Economies in MMOs

Massively multiplayer online games have been quite popular in the past few years and some of them have interesting economic aspects to them. Titles under this genre include Ultima Online, Everquest, Asheron's Call, Star Wars: Galaxies, Dark Ages of Camelot, The Sims Online, Shadowbane, and World of Warcraft.

Virtually every character you run into in games of this nature are controlled by another player. Player interaction is usually encouraged to defeat hard monsters or puzzles and players can trade virtually every item in most of the games. This exchange creates some interesting possibilities and problems. Most games have a common currency, usually gold. One of the larger problems in these games is that the gold massively inflates over time. The gold enters the economy usually by players taking it off monsters they've killed or as rewards for quests or puzzles. Gold exits the economy by buying things from non-player-characters. Some games make players use the gold to pay to power-up, other games require certain amounts of gold to cast spells or travel to other locations. We can see how this is not all that similar to a real economic system.

This system is called a "faucet-drain economy." There have been a few essays written on it. Some of them may be published. For me, the interesting part is what happens in-between the faucet and the drain. Nike has used some smaller MMOs to model or forecast preferences for clothing and shoes. Other companies have done this too. Some of the games may have some real potential for economic analysis - at least to see some of less-noticeable theories in action.

I think it'd be interesting to see some company make a game that didn't start off with a default currency like "gold" that can be looted off monsters. It'd be interesting to watch at first as players try to find something that can be used effectively as a medium of exchange. DarkFall Online, several years ago, had some posts about this on their development board, but I'm not sure if that game is still being tested or not.