates people to spend their hard-earned money on playthings they can’t touch or hold, he theorized that, at the heart of it all, it’s “the same thing that drives people to value the playthings of material life in general, the trappings of success, the visible tokens of accomplishment that keep us on the treadmill of production and make the economy go around.”

Yet, he adds, the people who splurge on an occasional “cloak of invisibility” or a piece of fine art for their virtual home might be on to something.

“If anything, they’re closer than the rest of us to the sort of enlightenment that frees you from the treadmill, if only because they know that their striving is just a game,” reasoned Dibbell. “May we all know it sooner or later.”

	Back Home