The following Guest Article by Steven Davis is an extract from his recently published book, Protecting Games: A Security Handbook for Game Developers and Publishers. The extract is from Chapter 22: Game Commerce: Virtual Items, Real Money Transactions, Gold Farming, Escorting, and Power-Leveling

Money makes the (real and virtual) world go around. In some sense, money itself is the oldest, most widely used virtual item. Because money is so universally understood, virtual currencies are widely used as incentives in online games. Whatever one’s views are about “consumer culture,” we all seem to have a Pavlovian response to accumulating more things.   Read more

Econometrics and statistics grad students reading this blog might be interested in the following news: Blizzard is seeking a data analyst for what sounds like it could be World of Warcraft ingame log data coupled with customer records. Thanks to Dmitri Williams for the heads-up. According to Dmitri, the position is of flexible rank/seniority, from an advanced undergrad to a Ph.D.

In other news, Edward Castronova’s Synthetic Worlds Initiative at Indiana University has opened their second game, “a browser-based game of kingdoms, trade, diplomacy, and warfare in the stone age” called Greenland for beta testing. The aim seems to be to study the emergence of commodity money, but looks like it could be an enjoyable game as well!  Read more

This semester I am aware of no less than four Calls for Papers with some relation to virtual goods, economies and currencies: one conference call, one workshop call and two journal issues. Great publishing opportunities for any student and scholar.

Please let me know if I am missing something that should be on the list and I will add it.

Updated: see also JVWR’s call on technology, economy and standards.  Read more

That question has been a driving force in much of my PhD research, which is finally beginning to reach its conclusion. During this year, I will hopefully have four journal articles published or accepted for publication. I will blog about them here as they come out. Academic publishing can be slow, so some of the stuff that comes out now will have been written two years ago. Fortunately I think all of it is still relevant.

The first article I thought I would blog about is titled Virtual item sales as a revenue model: identifying attributes that drive purchase decisions. It’s due to appear in Electronic Commerce Research 9(1-2). A pre-print version (essentially the same content with a less pleasant layout) of the paper can be downloaded here.  Read more

Mira Burri-Nenova has just posted a working paper on SSRN: "User Created Content in Virtual Worlds and Cultural Diversity"   Read more

User created content (UCC) has often been celebrated as a grassroots cultural revolution that as a genuine expression of creativity, localism and non-commercialism can arguably also cater for a sustainable culturally diverse environment.

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Economic experiments in virtual worlds (or, more generally, virtual economies) have been proposed a number of times and also conducted to some extent. A recent addition to the conducting category is “Reciprocity and status in a virtual field experiment” by Andreas Nicklisch and Tobias Salz. In their study, the authors conducted a field study in World of Warcraft, seeking to investigate the role of reciprocity, and the effect of status on reciprocity, in employment relations. Reciprocity here means the observed tendency to react kindly to kind actions, even though such reactions are not enforced. Unlike previous economic experiments conducted in virtual worlds, the authors did not create an artificial setup for the experiment. Below, I summarize and briefly discuss the study and its findings.  Read more

New York Times has an interesting story about Virtual Greats, a company that focuses on bringing licensed content to online environments:

For celebrities, licensing virtual products is a new way to make a buck and stay hip with a young crowd. Snoop Dogg’s manager, Constance Schwartz, said she did not have a clue about virtual worlds when Virtual Greats approached her this year, so she and her team spent a week exploring Gaia Online.  Read more

Dear VERN readers,

I am pleased to announce that I have accepted a position with
Pillsbury, a global law firm with San Francisco roots and a high-tech history dating all the way back to cutting-edge 1880s telegraph cases. I’ll be helping establish and build Pillsbury’s new virtual worlds and video games practice. Returning to practice with a large law firm means that I’ll be somewhat less free to comment on virtual law issues than I was while self-employed. As such, this is my final post at VERN.  Read more

Virtual currency issues have been on the table for a while now: Sulake introducing dual currency system to Habbo and Three Rings launching Whirled with three separate currencies. The purpose of this post is not to go into much detail, but to encourage discussion on this issue.

I just quickly wanted to point out what implications different currency implementation currency design choices may have on different sub-business models.   Read more

Virtual World News has now launched a sub-site on news concerning virtual goods, covering issues in a more targeted scope. This is a well reasoned developement as the amount of emerging information is quite huge. Virtual assets sales is also one of the primary topics here at VERN and forms a well grounded, independent perspective to virtual worlds.   Read more