Reflections on Commerce in MMOs and Virtual Economies

Hi,

I read a few days ago articles that aroused my interest on a subject that now seems very much in the hot news in the GW World, Commerce in MMOs and Virtual Economies (I understand that commerce concerns transaction from a group of people to another group while economy looks at the whole population and how money and goods flow):

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Big-shot economist to advise teen virtual world 'Gaia Online'

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Interview with a game economist and ex-RMT-manager: Jeff Lyndon on the history of gold farmers in China

(RMT=Real-Money Trading where real money is paid for virtual one)

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I'm sure that there are great "apprentices" (a reference to the tv show) which do virtual commerce in GW and could may be share their thoughts and experience on this thread. Any economist who wants to share is opinion is welcome of course. I guess a topic of discussion is also the recent introduction of the Mini Polar Bear, but with a max, say, 30 of them which may sell at 1000ectos+ it's probably not more than a few thousands items selling 30ectos right?

It's also very interesting to see how the real and virtual worlds meet at this point (because, for the rest, we don't carry swords to kill monsters ). I guess that MMORPGs are also fantastic playgrounds for economist to test their knowledge and theories. It's particularly interesting to look at how RMT is a threat, how to deal with it and how it relates to fairness of the economic model.

So: how do you think that the GW virtual economy works? What are its rules, its advantages and benefits? How does it compare to virtual commerce and economies of other MMORPGs you play? What trends do you see? How important do you think RMT is in GW? Is Anet able to influence the virtual economy and prevent RMT?

Please argument your position and do not hesitate to bring articles to this discussion table.

Cheers!

P.S.: for fun and memories, an article about Taxing MMORPGs in 2006.

i personally don't see GW's ingame items having much real world cash value in and of themselves... I know that people have bought ectos and gold etc...and i would imagine that is about all that i would think would sale for real world cash...at least in large numbers.. the reason for this is that the items in GW do not affect game play. Now if they were to drop a AnetWhomping Stick of Domination....that did +50 unconditional damage...at the rate that the Polar bear dropped...and for the same amount of time...then i can see people paying large sums of money to own one. But to pay large sums of money to buy an actual minipet or weapon i don't see that happening...hence me saying that only gold/ectos are worth RL moneys... I am no expert etc...just a normal 30 something Married with Children....

Neither am I. Thanks for sharing. Why do you think then than there's been so many bots in GW and Anet has to ban a lot of them all the time?

I stumbled about another piece of news related to the topic:
Blizzard won't support 'legit' RMT service

IMO the reason there are bots is because of the gold/ecto real world value...as long as players will go out and spend $50 plus dollars for in game gold..there will be someone trying to take advantage of it. But again i think the only thing that is worth "real" money is the golds/ectos.

Unfortunately...i think GW economy is dying/dead I truly enjoyed my journey through GW... I didn't start till Mar/Apr 06 so i missed alot of the big exploits...and didn't make a farming char till well after that ... probably Apr/May of 07. But i did enjoy earning money...collecting crafting material and selling to others because there was not enough storage....at lvl 12 in Pikens Square i had well over 20k in gold in storage..on my first character. Then i graduated to selling mods...because you never knew what youw as going to get from an expert salvage...so mods had some sort of value to them...then i started in on "almost" perfect weapons...buying/selling those...because not EVERY SINGLE weapon that dropped could be made perfect for 10k or less. Finally started trading in perfect weapons...made some cash...switch to trading minis...sold those..made some more cash...now i have nothing to do in GW....as far as the economy goes..still play the game quite a bit...but the thrill of getting a gold drop is gone...because any gold drop is perfect with a few trades...now we have to wait for that uber rare item to drop...which in honesty only drop from the zashien/hoh chests... i missed out on the PVP stuff because my computer was too slow..and now that i have upgraded...i find no desire to sit and let some one yell at me because i am new to pvp...so i stick to RA/AB/ and bit of PVE

its good to see new players start getting a good sword and not spending
so much on it..

greed it not a game..

