Virtual economies

The rise of secondary economies outside of game worlds is another issue that game publishers have had to deal with. The designers of Ultima Online were the first to notice this phenomenon at work when a castle in their game world sold for thousands of dollars on eBay. By 2006, the market had grown to a size of more than $1 billion. Players spend hours in-game accumulating wealth, hunting for rare weapons, and gaining power and prestige for their characters in order to sell the fruits of their labours for real money. The buyer and seller agree on a purchase price, the funds are transferred electronically, and the transaction is completed in the game world. Hundreds of “gold farmers,” who play games in the hopes of hoarding resources that can be sold to players in South Korea or the United States, have been employed by some Chinese companies. Most MMOG companies attempted to curb this behaviour by banning suspected gold farmers’ accounts (for example, Activision Blizzard has closed tens of thousands of such accounts since World of Warcraft went online), and eBay began enforcing a ban on the sale of virtual goods in 2007. When Sony launched Station Exchange, a service designed to make buying and selling virtual goods in its EverQuest games easier, it tapped into the secondary market. Linden Lab, on the other hand, was the first company to create a game based on a virtual economy. Second Life was the name of the game.

Second Life was less of a game and more of a virtual world, similar to The Sims, the best-selling PC game of all time. Though The Sims Online was a flop when it first launched in late 2002, Second Life took off immediately after its launch in 2003. The difference between the two games was in the economic models they used. Whereas The Sims Online was chastised for its lack of clear goals for players, Second Life gave them the opportunity to make as much money as they could with the game world and their own skills. Players were given an allowance of Lindens (the in-game currency) in exchange for a monthly subscription fee, which could be officially exchanged for US dollars at a rate of about 250:1. After that, players could buy in-game items, customise them with 3-D imaging software, and resell them for a profit. Crafting items and managing virtual real estate in Second Life has turned into a “first life” business for some.

Gaming in a social setting

Developers sought to capitalise on the opportunities presented by Web sites such as Facebook and Myspace as social media exploded in popularity in the early twenty-first century. They created a Web-based gaming experience that was comparable to older home consoles using animation programmes like Flash. These games were popular because of their simple game play and cartoon-like graphics, and many of them offered incentives for players to recruit new players to the game. The most popular “Facebook games,” such as Zynga’s Mafia Wars (2008) and Farmville (2009), and Electronic Arts’ The Sims Social (2011), maximised revenue by rewarding players for interacting with advertising partners and selling in-game cash.