Animal Farm

Pandaren Monk We finally have some reliable figures for the commercial value of “minipet” micro-transactions in the game, World of Warcraft. Specifically, the sales of just 1 item: In November and December 2009, at least $2.2 million worth of Pandaren Monk pets were sold. 220,000 at $10 each. We know this because “50% of the purchasing price” was donated to charity, and “more than $1.1 million” was donated (via WoW.com).

Over 220,000 sales to a market of about 4-5 million potential customers (only active WoW players can use the minipet, and the pet does not appear to have been sold in China or Taiwan). Roughly 5% of potential customers spent $10 on an ostensibly useless vanity item: A small pet that follows you around, looking cute.

Like most virtual goods, the cost of making and selling this pet is marginal: Primarily some additional art and marketing time, all built on the back of existing systems (store, staff, world). The first 2 months of Pandaren Monk sales will have made contributions to Blizzard’s profits of about $1 million. That’s only around 1% of the business’s turnover in that 2-month period. But that 1% is “free money”. Blizzard (-Activision) would be doing a dis-service to its investors if it did anything other than continue to milk this virtual cash cow.

Apply a healthy bit of European cynicism, and it is easy to conclude a scam. Tobold‘s:

“Send me $10, and I promise to send $5 of it to charity.”

Of course, Europeans fundamentally don’t understand US philanthropic culture: The idea that it’s fine to exploit your fellow human and make outrageous amounts of money, so long as you give some of it away in the end. Some philanthropy is able to take a somewhat rational, balanced view of what is good for the world. But there is a tendency to support visually appealing issues, such as charities servicing the needs of children.

The purpose of this article is not to argue that a European, government-centric re-distribution of wealth is preferable to an approach lead by personal responsibility. (I’m not sure it is.) The problem emerging here is more fundamental: That virtual goods are replacing trade-able value with non-trade-able value. Non-trade-able value that, by definition, can not offset inequality in (game) society. Donating part of the price of sales to charity is pure irony. In true Orwellian style, we’re sleep-walking into a potentially broken social structure with the best of intentions.

This article started as a box during my Adventures in the Invisible Tent, but has been expanded here in much greater detail. This article describes what a minipet is, highlights the role of money to balance inequality in society, and explains the problem with virtual goods. Read More

Valuing Nothing

In 2007 I wrote some introductory Thoughts on a Socio-Economic Environment based on Nothing. This article continues to explore the value of things in a highly intangible, knowledge-based economy. It wanders through internet-based payment systems, economic structure, role of government, organisation of information, community, and society, before disappearing into the realms of philosophy. It contains no answers, but may prove thought-provoking. Read More

Paying for Points

Dominante's WeeWorld avatar and room. This article examines the sociological implications of the different reward systems used in virtual worlds.

The original WeeWorld article attracted a lot of feedback from WeeWorld’s users. One common question was, why do we have to pay for points? Or even, “WHY DOWE HAVE TO PAY FOR POINTS!!!!”

Why indeed?

  • WeeWorld has 2 kinds of points: Gold points we buy with Dollars (“monetary rewards”), and green points we earn by doing things in the world (“achievement rewards”).
  • Gold points can buy more things in WeeWorld than green points. So the things we want most, tend to be bought with gold points. In other worlds, achievement rewards (like green points) are more important.
  • The things we want are things that not everyone has. We want those things because it helps us make friends. To stop everyone having them, those things cost points. If those things were free, everyone could have them, and then we wouldn’t want them.
  • Gold points are bought with our parents’ money. So some of our friends have less points, because their parents don’t have as much money. We may want to help them by giving them some of our points. That helps us keep friends.
  • Unfortunately, in WeeWorld, gold points cannot be easily shared. So WeeMees with lots of things tend to have those things because their parents’ have lots of money to buy them. This is “unfair”.
  • In other worlds it is easier to earn achievement rewards (like green points). This means we could earn our own rewards, instead of our parents earning them for us. But those rewards cannot be shared. That means we cannot help our friends who have fewer rewards. That might also become “unfair”.
  • Perhaps gold points would work better if we could share them, and we could earn gold points ourselves?

That’s the simple answer. With apologies for “we” and “our”. This article explains and expands those ideas. Read More

Virtual Worlds, Serious Work, and Collaboration for DKP

Byron Reeves (Stanford University) spoke to the Media X conference about how experiences from virtual worlds could be transferred into working life. This article summarises his talk, and contains personal analysis of the potential for using DKP (Dragon Kill Point) systems to measure contribution to collaborative activity.

Playing Puzzle Pirates at Work

Take a dull job such as that of a call centre worker. Now take the online game, Puzzle Pirates. Strip out the puzzling part, and add in the dull job. What do we get?

  • Metrics about the performance of yourself and others – highly detailed feedback loops that are largely missing from most regular jobs.
  • Through these metrics, a way to identify issues with team performance, giving…
  • An easy way to notice and resolve human issues within the team.
  • A way to make money that relates directly to performance within the game.

Why Might This Work?

