The ethics of social games and virtual goods: a bigger picture

ADOPT THE BABY SEAL! You can rescue a scared Baby Seal when it got lost while playing hide-and-seek! The Baby Seal is too young to survive on its own. (Happy Aquarium by CrowdStar)ADOPT THE BABY SEAL! You can rescue a scared Baby Seal when it got lost while playing hide-and-seek! The Baby Seal is too young to survive on its own. (Happy Aquarium by CrowdStar) A big theme at the Game Developers Conference this year was the rise of so-called social games: relatively open-ended games typically played on social networking sites such as Facebook, light on story and complicated game mechanics, but full of highly optimised feedback loops and virtual goods accumulation. A paradigmatic example is Zynga’s FarmVille, which has attracted an incredible audience of 80 million players. The success of social games is forcing traditional developers to reconsider the way they approach game design and game business. But some game industry veterans are now raising concerns about the ethicality of the social game paradigm (Soren Johnson has a good summary, check out the comments, too). Much of the concern relates to the idea that social games “exploit psychological flaws in the human brain” to keep users engaged and paying for comparatively simple game content. Sour grapes or valid concerns? I’m withholding judgment, but the discussion prompted me to write a short essay that puts the current concerns in a bit of a historical context.

How mass culture killed the auteur

Radio talk shows, refrigerators, packaged foods and other products of the industrial power of the United States and Europe began to reach a growing number of homes towards the middle of the 20th century. This rising prosperity was in large part due to the efficiency of the capitalist economy. But even as material prosperity grew, sociologists such as Max Horkheimer and Theodor Adorno (1947) felt that something was simultaneously being lost. They called the new mass-produced prosperity “mass culture”, and were sorry for all the more original culture it was replacing.

Horkheimer and Adorno studied music and radio in particular. Classical music was produced for the sake of music itself. In contrast, the entertainment offered by the new mass media, radio, was designed to sell advertising space. They thus argued that while culture was originally independent, in mass culture it is subjugated by economic interests. Culture becomes a machine for producing consumption: turning citizens into consumption machines in order to fulfil the needs of the growing industry.

During the latter half of the 20th century, competition between companies ensured that the science of persuading consumers continued to develop further. Vance Packard (1957) showed how American advertisers and retailers in the postwar era exploited the latest findings from psychology and sociology in order to beat their competitors and sell more goods. Subsequently this approach has been taken to new heights. Retail spaces and restaurants are literally Skinner boxes where customers’ every move is observed and analysed. Product palettes and prices are optimised for each target segment. Pop music songs and television shows follow carefully tested and re-tested formats with split-second accuracy. Where auteurs still exist, they largely subsist at the edges of the economy.

It is possible to fashion the concerns expressed about the shift towards social games according to this same pattern. Originally, game developers focused on creating the most touching and moving experiences they could fit on a floppy or cartridge, creating real cultural landmarks. In contrast, social games are turning the game industry into an industry where the profit motive directly dictates game design, and human psychology and sociology are harnessed in the pursuit of revenues. Developers become optimisers and the role of players is that of mindless clicking machines.

My game is better than your game

It is tempting to view mass consumption as an entirely “produced” phenomenon, where consumers are nothing but victims of manipulation. In practice, however, this view turns out to be too simplistic. We humans are reflexive subjects: as some new “brain hack” gains popularity, to some extent we can learn to identify it and negate its effects. Schoolchildren are increasingly taught media criticism. Gamers learn to break away from addictive mechanics to pursue other things they hold dear, at least healthy ones. People creatively repurpose consumer goods and influence the way in which markets and fashions develop through debate and advocacy. Although we will always be susceptible to marketing and optimised game mechanics, the relationship between production and consumption is by no means that of simple exploitation.

