Authors: Tom Chatfield
Fifth, customisation: a whole range of options allows users to control what other people see of their tastes and activities, as well as allowing users to configure their individual experience of the site by adding and removing modules from a ‘home’ page, subscribing to channels, and so on.
It’s an impressive box of tricks, and one that non-web-based businesses of all kinds would do well to learn from – in terms, for instance, of providing value for customers by encouraging information-sharing, exchanges, comparisons and monitored feedback. It’s an approach that takes some confidence, given that the essential dynamic of all five gaming techniques is not so much about fooling consumers into thinking that a product is ‘fun’ as about granting them a whole box of tools for making their own use of a product as powerful and convenient as possible. Above all, this means allowing people to interact meaningfully with each other and collectively to enhance the service they’re receiving by giving out criticism as well as praise. Socially, as in the world of games, simple is rarely satisfying: what an environment like YouTube permits is emergent behaviours that have the space to take on a life of their own – and grant a commensurately complex satisfaction.
As far as human behaviour is concerned, one of the most intriguing opportunities video games offer is a unique combination of measurement and experiment. Literally everything within a game is measurable: every action, every interaction, every message, every item, every rule. The entire structure of a game is composed of raw, recordable data. Imagine, then, the kind of information that can be gathered by letting loose thousands, or hundreds of thousands, of human players within a carefully constructed virtual space.
Given that the membrane between working life and play is already more permeable than most people think, the opportunities for exploring human motivation, interests and habits are vast – and in no field is this more true than that of economics. Arguably the most important of all the social sciences, theoretical and practical debates in economics have a direct impact upon the lives of almost every person in some way. The vagaries of economics have repeatedly been exposed by the failures of the world’s finest practitioners either to predict or to prevent most of the great financial disasters of the last few centuries – and, most recently, the global credit crisis that began in 2008.
Despite its empirical ambitions, economics is not an exact science – and is also one that seems fated to remain hostage to the more unpredictable depths of human behaviour. However, in the field of virtual worlds, and of video game studies in particular, there are those who believe that all this might be about to change. One such man, and a founding father of what is now known as virtual economics, is Edward Castronova, who since 2004 has worked as Associate Professor of Telecommunications at Indiana University. He began his career as an economics professor at California State University, but his interest turned increasingly towards the strange emerging phenomenon of virtual economies. Having gained his PhD in 1991 and spent some time studying the policies of German post-war reconstruction, as well as teaching in the subject areas of public policy and political science, he initiated the debate on virtual economics in earnest in 2001 when he published a paper entitled ‘Virtual Worlds: A First-Hand Account of Market and Society on the Cyberian Frontier’.
The paper explored in considerable statistical detail the economy of ‘a new world called Norrath, populated by an exotic but industrious people’. As its abstract observed, this Norrath presented a strange combination of the familiar and the entirely new:
About 12,000 people call this place their permanent home, although some 60,000 are present there at any given time. The nominal hourly wage is about USD 3.42 per hour, and the labours of the people produce a GNP per capita somewhere between that of Russia and Bulgaria. A unit of Norrath’s currency is traded on exchange markets at USD 0.0107, higher than the Yen and the Lira. The economy is characterized by extreme inequality, yet life there is quite attractive to many. The population is growing rapidly, swollen each day by hundreds of émigrés from various places around the globe, but especially the United States. Perhaps the most interesting thing about the new world is its location. Norrath is a virtual world that exists entirely on 40 computers in San Diego.
Here was perhaps the first detailed investigation into an astonishing scenario: tens of thousands of people pouring their time and energies into games whose strict conditions of scarcity, labour, reward and freedom of trading meant that a real and substantial monetary value could be placed on the monies generated by ‘play’ (in this case, the game was Sony’s
EverQuest)
. How seriously should or could all this be taken? Castronova put, and answered, the question on his very first page:
Isn’t Norrath just part of a silly game? Perhaps it is, on an abstract level. But economists believe that it is the practical actions of people, and not abstract arguments, that determine the social value of things. One does not study the labour market because work is holy and ethical; one does it because the conditions of work mean a great deal to a large number of ordinary people. By the same reasoning, economists and other social scientists will become more interested in Norrath and similar virtual worlds as they realize that such places have begun to mean a great deal to large numbers of ordinary people.
He then added, for good measure, an assessment of the potential of virtual worlds that is worth quoting in its entirety for its almost prophetic clarity:
Virtual worlds may also be the future of e-commerce, and perhaps of the internet itself. The game designers who created thriving places like Norrath have unwittingly discovered a much more attractive way to use the internet: through an avatar. The avatar represents the user in the fantasy 3D world, and avatars apparently come to occupy a special place in the hearts of their creators. The typical user devotes hundreds of hours (and hundreds of dollars, in some cases) to develop the avatar. These ordinary people, who seem to have become bored and frustrated by ordinary web commerce, engage energetically and enthusiastically in avatar-based on-line markets. Few people are willing to go web shopping for tires for their car, but hundreds of thousands are willing to go virtual shopping for shoes for their avatar.
Since 2001, the status of online game worlds has shifted by several orders of magnitude. At a conservative estimate, there are over 30 million people around the world with paid-for accounts in massively multiplayer games. Just in terms of legal revenue, the sector represents several billion dollars of annual income for the global industry and an unofficial market of virtual trade that’s at least as large again. And yet, as Castronova sees it, these raw statistics are far from the most interesting thing about virtual economies. What’s more amazing is just how much we may be able to learn from them about the real world within which they and we exist.
