CD4CD4Lecture 7Lecture 7

How real are How real are virtual virtual

economies?economies?

Small-group discussions:Small-group discussions: There are sign-up sheets are still on the wall in the There are sign-up sheets are still on the wall in the

usual placeusual place They start next weekThey start next week Please add your small-group discussion topics here:Please add your small-group discussion topics here:

https://docs.google.com/forms/d/1JX1v8BBXe5ANf7jKSHsAkBpZKZAoGYq93pPJmrJGVFU/viewform

Also don’t forget your essay is due Also don’t forget your essay is due by 1pm on by 1pm on Thursday!Thursday!

Today...Today...We will be looking at We will be looking at virtual economiesvirtual economiesWhat are they?What are the different systems and why

are they chosen by designers?What are the problems with them?How do they impact on the real world? ... And we will decide on this week’s ... And we will decide on this week’s

debate topic.debate topic.

What are ‘virtual economies’?What are ‘virtual economies’? We’re going to be looking at games and We’re going to be looking at games and

platforms withplatforms with internal currency systems internal currency systems that that have no real-world equivalenthave no real-world equivalent

i.e. The currencies in the game are not issued i.e. The currencies in the game are not issued by any real nation in the worldby any real nation in the world

Let’s look at a real economy for a moment...Let’s look at a real economy for a moment...

Real world economies...Real world economies... In theory, a healthy real world economy In theory, a healthy real world economy

ensures that the value of a currency is always ensures that the value of a currency is always matched up to the value of a real world asset, matched up to the value of a real world asset, such as goldsuch as gold

““Every country likes to have a certain amount of Every country likes to have a certain amount of gold in storage as a way of backing currency.”gold in storage as a way of backing currency.”

From ‘Great mistakes in politics (No23) – Gordon Brown sells Britain’s gold reserves’From ‘Great mistakes in politics (No23) – Gordon Brown sells Britain’s gold reserves’ http://drmatthewashton.com/2011/06/10/great-mistakes-in-politics-no23-%E2%80%93-gordon-brown-sells-britains-gold-reserves/

Values shift as the amount of goods/services Values shift as the amount of goods/services changes (more supply = lower price)changes (more supply = lower price)

This happens in virtual economies too.This happens in virtual economies too.

Virtual economiesVirtual economiesBut not all virtual economies are like thisBut not all virtual economies are like thisSome have very stable credits-to-value ratiosSome have very stable credits-to-value ratiosSome are a bit more flexibleSome are a bit more flexibleAnd others are much more like the real And others are much more like the real

world...world...

We’re going to look at three We’re going to look at three different systems today:different systems today:

1.1. Top-level credits: where Top-level credits: where users pay real money to users pay real money to a platform holder for a platform holder for credits to purchase credits to purchase games or items, e.g. games or items, e.g. Facebook Credits or Facebook Credits or Microsoft PointsMicrosoft Points, and the , and the credits stay in the credits stay in the game/systemgame/system

System 2System 2

2. Mid-level credits: 2. Mid-level credits: where users pay a where users pay a game maker real game maker real money for virtual money for virtual money so that they money so that they can purchase items in can purchase items in the game, and can sell the game, and can sell items for real money, items for real money, e.g. Linden Dollars e.g. Linden Dollars ((Second LifeSecond Life))

System 3System 3

3. Low-level credits: 3. Low-level credits: where users only earn where users only earn money through in-money through in-game actions, e.g. game actions, e.g. ISK in EVE Online.ISK in EVE Online.

(BTW, these definitions of top/mid/low are my (BTW, these definitions of top/mid/low are my personal way of thinking about these personal way of thinking about these things, not based on other sources – I just things, not based on other sources – I just find them useful. There are fuzzy borders, find them useful. There are fuzzy borders, e.g. with the PLEX in EVE, but trading e.g. with the PLEX in EVE, but trading these with others for real money is these with others for real money is prohibited by CCP.)prohibited by CCP.)

Top-level creditsTop-level credits Limbo Limbo cost 1200MSPcost 1200MSP Which was... What? Which was... What? Microsoft, and other Microsoft, and other

companies, charge users companies, charge users money for credits that can money for credits that can only be spent inside their only be spent inside their own systemown system

Does this system exist Does this system exist anywhere in the real world?anywhere in the real world?

