Virtual gaming's elusive exchange rates

In the world of online fantasy games, you can always buy more virtual assets if you've got a real-life credit card.

If you happen to find yourself short of fantasy gold pieces for the purchase of that battle hammer in the game "World of Warcraft," for example, you can surf to one of the many third-party Web sites trafficking in "World of Warcraft" gold, pull out your credit card and exchange real dollars for fantasy coinage.

News.context

What's new:
People who play online fantasy games routinely buy and sell fantasy-game currencies and other cyber-game assets using real dollars, sometimes on Web sites hosted by the game developers, sometimes on third-party sites.

Bottom line:
Because there is no regulator controlling exchange rates for virtual currencies, rates vary widely from site to site, making market prices for virtual currencies difficult to track. These micro-economies fascinate academics, who point out that as the volume of virtual-currency trades increases, so will the tax implications, which may eventually force the exchanges to regulate their pricing.

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At the Web site IGE.com, $51.99 can get you 500 "World of Warcraft" gold pieces, enough virtual currency to buy you the handy Hammer of the Titans weapon. IGE and its competitors also sell the virtual currencies of other major online games such as "Everquest," "Ultima Online" and "City of Heroes."

But according to two of the leading experts in the economies of these virtual worlds, getting a fair price in the exchange of real dollars for fantasy coins can be a crapshoot. Turns out it's hard to find reliable data about the dollar/virtual currency exchange rates in a pretend world where there's no Alan Greenspan setting interest rates and scolding everyone about irrational exuberance.

"I have looked at this data acquisition issue for some time and...keep hitting a brick wall," said Dan Hunter, an assistant professor of legal studies and business ethics at the Wharton School of the University of Pennsylvania.

Given that millions of real dollars are being spent every year on these virtual currencies--perhaps as much as $880 million annually--buyers could well be getting short-changed if they're paying sellers more than the true value, whatever it is, for their gaming gold. While some game companies try to keep a tight lid on rates of exchange between real dollars and fantasy coins on their own sites, they can't control the impact of secondary exchanges.

Here's how it works: Since most multiplayer games allow players to transfer their virtual gaming possessions, enterprising players can temporarily leave the gaming world and buy and sell their virtual currencies on exchanges like IGE and auction giant eBay.

Players looking to sell or buy typically use the secondary exchange sites to find one another. On IGE, for example, a buyer and a seller can strike a deal for 10 million "Ultima Online" gold pieces and exchange real dollars for them. But in order to transfer the fantasy gold, they have to meet up back in the gaming world for the handoff of the goods.

IGE also acts like a middleman, buying with real money fantasy coins from game players and, in turn, selling them to other players.

It's the currencies and the behaviors of these massive multiplayer games' virtual economies that fascinate academics who find that they often mirror real-world economies and can sometimes predict the way people behave in the real world. And like the black markets of the real world, the secondary exchange sites of the fantasy gaming world are a difficult-to-quantify factor.

One Chinese Web site, GameUSD, is trying. GameUSD claims to have the most up-to-date exchange data for several of the biggest games. Its results show that, ironically, given the dollar's weakness in world markets, in almost every case, the games' currencies are losing value against the greenback because of inflation.

The problem is pretty simple: Without a central bank controlling the flow of all this virtual currency, more and more of it floods the market every day. So what can buy a castle today is perhaps only enough to buy a battle ax tomorrow.

GameUSD's lead researcher, Tianmin Zhu, said he and his colleagues collected the data by aggregating exchange rates

[Earl Benser]

An overlooked market...

... for a game utility that can pump up a player's assets to any
desired level - sort of a pseudo player with great generosity, right
within your own game location.

Com'on gamers, get with it!!!!!!!!!!!!!!

Re: idiots with too much money and free time

If you are one of the morons who is spending your money on video game currency, send some of your cash to me and I'll use it for buying things that actually EXIST!

I once heard that people only use 10% of their brain, but I think that figure is being reduced each year.

[Draxknar]

Hey dimwitted...

Why don't you go drink a beer and watch some sports channel while scratching your back end.
It's people like you that are so narrow minded who can't see past the porn magazines and the beer commercials, that you have to pick on someone different because their not like you.
Oh what powerful person you are by pointing out someones faults.

