That Time a Video Game had an Economy Almost as Strong as Russia 

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1999: "We don't want players to buy in-game items for real money, so that everyone starts with an equal chance." 2019: "Buy the premium pack for $99.99 and get all the upgrades plus exclusive equipment that will give you a head start over your opponents!"

Just look at Oldschool Runescape. The Venezuelan blackouts literally effected the ingame economy.

Man this guy would freak on eve online.

You should talk about EvE Online, they have several economists that work full time.

Have you heard of OSRS? Venezuelans make more money playing the game and selling the in game money for real money then they would at a normal job. Recently there was a power outage in Venezuela and it affected the OSRS in game economy

If you're going to do a cut after each sentence you could at least wear a different hat each time.

Eve Online has actual economist ensuring the in game market does not collapse. Fun fact the Fountain War seriously pressured the game’s industrial players who could not manufacture ships at the rate they were being lost, at least I think that was the Fountain War.

And now the World of Warcraft gold piece is worth more than the Venezuelan bolívar!

Sounds more like he just wanted an excuse to play Everquest at work. Don't blame him.

Goldfarming is a very common thing in oldschool runescape, largely by the Venezuelan player base. Good video idea for you guys

There are several major problems with drawing this equivalency. 1) The inequality in the game was a direct result of already-existing inequalities in the real world. That is true of all games with currency exchanges, especially those that, themselves, sell premium content today. So it cannot be assumed that the inequality in game developed organically within that economy, but rather as a product of existing inequalities. 2) The value of the goods in real-world money was as high as it was only because a minority of players placed their goods on sale in the real world. Since this meant extremely low supply meeting relatively high demand, those prices were large. If all players tried to convert their 'assets' within the virtual world into real money, the value of items would catastrophically collapse...without anything unique to offer, no one would buy for anything but tiny sums. 3) The virtual gaming community is not a random sample of the human population and does not operate as the average human would - games can easily became addictions or, at the very least, overvalued in the minds of the most ardent players. Those players often spend more than they have to progress in games even today. That makes them a uniquely poor analogue to all real-world markets but pleasure-seeking pieces - drugs, sex, gambling, sports, entertainment. This is not remotely comparable to things like the service economy, the skilled trades, etc. 4) This economy was also extremely unstable...far more than the vast majority of real-world economies, specifically because it depended on the viability of gameplay, rather than real-world factors that carry intrinsic value.

"With the development of voice technology, communication in Virtual World will move from cumbersome chat to telephone-like conversation." Four years later: "LEEEEEEROY JENKINS!"

Economics is a difficult science. Humans aren’t “rational”, at least in financial terms. We have emotions and goals that don’t necessarily line up with the economic instinct to generate wealth. It’s not surprising researchers are turning to the virtual world to study.

Bulgarian here. Can confirm our economy is still shit. I'm sure all of Valve's F2P games are above us in today's chart.

Can't wait for the reports on RuneScape. The power outage in Venezuela has changed the economy.

Will you do a video about the Corrupted Blood incident in World of Warcraft? A glitch caused a debuff from a late game boss to be contagious between players, even out of the instance. So suddenly they had an actual pandemic on their servers, spreading and rapidly killing off low-level players, while pets and minions acted as asymptomatic carriers. It accidentally became the greatest, most realistic pandemic simulation to ever happen, sparking tons of interest from actual epidemiologists.

In soviet Russia the video game plays you

I thought this was an April Fool. I had to look it up on wikipedia.

my mom was an economics professor at vmi...she started using world of warcrafts economy as an example.

"Everyone will be sailing across the azure heavens on their flying purple horses, to shimmering virtual Walmarts in the sky." Did he just invent Vaporwave?

And then the players broke their economy soon after.

This channel has become, hands down, my favorite channel on youtube. Simon, i could, and do, listen to you speak all day. Thanks for the quality and passion you and your team pour into your videos.