Drink tokensDrink tokensLiquid, MEZZ, Liquid, MEZZ,

Poppodium 13, and Poppodium 13, and many more places many more places require you to buy require you to buy tokens that you then tokens that you then can only spend in can only spend in their locationtheir location

Why?Why?

Drink tokensDrink tokensFor the bars, there is the simplicity of keeping For the bars, there is the simplicity of keeping

all the cash going through one personall the cash going through one personBut there’s something else too...But there’s something else too...You’re always left with a few tokens at the end You’re always left with a few tokens at the end

of the nightof the nightYou’ve then got two options:You’ve then got two options:

1.1. Go back and spend them (and buy more tokensGo back and spend them (and buy more tokens))

2.2. Throw them away (free money for the bar)Throw them away (free money for the bar)

Now, take away the physical Now, take away the physical goods from the equation...goods from the equation...

MS Points came in 4200, 2100, and 800 point MS Points came in 4200, 2100, and 800 point packs (most commonly)packs (most commonly)

LimboLimbo was 1200. was 1200. So I will always have money left overSo I will always have money left over I have two options:I have two options:

1.1. Go back and buy more points to use up the Go back and buy more points to use up the spare ones I have (making MS more money)spare ones I have (making MS more money)

2.2. Throw them away (free money for MS)Throw them away (free money for MS)

Now, take away the physical Now, take away the physical goods from the equation...goods from the equation...

MS Points came in 4200, 2100, and 800 point MS Points came in 4200, 2100, and 800 point packs (most commonly)packs (most commonly)

LimboLimbo was 1200. was 1200. So So I will always have money left overI will always have money left over I have two options:I have two options:

1.1. Go back and buy more points to use up the Go back and buy more points to use up the spare ones I have (making MS more money)spare ones I have (making MS more money)

2.2. Throw them away (free money for MS)Throw them away (free money for MS)

There’s the trick...There’s the trick... ‘‘I will always have money left over’I will always have money left over’ But But II don’t actually have money don’t actually have money MicrosoftMicrosoft has my money has my money II just have points just have points It’s a psychological trickIt’s a psychological trick From then onwards, Microsoft can’t loseFrom then onwards, Microsoft can’t lose They might have to pay a small commission to a They might have to pay a small commission to a

game developer, but I probably have to give MS game developer, but I probably have to give MS even more money to do that.even more money to do that.

What are points worth?What are points worth?Whatever MS say they are worthWhatever MS say they are worthFortunately, by making the points cards Fortunately, by making the points cards

physically available, it means that retailers physically available, it means that retailers can compete on prices, lowering the cost can compete on prices, lowering the cost for the consumerfor the consumer

MS still charge retailers the same amount, MS still charge retailers the same amount, so they win whichever way.so they win whichever way.

And now...And now... Microsoft removed the points system from the Microsoft removed the points system from the

Xbox OneXbox One Why?Why? I suspect that it means that they can use finer I suspect that it means that they can use finer

adjustments on the prices of games without adjustments on the prices of games without ending up with messy numbers like ‘768 points’ending up with messy numbers like ‘768 points’

Whatever the reason, I’m sure they think they’ll Whatever the reason, I’m sure they think they’ll make more profit this way,make more profit this way,

But ethically I do prefer a real-currency price.But ethically I do prefer a real-currency price.

Facebook CreditsFacebook Credits“‘“‘The most effective way for developers The most effective way for developers

to generate revenue in games and apps to generate revenue in games and apps on Facebook’on Facebook’

““Facebook Credits is a payment system Facebook Credits is a payment system that offers a safe, easy and fast way to that offers a safe, easy and fast way to pay for digital and virtual goods in games pay for digital and virtual goods in games and apps across Facebook.and apps across Facebook.

Facebook CreditsFacebook Credits ““Facebook users trust the Facebook brand and feel Facebook users trust the Facebook brand and feel

comfortable storing their payment information with comfortable storing their payment information with Facebook and buying with their Facebook credentials. Facebook and buying with their Facebook credentials.

““Facebook Credits is avaialable internationally and Facebook Credits is avaialable internationally and supports supports 80+ payment methods in 50+ countries around in 50+ countries around the world and we continue to actively expand our the world and we continue to actively expand our footprint. footprint.

