Yanis Varoufakis: War Spikes in the Eve Online Universe – A Political Economist’s Account

Yves here. I must admit to being mystified and intrigued by Eve Online, which I have to confess I’d never heard of before today. First of course is the large number of people who find it appealing to spend significant amounts of leisure time in a realm designed to be ruthless and savage. Don’t they get enough of that at their day jobs? It used to be the most common narrative of entertainment was the hero’s journey. We now see rising popularity of amusements that celebrate ruthlessness and a breakdown or lack of social norms (such as the Game of Thrones)

The second curiosity is that have spent real money in meaningful amounts and invested time in a pseudo-economy where the funds are stranded (Varoufakis states in the post below that that participants transfer funds into the game currency but it cannot be converted back out). Gambling has never had any appeal to me, but as any activity, that makes more sense to me than this does. The odds only slightly, as opposed to completely, favor the house.

By Yanis Varoufakis, a professor of economics at the University of Athens. Originally published at

Vicious, intense war the other day. Hundreds if not thousands of people, in New York, in Chicago, in the great capitals of Europe, in China, rushed home on the news that hard-earned assets they were keeping in an inhospitable far away place had been placed under sustained, brutal military attack. By the end of the day, or more like it in the wee hours of the morning, exhausted by the battle’s intensity, the defenders took stock of the material damage: it amounted to hundreds of thousands of dollars.

The fact that the physical damage was of the digital variety, and confined within Eve Online, a multi-player game, does not mean that it was not real. The destroyed starships, outposts and mines cost real dollars and took months and months of dedicated, skilled labour to put together. Make no mistake dear reader: these were real losses.

They took place in a far away sector of Eve Online’s digital universe; the exquisitely designed multi-player game unfolding in real time in a cosmos that is modelled as the ultimate Hobbesian inter-stellar ‘state of nature’. Eve Online has purposefully created a universe in which life is “solitary, brutish, nasty and short” and where Machiavelli’s advice to the Prince, that “a necessary war is a just one”, rules supreme.

Unlike other multi-player games, Eve Online both tolerates and encourages players to loot, defraud, undermine, even to murder the avatars of other participants as long as such acts are carried out for ‘economic and material gain’.[1] This ultimate laissez faire universe, in the absence of a Leviathan to keep everyone “in awe”, is what motivates players not only to be ruthless but to seek out alliances, to forge cartels, to pay protection money to powerful gangs of other players. It is what makes Eve Online fun to play. And what motivates players to spend large wads of money to purchase ISKs, the Eve Online in-game currency, so as to invest in the starships, the materials, the rights to mineral extraction from far-away asteroids, the bribes; on everything one needs to build up a respectable presence in a universe where ‘might is right’.

The recent spike of violence that ruined so much property, worth up to half a million dollars (according to some estimates) was due to the accidental de-stabilisation of an unstable truce. In that part of the Eve Online universe, some forgetful player merely neglected to make the usual, periodic payment to the cartel that protected his ‘assets’ from other cartels. One thing led to another and an assault that was intended as a ‘lesson’ to the forgetful subservient triggered off major warfare.

Very soon journalists, some from respectable newspapers and media organisations, started emailing me, seeking my views on the economic significance of this incident, and of the destruction that it caused. I find this fascinating in itself. For when such media outlets take an interest in the way a video game is developing, and pose economic questions about it to an… economist, one knows that something is afoot. As I have , the social economies that have evolved within video games have acquired meaning and importance for the offline world that most of us live in. And vice versa, of course: it is not uninteresting that the good folks at CCP, the Icelandic company that developed and runs Eve Online, were the first video gaming company to have headhunted an academic economist (Eyjólfur Guðmundsson, formerly dean of the faculty of business and science at the University of Akureyri) to study and ‘manage’ the game’s social economy.

Turning to the economic consequences of the latest war, on which the aforementioned journalists were asking me to comment, the facts are plain: Eve Online’s economy has two inputs: economic ‘power’ brought into it (as players convert dollars, euros and yen into ISKs) and assets that are manufactured through hard work, cooperation and cunning within the game. The distribution of this value depends entirely on in-game behaviour. Participants will try to make their ISKs go further by populating far-flung parts of the galaxy where mineral extraction and property rights are cheaper but come at the hefty cost of the greater insecurity caused by the fear of rogue, brutish predators who prey brutally on the newcomers.

Many make the mistake to think that the Eve Online economy is a fully-fledged market economy ruled over entirely by the tension between demand and supply. Not so. If the terms demand and supply bring to one’s mind the neat diagrams of Econ101 textbooks, one’s mind has been misled. For these curves to make any sense at all, we need to presume an economy where no seller and no buyer have any power over the price of goods and services. The whole point about Eve Online is to corner markets, to forge cartels, to maximise one’s power over price. And unlike Adam Smith’s fiction, where such aspirations cancel each other out, leaving everyone with zero market power, and thus enabling the ‘invisible’ hand to perform it magic, in Eve Online power rules OK. Which means that none of the orderly models of microeconomics are applicable – at least not in a manner that is mathematically defensible.

Turning to Eve Online’s macro-economy, here things are straightforward. Since there is no labour market (even though there is a great deal of labour and of sub-contracting) and there is no endogenous money supply, none of the macroeconomic features of offline capitalism apply to Eve Online’s Hobbesian economy. Moreover, as the value created in, or imported into, the game cannot be transferred back to the offline universe (CCP bans the conversion of in-game currency to dollars), the economy’s growth is a function of the joy people get from playing the game and, thus, their readiness to invest more dollars, more time and cleverer strategies into it. Period.