Before ebay and sites like it cracked down on virtual trades for real money people did sell mini and the like online. Now, yes, the only thing that people buy for real world money is ectos and platinum. And when these people buy in game gold what do you think they do with it? It is quickly distributed back into the game economy, in some way. Usually this is detrimental to the in game economy because these are high value trades. The money is going from one, now "rich" person, straight to another rich person. Not getting filtered down to the average player. And loot scaling made the problem worse, because the rich are still rich and the poor have a harder time making money.
These are the reasons that the ingame economy is so messed up, and personaly, I doubt it will get any better till GW2.

As for bots. The bot does the farming and then a real person sells the crap to merchant, and the good stuff is sold in trade channels. Then, the gold is put on a website and sold to someone.

So you'd say Fried Tech that there are basically two economies, one between the rich ("high end") and the other one ("normal")? And they rarely communicate? But then it means that it would pretty to spot, so does this mean that there're money laundering techniques like in the real world?

I don't think that there is money laundering. More like.... the rich have the high end items, with a few exceptions (birthday present minis, lucky drops, etc.) and they know that they can sell these items for a rediculous amount of in game money because there are others just as rich as them in game. No casual player could ever hope to touch these items unless they go and buy some gold from a website. Unless, they work for the sole purpose of getting that one item, and then they will be broke again. I'd say its more like real life, where the gap between the rich and the poor just gets worse and worse as time goes on.

bout to get off work might not post again till monday

By "the rich" you mean the ones that have always been trading and amassing huge amounts of money? Because I guess that everytime someone gets a rare mini (like the extremely lucky ones for the minibear) he almost gets his entrance ticket into the "rich" economy?

(actually I was thinking that someone, but not me, could buy a Factions collector edition that I saw a few weeks ago and sell the mini kuunavang for 100k+, but it would cost him £40/$80)

Yeah, I know what you mean. But still it is perfectly possible to get tons of things that are not "high end" (I never farmed and bought a lot of minis, 1 or 2 greens and a few other things; so I guess that when I'll start farming, I;ll be able to get more), which may be equivalent to getting one that is "high end".

Yes very probably, but it's no so important because contrarily to the real-life, one can enjoy GW a lot while being in the "normal" (I would only call the "poors" the people that start and play with very limited knowledge about GW for a long while). Furthermore, anyone could possibly find a great item tomorrow in a chest or even that extra-uber-rare item that no one knew dropped? (honestly, I was thinking of the months I've spent without really knowing the stuff about GW, and I may have merch'd a few very nice golds ...)

Have a nice day (or welcome back )!

I'm sometimes amazed at the amount of trading on GWG. And I know there's the auction website in addition to the Ventari subforum. May be I should have put my thread in the Ventari? Or shall I pay 50g for the traders to come and participate?

W T B thread participants with perfect mods

W T S gold thread 15^50 20/20 s/b 100k

I dont' really see how it matters in GW. Max armor and weapons is a matter of simply playing a few weeks at most, even for a casual player. Whatever runes and mods you might want will be available in a few more weeks of beer and pretzels level gaming. After that, you're just chasing cosmetics, which will only ever matter enough to drive "an economy" for a small percentage of players. The economy is dead not so much because of anything ruining it, but because it never really existed. You don't need anything that money, real or virtual, is going to buy beyond what you achieve relatively easily in game. Nothing would stop the GW economy from failing because there's nothing to sustain it by design.

If you want a real economy you have to actually have something to sustain it. A game like WoW maintains its economy through utra rare items that actually affect the game and simultaneously includes constant money drains (repairs, respecs, crafting materials that require either lots of alt playing or purchase from other PCs) so that you don't accumulate stupid resources easily. It also has one thing GW actually fails majorly on: bragging rights - everybody can see your equipped gear in all it's gloriously enchanted detail. Compare that to something like GW which only allows other players to see your armor at low detail and your minis. No matter how cool your weapon skins and mods are, you and maybe a handful of friends are the only ones who will ever know just how "cool" the toon really is

IMHO, the Guild Wars economy evolved into a multi classed economy.

