CCP's economist's reports are the real deal. The EVE game economy is I dare say more developed and complex than most other games' - it has many kinds of input factors and stages of production, and many of the production facilities/resources are player-controlled and their fate determines on political maneuvering, war and sabotage between player corporations (guilds). The price of most items in EVE (ships, weapons, components, structures) is determined by the state of production and speculation in the economy, so CCP has to consider the economic impact of nearly every single change they make to the game world.

If any of you folks are interested in reading about a truly fascinating, active digital economy, you have to read the EVE economic reports and other investigations of EVE. It's like reading about mining, manufacturing and stock markets - against a background of eternal war between corporations - in far-future space.

edit: links to additional content ----- http://pc.gamespy.com/pc/eve-online/855380p1.html

>>> EVE Online was developed to have a very dynamic economy from the very beginning. It was decided that "time" would be treated as a valuable player resource: for that reason, raw materials were spread all over the galaxy map, which takes hours to traverse. This created regional pricing. Interestingly, there were no trade hubs built into the core game design -- players gradually settled into certain areas and made their own pockets of population where trade thrived.

>>> Gudmundsson had some fun examples of how intelligent virtual economies can be. He showed a graph displaying the prices of a mineral in the game known as Zydrine. Zydrine is hard to find in the EVE universe, but players had discovered that killing a certain class of drone often leaves behind Zydrine in the wreckage. This hole in the market led to lots of drone-farming, and subsequently the price started to drop. Drastically.

The developers decided to tweak the drop rate and this change rolled out onto the test server, unannounced, and mixed in with all sorts of other tweaks. Still, clever players noticed the change. Word got out. And suddenly, even though nothing had yet been done on the live server, prices for Zydrine spiked dramatically. Markets make for great predictors of future events!

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http://blogs.wsj.com/economics/2010/06/21/real-economist-tak...

>>> One of his team’s first big findings is somewhat sensitive. Confirming decades of gender research by economists, sociologists and anthropologists, Mr. Turpeinen’s group found that the same biases that have historically favored men in the real world exist in a virtual economy. Their research demonstrates that both women subscribers and female avatar characters operated by male subscribers in EVE are biased toward a slightly lower chance of success in competition with their male counterparts.

It would be absolutely useless & provide zero opportunity for intelligent dialog. If anyone from Valve is listening and wants to open discussion, they would do better to interact with 'higher quality' communities directly.

Well, not so much spells, since it's space oriented rather than fantasy, but it does have a complicated, realistic economy with corporations, wars, and economic exploitation.

Its player base is limited compared to most MMOs (around 1000-2000ish, last I looked), but it's a combat free game centered around economic production.

It's also a bit unusual in that it has no in game currency. The last time I played (a bit more than 5 years ago), it was largely a barter economy. However, there was a player run item exchange whose credit functioned as a defacto currency.

I have no idea what the current state of the game is, but if you're curious about a non-combat economic MMO, it's worth taking a look at.

Basically it's a huge data laboratory where you are able to record every transaction in the world, and work from there. That's massively useful to economists, because they can now test a far wider range of hypotheses and, furthermore, eliminate them much more quickly.

What do you mean by "so much"? Because they can't accurately, regularly predict the future?

I think you'll find that, in reality, economists know their fallibility and limitations. It's the proletariat that doesn't understand the under-pinnings and assume economists should be 100% accurate when they make predictions, and are upset when they are not.

http://en.wikipedia.org/wiki/Team_Fortress_2#Free-to-play

http://en.wikipedia.org/wiki/Dota_2#Free-to-play

Assume an economy can be sized... so it's a $100m economy, or a trillion-$ economy, etc.

Connecting economies together obviously causes them to impact each other. So long as games are connected just to the US economy, and it is much, much larger than any game economy, the impact on the "real" economy is nil.

What about a much smaller real economy? Connect an economy the size of Eve or WoW to one the size of Zimbabwe. Suddenly, events in the game can have very real macro-economic effects on the "real economy". For example, uncontrolled creation of "wealth tokens" can lead to inflation, and contaminate the real world just in the same way as currency fluctuations impact the real world.

Banks can create money, and they are regulated. If virtual economies can create money on a scale large enough to disrupt the real economy, shouldn't they be regulated too?

I'm not saying the answer is obviously one way or the other, but to dismiss the question with an "Oh wow" seems very short-sighted.

One such "glitch" is known as a "vintage scrap metal" which only a few exist in the game. They popped up when a user would delete their metal and ask valve to put it back, when they did, it showed up as "vintage scrap metal" with blue text. Such metal has sold for over $1,000.

I feel much of the TF2 economy (these items that can't be bought in a store) is simply players holding onto the weapons and working together to sky-rocket the price. Now, people refer to a "spreadsheet" which is set by a group of individuals. Everyone follows this spreadsheet religiously.

For small items, I think the TF2 economy is very neat. But for rare items? A mess.

