The Future of Cyberspace Economies Edward Castronova http://conferences.oreillynet.com/cs/et2004/view/e_sess/4632 at the O'Reilly Emerging Technology Conference: http://conferences.oreillynet.com/et2004 2-10-04 San Diego, CA Cory Doctorow doctorow@craphound.com -- Once MMORPG users start trading goods on eBay, you create real-world torts and property interests in gamespace objects. Korean court awarded damages to someone whose gameworld artifact vanished. I did economic analysis of MMORPGs, "shadow pricing" of gamespace econ. Analyzed Everquest world Norath. GDP/cap: $2000 -- comparable to Tunisia, Bulgaria. Economist said, "Game economy bigger than Bulgaria" eBay MMORPG trade: $20MM/yr, not counting Everquest, nor Asia. Estimated total: $50MM. The trade in the world is probably $1BB. Spectator sports are ~$13.6B. -- Econ is the study of choice under scarcity. The dismal science says, when essential stuff is scarce, you've got to trade something for something else. MMORPGs sometimes try letting everyone have everyone for free are ghost towns. MMORPGs create artificial scarcity. The surprise to econismists is that scarcity is fun -- people hunger for that which is dismal, scarce. Because wealth accrues due to temporal investment, the rich and powerful in MMORPGs are people who can devote a lot of time to games, which means that they tend to be poor in real life. Players become intensely interested in markets and trading -- The economies are crude: While you do have dupes, hacks and splouts, you don't have taxation, storage fees, transport, depcreciation, insurance, finance. -- What's a fun economy? Self-employment Manageable risk Formulas to get capital No skill bottlenecks: with enought time you can become right Social networks are fluid but required for investment -- 84%: Gamers feel that they live in realworld, travel to MMORPG 20%: Gamers feel they live in MMORPG, travel to reallife Same age across the board, not all kids -- MMORPG developers need to address the question of whether it's more fun to allow "illegal" activity -- player-killing, etc -- than not. Should people be able to carry goods from game to game? If you let people carry stuff everywhere, the game-play starts to suck. More to the point: if this stops looking like a tax-dodge, the feds will move in. -- People can choose their avatar identity -- dwarf, elf, woman, man. Games are a commons -- and getting them to non-tragically groom those commons is a deep political program. eof