Thursday, November 09, 2006

Korean Video Game Developers Understand Economics!

One of the things I find continually frustrating about my online gaming experiences is that I just don't have the time available to warrant the monthly fee associated with my favorite online games. It seems absurd to me to pay $15 a month for a couple of hours of entertainment where I am not able to accomplish much except watching my friends gain wealth and power while I remain a noob.

Players like me are why there is a secondary market, ie goldmining, for items, money, and higher level characters. I work and have a pretty full calendar, but I want to be able to keep up with my friends when I game. That means that I have to buy things that let me keep up. Specialty stores have arisen on the internet to give me that very option.

Before I get a lot of responses yelling at me for being a cheater, let me cut them off at the pass a little bit. I love playing online games for two reasons. I play for the story and for social interactions with people around the world. I often find it annoying when I want to do a particular instanced event when the people I team up with run through the event because they've done it twenty times. I want to experience the narrative and explore new things, and I want companions who are doing the same thing. Some people have a lot of time to play and it would be unfair for me to demand that they be bored with the same old thing, so I sometimes buy the privilege to keep up with my friends.

This isn't unusual, nor is it cheating, it's good solid economics. If you want a better car, in life, you can either build one (presuming you have the knowledge and time) or you can buy one with the largess you have acquired. That's the real world folks. As for cheating and bad economics, that is what most online game providers are doing. Let me illustrate. You have two gamers. One has near unlimited time to play and uses a large amount of server resources every day. The second has limited time and barely uses the server. Let's say one plays 80 hours a week, those 16 hour marathon weekend days are awesome, and the other plays 4. Both pay $15 dollars a month to play. One gets to do everything he or she wants, the other has a continually diminishing experience when it comes to possible play, there are just fewer people of similar power available to play with and sluggishly slow advancement can be frustrating. The 80 hour a week player, and his Czech employees, begin selling their accomplishements on the internet to the 4 hour a week player.

Both are happy, and are being economically rational. The problem is that the game company is being irrational. Not because they frown upon the secondary market or even that they try to prevent it from happening, no those are rational. The problem is that they have created an economic imbalance and refuse to acknowledge it. They allow both limited and unlimited users to access at the same rate which is economically irrational. They then complain when people who get what is essentially a discounted rate take advantage of their time and sell the spoils. Sorry, you don't get to do that. You have two rational options at this point, from an economic perspective. Either charge by the amount of time used, which will be very unpopular, or allow those who have less time and more money to purchase advancement and items from you, which has a bi-product of eliminating or diminishing the black market you oppose anyway.

Some key Korean developers understand this process and have begun to implement it in a Free to Play system where you can buy, for micro fees, in game advancements. Trust me, this is the way to go.
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