WoW I think had some of the most visible impacts in terms of gold sinks (some I am sure were pioneered by other games and MMOs)

They brought about the concepts of vanity items, which were absurdly expensive and went from there.

Whats even more interesting is seeing the progression and evolution of these economies.

Wow 1.0 auction houses and others barely had the concepts of gold sinks, nor any of the finer tuned economic catches that blizzard introduced by the time it reached its 3rd expansion - Wrath of the Lich King.

That would make the items too expensive for normal players - only the gold farmers and their customers would be able to afford it. Tricky business.

That would be one fun thing to test - and better yet, contrast with real world examples.

If every U.S. citizen could create dollars, we would indeed have hyperinflation.

And as you point out, that's not even touching bio-hacking, which is also converging to digital/created lifeforms.

Call me cynical, but this article struck me as nerd candy. It's a totally-awesome idea: we finally get to really measure and experiment with economies! But in my research several years ago I was already uncovering hundreds of millions of dollars in a virtual goods black-market. People will take a character of yours and spend all of their time leveling him up and getting lots of goodies. Then you log in and take over. You pay them through some back channel. Or you leave an item where somebody else can pick it up, etc. No matter how you design a virtual world, there are plenty of ways to make economic transactions outside the walls. The illusion that you somehow have a god-like view and can see and observe everything of important is just that, an illusion. But I'm willing to wait a few decades for the economists to figure that one out :)

The virtual economy will merge along multiple different lines. I don't think there's any one answer here. There's no reason your WoW character can't be traded for BitCoin and used as a downpayment on a VR piece of real-estate that you then later sell at a profit for options on a futures market in some rare item coming out in a game next year. Thinking in a linear fashion can really handicap the possible solution sets out there.

We have production facilities -- several of them. We have distribution facilities. Transportation units (local and long-haul). We have combat pilots to protect the transportation. And we have the final delivery points where we actually sell goods -- both retail (on the market) and bulk (contracts to buyers).

To manage all of this, we have built an ERP system. It tracks our inputs, outputs, and processes. It makes procurement decisions (build vs. buy) and submits orders to the various groups of people who actually make things happen -- the producers, researchers, haulers, marketers, etc. The game is very manual on that front, but we use an automated system to actually submit very small, easy to understand orders that people can do in a few minutes usually. In aggregate, it powers a rather complicated machine.

As an example... let's say somebody places an order for 10 Widgets out in the edge of space. We live out near the edge -- actually, look at this map:

http://go-dl1.eve-files.com/media/corp/Verite/influence.png

That's the sovereignty map. It's updated daily. My alliance is Intrepid Crossing in the top right in green. That's 0.0 space (null-security aka no police and lawless -- players own and control everything). Now, let's go through that example of a user ordering 10 widgets.

* Delivery order is submitted if we have it in stock. If so, someone will deliver it via contract. Done. * If not in stock, start the decision tree for this item. * Do we have this in stock in production/stock facilities? If so, submit a transportation order. When it gets transported, the system detects this and submits a delivery order. * If we don't have it in stock, check the market prices for the goods required to build this item as well as the cost to purchase it from a reseller. * If it's cheaper to buy, we submit an order to our procurement team. (Automatic, still.) Once they procure it, the order goes to transportation and then finally delivery. * If it needs building, we do another process of seeing if we have what we need -- or if we have to buy minerals, blueprints, etc. * If we had to buy things, those orders are submitted to procurement and transportation. * If we have it (or the minerals arrive), the production order is submitted. * When we finally have the good, then transportation and delivery happen.

The entire thing is mostly automatic. We carry out the whims of this machine and we supply (rather efficiently) a pretty large alliance. It's a really impressive system.

Yeah, it's a video game. Sort of.

I love it.

And I haven't even touched on the politics, wars, and everything else. It's a beautiful, wonderful, maddening thing.

The game is definitely full of time-sink complexity: Resources used for construction in EVE only come from a few sources, all of which are directly or indirectly player-driven - if you want to get raw materials to manufacture things, you have to either get them by mining asteroids (manually), killing AI-driven pirates and melting their wreckage down for scrap (manually) or by maintaining a setup of 'planetary interaction' stations that harvest resources from in-game planets.

On the other hand, the actual space combat - which is still a cornerstone of the game even if it's very abstract and strange to the casual observer - is often extremely engaging, has lots of room for high level tactics and coordination, and can actually handle groups of thousands of players all competing for control over a single star system. There's nothing else like it.

The best way to describe it is sort of like playing chess in outer space: Every action you decide on needs to try to anticipate your opponents' reactions and you need to apply that level of tactical thinking a few steps out. Likewise, in general fleets and vessels in EVE cannot move very quickly and battles can often become very drawn out, with much of the actual victories and losses occurring in a purely tactical sense (poor decisionmaking, incorrect information from your scouts, poorly chosen positions for your fleet, etc).

