Virtual Worlds

Title & Rationale
Before I started playing online games, that is, when I have little knowledge on virtual world, I do not think have a good impression on it. I thought it is only an activity which let many people wasted their precious time. After few years of observation through self experience, I found that it is actually also a social interaction activity with other players without geographical and demographical border. Virtual world creates a space for people from various backgrounds to mix together and communicate their mind and take down their mask. In that other world they can be what they want to be.


Virtual economy is studied in this paper, when I realized that in reality this concept is not widely known and understood by public. In general the virtual world concept, mainly MMORPG games brought a negative impression to adults (mostly parents) as many social news associated with those conflicts in game. I want to prove that there is something technical and meaningful to learn from the economy aspect of the game, as long as players do have a mind of learning attitude towards it, and getting the best achievement out of the activity. In this paper, I am going to discuss about the economy aspects by analyzing a Chinese background MMORPG based online game, MoSiang Online (MY).

The virtual economy and real economy are closely related as well. Many professions come into sight in real world brought to by virtual world economy, such as professional player help playing other people’s id and earn an income from the owner, or selling character after training their id to a certain level, and even exchange the virtual money or goods for real world money. Below this, discussions on the methods of doing so were explained and illustrated. Hopefully readers can gain some concept out of them. =)


Research Objectives
•To provide more specific understanding on how a virtual economy operates from a player's view, based on a selected MMOPRG game.


•To study the factors affecting the economy of a virtual world.

•To give guidelines for a first time player to earn money from a virtual environment.

•To generate public awareness that virtual economy is actually related to real world economy

Outline of Final Paper
1.0 Introduction

2.0 Price and Quantity Demanded

3.0 Demand & Supply
      3.1 Demand of Goods
      3.2 Supply of Goods

4.0 Market
     4.1 Game
     4.2 Discussion Forum

5.0 Creation of Goods & Services
    5.1 Power up Goods
    5.2 Stone makers

6.0 Exchange Rate
     6.1 Gaming Open Market (GOM)
     6.2 Exchange Rate in MoSiang

Literature Review/ Background
Virtual world can be studied from many aspects, the economy is one of the interesting subject found to be similar to real world economy. The emergence of virtual economy as a fast developing industry caused some experts to research on it. When virtual economy exist in a virtual world and the avatars does not rely on the economy to survive, how can the economy runs smoothly and continuously like the real economy does?


MMORPG games are commonly known to be addictive to players. Real economy runs as a group of people in the economy cycle exchange other things with other group of people from what they can produce. However, virtual economy is more similar to the gambling concept in real economy. Gambling implies the important concept of luck as in a part of Chinese culture. In MMORPG many activities are programmed as a rotating system-of-luck. For example, farming activities, where players can sometimes receive rare and precious items. In Mosiang, as illustrated in Power Up and Combination system (4.0 Creation of Goods & Services), it has certain probability associated apart from relying solely on player’s skill level. The probability, which is also called luck, can attract everyone to try, as there is always a chance to win. When they lose, they would think that they might win it back in greater amount next time. Human’s greed never can be measured nor satisfied. XD

The future of virtual economy is potentially developable in following years. In my opinion, even in virtual economy, human act rationally, placing their own self-interest in first place. The virtual economy examined can fully support this theory. When there are winners, there will be losers. Everyone competes to get their benefit in the virtual world using their very own strategy. Some obtain social benefit, while others obtain economic benefit or maybe other applicable benefits. Players sacrificed in terms of money and time and effort when they consume goods and services in virtual world. In this challenging environment, players only required to sit in front of a computer and click the “mouse” or type on keyboard to enjoy the benefits or experience losses. A trend of advanced technology is formed and people become lazier. Future statistics will move towards virtual economy development rather than real economy, if no efforts by authority is attempted. As in predicted by Bowers M., future entertainment are trends are growing based on Internet, primary trends of consumer electronic spending is also taken over by digital TV, gaming leads the software sales, and increasing computer power drives changes such as increasing emphasis on productivity etc.


If we relate the system used in MMORPG to the gambling concept, virtual economy can be related to social costs of gambling. Continuous number of players splurge into virtual world to share their market to earn profit will generally cause a negative shift in aggregate social wealth. In economics, theory of production possibilities frontier (PPF curve) explained that, if a country chooses to produce a category of goods, opportunity cost will be forgone. From the situation now, losses of capital and human resources from real world economy activities to virtual economy activities are foreseeable problems to be solved. The opportunity cost is very costly, as human resource is a country’s most valuable capital asset.


List of References for Final Paper
Bowers, M 2008, Future Trends in Technology: Creating a new reality of business, VatorNews, viewed 15th October 2009, http://vator.tv/news/show/2008-10-06-future-trends-in-technology


Eadington, WR 2003, Measuring Costs from Permitted Gaming: Concepts and Categories in Evaluating Gambling’s Consequences, vol. 19 no. 2, Journal of Gambling Studies, SpringerLink, http://www.springerlink.com.ezproxy.lib.swin.edu.au/content/p2276l14lv172221/?p=abb172203ffc4568aafd51d19e9f7172&pi=0

Eladhari, MP 2007, Digra notes day 2: Gambling is in My Genes by Byungho Park, Models for Life in Virtual Game Worlds, viewed 14th October 2009, http://eladhari.blogspot.com/2007/10/digra-notes-day-2-gambling-is-in-my.html

Silverstein, J 2006, Are Some Video Games Gambling? , abcNEWS, viewed 15th October 2009, http://abcnews.go.com/Technology/Story?id=2410456&page=1

Reference:
Bowers, M 2008, Future Trends in Technology: Creating a new reality of business, VatorNews, viewed 15th October 2009, http://vator.tv/news/show/2008-10-06-future-trends-in-technology


Eladhari, MP 2007, Digra notes day 2: Gambling is in My Genes by Byungho Park, Models for Life in Virtual Game Worlds, viewed 14th October 2009, http://eladhari.blogspot.com/2007/10/digra-notes-day-2-gambling-is-in-my.html

Eadington, WR 2003, Measuring Costs from Permitted Gaming: Concepts and Categories in Evaluating Gambling’s Consequences, vol. 19 no. 2, Journal of Gambling Studies, SpringerLink, http://www.springerlink.com.ezproxy.lib.swin.edu.au/content/p2276l14lv172221/?p=abb172203ffc4568aafd51d19e9f7172&pi=0