[uniushi]

just wanted too know if your realy as stupid too tell someone they can't buy something becuase it isnt real , when in fact real isnt something that can be touched or held rather it is something that is seen Period. you play GH? halo 2? any game in your life? hell a board game like sorry or chess? i could say the same thing too you WHY WOULD YOU! waste 20$ on a chess set its the same dam thing.

people buy ingame items / $ ettc. becuase of three main things
they want too finish a certain part of the game thats hard
they DONT like too party so they buy great gear and money so they can solo LIKE ME
or they just have nothing else to spend there money on

but before you bad mouth the last one think about what your goign to say
"Re: idiots with too much money and free time
by August 5, 2005 8:59 AM PDT
If you are one of the morons who is spending your money on video game currency, send some of your cash to me and I'll use it for buying things that actually EXIST"

go ask bill gates for a 20
i dont here people complaining about rich people buying private jets or big asZ trucks when a simple car can get you from a-Z
JUST LIKE IN THE REAL WORLD WETHER ANYONE WANTS TOO ADMIT IT OR NOT ITS ALL ABOUT SHOWING OFF AND IN FOR EXSAMPLE WORLD OF WAR CRAFT HAVING A ????? WITH 5 attack power is realy &(&%$ COMPARDED TOO A WEAPON WITH 40 attack power
even if it costs 20 gold too get that extra boost
thats what makes a difrent between getting an invite too the best guild
and NOT getting one
just like people say you can play on our team
they do it in the game too

so buck up
or shut up

Project Entropia

In Project Entropia you don't need to go outside the game to trade. The players can buy and sell everything inside the game. 10 PED in game money (Project Entropia Dollars) is 1 USD. Just as you can buy PED with real world money, you can cash out your ing game PED for USD.

[wazzledoozle]

So stupid

Why the hell should I play a game where I need to use actual cash in game?
Let alone pay monthly to pay a game (which I will never do)

You people who do this have way too much time and money free for use. Go outside.

[uniushi]

the idea behind these websites isnt too have an INGAME trade for real money
becuase wether you like it or not
if there is a system then the game makers are gonna take like 20% profit VS the normal 5% game sites take

so no
IJJI IGG Gpotato Softnyx all those item mall games are BS

people should have the right too pay what they want
as long as the other person is fine with what they get
thats fair
none of this 1$ for 10 coins crap
whent eh lowest item is 9 coins
they do it as marketing so you have too buy another 10 at least too get one more lowest crapy item
and most of the time
its an item that last 1 hour
ot 30min
and then its gone
the exsplaination of this
is too keep the game more fair
but in realaity they could amke that 3 hours and still have the same effect
or put a useage limit on it
once per day
or week
they make it run out fast knwoing that the feeling of getting stuf done will get you too buy more
where as buying with ingame money
and not super coins as i call them
can get you more
and for longer

Not an item for portfolios

There is a factor worse to games that inflation... Its called mudflation. The thing is every day more and more money is created out of the electronic bits. There is no finite amount of Gold for WOW or Plat for eq. Say in one month players loot 100000 gold off creatures. Every month there after 1000000 gold will enter the game. What would be collectible would be unique or limited items. As the supply of gold goes up on the server the values of that rare item will go up as well. Possibly moreso depending on the power of the item. The problem is with every expansion or new zone added there are more powerful items entering the game. So your FBSS or Glowing wooden twig of yesterday isnt worth much more than some of the high end food items of tomorrow.

proportion

proportional to the amount of players on which proportionally grows the game's total gold in players' pockets, there is a proportional amount of gold being spent to non playable characters or dropped or sits indefinitely in an abandoned character whose owner quit the game. prices do steady off, trust me. i am an avid MMO'er

[Mendz]

$pend-joy!!!

We spend money to have fun... we spend money to collect... we spend money for our hobbies... we spend money to get a lot of things we need and want. Virtual goods fall in the same category. I find the businesses tapping this "virtual market" amazingly smart and ingenious. Applaud!

[TMB333]

The Age Old Question?

If something 'virtual' has a direct cross over effect to that which is 'real' is it still considered to be virtual?

i.e. If I have to work in the 'real' world to pay for items in the 'virtual' world, the separation between the 'two' worlds becomes smaller and smaller.

This begs the question as asked by the great philosophers of our time, "What is reality?"