Conclusion: What Does a Flourish of Destructive War Mean for This Economy?

If a spike in destructive violence, like the recent incident, puts players off, Eve Online’s economy will suffer, as participants shall invest less in it. Only this is highly unlikely. Judging by what the victims of the latest episode in the Eve Online saga say in various message boards, their resolve seems to be holding. Indeed, they “shall be back”, they tell us. They shall invest fresh time, energy and real world money to re-build their starships, to re-furbish their mining outposts, to re-jig their uncertain alliances, to give themselves a chance to take revenge upon those that sought heinously to eliminate them. After all, this is what they signed up for: a game that transports them to a world where no one can be trusted and where dangers lurks behind every smile, every handshake, every seemingly lucrative deal. The only real similarity with the offline world is that their macroeconomy, just like ours, benefits from destruction. As for the main difference, Eve Online’s economy, unlike ours, does not suffer from a tendency toward permanent crisis. But that’s another story…


[1] Quaintly, the game’s developers, CCP, will not tolerate destruction or violence that does not have the purpose of personal gain on the part of the perpetrator. Destruction and murder ‘for its own sake’ is not allowed!

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61 comments

  1. Tom Bradford

    “The recent spike of violence that ruined so much property, …… was due to the accidental de-stabilisation of an unstable truce.”

    Didn’t something similar happen in the real world exactly 100 years ago?

  2. Marianne J

    Okay, okay, today is the day I finally add value to this blog. I would play Eve Online if I had endless time and money and no real world pressing matters. EO is beautiful. This is a snippet from a battle post-mortem from the losing side, emphasis mine.

    “Perhaps five years ago a loss of this scale would send an alliance into a tailspin, though the cold truth is that the top tier of alliances in Eve these days can incur a multi-trillion isk loss and keep on chugging. A week ago CFC/Rus lost 350 dreads and fielded the same exact fleet on Monday. The ISK lost from the b-r fight is a much greater scale, of course, but the ISK is still there for everyone. The lost momentum in the Soutnern conflict due to the B-R fight is a far greater loss than the isk assets. Because try as you might, you cannot buy swagger.

    Source:

    To put battle play in more understandable terms, I provide the following vid from the Battle of Asakai, dated about a year ago. Asakai has been pointed to as precipitating conflict for last week’s battle in HED-GP and this weeks’ battle in B-R5RB. It’s pure geek joy.

    And, here’s a more detailed post-mortem Eve Online community report with pretty, pretty, charts.

      1. Marianne J

        And P.P.S. some of the vids from B-R5RB will seem like they are in super slow motion. This is called TiDi (Time Dilation) a way for CCP servers keep up with all game play variables. In the past, battles were “telegraphed” so as to allow for CCP to arrange server resources in advance to manage the sheer number of players, shots fired, kills, and accrued damage. Organic launched battles like B-R5RB and Asakai do not have server processing arranged in advance. CCP slows down time in the affected region, I believe 1/10th of normal time.

  3. salvo

    “Two things are infinite: the universe and human stupidity; and I’m not sure about the the universe.”

    yet, I suppose that by ‘human’ Einstein unknowingly meant ‘masculine’

    btw is the game universe infinite? :-)

  4. allcoppedout

    I vaguely remember (from anthropology) a tribe in PNG had a social code not unlike Eve. They expected and approved of interpersonal hostility, an eye for the main chance and openly despised and ridiculed leaders. Something similar in Northern Pakistani barter systems too, the idea being to rip some other blighter off and brag about it. Goldman’s insider chat on ‘muppets’ etc.

    We allow QE to keep the assets of the rich and economic rents inflated, yet question where the money will come from to increase minimum wages (today’s Zerohedge in two stories that don’t make the link). We tell stories of ecocide on Easter Island through megalith fetish among the denizens, yet sounder history reveals a common story of diseases imported from Europe, slavery (to South American mines) and the destruction of a healthy ‘rock gardening’ (lithic mulching) agriculture through genocide and sheep farming not unlike the Scottish Enclosures.

    I’m even less likely than Yves to play Eve. Much of our science fiction has slavers in what one assumes would be an economy of robot heaven. Maybe NC should build a game that demonstrates the real world economics in which gamers choose between idle Greeks and economically superior sheep as absentee landlords once did in my country? By level 10 the best strategy would be mass migration of US citizens from the global warming dust-bowl to Argentina, funded by mutton sales and toll-booth receipts across non-Germanic Euroland.

    Good grief, how dumb are we?