Smoothest sponsor transition of not only simons whole channel, but also the channels of both sets of his triple twin brothers with those other 14 channels he and his triplet-twins operate. ;) Keep up the good work, bud. Love your content among ALL your channels! Your presence on RU-vid grows faster than I can subscribe! :)

Everquest, almost once the largest MMORPG in the world... But then SoE decided to break their winning streak and split their user base and create Everquest 2. Why make your huge game bigger when you can hand a win to Blizzard on a silver platter.

Everquest has just celebrated its 20th anniversary. It's still going.

hey simon. at the beginning i didn't expect too much from this video but now i think its one of the best videos about economy good job!

Great video; love the channel man! Keep up the excellent work and keep these vids coming please!!!

Well when was the last time you heard of someone beating EverQuest? When was the last time you heard of someone playing EverQuest?

@Today I Found Out, Maybe it's nice to do an additional episode of people who got very rich by just selling virtual items (and how that effects the real world) Nice episode! Very interesting stuff to think about!

This dude was the professor for my intro to games class last year. I was not expecting him to be the subject of this video. Awesome dude!

Watching this a year after you posted this at the end of 2020, the quote at the end is chilling.

Getting a job as an economist for a virtual world has been my dream job ever since I realized you could manipulate markets in Runescape. Love that the industry is employing more than just one these days (Dr. Eyjo of eve online)

as an economist in training, I can confirm that there is an ongoing research with E.V.E. trying to verify some economic results

I’ve gotta congratulate you for that seamless transition into the sponsor segment.

HOW did I not know you had another channel.... I've been watching Biographics for months now!

Every time I watch your videos I always expect them to start with: "Hey VSauce! Micheal here."

You should have a chat with Dr Eyjo ( Eyjolfur Gudmundsson ) if you want to delve deeper in the topic. He's actually been in charge for years of tweaking and controlling an ingame economy much more complex than EQ's one ever could be. He's since left that role to go back to Akureyri university where he's the rector (was the dean of economy before working for CCP).

In the virtual game, "Second Life," several people became real life millionaires as virtual real estate agents. Also, I had a friend who "engineered" virtual items in that same game enough to pay for her room and board, though it was a tiny apartment and she lived frugally as a student at the time.

Russia: you think this is a game? Everquest: um...yeah?

Now you gotta do one on the cutthroat world of Eve Online. That entire game is freaking crazy

"Hey man wanna come do a raid with us this saturday?" "Can't- I sold my sword. It bought be and my wife a holiday to Egypt!"

I was one of those half million in the years 1999-2000. I retired from plane of sky raids to focus on middle school. RIP.

I live on the east coast of Canada and my kids live in Calgary about 2500 miles west of here. Two of my 3 kids and I played a game called Eternal Lands. We were all in the same guild and spent many enjoyable hrs working on projects together.

As a player of everquest From 1999 till now and also a player of everquest 2 I love the video

What is that? A Monster energy drink? Okay, Simon! So that's how you make so many videos! LMAO!!!

Here's a topic suggestion for you: You know how in weddings the person officiating says something about "if anyone objects to this union, speak now or forever hold your peace"? Does that ever happen?

This is one of my game design profs! Very cool!

There is a flaw in using video games... they make the assumption that people will act the same in the real world as they do in the virtual world. In one world you just lose the game.... in the other world you starve.

Nice one - Posting something that sounds like an April Fools' Day joke but isn't, on April Fools' Day!

I remember playing guild wars years ago. An in game glitch caused the merchants to sell silver dyes for a 100g, this lasted for several hours. When people noticed they bought them up quickly. Once the glitch was fixed the price of silver dye had plummeted due to the amount circulating. Silver dyes use to sell for many tens of thousands of gold. Afterwards there worth had dropped to just a couple thousand.

This is actually great. I would have never thought that this was a thing.

No virtual economy is quite as deep and complex as EVE Online.

I never pegged you for a lo-carb Monster Energy drinker.

that was an awfully saucy "we're not done yet" at 6:05

check out the FOIP tech being built into Star Citizen... that quote about voice integration and the changing way we interact with virtual worlds... its really coming along strong lol

He basically predicted The Oasis from Ready Player One becoming real.