Old money players, player who played the game early, collected items that currently no longer drop, took advantage of profitable farming areas, sold high demand material items during increasing growth phases of the world (release of Faction, Nightfall, EotN).

Luck players, player who received a uber rare drop, knew its value, and sold it for the highest price.

Newer players, players just starting out with minimal resources. Are subjected to the world were elite weapon drops rarely occur. Farm less productive areas, sell lower demand material items during declining growth or the world (people are bored and are leaving the game)

It's not a class system where rich and poor don't interact. The game has been set where a 1,000,000 gold outfitted character has no in game advantage than a character who spends 20,000 gold on equivalent stats cheap armor and weapons. Its more like a status "look at my bling bling" thing.

Well said!!!

Very well said.

In Guild Wars, the most you'll get from 10000000k is a mini-pet that doesn't do anything besides walk around and look angry from time to time. You could use more K to buy more skills, but why buy gold when you can just buy the skill unlock packs? The only thing that gives you an "edge", per se, are the consumables. But if you need consumables, then you suck. If you suck, you ain't gonna get for.

Nonetheless, there's very little in Guild Wars that you need to buy with money. It's really why I could care less about bots, farming, gold sellers, etc.: It's all about dressing up your Barbie Doll. And if you wanna spend shit loads on it, then go right ahead, sir.

It's quite different with WoW. With a large amount of cash, you can get enough materials to craft weapons and armor that give you an edge in both PvE and PvP. Fortunately, a few items have a material requirement that can only be found in high-end dungeons. However, this still doesn't make up for the fact that the person doesn't have to even try for his gear and materials.

Basically, WoW has a lot of things that are actually worth buying. But I do believe that it's the overall popularity of the game that will give it a lot of gold sellers and eBaying.

(Now that I'm thinking about it, I wonder how much money I can make off of my own account?...)

Second Life has the right idea when it comes to online economy. They have a built in money system that was meant to be there as part of the game from the start, and dont have to ban ppl for trading out of game or duping, you just put in ur CC# or paypal info in ur account info and buy what u like( and nobody even tries to make you feel dirty about it). GW should just follow suit with their online store somehow.The system set the way it is pretty much encourages people to hit 3rd party sites for gold and good stuff (or to run them and make cash)....and the ones that don' go 3rd party are so stressed out about the in-game economy it is not even funny. (or fun to be around)

No, but people do hoard stuff which drives up prices and this creates waht we would call "cornering the market" in RL. Things like Ecto are naturally going to be pricey because of demand as craft materials, but the fact that people use ectos as secondary currency drives the price up all that much more.(the traders price is based on supply and demand, but people never sell ecto back to the traders, so it never goes down) Another market cornering concept in GW is if you have a perfect stormbow say, and you want to sell it for 100K + whatever......there arent many people who have that kind of cash, except you know who....and if they dont like your price on your weapon, they just wait until you've spammed yourself blue with no result and then come in and try to lowball you.

An important thing to understand in the current GW economy is while people may talk about "values" of items, the only thing that is really worth one platinum, is one platinum- the "value" of everything else is highly subjective.Back to the stormbow example, the people you are trading with when trying to get paid for an item like that hold the real cards......they have the cash which you want and need, you have a weapon that they only might want if you are lucky, since they have the cash to buy anything they do not need your item like you need their money.

sigh time to whip out the economic theories.

the most basic economic rule is supply and demand. in any environment, there are goods that are desired and a currency with which to trade. take guild wars for example. you have items that u want (perfect 15>50 itmes) and a currency to trade (platnum). in the early days of guild wars, the economy was perfectly healthy b/c there were lots of items people wanted (affected supply) and drops sucked (affected demand). there was a stable balance between the two. hence it was easier for a new player to recieve a relatively good stat weapon and sell it for money.