[Timmy2tone]

Curancy rates

There is a site ive seen www.rpgse.com it keeps track of different big sites and there rates

[gamesavor001]

wow gold

www.gamesavor.com

[uniushi]

too be honest this os one of the only jobs in the world that will NEVER run out
going into a game thats free and killing monsters and doing quests for ingame money
and selling it
your always goin to make a return
and never gonna go under
as long as you can play

"the world grows closer and closer too controll via mind"
soon the world will be conecting from there bedrooms too a Robot half way around the world too work lol
might seem lazy
but as they say
it gets the job done

[uniushi]

people
what are people?
they are difrent colars , difrent upbringing , difrent hair styles , difrent jobs
but no matter how difrent they are
they all want the same things
wether they do the same things to get those is up to them
people want
too be safe
too feel loved and needed
too feel like they left something behind for there offspring
too have fun
get scared in a controlled invoiment
too mess around with things
too read the world and try too firgure why something works a certain way

i heard this the other day it was funny
"i was at the bar with a friend talking too some frineds of mine"
a person jumped in our gruop started talking about video games and wow and everquest
when this happen , one of my friend made a fool of him self
he said
video games are a waste of time and money
they gain you nothing but a waste of time and a lose of intrest in the real world
i look at him with a funny look and said what?
and hes like just what i said,
so i went on to say
no there not
where would you be with your trucking bis without computer's
he said computers have nothign to do with it
we all looked at him and laughed
becuase a game consol or a computer are made in the same way
programed the same
too preform a task the same
i told him
without geek or nerds as he likes to call them in the world
they wouldnt be a truck
no cars
no place , airports , streets , guns <- very inportant for avid gamer haters or geek haters
no hunting with anything but your bear hands
Geeks and nerds are the ones who RUN the world
they created EVERYTHING
from the first wheel too the first rocket
from the leaning tower too the smallest chip ever
they make your car conect too onstar
they keep your pappers in oder on the computer
they even tell you what the speed limit should be on a road in the winter becuase of safty
they make games too Witch by now should be consittered a FORM OF ART rather then just extertainment

let me let everyone reading this or who will read this learn one thing is nothing at all
what do you see when you walk around?
a tree a dog a house a cat? mabey a car?
ill tell you what your brain see's
Square , triangle rectangle flat round round mixed with flat smooth white black green wavy red blue
let me tell you what you hear
you hear bugs and you brain thinks about green bugs or black betals giving you a shape in your mind or a criket and gives you this cartoonish shape of a bug in your head with long legs and a long green alien looking face
you head cars and thinking about the car you want or hope its not your
if you think about your you mgiht think about what the car looks likea nd start walking that way too make sure its not your
you think about police becuase they drive cars
you might think about how much gass is wasted everyday
or how long it takes to get home from work
ever SECOND of every day you Learn MILLIONS of things if not TRillions of thins
just by looking at something your mind softs this info into folder or tosses it out as useless
would you remember what blade of grass was cut in half problem not
"i like too call this human data disposal , too reuse that MEGA harddrive in your head for better things like how big your car tires are?
what you think thats stupid?
not realy your mind is based on prioritys like
what you use more
how long you use something
and are you gonna use it again
what you have too do tomorow or how long it takes too do soemthing
why it takes that long
and finaly the biggest one
will it kill me
or hurt me or anyone i feel close to
this is the one that makes data GRADE A
wether its true or not but i like too belive it is
saying not wearing your seat belt will get you kill will make something GRADE A DATA
where as saying
not wearing your seat belt will get you hurt might make it tord the top when your in a car
but wont make it too the very top
becuase your suvival is what people care about
numaro uno
too live is the main consern of all the living things on the planit
thats what makes rabits run
cats hiss
and dogs bark and run at you
some act in fear and run
while others act in fear and charge
some act in fear and shiver
and some just play dead
its all in your head
but puting that aside jut saying this isnt gonna kill me isnt good enugh too make your body happy
you have too prove it
just like when you first go for a swing
you say
its cold mom
or it looks gross
you say anything you can too not do it
and then finaly you run out of excuses and you get ether pushed in
or you slowly climb inch by inch down that latter
too prove too your body
that is WILL NOT KILL YOU

[uniushi]

[e-mail] thats my email if you wanta talk
but if you want to IM me go on yahoo
name is [e-mail]
message me

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