Real Millions Spent on Imaginary Assets

July 13, 2005 -- -- Heaves was fed up with working night and day to make ends meet. On top of an already demanding day job, he was spending his nights laboring over the same repetitive tasks just to put a little coin in his pocket.

Heaves, like most of us, wanted the good life and he didn't want to break his back day in and day out to get it.

But unlike the rest of us, Heaves isn't real. He's an invented persona, an inhabitant of a vast and mythical online computer game world called "World of Warcraft," where players around the globe take on the role of adventurer extraordinaire in the shoes of their personally crafted virtual alter-ego.

Big Business

The games are known as MMOGs -- Massively Multiplayer Online Games -- because they allow thousands of players to inhabit the same game-space simultaneously, and offer players a more social gaming experience than any other genre.

MMOGs are big business with millions of players around the world plunking down money for the games' software -- usually retailing around $50 -- and, in most cases, additionally requiring a contribution of about $15 a month in subscription fees to the publisher's coffers.

Historically, these games reward players for the time they put into them. The longer you play, the more your character progresses and the more access you have to the game's content, like places and items.

But for players like Inti Einhorn -- Heaves' real-world better half -- the monotony of repeating the same tasks over and over again just to get the items and currency he needs to have fun and stay competitive -- isn't always worth it.

"In these games time is money," said Einhorn. "I sit at work and I can't play and the only way of getting that gold [currency] is devoting hours and hours to the game."

A New Twist on Pay-to-Play

As a result, a secondary market has emerged around MMOGs, where players buy, sell, trade and donate in-game currency, items, whole characters and even real estate.

Einhorn, a 31-year-old system administrator for a major entertainment company in New York, has been playing MMOGs for years, but only recently made his first purchase from the secondary market.

"I bought 1,000 gold [pieces] for 90 bucks," recalled Einhorn. "It's a lot of real world money, but then I thought about it for a second and I realized how many hours I would have to put in playing -- doing relatively boring things -- in order to get that amount of money in the game. The trade-off was just too good to pass up."

It's that trade-off of money for time that Dan Morris, editor in chief of PC Gamer magazine, says has turned the MMOG secondary market into a global phenomenon.

"There are some people who are willing to pay lots of 'real-world money' for shortcuts to success in the games [MMOGs]," Morris explained. "Some of these have made headlines recently -- some five-figure transactions over virtual property -- which strikes you as crazy, but if it's worth it to the guy, it's worth it."

Economics and Virtual Real Estate

Morris is referring to what may be the most expensive virtual real estate deal in the world of MMOGs to date.

In April 2005, a 22-year-old Australian university student paid a record $26,500 for a 6,000-acre virtual island in the MMOG "Project Entropia."

Entropia was designed to take advantage of the very market forces that have caused economies to spring up in MMOGs everywhere.

"They began as a bit of an accident, as people started realizing that they had something that someone else wanted and could profit from," said Morris. "Before long Malthusian nature took its course, I guess, and a structured economy stepped up."

Economics is the name of the game in Project Entropia, where players can convert real cash into PEDs -- Project Entropia Dollars -- and buy anything the game has to offer.

In turn, players can convert their PEDs back into real money and, if they're savvy, may even turn a profit.

"They wanted to create a game that was all about the real world economy that was going to spring up around their virtual economy," said Morris. "They were enticing you to come in and play for a profit," he said.

According to Project Entropia's Web site, the game has attracted more than 250,000 players so far.

Virtual Addictions

Even if you manage to wrap your head around the idea of people buying and selling things that don't really exist, it may be hard for some to understand why players are so connected to their characters.

Recently in China, 41-year-old Qui Chenwei stabbed Zhu Caoyuan after learning that Zhu had sold a sword Qui had acquired in the game Legend of Mir 3.

Because Chinese law doesn't recognize virtual property as actual property, there was no legal recourse for the "theft."

But the case highlights the attachment many players feel to their characters and to the "work" they put in to achieve the games' goals.

Einhorn himself admits that as a former player of EverQuest, one of the first and most successful MMOGs, he was so involved he had to undergo a self-intervention.

Part of a guild -- a sort of in-game club for like-minded players -- Einhorn and his virtual cohorts became more and more involved in the game and the group.

My guild "got really ambitious and ended up pretty high up there and that's when the game got a little crazy for me," said Einhorn. "It got to a point where if I didn't play six hours a night, every night, I just wasn't contributing on the same level as the other players in the guild."

Einhorn says that after he and his fellow guildmates had reached a certain level in the game, it wasn't the game itself, but the social interaction that kept him playing.

"I was doing it for the love of this group and the motivation was good, but it was almost too many hours," he added. "In the end the value was really just the social interaction. When that boils down to pressing the right buttons at the right times, there's a limit to how much you can get out of that."

For some the social component of these games is so consuming, they become almost detached from their real lives.

Their devotion to the games has spawned support groups for their families. Members of the online group "EverQuest Widows," claim their spouses, friends and family members have become addicted to the game and refer to it as "EverCrack."

Putting a Value on Virtual Assets

There are no official tallies for the MMOG market -- no one knows for sure how much the primary or secondary market is worth, according to the Entertainment Software Association.

But Steve Sayler, president of IGE -- a company that facilitates and profits from the buying, selling and trading of in-game currency and assets in MMOGs across the globe -- says the secondary market has grown into an $880 million-a-year industry.

Sayler explains that IGE, founded by MMOG gamers Brock Pierce and Alan Debonneville, emerged naturally as a result of their interest in that aspect of the games.

"They realized very, very quickly that this was a real market," said Sayler. "I think that Brock Pierce was the first person in the world to recognize that there was real interest and real value applied or assessed to virtual items."

The idea of placing monetary value on objects that essentially don't exist may be confounding to some, but Morris points out that people spend money on things others scoff at all the time, like skiing.

"Certainly there's no reason why you wouldn't be willing to spend thousands of dollars for some kind of exclusive ski trip if you were a skier," Morris said. "You might say to yourself, 'Well, that's a tangible item, you're actually going to go to Stadt and ski. But at the end of your ski trip all you're going to have are memories. The same is true in virtual entertainment; it's just a perceptual shift," he added.