PLAY MONEY GETTING MORE REAL ALL THE TIME Publique Deposited
The E-Sylum: Volume 7, Number 15, April 11, 2004, Article 16
PLAY MONEY GETTING MORE REAL ALL THE TIME
A recent article in Wired magazine highlights an interesting
trend involving make-believe money:"The buying and selling of virtual currencies, weapons and other
goods from massively multiplayer online games like EverQuest
and Ultima Online may be off most people's radar, but it is truly
big business.One company, Internet Gaming Entertainment, or IGE, has
more than 100 full-time employees in Hong Kong and the
United States who do nothing but process its customers'
hundreds of thousands of annual orders for virtual goods,
the lion's share of which average nearly a hundred dollars
each. And demand is so strong, says IGE CEO Brock Pierce,
that the company is hiring about five new people a week."While IGE has had several hundred thousand customers
since its inception in 2001, it depends on a stable of more
than 100 suppliers -- hard-core players who sell IGE
surplus currency, weapons and other goods they regularly
accumulate."They can play games all day and make a little money for it,"
says Pierce. "Most of the time, they're selling off their garbage,
but one man's garbage may be another man's treasure....
They'll sell us that (extra) suit of armor, or sell the suit of
armor in the game and sell us the currency, and then they'll
go pay their rent with it."IGE's business treads into controversial waters in the gaming
world. That's because its buyers are spending real cash to
improve their lot in life, or at least in the games they play,
without having to spend the time to do so.""This has led IGE to bring on Ken Selden, a Hollywood
screenwriter and leading peddler of virtual goods, as its
chief economist."There's a relationship between real-life economies and a
virtual economy," says Selden. "I happen to believe that
these virtual economies are very real, serious economies."Selden says the strength of a virtual economy is determined
largely by how stable its currency is. And because IGE is
the largest secondary market for the currencies of games
like EverQuest, it has a lot of influence over the stability of
the exchange rates between the game currencies and U.S.
dollars."Everything circulates around the exchange rate between a
real and virtual-world economy," explains Selden. "We set
the rates that we buy and sell at, and those are divined by
supply and demand. The amount of currency in circulation
at any point is extremely important to the out-of-game
exchange rate.""One of the problems is that there isn't enough communication
between the people who are minting the currency and the
people outside who are selling it and defining it," he argues.
"It's almost like the treasury isn't talking to the federal reserve
in these worlds. And I think it's because the game companies
are just waking up to how important it is."
Wired Article on virtual currency.- 2004-04-11
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