CS5038 The Electronic Society
Lecture : Online Games
Lecture Outline
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What are Virtual Worlds and MMOGs
How many people are playing
Types of Games – mainly Fantasy Genre
Example: World of Warcraft (WoW)
Where do players come from?
Problems with private servers
The In-Game Economy
Linking to the real economy – how to make real money
Example: Second Life
Cheating in Games, and company responses
Gold Farming
Unresolved legal issues
Criticisms of online games – addiction problems
Non-Game virtual world uses
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What are Virtual Worlds and MMOGs?
A virtual world are computer-simulated environments,
typically quite similar to the real world
(3D with realistic physical laws and societies),
Users interact in the world via avatars.
Persistence: The world should be active and available 24/7
Events should happen even if a user is not connected
Plots continue to unfold
(in reality there will have to be some downtime for maintenance)
Primary use is games, but also used for education
MMOG=Massively Multiplayer Online Game
Hundreds of thousands / Millions of people interacting via avatars
Communicating by text or VOIP
Note: This phenomenon is quite new, and different to eCommerce,
eHealth, eGovernment etc.
It is more similar to the beginning of cinema or television.
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How many people are playing?
Charts from MMOGCHART.COM
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How many people are playing?
Note: MapleStory said to have >50 million players in all of its versions4(20)
Types of Games
Fantasy Genre Dominant (94%)
Remainder include Sci-Fi, Superhero, combat, social
Business Model: Typically pay for client software for a onetime fee + pay a monthly subscription to play
 ?? $65 billion industry (2011)
Typical Features:
 Character development: increasing abilities
 Economy: currency and trade of items (e.g. weapons /
armor)
 Guilds or clans: organisations of players
 Game Moderators: supervise the world
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Market Share April 2008
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Example: World of Warcraft (WoW)
(Currently most popular MMOG)
Currently >50% of overall market (62%)
>10.3M subscribers (November 2011)
~5.5M Asia (2008)
~2.5M North America (2008)
~2M Europe (2008)
Initial player cost ~US$20
Daily play cost ~US$0.50
Different pricing model in China – CD key to access game
Piracy less of a problem due to need to connect to servers
Reason for major success compared to earlier US games
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Where do Players come from?
Extremely popular in Asia:
 South Korea: 38% play online games (pop.~50M),
 Advanced Broadband infrastructure
 More people play the MMORPG Lineage than watch TV
 Well-funded professional video gaming leagues
 TV channels devoted to games
 China:
 ~20M MMOG players in 2005
(457 million Internet users)
 Majority of World of Warcraft players based in China, but recent legal
problems
 Also Japan, Taiwan
 Growing popularity in North America and Europe
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Private Servers
Run by volunteers -> free
Private servers -> less popular in west than the official servers
In Asian countries private servers popular
 High fees for official servers
 100MB/s fiber optic internet connections, ~US$30 a month
 Costs of running a server in China very low
- Damage commercial MMOG development
 Many gamers feel the companies make game progress slowly to make
more money
 Private servers allow faster progression
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Virtual Economies
In-Game Economy:
Players can specialise, gaining valuable skills which others will
pay for
 Leads to competitive advantage + division of labour
Commerce: magic weapons, houses, goods and services can be
bought and sold in game-currency
Need for property rights, and protection against crime
Second Life recognises IP rights for assets created in the world
Game economy mirrors many aspects of real economies
 For example: problems with inflation
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Virtual Economies
Link to Real Economy:
Users willing to spend real time and money for virtual resources
 Magic weapons, real estate, game-currency and characters are bought and
sold on auction exchanges for real money (e.g. eBay)
 http://www.gameusd.com/ lists virtual exchange rates
 Examples:
 Island in Project Entropia sold for U.S. $26,500
 Virtual space station for U.S. $100,000
 Level 60 EverQuest characters sell for up to $5,000
Criticisms:
 Many regard trading game items for real money as unethical
 Usually violates terms of EULA (end-user license agreement)
 Blizzard (WoW) has banned it (but hard to enforce)
 April 2006: Blizzard banned >5,400 players and suspended 10,700
(for farming, often using bots)
 Sony launched “Sony Station Exchange” for EverQuest to legally buy&sell
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Virtual Economies
Link to Real Economy:
Valuations of secondary market (real money trade of virtual commodities)
 $400m in 2004 ... 3 billion in 2011 World Bank report
 $20m in real-world dollars made by dealers in virtual currency and goods
(2004 figure) Professor Edward Castronova http://pc.gamezone.com/news/01_05_04_10_11PM.htm
 Statistics, check: http://virtual-economy.org/blog/how_big_is_the_rmt_market_anyw
 Some virtual countries wealthier than real ones (higher GNP per person)
 See BBC article “Virtual kingdom richer than Bulgaria”
New trends:
Companies beginning to use Second Life as a means of marketing
Politicians campaigning there
 Mark Warner
(former governor of Virginia + possible Democratic candidate for
president in 2008)
 First politician to give an interview in Second Life.
