13 Percent

Also posted at Terra Nova

According to Playspan, and reported by various outlets this week, 13% of internet users bought virtual goods last year, spending a little over $90 on average.  (If this is accurate, it matches the percentage of voters who claim membership in the Tea Party, the percentage of CEOs who drove hybrids in 2007, and the percentage of teenagers who eat the recommended amount of fruits and vegetables.)  Estimated global revenues from sales = over $10B.

In related news, 44M game passwords were reportedly stolen, presumably with the hopes of supplying a bit of that 13 percent, multi-billion dollar market.



AVEA Seminar on Research in Virtual Economies

June 8, 2010
12:00 to 16:00
Museum of Contemporary Art Kiasma, Seminar room
Helsinki, Finland

On Tuesday, 8 June 2010, Helsinki Institute for Information Technology HIIT is organising an open seminar on research in so-called virtual economies. Online gaming, virtual goods sales and the convergence of games and social networking sites are radically changing the operating environment for consumer facing online businesses. Understanding user behaviour and different business models as well as the ability to collect and analyse data are emerging as crucial success factors. This seminar will provide a scholarly perspective to these topics by presenting findings from AVEA, a Tekes funded research project. Please find the programme of the seminar below.

12.00 Opening words
Kai Huotari, Research programme Manager, HIIT

12.15 Virtual Consumption
Dr. Vili Lehdonvirta, Researcher, HIIT

12.50 Virtual goods sales as a business model
Juho Hamari, Researcher, HIIT

13.25-14.25 Coffee Break

14.25 A micro-economic approach to MMOs
Juha Tolvanen, Researcher, HIIT

15.00 Does a player driven virtual world need economic management? CCPs approach to managing the economy of EVE Online.
Eyjólfur Guðmundsson, Chief Economist, CCP

15.35-16.00 Closing discussion


Please confirm your attendance by Friday, June 4, to Kai Huotari (kai.huotari{at}hiit.fi).

Quick Notes

Also posted at Terra Nova


Cosmetic Real Money Trading in World of Warcraft

Despite a staunch position against non-company-sanctioned real-money trading (RMT), or the exchange of “real” money for virtual goods and services, Blizzard Entertainment has recently introduced new features of World of Warcraft that have opened the door to the sale of the company’s own virtual goods. While currently focused on cosmetic elements of the game in a controlled and limited way, the development of Blizzard-sanctioned and governed RMT raises some questions and concerns about such practices as well as opening the door for further such activities in the future.

Recent developments in RMT in World of Warcraft are focused on primarily cosmetic items. New items that add to the game in primarily aesthetic ways are available for player purchase within the Blizzard store. To date, offerings are focused on pets and mounts. In-game non-combat pets include a panda, robotic mini- deconstructor, and mini-monster. These pets serve no practical function within the game, and retail for $10.00 USD. The store also features additional in-game pets such as a wind rider cub and a gryphon hatchling that sell for $25.00, but that also include a stuffed animal. While it will not enhance play in a way that otherwise be unattainable within the game, another recent item available in the Blizzard store includes a purchasable mount. The star-outlined celestial steed allows for quick in-world transit and sells for $25.00.

To a degree, cosmetic RMT has been around in World of Warcraft longer than might initially be apparent, especially with the hyped advent of the Blizzard store and its merchandise. In truth, special rare items such as spectral tiger and saltwater snapjaw mounts became available through the purchase of card packs for the associated trading card game (TCG). However, the shift to Blizzard-enabled purchases through a dedicated store marks a potentially significant shift in RMT practices and their effects on video game play in virtual worlds.

While Blizzard has not announced all of their future RMT intentions for the site, there are a few possible repercussions that are worth considering. First, with the shift to special store-only in-game items comes the ability to read another player in terms of how much money they have spent on the game. Generally speaking, in-game items have been largely indicative of the amount of work a player had put into their character – they represent the completion of particular tasks, success in specific dungeons or other arenas, the accumulation of wealth or other currencies, or a combination.

In contrast, allowing players to purchase items – and making such items only available for purchase, and therefore distinctive within the world – makes it clear which players have bought their goods. While such knowledge is not necessarily an issue on its own, it does raise questions surrounding whether such purchases constitute cheating, and whether making apparent how much individuals spend on the game could be an issue in a game that, theoretically, offers an even playing field within the world.

Second, the progression of different items released within store could, if they continue at their present rate, gradually lead to the sale of goods that could significantly affect gameplay. Items introduced within the Blizzard store have begun, with the introduction of the celestial steed mount, to shift from being purely cosmetic – as with non-combat pets – to moderately functional. While the mount does not increase the speed increases available to players who buy it, it does function within the world as any other mount, rather than being a purely cosmetic addition such as with a companion pet. While it will not significantly affect gameplay, beginning to introduce functional items that could alter the play experience by gradually leading to a play style where players are able to purchase their in-game items.

These issues are not necessarily fully upon us, yet the development of RMT within Warcraft raises some interesting questions about the potential effects of such developments. While RMT is not a new element of virtual worlds, the development of such features in a world that has fairly consistent moved away from and even worked against these practices offers a useful case study. Many virtual worlds have only consistently omitted or offered RMT. With World of Warcraft, the gradual shift from one state to the other offers an opportunity to explore not only its effects on worlds, but how these worlds changes as RMT becomes a sanctioned element of the world.