Some possible reasons:

  1. Worlds are popular. People like playing them! Reeves was unusual among academics in acknowledging the huge popularity of teen-orientated worlds like Habbo Hotel, and down-playing relatively unpopular titles like Second Life.
  2. A new “gamer generation” is emerging. Even without the online component of games, these features aspects of competition, failure, risk and feedback. It is reasonable that this generation will come to expect to work using collaboration tools with features that match.
  3. Well understood recipe for creating a great game.
  4. Emotional involvement. Byron Reeves showed how heart rate increased by the value of 10 [presumably beats per minute] when playing with another human-controlled avatar, rather than a computer-controlled agent. This implies a performance gain when human collaboration is present.
  5. Technology: Worlds are easier to build, and “better”.
  6. Painful long-standing problems in enterprises might be solved. For example, large proportions of workers are “out of the office”; have limited employee feedback; do fundamentally dull work; and require emotional contact with other humans to innovate.

Dragon Kill Points as a Measure of Contribution

Dragon Kill Points (DKP) might be used as a way to value contributions to collaborative environments such as wikis. DKP is a way of resolving how to share finite loot among a group – originally from killing dragons in Everquest, now from any encounter that requires a group to complete.

The application of DKP to other collaborative environments was not fully developed. So let me try.

Loot is the primary reward from most collaborative activity in an game such as World of Warcraft (probably where DKP is currently most used). At the most advanced stages of the game a hostile creature might require 10 or 25 people to kill, yet only yield 2 or 3 items of loot. An equitable method of distributing loot is critical to long-term motivation of players.

Pragmatic random distribution of loot is one method: Players those avatars would benefit from the loot are invited to roll a virtual 100-sided dice, and the highest score wins the loot. The process is not entirely without social mediation. For example, one player might pass (forfeit their roll) to allow another to win loot that the first player knows they particularly need. Likewise rolling on loot that the rest of the group perceive the player doesn’t really need is likely to cause a social backlash. Pragmatic random distribution of loot is easy to administer and well suited to small groups comprising players that might not regularly play together.

However, pragmatic random distribution does not account for long-term contributions: One player might attend one session, gain a rare loot, and stop contributing to further sessions. Meanwhile another player might attend multiple sessions and gain nothing.

DKP is an alternative method. It creates a tally of points based on contribution to group activity. Loot is then distributed based on the volume of points a player has banked (and is prepared to spend) from earlier contributions. DKP is generally used where:

  • Groups are composed of many people, typically 10 or more.
  • Groups are formed out of a limited set of people that often play together.
  • A low volume of loot is generated relative to the time commitment required to generate it.
  • Groups routinely split play sessions between activities which generate different amounts of loot. For example, learning/practice (“progression”) vs gathering loot from already familiar activities (“farming”).

If DKP sounds simple, it isn’t: A DKP system is a complex construct, with different ways to measure contribution and balance the flow of loot to players. Agreeing that balance is a highly social activity, and failure to get the balance right can break-up long-established groups.

Group stress (“drama”) caused by the requirement for a complex DKP system may be one of the reasons for the growing importance of tokens in World of Warcraft. Group activity yields tokens, rather than loot. The tokens can still be traded for loot within the game. However tokenization removes some of the requirement for groups to balance the value of different items of loot.

DKP as a Currency

Edward Castronova and Joshua Fairfield have already mused on some of the economic aspects of DKP. But there are some interesting tangents that have not obviously been explored.

DKP is a meta-currency where the value of the currency is based on the values players place on one another’s contribution. Oddly this makes DKP far more like a modern physical-world currency than the formal in-game currencies created and balanced by game designers. Most modern currencies are valued on nothing more than trust – even if most users of currency never realise.

DKP systems effectively create many different currencies, each balanced and exchanged between a tiny number of people. The economy this creates is so devoid of complex economic mechanisms, and so obviously balanced by social interaction, that it might be mistaken for barter; but it isn’t.

Applying DKP Elsewhere

The value of DKP is in the ability of a group to allocate their own collective set of values to the results of collaborative activity. The value of the currency is a reflection on the group itself.

Applying DKP to a wiki-type collaborative environment is problematic: Contributions are not equally balanced within the group – the classic 1%-9%-90% pattern, where most contribute nothing, and few contribute a lot. While DKP might seem an ideal way to resolve this imbalance, and give the 1% the credit they deserve, we must remember that the DKP system’s balance is a social construct: The system will naturally be primarily designed by the 1%, and so will be biased to reflect their needs or perceptions of value. So DKP resolves nothing.

Administering DKP tends to be complex and time-consuming. DKP is not just technically complex (which might be eased through better software tools): Its value-system is an ever-changing function of the group itself.

That all assumes DKP will always be established through negotiation between those involved. We could theorise that eventually standard approaches will develop, that later generations of players will come to recognise and accept a standard approach. But standardisation would merely create another traditional currency system. Such a currency would be less arbitrary than some formal in-game currencies, since its value would genuinely reflect the work of players, and would not have to be carefully balanced by those designing the world.

It is not clear that DKP can be applied to any collaborative situation. However it may form a currency that better reflects players’ effort than one designed by those operating the virtual world. Consequently it does have a lot of potential for further development.