Gaming for money – What are the implications?
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If you’ve got a love for gaming, now may be the moment to turn it into a full-time career. And we’re not just talking about pursuing a career as a game developer, game tester, or gaming blogger, either. Thanks to virtual reality PC games like Second Life and action role-playing games like Diablo III, gamers are becoming increasingly capable of earning real world dollars for virtual goods. Learn more about this trend in gaming and its implications for hardcore gamers in the following article.
Second Life—A New Financial Frontier
This June will mark the 10-year anniversary of Linden Lab’s release of Second Life, a virtual world that has its own internal currency and economy. While new users aren’t charged for creating an account, they arrive to the virtual world with just 40 acres of land a mule, so they need everything from basic necessities like clothes and shelter to luxury items like jewellery, flora and fauna, and works of art to truly create a new life in the virtual realm. Users can purchase or rent these desired goods with the virtual world’s internal currency, Linden dollars, which has a real-world currency value of roughly 266 Linden dollars to $1USD. With user-to-user transactions equaling $567 million USD in 2009, it’s evident that there’s a lot of money to be made in the virtual gaming world, and Second Life’s users are certainly cashing in on it: Second Life users transferred a cumulative total of $55 million USD directly into their personal PayPal accounts in 2009, and 50 of the popular virtual world’s businesses earned profits exceeding $100,000USD each. What’s the key to success in this virtual world? Much like the real world, it’s selling niche products and services and owning, renting, and flipping land.
Diablo III—Real Money Auction House
Since the release of Blizzard’s Diablo III in May of last year, there’s been a lot of talk about the addition of the Real Money Auction House (RMAH for short)—and how avid gamers can potentially profit from it. Essentially, the RMAH gives gamers the option to sell in-game items for real world money. Last August, one savvy gamer with the username Wishbone claimed he had already made $10,000USD through RMAH in the first three months of the game’s release. Wishbone says he played Diablo III for eight to twelve hours each day, effectively converting gaming into a full-time job to get the goods other gamers so desperately wanted. It is worth noting here that promoting RMAH is in Blizzard’s best financial interests as well, as the game developer takes $1USD from each sale and an additional 15% when the seller cashes out via PayPal.
The success of top earners in Second Life and Diablo III drive home a basic economic principle: wherever demand is high and supply is low, a substantial profit can be made, even in the virtual world. With gamers today more willing than ever to shell out real world money in the gaming world for items of perceived value, in-gold game, goods, and services can now be viewed in the same terms as an international currency with a real live exchange rate.
So should you quit your day job and devote your life to gaming? For most gamers, the answer is probably not. The cumulative profits of Second Life’s top 25 earners total $12 million of the $55 million paid out to users, meaning that fortune eludes most of the virtual world’s residents, just as it does in the real world. Still, for anomalies like Diablo III’s Wishbone, cashing in on gaming has turned into a very real—and lucrative—full-time career, so only time will tell how in-game economies will continue to shape the real world economy long-term.