Online Games - Waste of Time, But Maybe Not Waste of Money
18 October 2006Yet Another Blog About Money posts about his bafflement at the idea that people spend countless hours (and real money) in online “virtual worlds” such as the games Second Life and World of Warcraft. He admits he does something somewhat similar with online poker, but suggests he ends up with real money in his pocket as a result at the end of the day.
Having played World of Warcraft and many of these other games myself (though not Second Life), I’m certain that he’s wrong about the idea that you can’t monetize your “online assets.” I made several hundred dollars in college selling imaginary items and characters in a game called Diablo 2. You’d be surprised what nerds with more money than time are willing to blow $10-15 on - that Sword of Superior Demonslaying of the Eagle +1 to Agility can go for a pretty penny on E-bay. Some extremely rare items would sell for $1,000 or more.
It’s a little harder to do that these days, both because some games have changed the rules to make it harder to transfer items among players, and because people in China and other countries have figured out that the $2 an hour or whatever I was making as a college student is a pretty high salary by their own country’s standards. On the other hand, while some companies are trying to crack down on people spending real money on virtual things, others are basing their entire business model on it. There’s a game called Project Entropia that doesn’t even charge you to play. You buy your weapons, houses etc. with real money - and they take a tiny cut of all the player transactions. They had $160 million in real-money transactions for virtual things last year. These include a $30,000 island and a $100,000 space station - which according to their owners have actually made them a profit by charging access fees to other players. In the game Second Life, one player has reportedly made several hundred thousand dollars in virtual real estate speculation. My guess is that this kind of thing will only get bigger in the future - mainly because the number of people who grew up with video games becomes a bigger and bigger part of the population.
That’s also why I think Yet Another Money Blog sees poker as a place where there’s real money, but not video games. His blog lists his age as 38 - part of an age group where video games weren’t as pervasive a part of your childhood as they have been for anyone born after about 1980 or so. I’m just inside that dividing line myself, and most males in my peer group still play them. If they’re jocks or not really that into it, they play sports games or James Bond games, and they do it more as a social thing like playing pool. If they’re nerds, they play Warcraft (as well as pretty much everything else). Even many women play games like the Sims or Roller Coaster Tycoon. And the upper cap on this age group is in the mid to early twenties. That means most of the spending now is from people who are just starting out in life, not really anywhere near their full income. As the people who grew up with video games age, my guess is they’ll be considered more like movies - most people buy them or spend money on them. With poker, a much broader section of society is interested in it right now. And for people who are good at it to make money, it takes a lot of people who are bad at it to casually play and pump money into the system. The only difference I see is that a larger group of people is currently interested in one than the other.
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One Response to “Online Games - Waste of Time, But Maybe Not Waste of Money”
November 2nd, 2006 at 2:31 pm
[...] Hmmm…online games are a waste of time but not a waste of money? Well, I can’t say too much about wasting time. Back to channel surfing! [...]