Virtual goodies, real greenies

The press release for Julian Dibbell's new book, "Play Money," hit my in-box Monday, and one sentence in that release summarizes why Dibbell's effort is so unusual.

"Behold: You bear witness here to the first mainstream-publishing title ever to go on sale simultaneously as both a physical and a virtual object, available for purchase in the currency of either the real world or a virtual one."

I had to laugh. I'd already been reading "Play Money" (Basic Books, $24--or an equivalent amount of Linden dollars, the coin of the virtual world "Second Life," where he will also sell the book). It's Dibbell's memoir of his attempts to become a titan in the shadowy world of the traders of "Ultima Online" weapons, buildings, gold pieces and other items.

Julian Dibbell

The premise behind Dibbell's challenge to himself--the operating principle of his "Play Money" blog from which the book draws its name--was simple: "On April 15, 2004, I will truthfully report to the IRS that my primary source of income is the sale of imaginary goods--and that I earn more from it, on a monthly basis, than I have ever earned as a professional writer."

As a reporter who writes about the culture and economics of online games and virtual worlds, I was familiar with Dibbell's challenge. Indeed, I had covered the lead-up to his self-imposed deadline. I also knew him personally from conferences we'd attended. So I already knew the outcome of the book before I picked it up.

I won't play spoiler and tell you whether Dibbell succeeded. But in many ways, his virtual adventure is much more the point of the book than his project's success or failure.

Virtual scarcity
Perhaps the place to start with Dibbell's unusual personal challenge is to talk about the general concept of virtual economies, where people pay real money for the exchange of virtual goods. Can, for example, such economies be taken as real, serious economic systems in which market forces dictate prices and in which fortunes are won and lost overnight?

The short answer, according to many experts, is a resounding "yes." Credit what Edward Castronova, an associate professor of telecommunications at Indiana University, called the "puzzle of virtual scarcity."

Castronova's idea was that in virtual worlds, as in the real one, goods that are scarce--like that powerful sword, magical spell or trove of gold pieces acquired through hours of game play--are more coveted, and therefore more valuable.

"'What we're learning is that scarcity itself is an essential variable,'" Dibbell writes, quoting Castronova. "'We just haven't needed to worry about it before. Thanks to God, the Man, or whoever's running this show, we're used to taking scarcity for granted. The emergence of virtual communities means that we have to make it explicit.'"

And in the real world, scarcity translates to a high price tag.

In fact, the question of whether virtual economies should be taken seriously is the fodder for any number of conferences and symposiums. For example, "State of Play," an annual conference in New York, brings together academics and other experts to work through legal, economic and social issues in the markets that sprout up around games like "Second Life," "World of Warcraft" and of course, Ultima Online.

By some estimates, those markets are worth as much as $880 million a year.

It shouldn't be much of a surprise, then, that Dibbell's transformation from casual player to wannabe market force to gaming addict did not take all that long.

"Does an addict ever know exactly when he crosses the line from curious to hooked?" Dibbell writes. "I'm pretty sure that moment was behind me now."