July 05, 2005

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Daily linklets 5th July posted by Simon on 07.05.05 at 12:31 PM in the Daily linklets category.


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Just in case you are curious Simon, but the link about Chinese game farmers contains a lot of BS. I have personal experience with much of what is described in the CGW article and can say with some confidance that a lot of it is sensationalized rubbish. For one thing, the secondary market for digital medium isn't nearly as large as described nor is anyone really pulling consistant 6 digit incomes from it. Most of the secondary market is not handled by professional farmers but rather by ad hoc personal sales between individuals via ebay or some other similar site. Simply because there is no business overhead and most resalers happen to be just getting rid of an account or inventory they are no longer using. The simple fact is although PC gamer demographics are fairly diverse, those who have the most time and effort to devote to MMORPG's universally have little purchasing power and potential customers are limited. The most critical factor that prevents the long-term viability of digital gaming markets is simple economics. Most mmorpg's have a limited shelf-life and eventually after a year start bleeding subscribers who are otherwise potential customers. Also of course is the in-game economic system. There is a simple truth, the addictive factor of MMORPG gaming is the accumulation of capital and (digital) power, this formula keeps players coming back and playing when otherwise boredom would set in and people would stop playing. To retain players, the players must be able to retain whatever they gain to have a sense of progress, unfortunately this is against the natural flow of economics since to keep player satisfaction such games forgo continuous expense (food, rent, clothing, etc in laymen's terms). What this results in is immediate and rapid inflation as the currency continues accrueing but it is not leaving the game economy fast enough. While the in game professional farmers can create millions of the artificial currency, the more they create and the more time that progresses makes it worth less and less. Eventually games reach a saturation point where there is so much currency in the game and the price of the digital currency is so low as to be fairly ridiculous. By this time the incentive to buy digital currency with actual money is nearly gone because those most attached to the game have already plateued (maximal capital and power accretion). This is why digital currency sellers have to operate in so many in games because after a given amount of time, depending of the popularity of the game in the first place it simply ceases becoming profitable. You simply cannot make a consistant living and those mysterious people claiming 6 digit salaries are more than likely either one of a kind or flat out lieing. The farmers create more artificial currency than they actually sell and will attempt in game currency manipulation to keep the dollar value of their digital assets stable. This is however a sysphean task because their work is constantly being devalued. In addition their financial security is at the complete total mercy of game administrators. Despite the convoluted descriptions of digital money laundering, the sources, accounts, etc of farmed currency can readily be tracked since all the information is stored in server databases and an occassional sweep will wipe out a number of mule accounts.

posted by: Jing on 07.05.05 at 01:42 PM [permalink]

Thanks Jing, that's really interesting.

posted by: Simon on 07.05.05 at 01:53 PM [permalink]

Wow, quite an explanation Jing. Appreciated.

Thanks Simon for making my blogging debut such a happy one! This has made my day, it really has.

Interesting to see that The China Herald also picked up on the Japanese Ministry of Trade and Industry's white paper as well. I thought it was only me that thought it interesting.

You see, I'm not as boring as everyone seems to think!!

posted by: Martyn on 07.05.05 at 02:35 PM [permalink]

Martyn, I'm glad something so simple has made you so happy. Mind you, I might have to start charging next time...

posted by: Simon on 07.05.05 at 04:30 PM [permalink]

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