One of the other interesting things about EVE is that at a high level, the design team tries to make it a game full of balances and counterbalances. Even once you've 'made it' and acquired one of the biggest, most powerful vessels in the game, you have dramatic weaknesses - a pilot in a supercarrier worth $500 USD can, despite his mighty defenses and arsenal of fighters and point-defense weapons, be undone by a single opposing player in a ship that is literally worth nothing. The way it essentially works is that the smallest, weakest vessels are dramatically more agile, which (as an extension of the game's physics model) makes it impossible for huge, slow-moving, heavy-hitting vessels and weapons to cope with them. The end result is that a viable fleet for combat in EVE needs to contain a mix of cheap, disposable vessels (to confront and 'tackle' the opposing fleet's big supercarriers and other heavy-hitters) along with a mix of larger, more expensive vessels to do the work of actually dealing damage to opponents and providing logistics support (scanning, repairs, etc) to the rest of the fleet. It creates a really nice equilibrium where, when the game is working right, new players end up being just as important as veteran players.

On the other hand, arguably EVE's biggest problem is that it is 'appointment gaming' at its worst. As an active player, you will spend probably close to 95% of your in-game time waiting for something interesting to happen. There are lots of things to do to fill that time, but none of them are particularly interesting; they're all preludes to that huge, pitched space battle that (if you're lucky) might happen every few days, if you're awake and around to participate. For people with flexible schedules it ends up being a great fit, but for me, it was hard to fit into my schedule and I ended up with few opportunities to participate in the 'fun stuff', so I ended up giving my accounts and ships away to other people who would actively use them.

EVE is nothing short of amazing in terms of what CCP is doing. They are one of the few companies actually evolving gaming and technologies involved. It is one of the very few "role playing games" where you instantly and automatically take on a role and play it both in and outside of the game - you decide to be a warrior, you play, act and talk like a warrior; if you want to produce or be a freighter pilot, you can also do that at just as much depth. There are no quirky flame-wars over what is "in character" or not, like in WoW on RP servers. In EVE, anything you do is automatically in character and perfectly suitable, at least to some degree. You can actually play a freighter pilot or a producer or miner/gatherer and nothing but that and be just as successful as a fighter, if not more! EVE really offers a lot and each route offers a lot of depth especially when compared to market-leaders like WoW. WoW's economy and crafting is quite frankly kindergarten compared to EVE's economy. Even the first, lowest items you craft in EVE have a purpose and will make you money while in WoW, you are actually just crafting to make it to the top-items and anything below is by and large useless. The battles you can find yourself in can be wild, imagine flying with a few hundred or thousand people from all over the world!

There are downsides to EVE, for me: it can be too much and get too real quickly. It has a LOT of depth and a LOT of that is happening outside of the game, so you will definitely have to invest more thought and reflection on what's going on, it can take time to learn just one thing. This outside-of-the-game is an integral part of EVE and one of the reasons it can offer so much. This can also make it very frustrating as a beginner while people in good corps and alliances have mentors or require you to spend a lot of time reading online. At the same time, anything you do is "real" and has actual consequences. Yes, you can loose days or weeks of progress if you do something very stupid. Yes, players have lost what can be estimated to be four digit real-world USD values. To really get full access to what EVE is really all about, you pretty much have to play in a corp and then special rules will apply of what you are and are not allowed to do. If you are a fighter, there will be a military-style drill of some sort. On this level, your actions can easily have even more consequences on a larger scale. To sum it up: EVE is no idle pastime and you do not just log into EVE and "zerg" through a few battleground inebriated without any consequences or danger. But if you like that, it is pretty much the best game around! Don't let the strange UI scare you off at first. Another downside might be that you will be very unimportant and expendable for quite some time; unlike in e.g. WoW where you get that satisfaction of really having killed some mob or a player, in EVE battles can be frustrating and drawn out, often without a clear 100% winner and seldomly do you get that same satisfaction of really having killed that one important enemy... you will be much more of an unimportant zerg; later on you can develop into a very highly trained and knowledgeable commando or a very well geared but strictly regulated and commanded fighting force. This might not be "fun" for everybody but it definitely offers you a lot of things that no other game can offer.

On the upside, a lot of that outside-of-EVE gaming gives TONS of fantastic opportunities for little software projects! A lot of EVE players with programming skills are developing something somewhere for themselves or their corp/alliance and CCP created a few APIs and services to openly interface with some of the game's information!

I guess it just frustrates me because I can't get around it.

With physical goods, if I don't like the AU price, I can easily shop online on another countries website and get the goods shipped. No problems.

With digital goods, there's mostly no way to legitimately purchase them from overseas. You can use a VPN and a fake address, but that breaks the terms & conditions.

The Australian Competition and Consumer Commission, an independant regulatory body in Australia that oversees the Trade Practices Act (among other things), is in the process of inquiring into the so-called "Australia Tax" to find out why companies like Apple and Valve charge far more for software sold in Australia than in other countries despite the low true cost difference.

Unfortunately, that means that the real reason is "Because they can".