Horkheimer and Adorno’s juxtaposition of shallow mass culture versus profound high culture has been criticised as elitist. Classical music and fine literature were originally the privilege of those few how could afford the time and education to enjoy them. As mass media brought music and talk shows to the reach of the ordinary working man, the cultural elite hastened to point out that these were nevertheless inferior forms of culture: the highest respect and reverence should continue to be afforded to the connoisseurs of high culture. Yet it is difficult to define objectively what it is that is so great about the products of high culture that sets them morally above the products of the vulgar mass culture. Connoisseurs say that classical music is “profound” and “the closest music has ever come to universality”, but people dancing to a trance track at a festival with hundred thousand other people report very similar sentiments (can anyone but a connoisseur tell the difference between the world’s most talented classical violinist and a street musician?).

To some the whole debate is thus a fight over whose taste gets to be called better, and whether cultural forms that are difficult to access are automatically privileged over popular ones. Should we look down on the neo-gamer because she or he doesn’t have the time or ability to unravel The Secret of Monkey Island, instead preferring the strangely satisfying rythmic movement of clicking on pictures of plants? Many of the criticisms of mass culture and exploitation of consumers still stand. But many scholars have given up on bashing mass culture, not because there wouldn’t be anything to bash, but because all has been said already. Instead, they have now taken the bull by the horns and moved on to studying “consumer culture” in itself: what new cultural and social forms do the products of the mass culture give rise to? Superbowl ads and all the discussion surrounding them are an good example.

Making moral decisions in a market economy

Market fundamentalists believe that the consumer is always right: every free and informed choice they make on the marketplace results in greater welfare. The equal belief in gaming terms is that if a player clicks on something, they must be enjoying it. From an ethical perspective, this belief frees the producer from responsibility and shifts the burden to the consumer to make the right choices.

However, we know that people frequently make bad choices even when they should know better. Smokers and gourmands often choose short-term indulgence even when they believe it will result in greater pain later. Gamblers may risk huge amounts of money or even their job and family for the sake of a moment’s exhilaration. Nor are consumption decisions in practice very informed: many children and adults alike are lead to bad purchase decisions by one-sided information provided by advertising. If you as a seller know that what you are offering to the customer is probably not good for them, it becomes hard to justify your business ethically.

How is the seller supposed to know what is good for the consumer and what is bad? The mismatch between the choices that people make and the choices that would have made them happy is studied in fields such as behavioural economics, happiness studies and the psychology of addiction, but there is no big theory or formula that can answer that question. It comes down to individual judgment. If your “customers” are calling a helpline to get away from you, as is the case with gambling addicts all around the world, then the implications are quite clear.

Yet individual judgment doesn’t always matter in our economy, which is built around maximising shareholder value. If your gardening simulator doesn’t exploit the latest hacks from cognitive psychology, the competitor’s will, and they will prevail. On the other hand, if you become too good at relieving customers of their money without leaving them with a feeling they got something of value in exchange, you run the risk of being regulated like casinos. Having your business destroyed by regulation or consumer activism is not good business, so it is possible to make a business case for short-term self-restraint. Sulake, the makers of the teenage virtual world Habbo, are very tactful about marketing to minors: they even limit the amount of money their customers can spend on virtual coins in a week. However, this is called stakeholder management and does not necessarily have anything to do with acting ethically out of one’s own moral compulsion.

Just because the goods are virtual doesn’t mean they are unethical

Besides the recent concern over the ethicality of social game mechanics inside the game industry, mainstream commentators have been questioning the ethicality of selling “nonexistent” virtual goods ever since this revenue model was first invented. The typical view is that “selling virtual goods represents taking advantage of children both economically and psychologically”. The quote is from my PhD thesis, in which I dealt with this charge extensively.

There is nothing intrinsically unethical in selling virtual goods. People use virtual goods to establish and communicate status and identity positions (i.e. to brag and be emo), achieve aesthetic experiences and express themselves (i.e. see cool graphics and build stuff), and as means towards ends (i.e. getting the girl’s attention or killing the dragon). These are the same things that people do with material goods, and the same kinds of things that people enjoyed the boxed games of the past decades for. And just as with other goods and services, it is possible to use virtual goods in business that contributes positively to people’s lives, as well as in business that exploits people and harms them. If you are working in the competitive economy, you might not get to make a real choice, except as a matter of business expediency. If you are someone who makes their living on the edges, such as a scholar or an independent game developer, you enjoy greater freedom. Just make sure that you are not confusing personal taste and privilege with moral good, as Horkheimer and Adorno were criticised of doing.