come nightfall however, that balance was drastically tipped. b/c inscriptions meant that perfect itmes to be used would be MUCH more commonplace as people could simply obtain the mod and put it on the weapon of their choice, rather than have to look for a particular skin, then wait a while to find a seller with that certain mod, the supply of things people wanted went down greatly. greens were equally affected b/c stats were no longer the main factor in purchasing a weapon, so the perfect stats inherent in a geen became less of a incentive for buying said green. on the same note, the drops for special skins, such as colossal scimitar in its early days, that people wanted remained bad, so the demand for rare items remained high. however, such items dropped at a MUCH lower ratio than high req but good stat weapon or greens, but those weapons were also the main methods for people who had a low-mid supply of cash to make money, so those people lost out and could not earn as much as they used to. with less items that could actually be sold to earn money, the low-middle class cannot earn as much, cannot purchase as much, and will drive a floundering economy.

when theres a decrease in the supply of goods that people want to purchase, currency value goes up (inflation). hence ultra desirable goods such as rare minipets, req 7, and tyrian crystallines go up in terms of price. their rarity didnt change, but people with money have nothing else they want to buy, so they would be willing to pay for more for what they do want.

on the same note, a constant influx in new goods affects supply, so more new items would affect the economy by driving demand for them up. if those goods are too rare or too common, however, said goods will affect a small crowd as the item will either be not desirable or impossible to acquire, such as the hybrid vs ferrari.

wow has a stable economy b/c money cannot buy the most desirable items (those must be dropped) what money is used for is common goods that are a necessity, such as constant repairs on items and materials for things as common as a quest.

hahaha i might be forgetting 1 or 2 factors but hey, im only 18 and this is a pretty good analysis for someone of my age.

@ maraxusofk

18 eh? That is a pretty good description of the economic "big picture" in GW right now.

GG

thks pygar

anyway at this point in the game nobody needs anything anymore so the benefits of new items will be ephemeral at best. but at least itll help somewhat.

sigh doesnt seem the causal player (even though some of us have been here for more than 2 years) fits into the above list from strat_53711.
Many of us have just enough money to get skills, a set of decent armor and that's about it...none of the ultra rare crapp--and for many of us it doesnt matter. We have a good weapon, so the skin isnt rare, it does the same job as the rare one (if they have the same mods etc).....so the economy doesnt mean much to us....15k armor costs.....15k. some of the costs of materials may change over time, though most dont fluctuate enough to worry about (and I am not talking about fow armor, its the ughhhhlist armor in game). Greens drop and with the free treasures in nightfall we might actually get a nice gold weapon in our lifetime. Many of us sell only to the merchant since he seems to buy almost everything we have in our inventory (or the material guys). So this economy that everyone talks about, well let the super uber rich people fight over some dumb sword....mine works just as well and only cost me....killing off a mob or two!

The lower level and casual gamer economy is the part that needs the most help.

For the newer or more casual players in the game right now, they need to make keys and lockpicks a more frequent drop. The best way to get anything out of the lower level grinds is out of the chests, and keys and lockpicks cost too much in the shops to make the investment worth it.....If you pay the shop price for keys and are at all unlucky with the chest you'l only get merch fodder that is worth 200-300 gold, which hurts much after spending 500-1.5K for a key or pick.....picking chests even if the loot isnt the greatest is the best thing for low level treasure because heroes and henchies cant steal those drops.(they steal all other drops, and thats devastating for new players, because you have to outfit those guys with nice stuff too, even tho they pick up and reduce your grind treasure) The lockpick drops during the EOTN promo kicked ass, they need to implement something like that (maybe not quite as often) in everyday play, not just for a promo like that......really just seeing EOTN for 2 hours was an instant sell for me, I went and grabbed the platinum edit. that nite.....then I got to reap the beni's of those lockpick drops for the whole time period of the promo, I got more good treasure in that week than the whole time i'd been playing the game prior- it was a stark contrast when the promo ended and everything went back to normal, normal being getting so little gold out of grinding that making and trying to sell perfect salvage kits for 1.5K almost sounds like fun.

