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An Analysis of Virtual Economics in Video Games AN ANALYSIS OF VIRTUAL ECONOMICS IN VIDEO GAMES ____________________________________ A Thesis Presented to the Faculty of California State University, Fullerton ____________________________________ In Partial Fulfillment of the Requirements for the Degree Master of Science in Computer Science ____________________________________ By Bijan Alexander Hamidi Thesis Committee Approval: Michael Shafae, Department of Computer Science, Chair Mikhail Gofman, Department of Science Sara Hariri, Department of Science Spring, 2018 ABSTRACT Bijan Hamidi explores economic systems in video games and expands on the definition of virtual economics to include economic behavior. Gamers commonly look to gain advantages over their opposition during game play. This thesis performs an analysis of how those decisions are constructed and provides insight on where economic principles are found in game play. This body of work is based upon preexisting virtual economic works from Edward Castronova, Zachary Simpson, and Richard Bartle. However, this work does not focus purely on economic markets, but extends to study economic behavior exhibited during play. ii TABLE OF CONTENTS ABSTRACT ................................................................................................................... ii LIST OF TABLES ......................................................................................................... v LIST OF FIGURES ....................................................................................................... vi ACKNOWLEDGMENTS ............................................................................................. vii PREFACE ...................................................................................................................... viii Chapter 1. INTRODUCTION ................................................................................................ 1 Synthetic Universes .............................................................................................. 1 Physicality ...................................................................................................... 2 Interactivity .................................................................................................... 2 Persistence ..................................................................................................... 3 Avatars Choose Skills ........................................................................................... 4 Virtual Society ...................................................................................................... 5 What is Economics?.............................................................................................. 7 Virtual Economy ................................................................................................... 8 Virtual Currency ............................................................................................ 8 Virtual Market ................................................................................................ 9 Why Do We Play These Games? .......................................................................... 9 Scarcity ................................................................................................................. 11 What Is Fun Play? ................................................................................................. 13 Fun and Gain Association ..................................................................................... 15 Virtual Worlds Require Economics ............................................................... 16 Fun & Economics .......................................................................................... 17 Gaining Is Winning ........................................................................................ 18 2. SYNTHETIC UNIVERSES ................................................................................. 21 Alternative Synthetic Universes ........................................................................... 21 Pac-Man ......................................................................................................... 21 Playing Unconventionally .............................................................................. 24 Virtual World Alternative Play ............................................................................. 26 iii 3. THE ROLE OF THE ECONOMY ...................................................................... 29 Simpson ................................................................................................................ 29 Support Specialization ................................................................................... 30 Ration of Power ............................................................................................. 31 Encourage Interaction .................................................................................... 32 Provide Goals ................................................................................................. 33 Support Economic Role Playing .................................................................... 35 Role of the Economy in a Synthetic Universe ............................................... 35 The Anatomy of Choice ........................................................................................ 36 4. IMPLICATIONS OF ECONOMICS IN GAMES ............................................... 42 Summary ............................................................................................................... 42 Conclusion ............................................................................................................ 43 Game Design Implications.................................................................................... 44 BIBLIOGRAPHY .......................................................................................................... 45 iv LIST OF TABLES Table Page 1. Anatomy of a Choice (Salen & Zimmerman, 2004, p. 65) .................................. 39 v LIST OF FIGURES Figure Page 1. Bartle’s interest graph that demonstrates the relationship between the axes of appeal in an MMORPG and the types of players associated (Bartle, 1996, p. 6) ............................................................................................... 11 2. The anatomy of choice is displayed as a flow diagram. This illustrates the process that occurs during player interaction inside a synthetic universe. The decision making process is influenced by both internal and external events of the interaction stimuli (Salen & Zimmerman, 2004, p. 64)............................. 37 vi ACKNOWLEDGMENTS I would like to thank my father, mother and sister for their support throughout my academic journey over the years, and a special thanks to Dr.Shafae for his excellent mentorship at California State University, Fullerton. vii PREFACE This thesis is divided up into four chapters. Chapter 1 provides background information that is core to understanding virtual economics. Chapter 2 illustrates examples of economical behavior exhibited in video games. Chapter 3 discusses the roles of economics systems within video games. Finally, Chapter 4 summarizes and states implications of this research. viii 1 CHAPTER 1 INTRODUCTION Synthetic Universes Developers at game studios strive to create immersive settings in video games. Developers can simulate laws of the universe, like gravity, to make their game experience more realistic. Not all games try to simulate the real world, but for those that do the end product is a digital world that reflects the real world. Developers decide and create laws that govern the synthetic universe which restrict the players within the bounds of that universe. These laws can be based on physics or completely made up by the developers. One genre of game in particular, massive multiplayer online role-playing game (MMORPG) embraces the synthetic world experience which is largely bounded by physical laws. Edward Castronova is an expert on the study of synthetic worlds. He describes a synthetic world as a computer program with three defining characteristics: • Physicality: people access the program through an interface that simulates a first-person physical environment on their computer screen; the environment is generally ruled by the natural laws of Earth and is characterized by scarcity of resources; • Interactivity: it exists on one computer but can be accessed remotely and simultaneously by a large number of people, with the command inputs of one person affecting the command results of other people; • Persistence: the program continues to run whether anyone is using it or not; it remembers the location of people and things, as well as the ownership of objects (Castronova, 2001, p. 6). 2 Castronova provides us with insight on his perspective of the synthetic world. However, his three defining characteristics could be further expanded upon in the context of synthetic universes. Synthetic universes are any virtual environment governed by predetermined laws that restrict game play such that users can only perform actions within the bounds of those laws. Physicality Developers of MMORPG games create virtual online worlds that can be immense in size. For example, the MMORPG World of Warcraft contains five continents on one of its three planets. Games of this magnitude are typically adventure games which focus on the player’s character referred to as an avatar, and their journey throughout the world. Avatars allow
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