Synthetic Worlds

Real economies in imaginary places

Virtual reality is halfway here in the form of massive multi-player online role playing games like EverQuest, World of Warcraft, and Ultima Online. Outsiders think these games are silly diversions overrun by pudgy guys in dim basements pretending to be elves, but the millions of gamers themselves (many of them women) know better. This is, as the new game in town is called, our Second Life. It’s old news that real things can happen in these unreal places. Julian Dibbell’s under-appreciated 2001 book My Tiny Life explored the weirdness of whether a virtual rape in a virtual world was a real crime. This new book, Synthetic Worlds, goes further. It tallies up all the world-changing consequences stemming from market places in fantasy worlds. Edward Castronova is an economist who began studying the exchange rates of token money in these games, analyzing the emerging prices as powers and characters were sold on eBay. He quickly concluded that these games have robust economies as large, and as “real” as many real countries. The clincher to this tale has been the recent stampede of newbies singing up for the game Second Life when USA Today revealed that amateurs were making hard cash (US dollars) selling virtual real estate in this unreal place. This is the fantastical stacked on the implausible stacked on the unexpected, but it is all very actual.

— KK

Synthetic Worlds
The Business and Culture of Online Games
Edward Castronova
2005, 344 pages
Available from Amazon

Sample excerpts:

Nothing is more eerie than a large, unpopulated city. It happens often in the cities constructed in virtual worlds, because the cities have no economic rationale and hence no economic activity. They are large, beautiful, empty spaces. Meanwhile, somewhere out in the countryside, all the players have accumulated somewhere to conduct their marketing activity. In the first few years of EverQuest, the main market was located in a tunnel in the wilderness because that happened to be the main route by which people traveled; a nearby city was evidently built to feel like a capital but was usually empty simply because the tunnel was the most direct route through that area. Getting people to congregate for market purposes requires that transportation practices be respected.


It is not uncommon for a user to own two or more accounts in a world, one that is his main avatar and the others to do nothing but menial, macro-able tasks to support the main avatar’s activities.


The key to generating economic activity is trade. Trade constitutes a large part of social activity on Earth and should do so in a synthetic world. Trade allows people to have fun buying things. It brings strangers together, to do something other than fight. Its broader effect is to make your world feel alive. Make sure trade involves conversation, chatting, shouting, verbalizations that can be overheard. It’s the buzz of the city — more than that, it’s why cities have buzz; it’s why there are cities

Creating economic activity is easy; specialize economic roles, and trade will follow. Specializing roles lets people feel unique and needed, which is fun, but it also makes trading worthwhile. The economic theory here is that specialization and gains from trade are what make economic activity grow; we owe the idea to Adam Smith, the founder of the discipline.


In contemporary synthetic worlds, it is not uncommon to find large numbers of people who do a mundane, unchallenging task over and over, for literally hundreds if not thousands of hours, just in order to gain some kind of advancement or reward. In my early days in EverQuest, I spent a great deal of time near a ruin that also happened to be the place where a certain NPC would appear extremely rarely and unpredictably. The NPC carried an item, the Glowing Black Stone, that was of some value to wizards. I began to notice that every day, as I was going about my business, I would see one person sitting near the ruin, for hours and hours, doing absolutely nothing. After conversing with the person, I learned that he was a very powerful character who decided he wanted the Glowing Black Stone and had come to wait for it. In game parlance, he was “camping” the item. So he sat there, doing nothing at all, for hours every day. It went on for weeks. Finally the NPC appeared and the player got his Stone and went away. Word apparently went out that the Stone camp was now open, because the very next day, someone else appeared to wait for the next one. Having a Glowing Black Stone was apparently quite a badge of honor — if you had one, it showed that you had survived a horrifically boring experience. People seem to find even the most onerous tasks enjoyable, if they provide some kind of suitable reward. The mere fact that the reward is rare and visible may be enough


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