Virtual Economy

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Definition

From the Wikipedia article, recopied at http://www.answers.com/topic/virtual-economy


"A virtual economy (or sometimes synthetic economy) is an emergent economy existing in a virtual persistent world, usually in the context of an Internet game. People enter these virtual economies recreationally rather than by necessity; however, some people do interact with them for "real" economic benefit." (http://www.answers.com/topic/virtual-economy)


Description

"These economies are observed in MUDs and massively multiplayer online role-playing games (MMORPGs). The largest virtual economies are currently found in MMORPGs, such as Entropia Universe, EverQuest, Ultima Online, Dark Age of Camelot, World of Warcraft, Lineage, Industryplayer, Miniconomy, and EVE Online. Virtual economies also exist in life simulation games such as The Sims Online, or Second Life, which has perhaps taken the most radical steps toward linking a virtual economy with the real world, such as recognizing IP rights for assets created "in-world" by Second Life subscribers, and maintaining a laissez faire policy on the buying and selling of Linden Dollars (the world's official currency) for real money on 3rd party websites. They can even exist in browser-based internet games like Neopets, Tokenzone or Kingdom of Loathing where "real" money can be spent and user-created shops opened.


1. Persistence ­ The software maintains a record of the state of the world and the resource possessions of the players, regardless of whether or not the game is "in session" for any user.

2. Scarcity ­ Users must expend "real" resources such as time and money to obtain goods and/or services in the synthetic world.

3. Specialization ­ Availability to players of the resources must vary. For example, a participant whose character has metalsmithing skills could have the ability to make swords, while other players would have to purchase them. Because this results in comparative advantage, complex trade relationships and a division of labor result.

4. Trade ­ Users must be able to transfer goods and services to and from other users.

5. Property Rights ­ The world must record which goods and services belong to which user identity, and the code must allow that user to dispose of the good or service according to whim." (http://www.answers.com/topic/virtual-economy)


More Information

See our entry on Game Currencies