Virtual Economy Research Network

In recent years, a market has emerged for so-called virtual assets. Virtual assets are intangible valuables that exist solely in the computer systems known as virtual worlds. The most popular type of virtual world is currently the massively-multiplayer online role-playing game (‘MMORPG’).
This study focuses on the question “what strategy should a company operating a virtual world take towards real-money virtual asset trade?” Traditionally most virtual world operators have either ignored the market or attempted to suppress it. This study maps a range of alternative strategies available to operators and discusses their viability from the points of view of customer needs, firm resources and law.
The approach to answering the research question comprises a literature review and qualitative case studies. The literature review examines the previous research on virtual worlds. It provides a summary of the debate concerning the so-called secondary markets and presents a generalised conception of real-money virtual asset markets. Research from the resource-based school of strategic management is used to establish grounding for the case studies.
Based on analysis of the literature and case studies, a model of nine generic economic integration strategies is presented: embargo, laissez-faire, marketplace, monopoly, monopsony, price floor, price ceiling, and price window. The strategies are distinguished from each other by the market structure which they seek to set in place in the virtual asset market. They also differ in their characteristics in relation to customer needs, firm resources and the legal environment.
Findings from the study indicate that contrary to the views prevailing among some established scholars in the field (e.g. Bartle 2004; Castronova 2004b), economic integration is not necessarily incompatible with achievement- and immersion-oriented play. Some virtual world designs are incompatible with certain economic integration strategies, but the findings suggest that corresponding experiences could be delivered with alternative designs that take better heed of the virtual asset trade phenomenon.