News, research and discussion on virtual goods, currencies and economies globally.

Economics of EverQuest II

Ted Castronova, Dmitri Williams, Cuihua Shen, Yun Huang, Brian Keegan, Robby Ratan and Li Xiong have published a paper dealing with the economy of EverQuest II based on analyses of huge amouts of log data. See Dmitri's post at Terra Nova. Congrats! I know it must have been a huge amount of work.

I don't quite agree with their concept of mapping and the idea of talking about MMOs as if they were somehow worlds apart from the real world, but the paper offers an extremely nice quantitative view into some of the internal workings of a MMORPG economy. HIIT's Tuukka Lehtiniemi published similar work on macroeconomic indicators in EVE Online last year in his Master's thesis (including some criticism of applying the concept of GDP to a virtual economy, which Castronova et al. should perhaps have a look at).

It's been almost customary for social science oriented papers dealing with MMOs to at least mention the idea of using MMOs as a large-scale research platform to contribute something to social sciences. With this work on EQII and EVE, it looks like the tools are starting to be in place — perhaps that contribution is not too far off.

Castronova, E., Williams, D., Huang, Y., Shen, C., Keegan, B., Ratan, R. (2009). As real as real? Macroeconomic behavior in a large-scale virtual world. New Media & Society. 11(5) p. 685-707.

Glad I found this site

I run a RMT website for the browser based MMO Neopets. I've been looking for a blog along these lines to read (there isn't much material with regards to RMT floating around). So thanks again! you've definitely earned another reader :)


There are a few good things

There are a few good things in that paper. However, it seems that they don't really understand what creates inflation in MMos and their analyze of GDP and prices is a bit funky.

To my opinion, itemization acts like technological progress in the real world.

Itemization => developping cost => more time paying a sub and an extension => in game inflation on brand new "gear" and therefore deflation on obsolete items.
That's the main difference between real economies and virtual worlds. Virtual worlds are economies that are build to bring real dollars. Trying to oversimplify and vulgerize their process won't make it truer or more valuable.

Anyway, with such a little comprehension of EQ2 economy i doubt that they will ever be able to use those virtual worlds as testbeds for economic research. It looks like they absolutly want to categorize virtual worlds and make them work as "real" economies. The contrary is absurd too.

It's not your best article, but it's still valuable information. Please keep on writing on virtual economies, you are doing great. I'm linking a few of your articles in my RMT section :) I'll focus on it a bit more when i'll be done with my price comparison tool. I hope i'll be able to provide you with valuable information soon. I'm working on detailled feedback forms, stats and graphs that won't rely on the study of 3 to 5 amounts like some website do.


Good stuff, I made sure to

Good stuff, I made sure to mention your blog on my "Top 5 Virtual World Studies Blogs You've Never Heard Of" feature -- you definitely earned it.


Thanks for the nice comments.

Thanks for the nice comments. Ad Peter: I think Castronova et al. know very well how the EQ2 economy works in practice, they are very smart people and they have played it. Why they nevertheless insist on painting a picture of EQ2 as a mirror of a real macroeconomy, you have to ask them.

Ad Max: Not 100% sure whether I should be happy or not about being included in "Top 5 Virtual World Studies Blogs You've Never Heard Of", but thanks anyway :)