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Virtual Economies
Some people have made the buying and selling of virtual property their full-time
jobs.
Case: Julian Dibbell (http://news.bbc.co.uk/1/hi/technology/3135247.stm)
Buys and sells virtual cash, weapons, armour, homes and other artefacts from
the Ultima Online game
Game developer Origin does not prohibit activity
Game has well established economy (less inflationary problems)
Real world transactions take place on eBay or Tradespot
Producers of economy are the teenage kids
 Have a lot of time but no money
 Do the hard work to produce items to be bought and sold
Consumers are rich who do not want to invest time
Much money to be made from accounts of long time players
 Selling the items individually can generate large profit
Can make profit of $1,000 (US) per week
Some players making >$100,000 annually
Risky business without real-world laws to protect virtual property
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Virtual Economies – Second Life
Second Life gives property rights to players
 Allows players to create new objects from primitives
 Allows them to decide if these may be copied, modified or transferred
 Residents actively trade their creations
 ~230,000 items are bought and sold every month (Economist 2006)
 In-world currency Linden dollars are exchangeable for hard currency
 Total value US$567 million in 2009 (in “real” dollars)
 ~7,000 profitable “businesses” (Economist 2006)
 Avatars supplement or make their living from their in-world creativity
 Top ten in-world entrepreneurs averaging $200,000 a year (Economist 2006)
Example of Web 2.0 – online collaboration and sharing
Business Model: virtual property company (Economist 2006)
 Residents lease property $20 per virtual “acre” per month
 25,000 residents, or about 3% or the population, lease property
 Monthly revenues of $1m
Companies taking notice:
 Toyota is selling virtual cars
 Hopes for viral advertising
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Cheating in Games
Botting
 External program simulates player actions for common tasks
 Usually prohibited and is a bannable offense
 Rarely enforced
Duping
 Exploit a bug in the game software to duplicate valuable items
 Very damaging to virtual economy
Sharing
 Multiple people share an online game character
Scams against new players
 Uneven trades or bad-faith dealing
 Players misrepresent value of goods or substitute lookalike worthless
items
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Cheating in Games
Companies’ Responses
 May take different viewpoints
 Ignore cheating
 Ban it (Blizzard)
 If a company does not take cheating seriously, game may lose players
 Cheats also bring subscription money…
Technical responses – tradeoff Efficiency versus security
 More code on server – slower but more secure
 Example: wall hacks
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Gold Farming
Gold Farmer = a player who farms items for the sole purpose of sale to other
players via an out-of-game venue (e.g. eBay)
Most MMOGs include terms of service that forbid this
China dominant in market, but also in Eastern Europe, Mexico, Philippines
 ~ 100,000 people in China employed as gold farmers (December 2005)
 Represents about 0.4% of all online gamers in China
 Typically work 12 hour shifts, sometimes up to 18 hour shifts.
 Generates between $200 million and $1 billion annually, 2008
http://www.sed.manchester.ac.uk/idpm/research/publications/wp/di/di_wp32.htm
“When I entered a gold farm for the first time, I was shocked by the positive
spirit there, the farmers are passionate about what they do, and there is
indeed a comraderie between them ... I do see suffering and exploitation
too, but in that place suffering is mixed with play and exploitation is
embodied in a gang-like brotherhood and hierarchy. When I talked with the
farmers, they rarely complained about their working condition, they only
complained about their life in the game world.”
– Ge Jin, a PhD student from UCSD
http://www.youtube.com/watch?v=ho5Yxe6UVv4
http://www.youtube.com/watch?v=sHi7M727MIw
http://uk.youtube.com/watch?v=KH1LGdjZUKQ
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Gold Farming
Ethical?
 Some players feel that this is unfair and "spoils" the game
 Others believe they should be allowed to buy items if they do not wish to
spend the time to earn them
Effect on Virtual economy:
 Inflation (introduces more money)
 Skews the cost of a variety of game items:
 increasing supply of those easy to acquire items
 increasing demand for the more difficult items
 Gold farmers make the game more difficult for players to "grind" their way
to in-game wealth
Company responses
 Usually banned
 Significant manpower required to perform investigations
 Players need to spend large portions of their time on repetitive actions or
"farming“ anyway - difficult to distinguish farmers for reselling
 Termination of a compliant user account -> very bad publicity
 Termination of a gold farmer’s account -> very little benefit
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Virtual Crime
Virtual gangs and mafia have emerged in South Korea
 Powerful players mug and steal from weaker ones
 Demand that beginners give them virtual money for their “protection”
Case: Chinese Exchange Student (in Japan)
 Mugged players in Lineage II
 Used software "bots" to beat up and rob characters
 Stolen virtual possessions sold for real cash
 Arrested by police in Kagawa prefecture, southern Japan
Case: Evangeline (The Sims Online)
 17-year old boy going by the in-game name “Evangeline”
 Built a cyber-brothel: customers would pay sim-money for cybersex
 His account was cancelled but no legal action
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Virtual Crime
Case: Li Hongchen (Beijing) sued Artic Ice Technology
 Hacker broke into game and stole his “biological weapons.”