I really like what they have to offer in the skill and pvp unlock packs and man I wish every day with every fiber of my being that I would have been able to get my hands on the BMP. (I have only been playing the game for about two months, I started right after the promo window closed-and I totally hate that the BMP is something you cant just buy online from them) If you are willing to spend the money, these kind of online bought "boosts" to your game could help the new player immensely to get good at the game faster, and not become mired down in grinding for treasure so they can "get over the hump" trying to equip themselves with the better skills and weapons in the game......even tho the "prime" level of your char. caps at 20, just getting to level 20 is a long ways away from being ready to get serious about pvp or the more difficult areas of the GW world.

I feel the same way. I pre-ordered the original GW (now called Prophecies). But I don't farm much and I don't want to support people that sell stuff for real world goods.

I have actually made in-game purchases online before, for this game and other games. However, in my blissful ignorance I really had no idea that they basically hire slave-labor to farm that stuff. (Even though buying Nike products is even worse, but that's beside the point.) Or that supporting such things actually ruined game economies. Which, is probably the real issue for Arena.Net.

Since then, I've found out that farming myself isn't actually all that bad if you do the research first. Go to pvx wiki, find a build for something easy, sell it on guru and buy what you actually want. It's actually not all that time consuming once you find something that you can farm a bit. And if you're like me, you don't have that much time to spare.

And aside from that, beat the game and you get really good items anyway (stat wise). Getting the money together for 15k armor isn't that bad either, if you are frugal and even slightly patient. The only thing you really give up by not buying from bots is unique weapon skins and obsidian armor. It's a small price to pay.


I have to agree with you completely. I know at least four people who have quit the game, even though they are avid MMO players, because they didn't like how difficult it was to get decent gear for their characters (or at least what the think is decent, which is probably at least above average).

The thing that upsets me the most is I gave away a lot of good stuff to them to try to get them to stay. And they quit over not having enough money to buy keys and kits, because they spent all their money on armor? Ouch!

I think a lot of the problem is that, because there isn't all that much character development, and what there is requires money (skills and gear), your average MMO player just can't adjust to the slow pace of character development.

Fortunately, I think that Arena.net has realized all of this and is attempting to fix the problem with GW2 (they're actually quick to see problems even though they are not always quick to fix them). With the news that there will be additional races, I expect character development in other areas will improve as well.

Hopefully, what will happen in GW 2 is there will be many levels and each level you will earn points to unlock skills and the attribute cap will remain (though at what numbers I don't know). If they did that (or something similar) both the character development and economy would benefit.

There's a major problem w/ the economies in MMOs; let's say a game allowed RMTs. Now, let's say a particular item is very rare and sells for a lot of money. Well guess what - a dev can go in and give himself a few of these "uber-rare" items and cha-ching he's rolling in real money. The supply is artificially controlled, and is as limited or limitless as the devs want it to be. There is no assurance that an item will or will not continue to be rare, and there is no finite amount of said item.

It all comes down to what people want to spend; there is no "need" for any virtual items/real estate, and as such, anything spent for such items is disposable income.

Just because people make a big deal about such things does not increase their legitimacy. The only issue I can think of is if someone took money for a virtual item, and failed to deliver it, or one side says they did deliver it and the other did not. In that case, it would come down to what sort of agreement was made, (like getting a court order for chat logs, etc).

Anyway, I simply think of virtual items/real estate transactions as payments for a service - you are paying for the time and efforts of the other person to obtain the virtual items, not the items themselves...

Biostem,

I highly doubt that any dev would be dumb enough to risk their well paying job at Arena.Net and future employment opportunities in the gaming industry over a few bucks by giving themselves items and selling them online. Really, I think that's a highly unlikely situation.

And if you really want to get technical. Anything that you "own" in GW is actually property of Arena.Net. And, you can't sell something that doesn't belong to you. That's called stealing, kiddies.

