Book review:An alternative economy has emerged in which virtual money and goods can buy real money in a grey market that revolves around eBay, writes John Collins
It is very easy to dismiss online virtual worlds such as Second Life, Ultima Online or World of Warcraft, which, basking in the recent glow attached to all things web-related, have started to become extremely popular. "Second Life?" goes the line, "I don't even have time to manage my First Life properly".
But as any good financial journalist knows, you have to follow the money. Virtual Worlds Management, a US firm that tracks the sector says that from October 2006 to October 2007 venture capitalists, technology and media firms invested over $1 billion in 35 different virtual worlds.
Play Moneydocuments the experiences of Julian Dibbell, a technology and business writer, who spent a year playing and trading in online games, primarily Ultima Online, in a quest to see if it could be more lucrative than his writing career.
Virtual worlds, or massively multiplayer online games (MMOGs), are online games populated by avatars created by real people. With a high level of detail - the worlds have their own banks, shops and bars - they have spawned an alternative economy as those who don't have the time or skills necessary to acquire possessions or wealth in the actual game can buy them with "real" money in a grey market that revolves around eBay.
They may look and feel like games but, as Dibbell points out, there are no winners in the traditional sense. "He who logs out with the most toys wins", he explains, which is why a manual worker in Oklahoma is willing to part with $750 to acquire a three-storey tower with roof garden in Ultima Online.
Dibbell provides some astonishing statistics to back up his view that there is something significant happening here. Annual sales of virtual goods run to about $880 million a year and he guesstimates the combined GDP of all the MMOGs as $20 billion annually.
The opening paragraph of the book points out that all value is make believe and this is the central thesis of the book.
Why shouldn't a "tower" in a virtual world be traded in the same way that abstract derivatives of real-world mortgages are sold on the world's financial markets, Dibbell argues. It could be argued that the ephemerality of those latter group of financial instruments is what has wiped billions off the values of real people's investments during the ongoing credit crisis that began this summer.
His epiphany as an online game player comes when he realises that their attraction is the same thing that keeps all of us going in the daily grind of the real world - the desire to own and not to be owned.
As the book progresses, Dibbell spends less and less time actually playing Ultima Online and more time selling virtual goods on eBay, much of which he sources from shady techies who have discovered flaws in the games software.
Half-business book, half-novel, Play Moneyruns the risk of falling between two stools. The inhabitants of virtual worlds will probably baulk at Dibbell's musings on play theory and the nature of markets. As he says himself in the book, "as I invested myself more and more in the economy of UO players, I could feel myself drifting further and further from their community".
On the other hand, those with an interest in economics and business will probably be put off by the backdrop of a game that is ultimately Dungeons and Dragons for the broadband generation. A telling passage in the book is when the author admits he has temporarily separated from his wife.
Ultimately his Achilles heel is that, like so many US technophiles who have bought into the Silicon Valley dream, he overestimates the impact of what is clearly an intriguing social, economic and technological trend but is many years off from being anywhere near mainstream. Consider for a second that Dibbell's year in virtual reality happened in 2003-2004 when these games were still a little-known phenomena.
Dibbell ultimately makes some fascinating and valid points about markets - whether real or virtual. It would be a pity if those insights were overlooked because of the background against which they are set.
John Collins is technology correspondent for The Irish Times
Play Money By Julian Dibbell Basic Books, $15.95
