Abstract
This study investigates the monetary value of virtual goods in the context of 24 most popular massively multiplayer online role-playing games (MMORPGs). Building on classic economic theory, we approach this issue through a combination of experimentation and cross-sectional time series data analysis. Our findings suggest that more intensive social networking and flatter social hierarchical structures are associated with lower monetary value of virtual goods across various MMORPGs. Instead, a larger base of active users increases the potential demand and thus the monetary value of virtual goods in the short run. A steeper social hierarchical structure further strengthens the effect. The implication is that social networking and hierarchical structure can be two effective angles for game developers or policy makers to address the issue of real-money trading of virtual goods.
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Notes
As reported in a recent Wall Street Journal, 452,000 people in America are making a living as bloggers, a scale close to the number of lawyers in the country.
For example, a virtual item in game World of Warcraft is not comparable with the same kind of title in Ever Quest.
Huhh (2008) defines flat fee as “applying a fixed price unilaterally without regard to each player’s usage level for a fixed period”. Two-part-tariff means that game service providers charge a small entry fee (normally free) and at the same time conduct RMT by selling virtual items to players—the so called micro-payment.
Some of these virtual items may be listed in an RMT market and thus can be directly valued in real-world currency. However we cannot ensure a real-money value available for each item in the same RMT market and at the same time. Thus using the price in virtual currency offered by a non-player controlled trader in the game can avoid the noise introduced by the variance in RMT markets.
This is evidenced by our observation that no guild membership is traded separately or bundled with a listed avatar account in 5173.com, the largest real-money trading market in China.
To the best of our knowledge mmogchart.com is the only available public source which provides the number of active subscriptions for 45 massive-multiple player online games till the end of 2008.
In June 2009, we conducted face-to-face interviews with three gold-farming entrepreneurs in mainland China. All of them disclosed that instead of asking their employees to play online games 12 h shift as described by Jin in 2006, the gold farming industry in China as of in 2009 has evolved into a stage of “add-on”, software program that can communicate with game servers to automate gold-farming process. Thus an employee in their studio can be simultaneously in charge of four computers to harvest online game items. Consequently XFire does not look like an efficient or even necessary channel for the communication between gold farmers.
We use the adjustment on the standard errors as suggested by Davidson and MacKinnon (1993), who report that this method tends to produce better results when the model really is heteroskedastic. This is technically supported by STATA 11.
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Acknowledgements
We thank Ivan Png for his helpful comments and kind support on this research. We also thank Wen-Jing Yew for his assistance on data collection. Corresponding author: Qiu-Hong Wang, Department of Information Management and Information Systems, School of Management, Huazhong University of Science and Technology, China; Email: qhwang@mail.hust.edu.cn. The research was partially supported by grants from the NSFC (71001042, 70971049, 70731001, 71061160505), and Research Fund for the Doctoral Program of Higher Education of China (20100142120056).
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Wang, QH., Mayer-Schönberger, V. & Yang, X. The determinants of monetary value of virtual goods: An empirical study for a cross-section of MMORPGs. Inf Syst Front 15, 481–495 (2013). https://doi.org/10.1007/s10796-011-9339-4
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DOI: https://doi.org/10.1007/s10796-011-9339-4