““Finally Facebook credits provides a consistent way for Finally Facebook credits provides a consistent way for users to buy on Facebook across mobile, desktop, users to buy on Facebook across mobile, desktop, games as well as non-game apps.”games as well as non-game apps.”

https://developers.facebook.com/docs/credits/

Facebook CreditsFacebook Credits ““Facebook users trust the Facebook brand and feel Facebook users trust the Facebook brand and feel

comfortable storing their payment information with comfortable storing their payment information with Facebook and buying with their Facebook credentials. Facebook and buying with their Facebook credentials.

““Facebook Credits is avaialable internationally and Facebook Credits is avaialable internationally and supports supports 80+ payment methods in 50+ countries around in 50+ countries around the world and we continue to actively expand our the world and we continue to actively expand our footprint. footprint.

““Finally Facebook credits provides a consistent way for Finally Facebook credits provides a consistent way for users to buy on Facebook across mobile, desktop, users to buy on Facebook across mobile, desktop, games as well as non-game apps.”games as well as non-game apps.”

https://developers.facebook.com/docs/credits/

Facebook CreditsFacebook Credits ““Facebook users trust the Facebook brand and feel Facebook users trust the Facebook brand and feel

comfortable storing their payment information with comfortable storing their payment information with Facebook and buying with their Facebook credentials. Facebook and buying with their Facebook credentials.

““Facebook Facebook CCredits redits isis avai avaiaalable internationally and lable internationally and supports supports 80+ payment methods in 50+ countries around in 50+ countries around the world and we continue to actively expand our footprint. the world and we continue to actively expand our footprint.

““Finally Facebook Finally Facebook ccredits provides a consistent way for redits provides a consistent way for users to buy on Facebook across mobile, desktop, games users to buy on Facebook across mobile, desktop, games as well as non-game apps.”as well as non-game apps.”

https://developers.facebook.com/docs/credits/ (They’ve fixed the typos now.)(They’ve fixed the typos now.)

They’ve got a point...They’ve got a point...As a gamer, I wouldn’t want to go through As a gamer, I wouldn’t want to go through

ten different payment systems on ten ten different payment systems on ten different gamesdifferent games

If my farm needs cows and my gangsters If my farm needs cows and my gangsters need guns, I want to be able to buy them need guns, I want to be able to buy them easily...easily...

So it is in the interest of the user...So it is in the interest of the user...A bit.A bit.

But...But...Do these systems feel like spending money?Do these systems feel like spending money?Once you’ve got credits, do you feel like Once you’ve got credits, do you feel like

you’re spending money when you use them?you’re spending money when you use them?Will people probably spend more ‘points’ than Will people probably spend more ‘points’ than

they would ‘cash’?they would ‘cash’? ... But it is a good way for the platform holder, ... But it is a good way for the platform holder,

Facebook, to make money.Facebook, to make money.

Which is important...Which is important...

Facebook stock prices today from:

http://www.nasdaq.com/symbol/fb/stock-chart?intraday=off&timeframe=4y&splits=off&earnings=off&movingaverage=None&lowerstudy=volume&comparison=off&index=&drilldown=off

And last year…And last year…

““We are moving from Facebook Credits to local currency We are moving from Facebook Credits to local currency pricing, and plan to migrate all game developers on pricing, and plan to migrate all game developers on Facebook.com in the third quarter this year.”Facebook.com in the third quarter this year.”

Again, I bet this isn’t just because they think it’s ethicalAgain, I bet this isn’t just because they think it’s ethical If you’re thinking of going into production, you really If you’re thinking of going into production, you really

should be following these trends.should be following these trends.

We’re back to businesses againWe’re back to businesses again If Facebook and Microsoft don’t make money, If Facebook and Microsoft don’t make money,

then obviously they can’t keep on making cool then obviously they can’t keep on making cool things...things...

But how far are we prepared to let them go in But how far are we prepared to let them go in making that money?making that money?

Top-level credits systems are pretty reasonable Top-level credits systems are pretty reasonable – we roughly know what we’re getting for the – we roughly know what we’re getting for the money we spend.money we spend.