 Court ruled that weapons had indeed been his property
 He had invested time and money in acquiring them
 Arctic Ice was forced to pay damages and recreate all weapons lost
Case: Qiu Chengwei (Shanghai) killed Zhu Caoyuan
 Qiu obtained weapon in game and lent it to Zhu
 Zhu sold weapon for 7,200 yuan (real money)
 Qiu went to the police to report the theft
 Police said weapon was not real property protected by law
 Zhu promised to pay, but Qiu lost patience and attacked Zhu at his home
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Virtual Crime and Real Police
Example from South Korea
Some countries like South Korea have special police investigation
units for "virtual crimes“
40,000 cyber crimes reported in the first six months of 2003
22,000 related to online gaming
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Unresolved Legal Issues
Clicking “I agree” on an end-user license agreement (EULA)
 Could mean property rights are lost
 Game and contents remain the intellectual property of company
 Attorney Greg Lastowka (US):
“In the US, I think that you’d have a hard time making a case in court for
the loss of virtual property because of license agreements.”
Power seems to be in the hands of game companies
Case: Peter Ludlow, Sim citizen & Professor at University of Michigan
 Started a newspaper, The Alphaville Herald
 Documented crime and prostitution in Alphaville, largest Sims city.
 Ludlow promptly kicked off the game
(continues to write outside of game)
Case: Earth and Beyond (Electronic Arts) shut down September 2004
 One player had just bought an avatar for $3,000
Players sometimes organise uprisings or boycotts to reclaim their rights
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Virtual Crime
Stealing Players Accounts
Most common technique is via trojans which steal account details
 Trojan is disguised as a program to give a character special powers
(e.g. invisibility)
 Trojan distributed through games' chat rooms or by e-mail.
 Trojan secretly collects user’s login and password information
 Information sent back to the hacker
Hackers then sell the virtual items (gold or weapons), for real world cash
Player accounts can be worth up to $10,000
Player accounts also stolen by in-game nontechnical attacks
 Pose as a game administrator (staff of game company)
 Ask naïve player for account details
 Alternatively: offer hints on cheats or offer membership of gang
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Virtual Crime
Stealing Players Accounts
Also done via hacking company servers
Case: September 2006:
Hackers break into database of "Second Life"
Accessed 650,000 player accounts
Information included real life names and contact information, and
game passwords, credit card information was encrypted
Developer asked players to change their log-ins
"I reported that my SL account had been hacked on Sunday. Of
course, the only reporting that could be done was a message
to Customer Support and Live Help as the individual was
selling off my first land and deleting my inventory ... I know of
two other accounts that were hacked ..."
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Virtual Crime
Identity Theft
~250,000 characters created in Lineage (Korean) using stolen
identities
 Characters likely put to work in gold farming in China
(Korean ID number required to sign up to play Lineage in
Korea )
 Most Ids stolen from non-players
 Used to sign up without their knowledge
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Game Criticisms
Addiction:
 June 2005, it was reported that a child had died due to
neglect by her World of Warcraft-addicted parents
 A player has also died from playing non-stop without eating
or sleeping
 August 2005, China introduced restrictions on how many
hours gamers can play
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Virtual Worlds – non-game uses
 Managing a city or a country
 Form support groups for cancer survivors
 Rehearse responses to earthquakes and terrorist
attacks
 Build Buddhist retreats and meditate.
Second Life examples:
 Peter Yellowlees, psychiatry professor
 Leases a virtual island in Second Life for $300 a month
 Simulates schizophrenic hallucinations
 Understand schizophrenia by visiting virtual island
 Therapists help autistic children
 Also for long-distance learning.
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Summary
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What are Virtual Worlds and MMOGs
How many people are playing
Types of Games – mainly Fantasy Genre
Example: World of Warcraft (WoW)
Where do players come from?
Problems with private servers
The In-Game Economy
Linking to the real economy – how to make real money
Example: Second Life
Cheating in Games, and company responses
Gold Farming
Unresolved legal issues
Criticisms of online games – addiction problems
Non-Game virtual world uses
28(20)