EverQuest’s Place in the Economy
It’s unlikely any other economist has made the claim that Edward Castronova did in his most recent scholarly study.
“I faced many dangers,†he wrote, “and died many, many times in order to gather impressions and bring them back for you.â€
Castronova, an assistant professor at Cal State Fullerton, did his economic study on Internet role-playing games such as EverQuest, where characters created by fee-paying players can die and come back to life numerous times before amassing vast virtual wealth.
By immersing himself in EverQuest, surveying players and keeping track of online auctions where virtual goods are sold for real dollars, Castronova arrived at a startling conclusion.
“The GNP per capita in EverQuest is the 77th largest in the world, right between Russia and Bulgaria,†he said . “If a character, even a virtual one, is doing something that has a clear marketable value, that’s part of an economy.â€
Castronova allows that he was stretching the traditional guidelines of gross national product to arrive at the conclusion in his paper, “Virtual Worlds: A First-Hand Account of Market and Society on the Cyberian Frontier.â€
But experience levels and items gained in game play are regularly sold for real-world money on auction sites. Castronova determined that a powerful level-50 character can sell for as much as $500.
Even though relatively few players participate in real-world transactions involving EverQuest goods, he believes the potential value is meaningful.
“Every level is worth about 10 bucks. To me, that is value creation and fits into any standard definition of economic value,†he said.
The selling of EverQuest components has been banned by Sony Online Entertainment, which owns the game. But players, who pay $10 a month to participate, can find weapons, armor and magical jewelry readily available on auction sites.
Castronova’s study, which also assigns exchange, inflation and poverty rates to the EverQuest world, was published as a working paper by the Center for Economic Studies at the University of Munich. After refinements, he hopes eventually to get it published in a peer review journal.
So far, he said, the reaction has been positive. “Economists seem to really dig it when standard economic thinking is applied to different areas. It shows how economic principals are widely applicable,†Castronova said.
“You should see the economic studies of game shows,†he added. “Whole papers have been done on ‘Jeopardy.’â€
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David Colker covers personal technology. He can be reached at david [email protected].
