The Art of Economies

Economics and games are becoming inseparable. From in-game virtual economies that balance risk/reward to the real-world business of game construction/consumption.

As a game-mechanics addict, I have always had a disproportionate love for how virtual game economies work; and as a business owner I have always been sensitive to the capitalistic laws that shape the fledgling game industry.

There is plenty of criticism of modern game factories, so discussing the pros and cons of Big Business and how it affects the products we love so much is more like cannibalizing a corpse than creating discourse. While there are some tantalizing tidbits left on this particular corpse, as a broad subject it has been picked over beyond the point of death. In-depth conversations about Big Business Gaming seem to dissolve into rants and ruminations about the ‘good ole days’ more often than not. The precise effects that corporate structures have on gaming products are far more interesting, but far rarer due to the fact that flaming is just more fun than thinking.

So I will leave the real-world economics of games for anther day, and get a bit esoteric. I am going to deconstruct and examine how in-game economics are being used in Strategy games and in MMO’s. As technology, complexity, and communities advance, are game economies keeping pace? What works well, what works and what fails? Hell, what is the purpose of in-game economies?

Before I dive into these questions, here is some great background information to help illuminate this subject.

-This short piece by Edward Castronova for Wired magazine explains the basic relationship that real economic principals play in the virtual world.

-Here Nate Combs (on the site Terra Nova) discusses why MMO economies are so hard for designers and developers to get right.

-This rough essay by Chris Chapman discusses the mingling of experience and wealth to create a unified currency in games.

-Here Shannon Applecline investigates a game mechanic called “The Tragedy of the Commons” that can be applied to a variety of game systems.

-Damion Schubert from Zen of Design tackles the incentives of fun and economic gains, and how WoW is struggling with those concepts for end-game players.

-This article is merely meant to point out the effects that these virtual-economies can have on real world businesses, and the steps Developers are taking to protect their IP.