The video forgot to mention hyperinflation is almost always a thing in MMORPGs. Due to the thing of infinite ingame currency the prices at player run stores will only ever go up when the thought price of an item goes up for everything that takes you more than 1 step to get.

The GaiaOnline economy has also been studied for the effects of inflation. The in-game economy crashed in a few months after the company was bought out by a new group who re-released super valuable items and flooded users with free gold, lowering the value of everything all at once.

Closest I could play to playing Everquest was Champions of Norrath on PS2. I still play it on my PS3 today, and LOVE it since I can play 4 player now without a multitap.

In most MMORPG there is no debt at all, yet economies are flourishing.... and in the meantime pretty much all "rl" economists claim, economy without debt would be impossible... they should just play frigging MMOPRG ffs.... btw, you should check out entropia universe, it has a fixed ration of 1$:10PED , the GDP is a couple hundred million dollar unnually if i'm not mistaken.

i actually read this one on the site a few days ago lol

A note for those who may not know about Japanese Yen: It's more equivalent to cents than dollars. At this moment 1 yen equals 0.009 dollars. So in other words, 1 yen equals 0.9 cents. In other words, 1 "dollar" worth of yen is 90 cents ($0.90) in USD. It wasn't always that way of course. After WW2 it was set by law to ¥360 = $1 for a long while. Around 1995 and 2011 it actually took less than 100 yen to equal a dollar.

World of warcraft was also studied by epidemologists back in vanilla due to a virtual plague. Raiders would get this plague and it had bugged (i think) and stayed on the character within the boss encounter, players would go to social hubs and auction houses and spread the plague like wild fire. Was quite interesting at the time :P

pretty sure WOW's economy in its peak was worth alot more

Eve Online's economy. ;-)

I love how your monster zero keeps turning during the vid, must be thirsty work :). Pocket empires (android but now gone) had an incredible market. I miss these sort of games

Fun fact on EQ we are celebrating the 20th anniversary. Been playing since the beginning & I remember when people were going nuts spending real money on in game items and buying in game platinum as well.

The comparison of economic inequality in EQ to IRL was poor. Based on the guys quotes, its obvious that he didn't get past being a low level character. It's comparing the income and expenses of a low level to a max level really. Low level characters made as much as was appropriate for their level, same as max levels. At best, maybe you could compare the leveling system to education/training. But IDK. That doesn't seem right. It's only fair to compare equal level character mains really for economic equality. When doing so... yea, there was some. There was a lot of monopolizing income sources in that game. People had spawn timers locked down! And even after averaging income as a result among participants, it really created a separation in max level characters income and net worth when equal time invested in the game considered. FYI, I'm not complaining about that though. In fact, it was a part of what made the game so interesting. Sucks that Plat duping ultimately destroyed the economy though. You should talk about that as a follow up. The EQ economic crash. Though people tend to get the source of that wrong, and blame it on a silly urban legend exploit, instead of the real source. A craft->vendor loop.

>Norrath was only virtual Oh, you mean just like modern money? Lol

3:33 can't help but notice the monster can in the bottom right of the screen lol. Probably showed up earlier, but this is when my adhd brain went "oh look, monster!"

That transition was smoooooooth.

I love eq I played it for so many years I miss my iksar shadowknight

Here is a scary thought.....we are already in the theoretical petri dish.....studying petri dishes of OUR own creation....like nesting russian dolls....lol

You can still buy things in Everquest, and people do. $17.99 USD buys you between $2-$2.2 Million platinum depending on who you buy from. Which is a tiny fraction of the value back in 2002 when the article was published it still exists in 2019. The $17.99 buys you a 'krono', a tradeable item in game that when clicked gives you a month long subscription. So if you can generate $2+ million platinum a month in game you can essentially play for free. I'm sure there's also ways to sell Krono's for back into real life cash (for example at $15 to other players) but I'm not aware of them. There are also a few extremely rare items that trade at 5-8 Krono's on my server, but I don't really know much about that market. The ingame merchants that players setup are capped at 2 million pp so that is part of the pricing.