Anyway, I've said my piece on the issue and I will say no more on buying/selling online as the argument is truly moot when most people are still buying products made in sweatshops by the tons (*ahem* Wal-Mart).

Just for fun: http://www.theonion.com/content/node/50883

Statements like this make me chuckle. Some people scream about this problem all the time but they would be very suprised if they actually took the time to look up everything they bought to see where it came from and how it was made. Very few countries have laws to prevent the exploitation of children and women. Now I'm not condoning it but if you boycotted every one of them then you probably wouldn't be spending much of your money at all.

As far as the in-game economy goes; GW does a good job of giving you as much as you NEED as you progress through the storyline to get the job done. Of course this if providing that you don't waste your money on "blings" along the way. If you want those "blings" then you have to be willing to spend the time (and find a manner that works) to obtain them; via farming, trading, etc.

As in all online economys it all comes down to you spending your non-existant money on non-existant pixels. The only REAL thing you spend is your time in game, and some of us spend way too much of that. So on that note, simply play the game and enjoy it. Don't worry about that next "bling", but if it happens to come your way then enjoy it all the more.

Very interested answers (though as some said early, there's a limited number of things we can say about the GW economy), I'll just pick a few for the moment and will come back to the rest. Plus we haven't touched a lot on comparing the virtual economies yet (is it actually such a bad thing that GW economy is so limited?) and the interest or real-world economists.

I didn't attend EotN launch event, but if this is so, this is strange. It asks the question of whether Anet has been influencing the economy. They obviously do whenever they introduce new minipets (no in-game advantage but it's very much like in real-life and sometimes people want things they don't need) or the Zaischen chests. Do people feel that Anet should have controlled the economy more? Or better managed the introduction of new elements?

(I remember the thread discussing the fact that GW's economy was socialist, or even communist )

Completely agree here. Anet wouldn't last a few months is this were to happen. Plus the Anet founders were smart and made sure that the game design would make this very difficult to do (and very easy to spot), as recently said by Gaile.

(I've read that accusations of collusion of Anet and gold-sellers via the bugs and duping events and though the fact that RMT could indeed be a good source of new accounts and income for Anet, I never could believe the stories that this "ex-employee of Anet" said)

Actually one of the article I originally quoted mentions something similar:
http://www.mmobux.com/articles/746/i...rmers-in-china

I can see your points, but having "bling" is as much an essential part of character building as it is to get skills and weapons to make you tougher.....this is the crux of why so many people get so uptight about GW's in game economy (and some end up /ragequitting over it). I have just ended up dedicating the extra time to make some attempt at both bling and brawn myself, and am very much on the edge of being on the game too much..... an addiction level of dedication, and srsly kinda not good for me.

Get the habit of taking a little break once in a while. You decide on a rythm of play that suits your lifestyle and wishes. You'll soon discover the added joy you can get.

oh yeah, postin here has been my break lately Good thread Fril

It actually is not a real break as your head is still somewhat in the GW world. Take a real break away from GW, you can even play WoW :P. Unless it's snowing where you are, get out, walk/jump/swim/run, go meet friends, see a movie, read a book etc.

Thanks! (the will for writing this thread came from a comparison of GWG with other GW forums, where people were more positively contributing)

There is a one major difference (and several smaller ones) between an online game's economy and the real world's economy; it is known as the 'economic problem.' This refers to scarcity, or limited resources that can drive up the cost to produce, and therefore prices and demand for goods. In GW, like all other online games (that I know of), this scarcity is entirely simulated and manipulated by the developer's code, and thus the whole economy is at their mercy.

Socialism is a concept that does not pan out too well in the real world because of the economic problem. Everyone can't have everything because there isn't enough resources to satiate the public. Unfortunately, that also means it works amazingly well in an online game for the reason that the economic problem doesn't exist. But then that begs the question - is it fun? Can a game be fun if everyone has everything already?