  5. Gri

    First time writing here, but I wanted to just say that this is not an example of rising popularity of ruthlessness and lack of social norms. Though I’ve never played EVE, there is quite some empowerment in this game and not in an artificial way that most games have – an infinite universe that gives you thousands of ways to make something of yourself. It’s very hard to create something of significance today. And EVE’s economy makes your work worth something and consequently the loss that more meaningful and emotional. It’s just like the feeling you get when a beloved character dies, but even more so, because there was a greater investment in time, money and emotions.
    And the game of thrones stuff – people love because of the ruthlessness of the characters, but because they are more real then the shinning good guys you typically have in a fantasy setting. And despite the crappy world there are good guys, even among the bad guys. Therion is everybody’s favorite not because he is a mean little dwarf that screws around, but because he is actually a good guy and we all wait for his redemption… or mostly for George Martin to finish his books.
    Maybe we started to like grim dark settings, because of the promise that it could be fixed, by somebody that is not a complete infallible tool, cause in the real world that sure as hell doesn’t happen

  6. Daize

    Being in the game industry and having played quite a few MMO’s, I guess I should chime in here.
    Many articles in the press, especially regarding EVE, like to miss an essential point, because it makes the article sound more exciting: It’s a game!
    My point is, people play it because they are having fun doing so. Any game requires at least some investment in time which can be represented by dollars, but like in every game, the end goal is to have fun and make friends.
    What many articles miss out is that MMO’s are a great place for fellow gamers to meet up and play the games they like which obviously costs time and money. These games sometimes like to “simulate” some economic aspects, but the main aspect of the game is a the changing alliances of friendships and organizations. That people spend money and time on hobbies they like is tautological.

  7. Skeptic

    World Of Warcraft.

    WOW is a similar game. I once spent 11 days on a sailboat from Peru to Panama with a captain who was without access to his WOW fix. Practically all he could talk about was famous attacks he had made and ones he would make upon his return to the terminal. It was quite obvious to me that he was addicted to WOW. Upon my landfall I found indeed that many are addicted to WOW and other computer activities:

    Many of these games, I believe, access much of the social and psychological research on addiction in order to build features into the games which will trigger and reinforce that addiction. Universities have much to atone for as to how their research is used. There are also those video gambling machines. Very powerful stuff.

    1. Econ101

      I really don’t understand the psychological need for this type of entertainment, but if there were a way to attract our young men and women to this instead of going to war, I would find Eve Online a productive enterprise. Just need to pay them for a couple of years and label it patriotic. No deaths, no quadriplegics, no PTSD. The president would need more compelling reasons for war.

  8. AbyNormal

    “And it all flew away like a dream–even my passion, and yet it really was strong and true, but…where has it gone now? Indeed the thought occasionally flits through my head: “Didn’t I go out of my mind then and spend the whole time sitting in a madhouse somewhere, and maybe I’m sitting there now–so that for me it was all a seeming and only seems to this day.”
    Dostoyevsky, The Gambler

    “The gambling known as business looks with austere disfavor upon the business known as gambling.”
    Ambrose Bierce

  9. Brick

    “It used to be the most common narrative of entertainment was the hero’s journey. We now see rising popularity of amusements that celebrate ruthlessness and a breakdown or lack of social norms (such as the Game of Thrones)”

    Well, the new (but already almost old) thing is actually survival horror with zombies in a post-apocalyptic world, in which after a short time other players become your group’s worst enemy in the struggle for the few resources still available and death is permanent (you have to start all over again – Eve Online allows “saves” in the form of clones that you can create and you don’t lose everything, if I recall correctly). Eve Online can be your personal hero story since you are the captain of a ship in the struggle for your group, or you can be a pirate, or you fail and much of your “property” is destroyed. In general, hero stories don’t disappear, it’s just that they have gotten increasingly boring. If you know the good guys win in the end – why even bother? That’s the appeal of Game of Thrones for me, I have no clue how it will end. In the beginning I assumed that Ned Stark would single-handedly solve all the issues in the kingdoms and fight off the danger behind the wall… I was actually pretty happy that I was proved wrong quite gruesomely, the next person I imagined to be the “hero” fared even worse.

    “The second curiosity is that 500,000 people have spent real money in meaningful amounts and invested time in a pseudo-economy where the funds are stranded (Varoufakis states in the post below that that participants transfer funds into the game currency but it cannot be converted back out). Gambling has never had any appeal to me, but as any activity, that makes more sense to me than this does. The odds only slightly, as opposed to completely, favor the house. ”

    The servers only stay online if enough players keep playing and therefore paying. It’s just like most other hobbies – a money sink. Friends of mine do a lot of motocrossing which is “a bit” more expensive, and all you get in return are a few broken bones – and FUN. It’s not about the developers winning, it’s actually a rather cheap and fun way to spend your free time. Of course, there is the question if it makes sense to buy a monocle for $70 that does nothing but make your character look snobbish, but still it keeps the developer and therefore the game alive. It’s actually quite similar to the motocrossers who pay significant amounts and spend a lot of time each year to keep their track in good condition, most of the money they have spent would be stranded (used helmets are worthless, the motorbikes lose in value) if they didn’t invest in the very thing that in the end might cause real bodily harm to them.

    Most hobbies do not make sense from an economist’s (or a medical doctor’s) perspective and Eve Online is no exception. If you are earning real money in a video game chances are you are working for a Chinese sweatshop and not having any fun at all.

    1. TimR

      I haven’t watched GOT, but I heard someone say that there *are* characters Martin doesn’t kill off — the ones he finds interesting. Not “good” or “heroic” necessarily, but entertaining to write and read about. So if you can determine which ones those are, it will be just as predictable and dull as other entertainments. ;-)

      1. NotTimothyGeithner

        The characters he doesn’t kill off are Mary Sues, and then he introduces more famous and powerful replacements no one ever mentioned previously while he tries to get the narrative back on track. It’s a soap opera. I enjoy the show, but the South Park portrayal of Game of Thrones was pretty accurate.

