Virtual Economics

Gold recently hit a 26-year high. Should I invest? It’s a bit rich and even more risky for my tastes. But not as rich nor as risky as the Virtual Economies out there. What follows are today’s prices for the cost of virtual gold in the virtual world of Warcraft.

Today’s Virtual Gold Spot Prices

Quantity------------# of providers------Min. Price--------Max. Price

50 Gold-------------1-----------------------$12.99-------------$12.99

3000 Gold----------8----------------------$241.38------------$329.77

EverQuest, Ultima Online, Dark Age of Camelot, World of Warcraft, EVE Online, Industryplayer and Lineage are all MMORPGs. Massive Multiplayer Online Role Playing Games. These sites maintain huge virtual economies. An economy will emerge in a game world with the following characteristics:

1. Persistence. The software maintains a record of the state of the world and the resource possessions of the players, regardless of whether or not the game is "in session" for any user.
2. Scarcity. Users must expend "real" resources such as time and money to obtain goods and/or services in the synthetic world.
3. Specialization. Availability to players of the resources must vary. For example, a participant whose character has metalsmithing skills could have the ability to make swords, while other players would have to purchase them. Because this results in comparative advantage, complex trade relationships and a division of labor result.
4. Trade. Users must be able to transfer goods and services to and from other users.
5. Property Rights. The world must record which goods and services belong to which user identity, and the code must allow that user to dispose of the good or service according to whim.

Virtual GDP

The virtual economy in the online computer role-playing game EverQuest is larger than that of Argentina and Chile combined.

Virtual Forex Rates

• The value of Linden Labs "Linden Dollar" has decreased by roughly 11% in the last two months, $2.6M USD has been traded at average exchange rates (through Linden Lab's official currency exchange) in the first quarter of the year. The company announced that in Q1 2006, "[U]ser-to-user transactions in Second Life totalled $4.17B Linden Dollars, an increase of 68% over Q4 2005."
• The MMOG “There” has “therebucks” that sell for US dollars.
• The currency in Project Entropia, “Project Entropia Dollars”, could be bought and redeemed for real-world money at a rate of 10 PED for U.S.$ 1.
• Even human capital can be acquired. Level 60 EverQuest characters reportedly have sold for as much as U.S.$5,000.

Cheaper Than San Francisco Property

On December 14, 2004, an island in Project Entropia sold for U.S. $26,500 (£13,700). One gamer also purchased a virtual space station for U.S. $100,000 (£56,200) and plans to use it as a virtual nightclub. Jon Jacobs, aka Neverdie, won the space station, currently being built within the online role-playing game Project Entropia, in an auction.

He wants to call it Club Neverdie and sees it as the perfect vehicle to bridge reality and virtual reality. Maybe you can even meet a Sim babe there.