This is part of ‘Freemium’This is part of ‘Freemium’ Where the game is given away for freeWhere the game is given away for free Users pay for extra items in the gameUsers pay for extra items in the game ““Players who get hooked on a game often end up spending more Players who get hooked on a game often end up spending more

than they would have if they had paid for the game upfront.”than they would have if they had paid for the game upfront.” Behind the Curve: EA Finally Making Mobile Games Free This YearBehind the Curve: EA Finally Making Mobile Games Free This Year http://allthingsd.com/20120608/behind-the-curve-ea-finally-making-mobile-games-free-by-year-end/

Also, “Also, “The economic system in Iron Realms games works in such The economic system in Iron Realms games works in such a way that the less fortunate, or those who are not willing to a way that the less fortunate, or those who are not willing to spend their hard earned cash on a video game, can still play and spend their hard earned cash on a video game, can still play and enjoy the exact same opportunities without favoritism either way.”enjoy the exact same opportunities without favoritism either way.”

http://www.ironrealms.com/mmorpgs-the-controversy-of-the-f-word-free

... Which is pretty generous really. ... Which is pretty generous really.

... And then there’s ... And then there’s ‘pay to win’‘pay to win’

Star Wars: The Old RepublicStar Wars: The Old Republic You can have any costume You can have any costume

colour, as long as it’s not blackcolour, as long as it’s not black You’ll have to gamble in-game You’ll have to gamble in-game

money to get that...money to get that... Which is very limited...Which is very limited... But you can buy it if you wantBut you can buy it if you want Also, it’s FREE... Sort of...Also, it’s FREE... Sort of... 'Star Wars: The Old Republic' Goes Free-To-Play, But Not Too Free'Star Wars: The Old Republic' Goes Free-To-Play, But Not Too Free http://www.forbes.com/sites/erikkain/2012/11/21/star-wars-the-old-republic-goes-free-to-play-but-not-too-free/http://www.forbes.com/sites/erikkain/2012/11/21/star-wars-the-old-republic-goes-free-to-play-but-not-too-free/

Keeping it fairKeeping it fairKeeping the balance of payment:reward is Keeping the balance of payment:reward is

the key to making players feel good about the key to making players feel good about your gameyour game

You have to deliver a good You have to deliver a good value value propositionproposition for the player for the player

I suspect Jack will have discussed all of I suspect Jack will have discussed all of this with you already, if not then he will, this with you already, if not then he will, and we come back to it in the third year.and we come back to it in the third year.

Mid level creditsMid level creditsThis is where you This is where you

give a game maker give a game maker real money directly in real money directly in exchange for virtual exchange for virtual moneymoney

Usually, you can then Usually, you can then resell these credits for resell these credits for real money again.real money again.

Linden LabsLinden LabsLinden Labs created Linden Labs created Second LifeSecond Life in 2003 in 2003They have the Linden Dollar (or Linden$) They have the Linden Dollar (or Linden$)

as their currencyas their currencyYou can buy Linden Dollars from Linden or You can buy Linden Dollars from Linden or

currency exchange websitescurrency exchange websitesWhat do Linden Dollars get you?What do Linden Dollars get you? ... Stuff.... Stuff.

Stuff.Stuff.More specifically, Linden Dollars buy you More specifically, Linden Dollars buy you

stuff in a world made by Lindenstuff in a world made by LindenThe same people selling you the money The same people selling you the money

are also selling you the goodsare also selling you the goodsLinden doesn’t even need to make the Linden doesn’t even need to make the

goods – users do that for them!goods – users do that for them!

That works out pretty That works out pretty well for Linden...well for Linden...

‘”‘”I was taken aback by just how big I was taken aback by just how big Second LifeSecond Life was. […] To be honest, it had fallen off my radar was. […] To be honest, it had fallen off my radar […]. And I looked at their numbers; this is a world […]. And I looked at their numbers; this is a world that has got 1 million people logging in every that has got 1 million people logging in every month, generating well in excess of $75 million a month, generating well in excess of $75 million a year -- it's extremely profitable.”’year -- it's extremely profitable.”’