  10. zephyrum

    I watched several minutes of one of the videos linked above. Reminded me of looking into a microscope at some dirt and seeing little moving things.

    Myself, I spend my waking hours in a realtime fantasy game called “The Economy”. The most powerful coalition is the “Federal Reserve” and they manipulate other players through a currency called the “Dollar”. Like Eve Online, to the extent there’s a central authority, the “Government” encourages other players to loot, thieve, cheat, etc. the other players. Any activity is acceptable if the motivation is increasing one’s “Dollars”. Unlike EO, one is not allowed to commit direct violence against other players, at least not visibly within one’s own “Country”. However players are encouraged to work with the “Government” to kill and maim players in other “Countries.” And if one’s pursuit of “Dollars” results in death or damage to other players but was not specifically intended, then that’s OK as long as there are enough “Dollars” involved.

    I’m getting kind of tired of my game; perhaps I should check out Eve Online as an alternative. Spaceships sound nice, but I have my heart set on flying cars. Do they have flying cars?

    1. TimR

      The “real world” fantasy game is just a highly elaborated legalistic/bureaucratic version of Monopoly or any other game IMO.. Maybe with the caveat that the real world rules/laws are contested and debated by the players to some extent.. And worked out over the centuries via wars, revolutions, activism, power of persuasion, physical limitations, etc.

    2. American Slave

      Lol.. I too am playing the realtime fantasy game called “The Economy”.

      The only thing I wish is that the real life war makers and corporate thieves would move to an online universe and do there destruction there rather than in real life.

  11. Klassy

    “Quaintly, the game’s developers, CCP, will not tolerate destruction or violence that does not have the purpose of personal gain on the part of the perpetrator. Destruction and murder ‘for its own sake’ is not allowed!”
    What does that mean? Who are they to say that the perpetrator is not gaining something? Can they see into the psyches of all the players?

    1. Lexington

      Can they see into the psyches of all the players?

      The point is exactly that they cannot, so their pathetic gesture is empty.

      This is just a fig leaf to maintain the pretense that they aren’t completely amoral zombies.

      Still, it’s interesting that they feel the need to keep up appearances…

    2. fajensen

      Not needed. It simply means that you will get kicked & and eventually banned(!) if the games-masters think that you are behaving out of line. Incessant whining about the swift and summary judgements by games-masters is out of line too. Like God, from the old testament!

  12. TimR

    gee, I don’t think those old role-playing games like Dungeons & Dragons relied so much on the real-world cash infusions a player could bring to the game, did they? I guess everyone had to “ante up” with buying the game, some figurines, dice, etc. But I thought it was mostly about your game-play after that — skill, imagination, luck, etc. Nice racket these virtual game makers have come up with… Seems like it would put a damper on the escapist fun though, to tie your success in a fantasy life to your success in real life.

    Maybe Parker Bros should come out with a version of Monopoly where players who have wealth in real life, get to go ahead and translate that into houses and hotels right away, and players who work at McD’s start with less than the standard Monopoly cash pile.

    1. Brick

      “gee, I don’t think those old role-playing games like Dungeons & Dragons relied so much on the real-world cash infusions a player could bring to the game, did they?”

      Hell yeah they did. Every year there were new rule-books. You can quite easily at around €30 per book sink a few hundred euros into the game.

      In fact, there is a power creep designed into each new book, so you will be worse off with just the basic rules. There is basically no way you can design any non-mage that can stand up to a monster from a later monster manual, with just the player handbook.

      “Nice racket these virtual game makers have come up with… Seems like it would put a damper on the escapist fun though, to tie your success in a fantasy life to your success in real life.”

      You can easily destroy your player base by making your game pay-to-win. Games that do that typically disappear quite fast. Since you mentioned D&D, D&D online seems to now have a really fair business model without any ptw aspect and without mandatory monthly fees. Eve online seems to be OK, too as in you cannot buy something with real money that is more powerful than anything you can get through just playing the game, but there seem to be a few issues. Developers are walking a fine line here and have to be really careful with new stuff they add to the game. Gamers can be both a quite angry and whiney bunch, which may boycott you for minor transgressions, even if you never had any bad intentions.

    2. washunate

      You might be interested in googling Magic the Gathering. It’s a card game where your first purchase isn’t exactly your last…

      I think what you are describing is a combination of inflation and the 80/20 rule (the majority of the money is earned from the top players), not a fundamental difference between virtual and real world gaming. Settlers of Catan and Dominion are great examples of physical games where you have to purchase a lot more than the core game to get the full game.

  13. Lexington

    First of course is the large number of people who find it appealing to spend significant amounts of leisure time in a realm designed to be ruthless and savage. Don’t they get enough of that at their day jobs? It used to be the most common narrative of entertainment was the hero’s journey. We now see rising popularity of amusements that celebrate ruthlessness and a breakdown or lack of social norms (such as the Game of Thrones)

    I played Eve Online briefly a few years ago (think it was when I was on the rebound from Everquest – or “Evercrack”, as the cognoscenti called it) and quickly became disenchanted with it for exactly this reason. It’s not really comparable to a MMORPG like World of Warcraft because WoW, like most MMORPGs, is mainly PvE (player vs. environment – you mostly kill in game monsters, not other players) while EVE differentiated itself by being uber hardcore PvP (player vs. player). For that reason it has never had anything like WoW’s runaway popularity.

