Home Games & Tech Adam Smith’s Invisible Master Hand of the In-Game Market

Adam Smith’s Invisible Master Hand of the In-Game Market


Adam Smith Microtransactions

Eve Online is the younger technophile sibling of World of Warcraft. Both of them have gamers putting what is arguably too much of their time and money into a system, and both are compulsive enough to be important news when something in the game world becomes chaotic. Game-wise, it’s similar to running middle-management corporations, but in space. And recently, it was revealed that £181,000 was lost after a player missed a payment to protect an area of that virtual space. The battle that caused the loss of players’ in-game content involved 75 Titan ships and 40,000 gamers and was one of the most violent battles in the game’s 10 year history.

This is going to lead many people to ask how in-game content can be worth so much. But in a medium where a “Burning Flames Team Captain” hat in Valve’s Team Fortress 2 costs $4,407, it is not surprising. Part of the reason is that microtransactions in mobile games — paying a small amount of money for a bonus in the game — have also desensitised gamers to the concept of paying larger amounts of money for in-game items.

EA’s recent rebranding of Dungeon Keeper as a ‘Free To Play’ game has come under criticism for that very reason; it has extortionate prices for in-game items. In order to clear a dungeon, one must mine through rocks. Some of these rocks take 24 hours to mine through. In Dungeon Keeper, you can speed up this process by buying ‘gems’, and the ‘best value’ deal on gems is 14,000 for £69.99. This equates to digging out 56 of the hardest rocks.

Critics have claimed that there is no other word to describe that mechanic except ‘extortion’, and yet people pay for it. Consumers have been naturalized. It is a Skinner Box mentality, with consumers repeatedly coming back (every 24 hours, say) and performing the same task until they break and purchase the gems. Then the initial burst of euphoria at the speed in which the game improves means they do it again.

As well as using a ‘maguffin’ — such as ‘gems’ or ‘snowflakes’ or ‘diamonds’ — instead of more traditional forms of currency such as coins, this is an extra step in blurring the boundary between real money and in-game items and encourages increased payments. This, alongside the emotional response, drives the economic factor in both mobile games, and AAA games.

The reason for such ludicrously priced items, and the length of time it takes to play mobile games, is simple – video gaming is a business and wants to make as much profit as possible; but can this system be manipulated for the average gamer?

The most common way of making money in video games is though ‘item farming’. To continue using Team Fortress 2 as an example, players could theoretically continually play the game so that the game will reward them by periodically giving the player new weapons. These weapons can be smelted down into ‘metal’ (the smallest quantity of the in-game currency), which has a relatively stable value: two weapons will always equal one ‘scrap metal’; three scrap metals will be a ‘reclaimed metal’. Three reclaimed metals become a ‘refined metal’. And that’s where it becomes complicated.

In the TF2 trade servers, four refined metals can be swapped for a ‘key’, an item that can be purchased from the Team Fortress 2 in-game store for £1.99. However, this price is not as stable, and between 2012 and 2013 the ‘price’ of a key changed from four refined metals to five. Which means that while the real-world price is the same, the in-game price is increasing. By using this knowledge to stock up on keys at the right time, one can make bigger purchases and, though services like Paypal, can be converted back into real world currency.

This basic system is how every player makes money from an in-game economy, in every game. Does that mean we should all start putting our money into in-game economies? Not at the moment. But with the rise of new monetary systems like Bitcoin, there are worse economic ideas… Paying EA £69.99 for 14,000 gems in Dungeon Keeper, for example.


Adam Smith


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