‘The best way for any science to go forward,’ Castronova explained to me when we spoke in March 2009, ‘is for smart people to read literature, think deeply, theorize, and then try to create a controlled experiment to find out if their thinking is legitimate. In the natural sciences that is where we started in the seventeenth century. In social science, we don’t do that. Only, now we can: we can create proper controlled experiments, we can use virtual worlds as Petri dishes.’ What might this mean for economics in practical terms? ‘You can get away from a lot of the ideology and theorising we’re doing right now and become much more pragmatic about what is the right way to, for example, regulate a market that is very sparse in terms of its information, like the mortgage market. That sort of thing could be trivially easy to do controlled experiments on if we had a virtual world environment with, say, a hundred thousand people playing under the control of academics. It’s not that hard to do.’
One key factor in this is just how far human behaviour in virtual worlds can be said to mirror human behaviour in the real world, and the first problematic word here is, once again, ‘game’, something that sounds a million miles away from the world of work and mortgages. Shouldn’t any virtual world that hopes to model the real one even approximately stay as far away from the idea of play as possible? Absolutely not, argues Castronova. ‘Fun first. What I say to a lot of professionals in the area is that you must surrender to the principles of a game. You have got to surrender to what the hairless monkey wants to do; and once you do that, you can do anything. I know people are suspicious of words like “fun”. But I think you’re not getting the whole person if you’re compelling them.’
In other words, it’s actually the structures of a successful game that make a virtual world – socially and economically speaking – a good model of the real one: the laborious, finely calibrated business of constructing and balancing aims, objectives, challenges and rewards. This isn’t entirely surprising. When we think back to the reasons people play games in the first place, it’s clear that the dynamics of a good game – of a truly satisfying one – are anything but trivial. When we are immersed in the flow of a game, Castronova notes, our behaviour is in many ways more natural and unaffected than at almost any other time, including during the routines of most kinds of work.
One area where the monitoring of in-game behaviour can be especially useful is the problem of market locations: the geographical question of where in a city, country or continent the optimum place to locate a trading hub lies. Trying to find such a spot is an extremely hard problem to solve mathematically; in scenarios approaching anything like real-world complexity in terms of landscape, people and paths, it’s near-impossible. Yet modelling the same scenario within a game environment is both simple and largely faithful to real-life motivational and behavioural patterns: in each case, players will seek to minimise their effort and maximise their convenience. Thus, explains Castronova, ‘there have been video games where the designers didn’t specify where the player-to-player market would be, and its location has emerged according to very intuitive patterns; across different versions of the game it will tend to be in one of, say, three open, accessible, safe meeting places. It’s all very intuitive and understandable in real world terms.’
On a more mundane level, a controlled study in 2008 of two parallel game worlds demonstrated a simple but crucial point: that players in virtual worlds appear to attach the same kind of importance to getting a good deal, and to striving to win value for their virtual money, as they do in real life; that is, they were prepared to pay twice as much for one item that was twice as effective as another. It sounds banal but, as Castronova points out, ‘a lot of people think that if you go into a fantasy world you don’t care about saving your pants any more. In fact you do, and we found a surprisingly robust confirmation of that behaviour.’
There’s a surprisingly robust confirmation of something else to be found in games, too: the degree to which certain behaviours are deeply engrained in people. In the real world, scarcity is a fact of life. There isn’t enough of everything to go around, and a lot of people suffer – or don’t live as well as they might like to – as a result. You might assume, then, that given the opportunity to create a virtual world from scratch, scarcity would be one of the first things people would get rid of. Within a virtual world, after all, there can easily be enough of everything for everybody; where digital items are concerned it costs nothing to reproduce almost any object. Everything is just bits of data that can be copied at will.
The earliest virtual worlds were indeed lands of plenty. Places like
The Palace
, which opened its doors to the public in 1995, offered users a kind of enhanced chatroom where they could interact with each other within graphical environments (‘palaces’) that they had created themselves. Within the limitations of the technology, you could have and do anything you liked. It seemed like a fine template for the growth of other virtual environments – egalitarian places within which people could express themselves without any of the limitations real life imposed on them. Virtual Utopias would rule.
What actually happened was rather different. People, it turned out, were extremely attached to scarcity. They liked it so much, in fact, that not only did they prefer virtual worlds in which there were strict limits on available resources over ones in which you could simply have anything you wanted; they were actually prepared to pay money to spend time in these scarce worlds. What they demanded, in other words, was a very particular kind of game: an environment where strict rules governed what it was possible for players to have and to do, and where, much as in the real world, rewards could only be achieved by the expenditure of effort. The principal difference with a game world being, of course, that within it effort was always rewarded.
The amount of effort people wanted to expend, too, proved quite staggering. Again and again, the most successful online games emerged as those that imposed brutal regimes of scarcity on their players. Even the non-elite majority seemed to enjoy watching other players strolling around wearing equipment that gave them the status of mythic heroes. Equality was dull. All players may have been created equal, but what they wanted was the opportunity to create, or to witness, a hierarchy.
From Castronova’s perspective, this indicated that the time for setting theories and ideals above practical observations was long gone: it is no longer possible to pretend that you can change in some fundamental way what people are like or, indeed, what they like. ‘It’s like the discovery of a new continent,’ he tells me. ‘What we’re developing here is a science of how to make people happy, and that’s both a really exciting and a dangerous thing. On the one hand it’s exciting because we may be able to give people happy, fulfilled lives. But if we focus only on that we come into conflict with our understanding of what living a good life means. This is the notion that being hooked up to an experience machine that makes you happy all the time is not a good life, and we’re going to have to confront this as a practical issue within a generation or two.’