    Still, I think the appeal of Eve (and Game of Thrones) says a lot about the times we live in. I’m not completely sure what it is – the loss of a meaningful sense of community and rise of anomie, the triumph of market fundamentalism, secular humanist induced ethical incompetence – take your pick, but none of it is good.

    Oh yeah, one more thing – EVE’s player base is overwhelmingly male.

    Pretty sure it’s not a coincidence.

  14. OMF

    It’s actually amazing how much Eve Online serves as a pure manifestation of the Zeitgeist of modern western finance, and indeed society at large society. The pursuit of money and influence, the ease of divorcing actions from consequences, the dominance of corporations, the lauding and indeed glorification of both fraud and destruction. The game turns the dark and self-destructive elements of capitalism and corruption into an enjoyable amoral romp, which mercifully stays within the realm of internet pixels. Others above have already noted how similar the flood of terms and stats in this online game is to the flood of data and language in the modern economy.

    One fascinating aspect of Eve players is how they openly acknowledge that the rules of the game itself are essentially meaningless in the real meta-game of power and intrigue. Most battles in Eve are not about assets themselves, not even about who wants the assets. Most battles are about who wants to win battles. There is no other purpose.

    The true lesson of Eve Online is that the rules are meaningless when the goal is the meta-game. This is as true in modern global economy as everywhere else.

    You can read up on the mechanic of Eve’s space battles, the minerals in its economy, and the exchange rates of ISK all you please, but you will understanding nothing about the battle in B-R unless you understand the greater meta-game being played by the pilots in Pandemic Legion, N3, and Goonswarm. A meta-game in which the rules of the game itself are meaningless, and which is played out on a wider field than the game itself.

    Likewise, you can read up on Voker rules, regulations, GDP, bond markets and all you please, but until you understand the true meta-game being played by the decision makers in the banks, the Fed, and in the Political class, you will never understand the global economy or its crises. A very real “game”, with the futures of billions at risk, in which the stated rules being debated are also just as meaningless.

    P.S.
    DEATH TO ALL SUPER-CAPITALS!!

  15. Banger

    I liked this article and quelle suprise! Social science has been looking at these issues for a couple of generations and….well whatever.

    What is important to understand is that, today, the world is actually constructed in Eve Online is similar to the way our current world is set up. What keeps us from general conflagration is that the vast majority of people are not motivated by such narrow interests. Most people are moral in nature (we are hardwired for cooperation and connection) but they are living, increasingly, in a world that rewards immorality (selfishness and separation) and punishes morality. Most jobs that involve compassion, care-giving and so on pay a fraction of what people who are predators get. As those of us who worked or currently work in the federal government say, no good deed goes unpunished.

    Thankfully, there are enough people in the ruling class that understand that this is a problem–hopefully, when the populace wakes up a little and sees we are not so much in an economic, political or environmental crisis as a moral crisis I think we will restructure the rules of the game away from the Eve Online model.

    1. Lexington

      What keeps us from general conflagration is that the vast majority of people are not motivated by such narrow interests. Most people are moral in nature (we are hardwired for cooperation and connection) but they are living, increasingly, in a world that rewards immorality (selfishness and separation) and punishes morality

      Being hardwired for cooperation and connection doesn’t necessarily have anything to do with morality, it simply reflects survival strategy optimization. Also, it only works in small groups where people know each other personally. Even the briefest acquaintance with human history should be sufficient to demonstrate that human beings are not in fact innately “moral” – if anything quite the opposite.

      When you see a homeless person on the street do you stop and take a few moments to establish a human connection, say by asking where they slept last night? Do you offer a few coins from your pocket? Or, like the vast majority of people, do you avert your eyes and pretend not to see them as you shuffle past? That’s your morality right there.

      I feel it’s important to challenge this complacency about morality because it’s a popular talking point among atheists and fellow travelers, and I think its potentially very dangerous. The last time faith in the innate goodness of people was so widely propagated by the chattering classes was the early 20th century. Those dreams and delusions perished in the killing fields of the First World War but prolonged periods of peace makes people forgetful.

      1. Banger

        People can be perverted. I had a friend many years ago who worked with B.F. Skinner as a behaviorist and he had some small fame in those circles from constructing tests that said, in essence that if inflict pain on lab rats they will get pissed off, stressed and act in very anti-social ways. Neuro-science says we are hardwired for cooperation and connection. The West’s reading of history is highly misleading, btw, and ignores information that strays from the general notion that history is about war and conquest–I suggest that notion fulfilled an ideological need for those that thrive on general nastiness and want to keep us all in fear for our “security”, i.e, protection rackets.

  16. TarheelDem

    Monetizing the “animal spirits” and nothing else. Of course, they will be back. The individual investors always come back to the securities markets even when it doesn’t make economic sense.

  17. NotTimothyGeithner

    These games are obviously see selective, but I’ve noticed war video games in the last few years have a certain homogenization. I suspect software limitations are causing an exodus to n we venues despite new consoles. Online games often require the same hardware which means as people upgrade or become luddites the old online clans dedicated to destruction are moving to New venues*. As a counter argument, the popularity of nintendo handheld side scrollers and cartoonist cooperative games provides a balance.

    *I think we are experiencing the first stages of a video game crash which means existing games will find new audiences before new ones are bought. There have 2 large crashes and 3 small ones.