Of course the answer is no. However, where are the limits? Do you make it so that only a truly elite few have 95% of everything, everyone else gets peanuts? That kind of system in a video game makes people want to cheat, because they can. If they can't get it the good ol' honest way, and there is an alternative (money trade), and they want it, they will do it.

Scarcity is something that needs to be delicately balanced and tended to at all times if it is going to exist in a video game. That is the really difficult part. I give props to Anet for doing as well as they did, even if they aren't perfect. There really are only two ways to remove botting and gold-selling: 1) remove any reason for people to buy gold, or 2) ban bots en masse. Option #2 is really the only option that wouldn't destroy the game.

actually though, the world DOES have enough food to fully feed every mouth in the world. the only difference is that it costs too much to ship the food to places like africa to feed the children. in the end it comes down to economics, not resources.

It does come down to resources. Resources come in many forms, including land, labor, and capital.

You're right on many points maraxusofk and I want to come back to your post a bit later, more in depth (GJ for an 18 year old ).

There's still one big difference with the real world as you pointed out, the resources. But these resources are not created in a random way, Anet's server program have precise algorithm when generating loot and even the quite efficient "randomness" factor (much discussed in various threads) does not change the fact that resources are created according to rules defined by Anet. It's infinite, but among a certain path decided by Anet, so economically I guess it's still sound to discuss the issue of the virtual economy. (it's like in real-life, we have limited supply but we discover more regularly isn't it?)

Thanks for your insightful contribution,

The issue about the devs (and code) being in control of scarcity can prove to be a big problem when something goes against the devs' intentions. By that, I mean exploits/bugs. As a side note on exploits, I don't mean just the severe ones like duping, I mean anything that makes use of otherwise poorly designed areas, such as a certain build designed to solo an area that is originally intended to be elite/high-end. If the build gets out, and it is easy enough anyone can use it, whatever high-end items in that area get the 'common' treatment.

This isn't a problem in the real world, since that downgrading treatment of goods balances out. There is no central controlling force that steps in and fixes said 'exploit' to make sure it doesn't balance out, and remains rare. Also, the real damage can come if that item (or items) have an unchangeable price (merchant value), such as keys or collector loot. Loot scaling did a fairly good job of decreasing the likelihood of that happening, though.

Those that haven't played games like Final Fantasy XI, you have no clue how good Guild Wars has it, in terms of RMT being a problem. But to those that have experienced how devestating RMTs CAN be to a MMO if left unchecked for too long, you'd realize that RMT = EVIL.

Of course, game/economy design plays the biggest role in RMT's degree of "evilness." In my opinion, RMT is not an issue at all in Guild Wars, but I believe GW2 may be a new breeding ground for RMTs... IF ANet allows them to flourish (which I hope and believe won't happen).

gonna re-iterate what i said earlier....Second Life has it perfect when it comes to in game economy...just let people buy what they want from the main company, there is no black market and everybody is happy.....it's all the companies that make stiff rules and then expect people to really follow them that suffer the "RMT problem".

also, they could just drop a smidge more treasure in in the non- HM areas and a lot of the economic stress in GW would lift.

I was just reading this:
http://uk.ps2.gamespy.com/playstatio.../843470p1.html

pygar: the problem with this kind of economy is that it can't realistically apply to a game, where players have more inventives to "cheat" because it's less involved in everyday life (virtual communities in 2L tend to be close to real ones).

This thread makes me grin.

As an actual economist (yep, graduate school and everything), I think about these issues frequently. I've posted on the matter innumerable times in the past; sadly, the message gets lost upon people who don't really understand it.

As for previous comments in this thread, some of you are spot on in your analysis. Others clearly don't have a clue what the hell they are talking about. I'll refrain from naming names; feel free to pm me if you'd like any assistance in separating legitimate theory from nonsense.

Above all, keep the discussion going. Economics, as a field of study, is very bottom-heavy. Mastering well a small handful of key concepts will go a long way in explaining why the world behaves as it does.

October Jade: why don't you explain to us the right and wrong theories?