Virtual Worlds

4.0 Creation of Goods and Services

Goods are created and destroyed in the game environment. Different group of players create different goods. Professionals in combining virtual weapons and armors can earn big portion of money, at a high risk and cost too. They provide combine service to other players, at a certain level of reputation, which rely heavily on their skills. Same to professionals in power up the goods and stone sellers, where they can create goods at a lower cost and have a more stable source of income relying their power up skill. Other players earn money through farming gold in leveling map. There are different patterns of income for different group of users. For instance, spear users and fire mage farm gold easily. They have skills which can kill a big area of mobs at the same time. Katana skills however eat a lot of mana, unable to multi kill mobs and therefore katana users are very hard to get rich as many cost are required to buy mp pot.

These group of players actually produce a stable Gross Domestic Product(GDP) each year. According to a research carried out in the United State, virtual internal markets, combined with illegal online trading on auction websites, Norrath has a gross national product per capita of $2,266, bigger than China and India. FYI, Norrath is the setting in online game call Everquest. I do not have a database to calculate the total GDP produced. There is only some records which briefly shows the pattern of earning money.
5.1 Power up Goods

In order to power up (PU) a virtual item with good stats, the character in game has to acquire a skill call “power up (PU)” skill.  The probability of PU-ing a highly valued item will increase following the increase of skill level. There can be higher probability when players purchase Power Up Protection Stones (Cash Item).

Materials needed to operate this business are to prepare the item to be PU-ed, and the raw materials (stones) to PU the item. Different item requires different classes of stones. The cost of the stones also varies. In previous post, I mentioned that strength bracers are created by using bracers and “inverse stones”. A beautifully PU-ed bracer can be sold at high price, if market do not have much substitutes. Eg. Level 45 Bracer can highest be PU-ed *58. Then it can be sold at market price 10m. Let us calculate the profit earned. Suppliers do not get so lucky every time. Even their “PU” skill level reach 30 (maximum), items can fail to PU too. Therefore, it is a concept of gambling.

We can calculate the cost of PU :
Bracer level 45 (can be acquired lower price from “Chang Ann 1 market” at 900k)
1 set/100 pcs “Inverse Stones” (can be acquired at 900k cheapest for 1 set)
Cost to PU Level 45 bracer=1.8m.

1>If failed, the supplier experience 900k losses. They have to buy a set of inverse stones again and retry their luck.
2>If successfully one-go get highest PU value like illustrated above, they can earn 8.2m (10m-1.8m). It depends on skill level, usage of cash item, and sometimes a lot of luck!

Here include a table of different materials needed for power up:

Note: All the materials used have to be in one set, which is 100 pieces, in order to get the highest possible result.


5.2 Stone makers


In the example given for PU items, bracer makers can buy the bracer from game NPC or get the clean bracer from mobs and quest. Where does the stone come from? They can be either dropped from the mobs or make by players themselves. If they make stones themselves, the cost will be lower. But firstly, they have to learn a skill call “separate” skill. Learning this skill enables players to acquire some rare ingredients from disassembling armors or weapons. Anything which is being combined can be disassembled using this skill, and players can 100% take back the ingredients, unlike “combine” and “power up” sometimes will fail.

Revenue, as discussed just now for a set of inverse stones, is 900k cheapest. However, on high demand period, the inverse stones can be sold at 1.5m per set. On the perspective of stone seller, we take the higher revenue, 1.5m.

The process of making stones is:


Step 4: Combine "Purple Rock" into "Inverse Stone". An "Inverse Stone" requires 10 units of "Purple Rocks".

Following the 4 steps above, we can calculate the cost for the making of "Inverse Stones".


1 piece of Inverse stone = 10 purple rocks

1 Purple rock = 2 jade rocks

2 jade rocks' minimum cost = 1 unit silk shoe/walking boots = 690 gold

Minimum cost of Inverse stone per set = 100 x 10 x 690 gold = 690k gold

This is the minimum cost. Normally the process of making stones will have failures. Assuming the player's combination skill reached maximum of 30, and probability of success rate is 0.90.

100 = 0.9x

x = 100/0.9 = 111.11

To get a set of inverse stones, cost required will be increased to:

112 x 10 x 690 gold = 772,800 gold



Profit earned by stone sellers for selling each set of Inverse stone is:

1,500,000-772,800 = 727,200

Stones seller will never lose money out of this business operation as the demand for stones is always there. However they earn money very slow and spends a lot of time on the process. Moreover, when the demand is low, they can earn only about 100k++ (900k-772k).

3.0 Market

Market is the place to trade the virtual items, where players meet to sell and buy. Economy is based on ms gold. Market price can be examined here. For new players, the first thing to do is to go explore the market place. Much information can be found.

3.1 Game

Players can buy and sell virtual items at the town area. In MoSiang, they grouped together at the centre of crowd, which is Chang Ann channel 1, KaiFeng channel 3, and LanZhow channel 1. These 3 places are popular as the players flow is high due to repot convenience and ease of navigation. Sellers can choose to enter into selling mode or buying mode. In buying or selling mode, they set the price and others can take it or leave it. Therefore, if the sellers want the stock to be sold out, they have to predict and estimate the price which buyers can accept. It cannot be too high or too low. When buyers set high price to collect materials, they can collect ingredients or item immediately as many players are willing to supply them. The situation is like this.