  18. washunate

    Yves, great to see you venturing into this topic! Computer games specifically, and games in general, seem to be misunderstood/underappreciated by some. Fantasy and immersion and role playing and competition and so forth are ‘fun’ (to some).

    For those interested, some other games that have received particular attention outside of the gaming world include World of Warcraft’s inflation problem and the Second Life environment. The book Reality is Broken also takes an interesting look at gaming. The Sims is probably the most commonly known computer game.

    “Unlike other multi-player games, Eve Online both tolerates and encourages players to loot, defraud, undermine, even to murder the avatars of other participants as long as such acts are carried out for ‘economic and material gain’.”

    Unlike? A significant portion of electronic gaming is based upon defeating an enemy, from first person shooters to real-time strategy to role playing to turn-based games. The vast majority of real world games end up with losers, too – indeed, that’s pretty much the dominant form, from Monopoly to Risk to Resistance to Small World. Giving the bear to someone in Pit or an accident to someone in Mille Bornes or a proxy to someone in Venture is pretty much exactly the same concept as defrauding/assaulting someone in a digital world. It’s just that the graphics and the networking are a little different.

    One of the most famous electronic versions of a board game is literally called Battle Chess.

    1. Lexington

      Giving the bear to someone in Pit or an accident to someone in Mille Bornes or a proxy to someone in Venture is pretty much exactly the same concept as defrauding/assaulting someone in a digital world

      No it’s not.

      Those games permit certain actions that harm the interests of other players in the interest of promoting competition, but the actions are bound by well defined rules that limit their scope and magnitude in order to preserve “game balance”, which is usually held to be a highly desirable feature of a well crafted game.

      The whole point of Eve Online is that there are no rules. You can do whatever you want to your fellow players, within the parameters of what is possible within the game world. There is no game balance – which exactly the game’s main “feature” and selling point and what differentiates it from competing products. That’s a completely different paradigm with potentially profound consequences.

      1. washunate

        I think what you are describing is a personal preference. EVE has rules; both a TOS and a EULA.

      2. The whole point of Eve Online is that there are no rules

        is just nonsense. Instead, the game is chock-full of rules. Even simple computer games often have more and more complex rules than non-digital games simply because the computer can process them faster than humans can.
        How many resources one can mine, how much of those are used in construction, how fast and far ships can fly, how much damage their weapons do – all those are defined by the game’s rules and you can bet your ass that power balance is very much considered in defining those rules. If the game were broken, you might not even have several players left.
        What you object to is the narrative that’s on top of the rules, and the meta-game people play. But if you’re playing Monopoly and two people agree not to charge each other, then they’re not breaking the rules of the game (as far as I know) and the only thing you can do is walk away. In the same way, if you played chess against me and when my knight took one of your pawns I’d launch into a lurid description of how my cavalry hunts down your peasants and dismembers them, followed by them proceeding to those peasants’ village and burning it down in reprisal, you might consider me an asshole and walk away from the game but I wouldn’t have broken the rules.

    2. ChrisPacific

      I’m not sure World of Warcraft has an inflation problem, or at least it didn’t up until the point I parted ways with it (about 3 years or so ago). Yes, it had inflation, sometimes quite dramatic, but I always had the impression that it was by design. They wanted the game to be accessible to new players, without requiring too much of a grind for them to achieve a reasonable level of power relative to more experienced players, and a high but controlled level of inflation was the easiest way to achieve that. (While currency is not power, it’s convertible into power by a variety of direct and indirect means, so it’s not a bad proxy for it).

      The amount of coverage given to the Eve Online battle has been quite interesting, with a lot of focus on the resulting value destruction (if only real wars were covered this way). It’s worth remembering the death and casualty count in comparison to an actual battle (zero, of course). It’s also worth remembering that people who spend actual money on the game usually do so in the sense of entertainment spending rather than gambling or investing – i.e. they expect to receive value back for it in terms of hours of entertainment, and have no expectation that they will recover any of it in dollar terms. Although the restriction on currency conversion is probably largely meaningless in practice (there is usually a thriving black market in these games) it would never occur to most of the community to even try. So in a sense the value destruction is largely illusory, since the assets would likely never have been converted into dollars anyway. Value in gaming is largely measured in terms of duration and quality of entertainment, and it’s hard to see how the recent events have destroyed value in that sense. If half the players involved decide to take their ball and go home then you’d have to conclude that value destruction occurred, but I very much doubt that will happen. Instead it will be woven into the culture and history of the game, act as a common shared experience for those involved, and provide the basis for more compelling individual story lines (revenge or consolidation, depending on affiliation). In brief, events like this are why a lot of people play the game in the first place.

      (Disclaimer: I have not played Eve Online as I don’t find the crony capitalism sandbox model to be all that appealing, but I have played several other games with virtual economies and currencies, and have done my share of figuring out ways to profit from them).

      1. Indeed, WoW has inflation but no problem. If repair bills for weapons and armor don’t go up for higher-level gear, long-time players might have less incentive to grind and Blizzard might lose subscribers. Inflation spurs activity, and as ChrisPacific points out, this filters down to new characters to a certain degree in that one can sell lower-level materials for much more than at the beginning at the game. So higher inflation => higher income. Finally, the truly expensive items are luxury items like mounts…I’ve never had the patience to grind gold and therefore don’t bid on the black auction house for the rarest mounts, and gold-wise I’m fine :)

  19. Dan Kervick

    I wonder if this kind of phenomenon contributes to the ineffectiveness of social activism we were talking about on other threads. To the extent we can all be enticed into immersing ourselves to imaginary social worlds, we have less time and attention to devote to the crummy real one we find ourselves in when not so immersed. We can also be seduced into substituting fantasy achievements in a fantasy life for real ones.

