We identified some problems with the previous MMORPGs -- things like the older a (gaming) server is, the more money is available, meaning less value for 'über-items,'" Blackman said, referring to the devaluation of currency that occurs when an economy lacks monetary drains"We wanted to avoid that syndrome if we could, and so a very simple addition like 'item decay' in our game will hopefully help.

And as similar games move closer to economic reality, the line between "real" and "fake" economy begins to disappear

"From an economist's standpoint what's happening in these games is real," said Edward Castronova, an associate professor of economics at California State University at Fullerton"You've got a distinct territory with specialization of labor, gains from trade, a floating exchange rate -- real economies are happening."

As a doctorate student in economics, Castronova had a strictly recreational interest in gaming -- until he encountered Sony Online's EverQuest, the most massively popular MMORPG in history

"I started playing EverQuest in early 2001, and was playing for about four days when I saw the reality of the economy in it," he said

A year later, Castronova had penned the first-ever study of a game society's economic systemHis paper examines the EverQuest world of Norrath, where "the exchange rate between Norrath's currency and the U.Sdollar is determined in a highly liquid (if illegal) currency market, and its value exceeds that of the Japanese yen and the Italian lira...Norrath's GNP per capita easily exceeds that of dozens of countries, including India and China."

Star Wars Galaxies directly addresses many of the economic problems Castronova identified in the Norrathian economy -- namely the reduction of computer-controlled merchants and the elimination of infinitely durable goodsBoth of these measures should eliminate the deflation experienced in Norrath

 

Castronova believes games will eventually move from the creation of "real" economies to the formation of "real" governments

 

"What you have now is a customer service state -- history has shown that this is not a viable way to run a people," he said"I'm sure that we'll see a move toward consensus-based decision makingYou are going to see player parliaments, or people are going to go to Earth courts and sue."