When do you think this interview was?When do you think this interview was? 1515thth May, 2012 May, 2012 http://massively.joystiq.com/2012/03/15/linden-labs-second-life-extremely-profitable-company-lookin

g/

People still think it’s an important game. There’s a good article about it here:People still think it’s an important game. There’s a good article about it here:http://gigaom.com/2013/06/23/second-life-turns-10-what-it-did-wrong-and-why-it-will-have-its-own-second-life/

Club PenguinClub Penguin

http://http://www.clubpenguiwww.clubpenguin.com/n.com/membership/ membership/

Club PenguinClub PenguinYou can earn money in the game...You can earn money in the game...But you can only spend it when you are a But you can only spend it when you are a

membermemberYou You paypay for the right to spend the credits for the right to spend the credits

that you earn in the gamethat you earn in the game......And this is aimed at children!And this is aimed at children!

Banker-manufacturer relationshipBanker-manufacturer relationship In the real world:In the real world: Is it be a good idea to have the money Is it be a good idea to have the money

printers be the same people who printers be the same people who make/sell the goods you buy?make/sell the goods you buy?

What problems could you see arising from What problems could you see arising from this situation?this situation? Think for 30 seconds... Think for 30 seconds...

Now tell your neighbour for 60 seconds.Now tell your neighbour for 60 seconds.So... What do you think?So... What do you think?

What if Linden wants What if Linden wants more money?more money?

It can just make some...It can just make some... In the short term, inflation is meaningless to themIn the short term, inflation is meaningless to them Inflation in an economy is where a government prints more Inflation in an economy is where a government prints more

money (usually to pay a debt) but all that happens is more money (usually to pay a debt) but all that happens is more money exists, the amount of ‘stuff’ (e.g. gold) in the world money exists, the amount of ‘stuff’ (e.g. gold) in the world stays the same... stays the same...

The ratio between the two changes so money is worth less.The ratio between the two changes so money is worth less. Not a problem for a government, because they profit from a Not a problem for a government, because they profit from a

delay in the ratio shifting in the market, but a problem for delay in the ratio shifting in the market, but a problem for people and playerspeople and players

No-one can stop them, because the ‘money’ isn’t real.No-one can stop them, because the ‘money’ isn’t real.

Inflation...Inflation... We can see that this We can see that this

does happen slowly does happen slowly in in Second LifeSecond Life

Not so fast that it’s a Not so fast that it’s a big problem, but big problem, but there’s nothing to there’s nothing to stop Linden if they stop Linden if they want to do itwant to do it

http://community.secondlife.com/t5/Featured-http://community.secondlife.com/t5/Featured-News/The-Second-Life-Economy-in-Q3-2011/ba-News/The-Second-Life-Economy-in-Q3-2011/ba-p/1166705 p/1166705

There are all kinds There are all kinds of issues here...of issues here...

No happy endings for virtual investors By Maria Korolov Korolov talks about that virtual stock exchange Korolov talks about that virtual stock exchange

in Second Life where people can invest their in Second Life where people can invest their dollars in virtual company stocks…dollars in virtual company stocks…

Except they have no security at all.Except they have no security at all. ‘‘The folks investing their money knew it was a The folks investing their money knew it was a

game going in. They knew it wasn’t real. They game going in. They knew it wasn’t real. They knew that it wasn’t going to last. Right?’knew that it wasn’t going to last. Right?’

http://www.hypergridbusiness.com/2011/05/no-happy-endings-for-virtual-investors/ http://www.hypergridbusiness.com/2011/05/no-happy-endings-for-virtual-investors/

Remember this...?Remember this...? From week 4...From week 4... ‘‘Qui reported the loss of Qui reported the loss of

the “Dragon Saber” to the “Dragon Saber” to police but they said it police but they said it wasn’t real property wasn’t real property protected by the lawprotected by the law’’

So if someone cons you So if someone cons you out of your Linden out of your Linden Dollars then sells them Dollars then sells them for real money, there is for real money, there is no crime...no crime...

Apparently.Apparently.

We’re also only thinking about We’re also only thinking about legal or ethical problems...legal or ethical problems...

These arise from abuses of the systems These arise from abuses of the systems inside the game world, but this could be inside the game world, but this could be inverted...inverted...

But what about abuses of the systems of But what about abuses of the systems of the real world exploiting the virtual the real world exploiting the virtual economies?economies?

What about real world crime?What about real world crime? ““The new opportunities offered by The new opportunities offered by

virtual worlds for money laundering virtual worlds for money laundering include people providing false online include people providing false online identities, tax evasion and unregulated identities, tax evasion and unregulated cross-border money movements.”cross-border money movements.”