    1. Andrew Watts

      The same argument could be made about television. They are both powerful mediums that distract attention away from the real world. They aren’t the reason why social activism has failed in our day. Activism has always faced the same obstacles of overcoming powerful interests, attracting public attention, building a political movement, etc.

      The main problem is that modern activist rhetoric does not match their current individual actions. This is an effective deterrent from achieving their collective goals because they covertly support the issue they think they oppose.

      As an example, the NSA’s domestic mass surveillance:

      “…because the moral of the story from ‘The Matrix’ was not to be an individual battery that s it.

      And if you want to know more follow me on Facebook and Twitter!”

      This factor is ultimately what destroyed the global warming / environmentalist movement… and Al Gore. But hey, we can always blame Republicans though right? It’s not like a Republican president like Nixon would ever sign pro-environment legislation into law.

    2. American Slave

      “I wonder if this kind of phenomenon contributes to the ineffectiveness of social activism we were talking about on other threads.”

      There are a lot of reasons for that but the main ones are that most people realize that getting beat-up by the police and thrown in jail for holding up posters that the leaders dont care about or read is not there idea of a fun time.

      Lets be honest in the old days social activism was violent at times such as the Hay Market riots but ultimately the rulers were concerned and gave in a little to avoid a Russian revolution situation. Wall street is not afraid to call our bluff, they will shut down a factory and move it to another country in a heartbeat and not look back. The only time the new tactics work is when people can shut down a country and occupy factory’s while maintaining production for there benefit.

      The only thing we can do in this day and age is educate people about better systems and hope that someday enough people demand a better system and not wait for someone like Obama to come along and fix everything.

  20. Oregoncharles

    ” We now see rising popularity of amusements that celebrate ruthlessness and a breakdown or lack of social norms (such as the Game of Thrones)”

    doesn’t this reflect the real world we are, increasingly, living in?

  21. Rennah

    I used to play EVE a few years back, and I think it’s unfair to describe the game as “laissez faire” (even though it is compared to other online games). It would be like describing the planet Earth as laissez faire just because there are no natural laws limiting the market. In fact, many of the corporations (think of them as states, since that’s really what they are) are not laissez faire.

    Goonswarm, one of the more powerful corporations in the game and a member of the CFC (Clusterf*ck Coalition), one of the belligerents in this war, is openly socialist. At least when I played, all new players were guaranteed free ships (up to a certain size). This is important since, like in real life, if your ship blows up, it’s gone forever, and normally you’ll have to scrounge up enough money to buy a new one. Goonswarm realized that by providing a safety net for its members (and having a lot of those members), they were more effective at holding territory in the game and could hold their own against much richer and more experienced enemies.

    As for why people play it even though it’s ruthless and savage, that’s the whole point. A lot of Goonswarm’s actions are motivated by causing chaos in the game just because it makes things more interesting (although Goonswarm always has an angle to make money out of it too). It’s just a way to explore the limits of ruthlessness in a safe area; no one’s going to get seriously hurt in a fight between a bunch of pixels that look like spaceships, so you can do pretty much whatever you want. (Sometimes it spills over into real life in kind of creepy ways, though.)

    1. That’s a weird interpretation of socialism. Isn’t free starting ships more akin to a welfare state that has a free educational system? You called it a safety net yourself…

      1. Rennah

        I’m just using the terminology that Goonswarm would use. I’m not really familiar with the administration of Goonswarm’s “government”, so my direct experience was in the form of a “safety net”. I think the official line is that they practice “space communism”, although some of that is just an excuse to repurpose Soviet art for recruitment posters. Someone else with more connections in Goonswarm could probably explain in more detail.

        You could probably argue that Goonswarm has other state-socialist features, like communal land, in which the regions of space Goonswarm controls are free for any of its members to use for production. I don’t think that’s a unique feature of Goonswarm, though. I never heard of any corp in which members had private land that other members couldn’t use.

        It’s a bit weird to talk about corporations as states, but when you’re in null-sec*, that’s really what they are.

        * Null-sec is space where there’s no computer-controlled police force to keep players from killing each other. It’s where all the interesting stuff happens.

        1. I don’t know – Neuromancer and Shadowrun have introduced me to the idea of corporations as being state-like years ago, with the potential advantage that they’d have no territory that’s very vulnerable to attack. :)

  22. WJL

    I’ve been playing EvE online now for near 3 years. It is a unique game amongst the MMPORG choices available because it is a ‘sandbox’ game, with most of the content created by the players themselves. It has a completely functional and above-board economic system, and CCP has an economist employed to be in charge of monitoring the ebbs and flows of commerce in the game. It is indeed a fairly vicious game, and the question you must always ask yourself is if you are being paranoid enough. The game is riddled with spies from one coalition or another. There are players that make their living infiltrating corporations and stealing their assets. There are giant fleet battles between coalitions that number in the thousands of players. The game is played in a ‘single shard’ universe, where everyone is playing in real time and shares the same playing field of 7500 planetary systems. The players themselves are ‘immortal’, in that their bodies can be killed, but their consciousness is conserved and placed in a new ‘clone’ body identical to the old one. Their assets, however, can be destroyed forever or trapped in stations held by their enemies, completely inaccessible. It is a bleak and uncompromising universe, and the players who play it are die-hard gamers who sometimes spend 40-50 consecutive hours in front of computer screens leading battles or evacuations of newly-hostile space.

