Data makes me weak

I have a soft spot for data, not the cutie on ST:Enterprise but plain ol'number crunching. GameStudy.org, a great blog that looks at Korean MMO activity, posted some very intriguing data about the effect that a gambling game within an MMORPG had on game currency and RMT (real money transfer, buying or selling game money for real money). Let me explain.

There's this game called Lohan, according to the article, it's not a big contender in the industry. However, in Korea, almost every game you play, you can exchange your game currency for real money. A site called Itembay (think currency exchange market) keeps track of how much value related to real money a certain game's currency is worth. Using Itembay's data, GameStudy notes that the game currency in Lohan started to become really valuable after people started to play an in-game version of baccarat. In fact, so many people played it that there was serious demand for game currency. Since gambling is illegal in Korea, this became a method to gamble. Eventually, the devs pushed a patch that limited how much you could gamble and the market tanked.

Let me take it down another notch, basically people walked into the game as they would a casino and used the game currency as they would casino chips. Instead of exchanging chips at the casino cashier, they did it via a third party site. Gambling at its most simple.

Man! I love me some data. This is empirical evidence that people will do anything to gamble. However, more importantly to me, this is evidence that virtual world activity is just as much a legitimate cultural concern as real world activity. No matter what you think of real money transfers, virtual currency has value.

In this example, because gambling was introduced, the value of virtual currency took on the form of an intermediary between real cash. However, it's not too far of a cognitive leap to apply this to virtual items. People will buy and trade virtual items in an attempt to gain value, like stocks. It's undeniable; whenever there is value associated with any market good (real or virtual), people will pay money for it. In virtual worlds, as in real life, you just cannot stop people from establishing black markets or gambling outlets.

I might be a raging liberal on this one but I think the only way to make sure people don't get taken advantage of or the virtual economy doesn't collapse is to provide structure. Everyone needs to wake up and realize that it happens. This free market needs to find its own equilibrium. Granted, there needs to be regulation and structure (like the role the Fed plays) but you cannot deny that the impact of virtual economies is legitimate and will be significant. There's significant spoils awaiting the company that can figure out how to do this correctly.