In other words, unregulated virtual In other words, unregulated virtual trading can allow people to move trading can allow people to move money from crime in very hard to trace money from crime in very hard to trace waysways

… … Although the evidence for this Although the evidence for this actually happening is questionable.actually happening is questionable.

http://phys.org/news188502643.html http://phys.org/news188502643.html

One other important part of this One other important part of this kind of mid-level credit system...kind of mid-level credit system...

Gold farmersGold farmers ““In 2009 300,000 ‘workers’ in Asia mine virtual

gold worth $730 million/year. ““Workers earn between €85-€130 a month which, Workers earn between €85-€130 a month which,

given the long hours and night shifts, can amount given the long hours and night shifts, can amount to as little as 30 cent an hour. After completing a to as little as 30 cent an hour. After completing a shift, they are given a basic meal of rice, meat and shift, they are given a basic meal of rice, meat and vegetables and falls into a bunk bed in a room that vegetables and falls into a bunk bed in a room that eight other gold farmers share. Wages may be eight other gold farmers share. Wages may be low, but food and accommodation are included.low, but food and accommodation are included.”

http://www.nextnature.net/2009/03/games-become-jobs/

Gold farmersGold farmers ““In 2009 300,000 ‘workers’ in Asia mine virtual gold

worth $730 million/year. ““Workers earn between €85-€130 a month which, Workers earn between €85-€130 a month which,

given the long hours and night shifts, can amount to given the long hours and night shifts, can amount to as little as 30 as little as 30 cent cent an hour. After completing a shift, an hour. After completing a shift, they are given a basic meal of rice, meat and they are given a basic meal of rice, meat and vegetables and fallvegetables and fallss into a bunk bed in a room that into a bunk bed in a room that eight other gold farmers share. Wages may be low, eight other gold farmers share. Wages may be low, but food and accommodation are included.but food and accommodation are included.”

http://www.nextnature.net/2009/03/games-become-jobs/

[Again, not my grammar]

““China used prisoners in China used prisoners in lucrative internet gaming work”lucrative internet gaming work”

““As a prisoner at the Jixi labour camp, Liu As a prisoner at the Jixi labour camp, Liu Dali would slog through tough days Dali would slog through tough days breaking rocks and digging trenches in the breaking rocks and digging trenches in the open cast coalmines of north-east China. open cast coalmines of north-east China. By night, he would slay demons, battle By night, he would slay demons, battle goblins and cast spells.” goblins and cast spells.” http://www.guardian.co.uk/world/2011/may/25/china-prisoners-internet-gaming-scam http://www.guardian.co.uk/world/2011/may/25/china-prisoners-internet-gaming-scam

Mata’s law of real money:Mata’s law of real money:

If there is real money, there If there is real money, there will also be exploitation.will also be exploitation.

(Please try not to help those doing this.)(Please try not to help those doing this.)

Low-level creditsLow-level credits I use this term to describe in-I use this term to describe in-

game credit systems that are game credit systems that are purely tied into the world itselfpurely tied into the world itself

You could argue that You could argue that ZeldaZelda and and Final Fantasy Final Fantasy have this...have this...

But the most interesting example But the most interesting example is is EVE OnlineEVE Online

It mixes mid and low-level credits.It mixes mid and low-level credits.

EVE Online EVE Online (made by CCP)(made by CCP)EVE OnlineEVE Online is a MMORPG based on is a MMORPG based on

spaceships trading goods and going to warspaceships trading goods and going to war It has a complex political and economic systemIt has a complex political and economic systemTop members of guilds are elected to oversee Top members of guilds are elected to oversee

the work of the developers to ensure that it is the work of the developers to ensure that it is not biased towards particular guildsnot biased towards particular guilds

It has been running since 2003It has been running since 2003Over 500,000 monthly subscribers Over 500,000 monthly subscribers (February 2013 (February 2013

http://www.rockpapershotgun.com/2013/02/28/after-ten-years-eve-stands-at-500k-subscribers/ )http://www.rockpapershotgun.com/2013/02/28/after-ten-years-eve-stands-at-500k-subscribers/ )

How do I make money in EVE?How do I make money in EVE? ““There is an infinite number of ways to ways to make There is an infinite number of ways to ways to make

ISK (Interstellar Kredits, the in-game currency) in EVE. ISK (Interstellar Kredits, the in-game currency) in EVE. Some of them evolve around performing various tasks Some of them evolve around performing various tasks arising from the game environment. For example, you arising from the game environment. For example, you can always make money by mining asteroids for can always make money by mining asteroids for materials to use or just sell on the open market. You materials to use or just sell on the open market. You can also run all kinds of missions for NPC agents. You can also run all kinds of missions for NPC agents. You can hunt NPC pirates in some parts of space or you can hunt NPC pirates in some parts of space or you can explore unknown parts of space for hidden can explore unknown parts of space for hidden artefacts and resources.artefacts and resources.

