According to Wikipedia a virtual world (or sometimes a synthetic economy) is a computer based simulated environment intended for its users to inhabit and interact via avatars. However when these avatars start making transaction using "real" money another form of virtual economy is formed. "Open" virtual economies vs. "closed" virtual economies. Second Life is an "open" virtual economy that encourages the flow of "real" money however World of Warcraft, or WoW, is a "closed" virtual economy and does not allow for the exchange of money. Is one of these economies better than another, is one more fun to play then another? That all depends on who is playing the game and how much they are willing to risk and invest in it.
Investing real money in these type of "open" virtual economies can sometimes have its drawbacks. From Dibbell's The Unreal Estate Boom, even though you can plunk down $750 dollars to buy a nine room, three story house over looking the ocean, you can still never actually go there, because it is imaginary. So why bother investing in something you can never touch? People are looking for a quick buck, but getting greatly disappointed. In the virtual worlds there are banks promising extremely huge returns. A lot of the online worlds trap people into what is known as a Ponzi scheme, or pyramid scheme. Wikipedia defines Ponzi Scheme as a fraudulent investment operation that involves paying abnormally high returns ("profits") to investors out of the money paid in by subsequent investors, rather than from net revenues generated by any real business. The system is doomed to collapse because there are little or no underlying earnings from the money received by the promoter. A recent example of this would be that in August 2007, a bank in Second Life called Ginko Financial claimed that it could give returns of 40% to 60%, collapsed and gone insolvent with debts of $750,000. Some residents have lost amounts of almost 10,000 in the scheme. On their web site they explain that they have exhausted all of their funds and are trying to find ways to pay back their customers.
People get involved in these schemes and find it hard to get out. Perhaps this is why WoW has chose to be a "closed" virtual economy so they do no have to deal with all the problems that arise from having to deal with "real" money. Maybe all that hassle could be avoided by not being frivolous with their had earned money, by trying to buy thing that in all honesty really do not exist. I don't really get the whole concept of playing virtual reality games and stuff, I know my brother is a freak for Halo 3 on his Xbox 360. He sits there for hours with his head set on yelling at little kids around the world, I personally just don't get what all the hype is about. But the main point in all of this is be careful with your money and who you trust it with and dont get into something that you cant get yourself out of.
5 comments:
I'm not really into video games either, but after reading how so many people are making real money from these virtual worlds, it does sound quite intriguing.
I cant believe people actually invest real money into these video games. It seems ridiculous to me.
i find it ridiculous too... However you'd be surprise it is possible to earn money from it. I had a friend who setup an account and will train those characters and then sell them off for a good amount of money.
This is one of the blogs i decided not to write about because i was not interested in it AT ALL, but after reading your post it is actually interesting. i cant believe people really put so much money into this.
It's interesting when virtual reality crossing in to "real" life reality. Especially when people are making money that esentially does not exist in real matter. Especially a house that they will never touch, smell, or physically take a walk in. I'm curious to know one's motivation behind it, I certainly can find a better way to spend $750!
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