NPR on MMO Economies

National Public Radio did an All Things Considered segment yesterday called "Paying Real Money to Win Online Games." The title is slightly misleading, as it's actually about paying real money to buy virtual currency in MMOs (which, of course, are rather difficult to actually win). Host Robert Siegel spoke with economist Edward Castranova, author of Synthetic Worlds: The Business and Culture of Online Games, as well as resident NPR game reviewer Robert Holt. After introducing what an MMO is and how it's possible to purchase in-game items and currency from other players using real-world currency, the conversation touched on positive and negative aspects of such trade. Sony Online Entertainment recently began officially sanctioning these transactions on certain EverQuest II servers. Blizzard, however, remains staunchly opposed to the practice with World of Warcraft, the focus of this segment. Both Holt and Castranova acknowledge the obvious appeal of buying in-game money as a way of saving time and effort in what can be a very time-consuming process of earning gold in MMOs, but they also both agree that the trend is not a positive one overall. With the growing phenomenon of gold farming as a way of making a living (and the usage of cheap labor in other countries to do so), Castranova worries that such schemes may eventually attract regulation.

Seigel: "Castranova agrees that it's wrong to mix the virtual economy with the real economy. For one thing, the real conomy is regulated." Castranova: "If you're going to say that I can make profits with gold pieces, why isn't the IRS taxing those profits? And I think everybody would agree that that would wreck the game. So what's at stake here is the game itself; these things could be destroyed if we don't try to put a wall between the real economy and the virtual one."