How do I make money in EVE?How do I make money in EVE? ““Most importantly, you have the option of using your own creativity, Most importantly, you have the option of using your own creativity,

your social skills and your business skills to make money from your your social skills and your business skills to make money from your interactions with all the other people playing EVE. Around 95% of interactions with all the other people playing EVE. Around 95% of every item or ship in EVE is made by the players from scratch and every item or ship in EVE is made by the players from scratch and sold through EVE’s central market system. sold through EVE’s central market system.

““You can start your own corporation to build items that are in You can start your own corporation to build items that are in demand and sell them to other people. You can also buy things demand and sell them to other people. You can also buy things when the price is low and sell them when the price is high or when the price is low and sell them when the price is high or exploit other people’s lack of time or patience by moving things exploit other people’s lack of time or patience by moving things around for them. In essence, you are free to invent any service around for them. In essence, you are free to invent any service valuable to other players and market it for your own profit. valuable to other players and market it for your own profit. Wherever you see an opportunity there is probably ISK to be Wherever you see an opportunity there is probably ISK to be made.”made.”

http://www.eveonline.com/faq/what-is-eve-online/ http://www.eveonline.com/faq/what-is-eve-online/

Which sounds good...Which sounds good... And it is. This results in gameplay where people are And it is. This results in gameplay where people are

constantly trying to find great bargains, work out new constantly trying to find great bargains, work out new angles, and generally be as sneaky as possible to get angles, and generally be as sneaky as possible to get money...money...

Just like real lifeJust like real life Perhaps it is fun for precisely that reasonPerhaps it is fun for precisely that reason ISK is not a real-world currency, so ‘theft’ in the game ISK is not a real-world currency, so ‘theft’ in the game

is part of the game and has no real-world impact, and is part of the game and has no real-world impact, and the economy fluctuates just like a real one...the economy fluctuates just like a real one...

But... But... Couldn’t a guild troll the rest of the game?Couldn’t a guild troll the rest of the game?For example, could a guild spend months For example, could a guild spend months

working out a way to completely screw up working out a way to completely screw up the economy?the economy?

Well... Yes...Well... Yes...

‘‘Burn Jita’Burn Jita’ Jita is a major trading Jita is a major trading

pointpoint A guild decided to A guild decided to

destroy as much of it destroy as much of it as possibleas possible

‘‘I tell you what, it’s I tell you what, it’s going to be fucking going to be fucking brilliant’ says CCP brilliant’ says CCP (makers of EVE)(makers of EVE)

http://www.eurogamer.net/articles/2012-04-27-ccp-players-http://www.eurogamer.net/articles/2012-04-27-ccp-players-attempt-to-destroy-eve-online-economy-is-f-ing-brilliant attempt-to-destroy-eve-online-economy-is-f-ing-brilliant

So...So...

How real are virtual economies?How real are virtual economies? Top-level credits are normal business transactionsTop-level credits are normal business transactions

Players pay a platform holder for access to a service or productPlayers pay a platform holder for access to a service or product Once the service is unlocked, the player has access to extra Once the service is unlocked, the player has access to extra

facilities inside that servicefacilities inside that service There are borderline products, such as Facebook Credits which can There are borderline products, such as Facebook Credits which can

buy products/services, but which also can act as virtual money buy products/services, but which also can act as virtual money inside the services tooinside the services too

This is going to happen a lot in the futureThis is going to happen a lot in the future The people who make the most money will always be the platform The people who make the most money will always be the platform

holdersholders (Not developers)(Not developers) (And definitely not players, but they should still have a good time)(And definitely not players, but they should still have a good time)