JVWR issue on virtual economies, goods and service delivery published

The Journal of Virtual Worlds Research has published its latest issue (volume 2, issue 4) titled Virtual Economies, Virtual Goods and Service Delivery in Virtual Worlds. Official announcement and list of articles below the fold.

In other news, slides from my presentation at the Game Developers Conference 2010 Social & Online Games Summit are now online: Why Do People Buy Virtual Goods? Ten Attributes That Influence Item Desirability. The room was packed and I hope the audience got what they wanted. Feedback welcome!

Volume 2, Number 4: Virtual Economies, Virtual Goods and Service Delivery in Virtual Worlds

In this special edition on virtual-world goods and trade, we are pleased to present articles from a global cohort of contributors covering a wide range of issues. Some of our writers, such Edward Castronova, Julian Dibbell or KZero’s Nic Mitham will be well known to you as distinguished leaders in the field, but it is equally our pleasure to introduce exciting new voices. Here you will find pieces written by academics, practitioners, journalists, a documentary filmmaker and perhaps the youngest contributor to JVWR yet, Eli Kosminksy, who attends high school in upstate New York. We would also point out that this issue extends its format to include Anthony Gilmore’s pictorial story, Julian Dibbell’s audio interview, and Lori Landay’s machinima. In real life, most contributors live in the US, the UK and Europe, and we, the editors, are based in Australia and France.

The editorial team for this issue includes:

  • Mandy Salomon, Smart Services CRC, Australia
  • Serge Soudoplatoff, ESCP-EAP / Hetic, France

Editor′s Corner

Why Virtual-World Economies Matter

Mandy Salomon

Serge Soudoplatoff

Abstract | PDF


Interactive Online Exhibits and Demonstrations

Rethinking Virtual Commodification, or The Virtual Kitchen Sink

Lori Landay

Movie | PDF


Invited Articles

On Money and Magic

Edward Castronova

Abstract | PDF

Characteristics of the Virtual Economy (after ‘State of Play VI’ Conference , 2009)

Julian Dibbel


China′s New Gold Farm

Anthony Gilmore

Abstract | PDF

Virtual Goods: Good for Business?

Nic Mitham

Abstract | PDF


Peer Reviewed Research Papers

“We Will Always Be One Step Ahead of Them” A Case Study on the Economy of Cheating in MMORPGs

Stefano de Paoli, Aphra Kerr

Abstract | PDF

An Exploration of Entrepreneurship in Massively Multiplayer Online Role-Playing Games: Second Life and Entropia Universe

Stéphane Kieger

Abstract | PDF

Born Virtuals and Avapreneurship: A case study of achieving successful outcomes in Peace Train – a Second Life organization

Robin Teigland

Abstract | PDF

Virtual Commerce (V-Commerce) in Second Life: The Roles of Physical Presence and Brand-Self Connection

Seung-A Annie Jin, Justin Bolebruch

Abstract | PDF


Research Papers

Understanding “Gold Farming” and Real-Money Trading as the Intersection of Real and Virtual Economies

Richard Heeks

Abstract | PDF

World of Warcraft: The Viability of Massively Multiplayer Online Role-Playing Games as Platforms for Modeling and Evaluating Perfect Competition

Eli Kosminsky

Abstract | PDF


“Think Pieces”

Currencies and Capitalisms on the Internet

Minna Ruckenstein

Abstract | PDF

Licensing Considerations for OpenSim-Based Virtual Worlds

Shenlei E. Winkler

Abstract | PDF



Teens and Virtual Goods: The Fun, Useful and Affordable Luxuries that are Driving the Virtual Economy

Maura Welch

Abstract | PDF


Editor-in-Chief′s Corner

Topping from the Viewfinder: The Visual Language of Virtual BDSM Photographs in Second Life

Shaowen Bardzell

Abstract | PDF