Thursday, June 02, 2005

The Game Is Virtual. The Profit Is Real.

Interesting article about how people are able to make real money selling virtual goods in multiplayer online games.

Jason Ainsworth plays the online game Second Life at least four hours a day. In the game, he runs a virtual real estate development business. But his after-tax profit - about $1,800 a month - is real, and it's enough to pay the mortgage on his home in Las Vegas.

Earnings can be considerable. Ailin Graef, who goes by the screen name Anshe Chung in Second Life, said she was on track to earn about $100,000 in real money in her first year in the game's real estate business.

But game companies are beginning to accept "real-money trade" as a fact of life. Sony Online Entertainment recently began a service that allows players of its EverQuest II game to buy and sell items through a Sony site.

With about 10 million people worldwide playing at least one of the 350 or so massively multiplayer online games, there is no shortage of income-producing possibilities for the imaginative. Steve Salyer, a former game developer, is now president of Internet Gaming Entertainment, a Los Angeles company that runs He estimates that players spend a real-world total of $880 million a year for virtual goods and services produced in online games - not counting sales of the games themselves, and monthly subscription fees, often around $10.
In a way it seems crazy that people would spend real money for imaginary items, but I am sure that the investment bankers must have thought the same thing when Microsoft talked about selling software. Even though the goods are imaginary, they take real time to create, and time is a good that will always be scarce and therefore always valuable.

I also like this development from an environmental standpoint. I just finished reading a book about Ecological Footprints. The question the book left me with, is how do we reform our economy to live within our ecological constraints? And this looks like one very real possibility. As people spend more and more time in the virtual world, they spend less time doing activities in the real world that use natural resources. We will start spending more time playing video games about racing cars and less time actually driving them.

It also seems to me that a lot of our current consumption has to do with social status. You want a 4,000 sq foot house because your friends have 3,750 sq foot ones. In the real world this has negative environmental impacts. In the virtual world the status is still real, but without any environmental implications.

Wired had a good article on this a while back. And there was this side bar which I love about a Mexican "virtual sweatshop".
As the workers sat mouse-clicking virtual trolls to death, their characters acquired skills and gold at a brisk, assembly-line pace. For this, Black Snow paid the Mexicans piecework wages -- then turned around and sold the high-level characters and make-believe money on eBay.
Nice. But, it does make you think about outsourcing the work to India. How cool would it be to hire a personal game player, that would go around and do all the boring stuff so that you could get a cool character and could spend your time just doing the fun stuff.

via New York Times

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