3.2 Discussion Forum

MoSiang is a quite complicated game. There is much knowledge to be studied especially on the creation of virtual goods and services. Even many experienced players played for almost 4 years (since launched in Malaysia), they also cannot logically explain a good method to combine the goods successfully. Therefore, many discussions about the game including methods to farm rare items, method to power up a good quality equipment, strategy to win guild war and even share screenshots about special moments in the game. The official forums of MoSiang in Malaysia is on9g.com, available in both mandarin and english version.

The topic about selling one of the top 5 Superiors, O000OFLAM30O0OO received a lot of feedback and replies. They probably discussed about the character's stats and skills or the price. Sellers normally have to include screenshots of their character disclosing their conpetitive advantages or offers the id in a package stating what powerful items are included along with trading the id. While buyers responding to the topic might counter offer the price given. Issues like the mode of payment, different nationality, trust, and theft isses are not to be forgotten too.

Buying id for new players can be discussed here too. For example, the BunnyZai in the forum do not want to waste time training a new character from level 1 to 70 again. Therefore, the easiest way to be strong in the game is to buy id from other players. Buying of pets, rare items can be posted here to find ways to get it. Sometimes discussion going on and there might suddenly be lucky occassions. Player who owns the item who are not interested in selling the item might suddenly needs to quit the game for certain reason. They can give the chance or priority to the needed ones.

2.0 Demand and Supply

Virtual economy exists based on players need for entertainment. This is the main difference between real world economy and virtual economy. It lacks the physiological needs of human such as food, water, breathing, and sleep. It still forms an economy as it satisfy basic characteristics of economy. There are supply and demand involved. Following will be discussion on the fundamental characteristics of economy aspects.

As in a real economy, there are factors affecting the virtual economy. The factors are influencing the demand and supply of the goods. The law of demand states that, as the price increase, quantity demanded will decrease and vice versa. Players will demand goods that they feel will give them more value, and therefore the price is actually set by themselves. The economy in game runs automatically as long as there are still players trading goods. I have chosen a Massively Multiplayer Online Role Playing Game (MMORPG), Mosiang Online as my main example for following online game discussion.

In Mosiang, goods can be grouped into 3 classes:
a, Normal goods. These goods can be bought from game NPC and usually their prices are fixed. These goods includes hp pot, mp pot, clothes, weapons, and low level skill books.
b, Enhanced equipments. These goods are normal goods being combined and power up to a better stat. For example, the probability of creating a high damage weapon is very low. Therefore, this category of virtual goods become valuable. For instance, weapon can be combined from a normal level 5 katana to a level 5+1 until +9 katana. The higher value it combines, the higher the damage goes. Second stage of enhancement is the power up of equipment. After katana is combined to level 5+9, the player can power up the katana again to have *1 to a certain limited value at the back (level 5+9*45).
c, Cash item. This supply of goods are sealed virtual items which can only be bought from the official website. These goods are only usable for a period of time and will be expired after few days. Company earn real cash from the trading of virtual goods. These items are supplies that enable players enjoy the game more. One example is,town teleport, which is used for the players to change map whenever and wherever they like. Usually players need to travel from one map to another by running or flying skill. When they have town teleport, they can save a lot of time and use it for leveling instead. The cash items can be bought at a fixed price of real cash, that is, using certain amount of points to exchange for an item.

Normal good's price is fairly stable. The goods are uniform and can be get from game NPC. If the price is higher than the NPC, then the quantity demanded will be 0, however, if the selling price is lower than the NPC, the quantity demanded will increase as the price decrease.

Enhanced good is the focus of main economy activity run amongst players. Following the creation and destroy of goods, the value of currency will fluctuate. In the game, as player character's level increase, the demand for more powerful equipment will increase, where the demand for lower level equipment will drop as the season passed. As a game player's observation, when majority of players stay at what range of level, the price of certain range level of enhanced goods will value more. When majority of players moved to a higher level, the value of the goods will drop. Like the level 5+9*45 katana, it will be worth at 10m when majority of the players ranged from level 20 to 25; then it will drop to 5m when majority of them moved to the level range from 40 to 45.

The last category of virtual goods, cash items, are introduced by the official company. The price of the goods fluctuates with the exchange rate of the game currency. If the value of game currency becomes higher, then the cash items will be sold cheaper in game, vice versa. For example, when the players do not value much of the game currency, then the cash items will be sold very expensively in game money. Because the game currency can be easily collected, the players have much supply already, they have to get the real cash item in exchange of higher value of game currency. The town teleport discussed earlier, is worth at 5m when the game is stillat an earlier stage, where not many players are rich in the game; today, the town teleport requires 20m as game currency is easy to earn and many players have become rich already.

As discussed above, the price of virtual goods can be affected by different factors in different situations. More detailed discussion will be updated. =)