up to MOP a typical WOW server had a healtheir economy than the US and EU combined. It was so vibrant in fact economists were and still are totally baffled how. My uncomplicated thought is a combination of trading goods for favors (did that on a tank a few times), plus things people would actually want

I have to question Castronova's conclusions. he whined about his poverty, which would be more likely a product of his industry and ingenuity than anything "unfair" in the economy of Norrath. One factor left out is that Verant (the makers of EQ) were absolutely adamant about forcing players to group. So if Castronova insisted on playing the game solo in 2001, as one can do in games such as WoW, Tera and others, yeah, your personal economy is going to suffer for it. I don't know what server(s) he chose to play on, but on the VAST majority of servers you will find very generous people willing to help a struggling low-level or new player out... key word... "struggling". That means "trying", not sitting around expecting things to be handed to them. Everquest as it existed in 2001 is still around in Project 1999 (do a search for it online). And it has much the same atmosphere as live EQ did in 2001. On P99, high-level successful players will often give valuable weapons, armor or items to low-level players, the general criteria being that the person actually use it, and that it is a "main" character and not an alt. I myself, and I know many, many others, will spend time giving high level "buffs" and assist lower level players gain experience and wealth... as we did back in the day. Heck, we discussed the acquisition of a tunic for a monk that drops in an area extremely difficult to get to, from a monster higher level than any player, and cannot be traded (therefore must be looted directly from the body). One person related that he had acquired such a tunic for his level 8 monk by looting one of the "rotting" tunics left by a high level player.. with the assistance of that player. Yes you will find items selling for 10s of thousands, in rare cases hundreds of thousands, of "plat". Rather than consider this unreasonable and unfair, consider that, on his own, the average player simply *cannot* acquire the items, such as the tunic cited above. So the choice is paying lots of "plat", which you can acquire over time in any number of ways, or not having the item, at all.

Was hoping you and Micheal from vsauce switched places describing how apirl fools day came about. sigh... maybe next year

The cool thing that a study such as this referred to is that we, the society of players, prosper just fine without government.

Sunk YEARS into EQ from 2000 to 2010. The game was absolutely amazing at the time!

RuneScape has got to be the richest MMORPG economy 🤔

Everybody: Some Economist: Whoa! This game money is worth more than Japan money! _🚨China has entered the chat🚨_ Everybody: _...blyat_

Interesting I knew about the incident in which WoW that was used to study disease outbreaks but the way the economy can also be studied is cool

You never struck me as a consumer of ''energy'' drinks, Simon :P

Lets be serious here for a sec: Castranova is an epic name^^

You can play classic EQ right now, check out project99, it's free.

Reminds me of the plague event in World of Warcraft, studied afterwards by epidemiologists, which I seem to recall TIFO may have done a video on too.

I remember at the height of Everquest's popularity there were artists trading commissions for items and or cash from Everquest.

Holy crap. One of the kids from Mighty Ducks owns all the gold farming sites from WoW? That's amazing lolololol

I'm no economist but wasn't Russia still recovering from the collapse of the Soviet Union when the study was released?

I played EQ from launch, now I still play EQ2 on occasion. That and Star Wars Galaxies (can be played via emulator now) are both games that really has done well. But then again, I was one of those nerds that started playing DnD table top when it first came out...

Intersection of my two favorite things. Economics and video games!

That's not hard to do now

This is like how osrs has better eco than Venezuela, so Venezuelans make bank playing it/botting it.

Happy new month day

Nice this video is awesome thanks for uploading this.. I used to play everquest quite a bit back in the day around the year 2000, I haven't played it in about nearly 20 years. The game is still thriving to this day which is amazing, seeing it's the second MMORPG that is still successful and the second one to make the MMO genre more popular the first being Ultima Online, which brings me to the question, could you do a video on Ultima Online would be awesome to see here 👍😎🍻

this didnt need to be 11 minutes, but great story

Hahaha! Nice April Fools joke😂😂😂. Forward to 05:61 if you want to get to the actually joke and skip the boring build-up.

Nice product placement with that Monster can

i saw this video on my front page was exited to see it was EQ that this was talking about a fun video and even as a player for 7 years did not know all this