How real are virtual economies?How real are virtual economies? Mid-level credits are where a player pays real-money for Mid-level credits are where a player pays real-money for

virtual currencyvirtual currency Often, the true value of a product is withheld to extract money from Often, the true value of a product is withheld to extract money from

playersplayers They can be a morality test for players – play to earn rewards, or They can be a morality test for players – play to earn rewards, or

pay to win instantly (which is tempting for many)pay to win instantly (which is tempting for many) This kind of system is very open to abuse by the developerThis kind of system is very open to abuse by the developer The economy is often in a constant state of inflation to provide The economy is often in a constant state of inflation to provide

income for the developerincome for the developer There is potential for real world crime and gold farming slavery, so There is potential for real world crime and gold farming slavery, so

it can be morally quite dubious at best...it can be morally quite dubious at best... But there’s also a huge amount of profit for a developer.But there’s also a huge amount of profit for a developer.

How ‘real’ are virtual economies?How ‘real’ are virtual economies?Low-level credits are currencies that remain Low-level credits are currencies that remain

entirely inside the gameentirely inside the game Tricky to get rolling – they need a very complex world to Tricky to get rolling – they need a very complex world to

support themsupport them ... But also the most realistic and so these are excellent ... But also the most realistic and so these are excellent

when achievedwhen achieved Be prepared for in-game terrorist attacks on your economy...Be prepared for in-game terrorist attacks on your economy... And embrace them if possible! It’s all part of the game.And embrace them if possible! It’s all part of the game. Morally, these are also the safest of all the types of virtual Morally, these are also the safest of all the types of virtual

economic systems presented today, because they don’t lead economic systems presented today, because they don’t lead to real-world crime or suffering.to real-world crime or suffering.

So...So... It’s time to vote for debate topicsIt’s time to vote for debate topicsAlso, I want to wrap up the lectures after Also, I want to wrap up the lectures after

we’ve voted, so don’t pack up we’ve voted, so don’t pack up immediately!immediately!

This week’s debate topics:This week’s debate topics: You have three options to vote on:You have three options to vote on:

Proposition 1: That players should never be able to pay Proposition 1: That players should never be able to pay to climb ranks in a game more quickly.to climb ranks in a game more quickly.

Proposition 2: That the ‘Freemium’ business model will Proposition 2: That the ‘Freemium’ business model will destroy the games industry.destroy the games industry.

Proposition 3: You get to choose anything at all for us to Proposition 3: You get to choose anything at all for us to talk about in your classes! (Come up with ideas before talk about in your classes! (Come up with ideas before you attend!)you attend!)

And… And… If you have all been judges If you have all been judges then, if you want, you then, if you want, you can form one team against me.can form one team against me.

In conclusion...In conclusion... How real are virtual economies?How real are virtual economies? They can fluctuate and change like real They can fluctuate and change like real

economieseconomies They cause murder, death, and can conceal They cause murder, death, and can conceal

international crimeinternational crime I’d say you don’t get much more real than I’d say you don’t get much more real than

that...that... ... I just wonder how long it will be before ... I just wonder how long it will be before

international law makers work this out.international law makers work this out.

That’s CD4’s lectures!That’s CD4’s lectures! Thank you for joining in with this moduleThank you for joining in with this module I hope you’ve enjoyed it and found it thought I hope you’ve enjoyed it and found it thought

provokingprovoking If you have any feedback about the content or the If you have any feedback about the content or the

teaching, please give it to your student rep who will teaching, please give it to your student rep who will pass it on to uspass it on to us

It’s been a pleasure teaching you all, I hope you’ve It’s been a pleasure teaching you all, I hope you’ve enjoyed it as much as I have!enjoyed it as much as I have!

Good luck with your other courses!Good luck with your other courses!

Thank you!Thank you!See you in the See you in the

working class!working class! Proposition 1: That all mid-level Proposition 1: That all mid-level

credits systems should only use real credits systems should only use real currencies.currencies.

Proposition 2: That players should Proposition 2: That players should never be able to pay to climb ranks in never be able to pay to climb ranks in a game more quickly.a game more quickly.

Proposition 3: That the ‘Freemium’ Proposition 3: That the ‘Freemium’ business model will destroy the business model will destroy the games industry.games industry.

Proposition 4: Your choice!Proposition 4: Your choice!

RAWR!RAWR!