    You do, on the other hand, make some good friends and get the chance to create some enduring organizations and relationships that are unique as well. Yves, if you are interested, we can have a chat about the game sometime. There’s a lot more about the game and its meta I can tell you beyond what this article talks about.

  23. Paul Tioxon

    There used to be the world game, designed by Buckminster Fuller. People from around the world would come to Philadelphia to participate in the design science for humane technology on space ship earth. Here’s an alternative to the space opera simulation.

    ——————————————————————————-

    “In the 1960’s Buckminster Fuller proposed a “great logistics game” and “world peace game” (later shortened to simply, the “World Game”) that was intended to be a tool that would facilitate a comprehensive, anticipatory, design science approach to the problems of the world. The use of “world” in the title obviously refers to Fuller’s global perspective and his contention that we now need a systems approach that deals with the world as a whole, and not a piece meal approach that tackles our problems in what he called a “local focus hocus pocus” manner. The entire world is now the relevant unit of analysis, not the city, state or nation. For this reason, World Game programming generally used Fuller’s Dymaxion Map for the plotting of resources, trends, and scenarios essential for playing. We are, in Fuller’s words, onboard Spaceship Earth, and the illogic of 200 nation state admirals all trying to steer the spaceship in different directions is made clear through the metaphor–as well in Fuller’s more caustic assessment of nation states as “blood clots” in the world’s global metabolism.

    The logic for the use of the word “game” in the title is even more instructive. It says a lot about Fuller’s approach to governance and social problem solving. Obviously intended as a very serious tool, Fuller choose to call his vision a “game” because he wanted it seen as something that was accessible to everyone, not just the elite few in the power structure who thought they were running the show. In this sense, it was one of Fuller’s more profoundly subversive visions. Fuller wanted a tool that would be accessible to everyone, whose findings would be widely disseminated to the masses through a free press, and which would, through this ground-swell of public vetting and acceptance of solutions to society’s problems, ultimately force the political process to move in the direction that the values, imagination and problem solving skills of those playing the democratically open world game dictated. It was a view of the political process that some might think naive, if they only saw the world for what it was when Fuller was proposing his idea (the 1960s)–minus personal computers and the Internet. “

  24. I have to say that I find Yves’ introduction a bit puzzling.

    It used to be the most common narrative of entertainment was the hero’s journey. We now see rising popularity of amusements that celebrate ruthlessness and a breakdown or lack of social norms (such as the Game of Thrones)

    Seems to equate literature (or before that oral narrative) with entertainment. I’d argue that strategic games like chess or go very much “reward ruthlessness”, and that this is unavoidable given that most games are contests. So Eve Online differs in the scale of players playing against each other, and in the fact that the rules are hidden below a narrative but apart from that is not more ruthless than older games.

    The second curiosity is that 500,000 people have spent real money in meaningful amounts and invested time in a pseudo-economy where the funds are stranded[.]

    As writers discussing computer gaming never tire of pointing out, a paying community like Eve Online’s is dwarfed by the amount of people that play so-called casual games such as the ones easily accessible on Facebook, and pay for it, even if these games are designed not to be competitive. People seem to be extremely willing to pay for entertainment, especially for interactive entertainment.

    1. skippy

      I followed your questioning till the ” People seem to be extremely willing to pay for entertainment, especially for interactive entertainment.” – summation.

      skippy – um… casinos are a growth industry these days, why bother with buildings when you can just set up some servers.

      1. I have to admit that I am not sure whether the question is ironic or not. :)

        Afaik, online gambling is very much growing and at least in Germany the discussions of whether/how to regulate have gone on for years. But Yves claimed to at least theoretically understand gambling but to be puzzled by the willingness of people to throw money at a game from which they’d not get a monetary reward. I just wanted to point out that this is very much not an important feature of Eve Online’s, compared to other online entertainment.

        As to why people still bother to build offline casinos, I’d point to the above-mentioned discussions regarding online gambling. I don’t remember the details but while offline gambling was clearly regulated, there was (and is) a bit of a lack of planning security for online providers (and for players who might lose any gambling wins in case of illegality).

        What I don’t understand is why people program online gambling sites and don’t aim for the next farmville, in which, as Yves pointed out, the house always wins.

        Did this address your question/remark?

        1. washunate

          And yet, isn’t ‘the next Farmville’ exactly what an entire category of electronic games now use as their business model? Somebody is betting that this sector is more than a one-hit wonder. Zynga alone has a market cap over $3 billion. This is all rounding errors in public policy land, but in gaming, that’s serious money.

          But that doesn’t make it a guarantee. The house only wins when the game is a hit. A company can actually lose money if it doesn’t hit a home run. Look at what Zynga did to CityVille 2, for example. They actually messed up a popular franchise.

  25. holygrail

    I play eve online and I participated in this battle, in the losing side by the way :)

    It’s very simple really. People pay to play because they enjoy it as a hobby. It’s the same as playing hockey, they spend time on it because they have fun. There’s a ~$15 monthly subscription to enjoy the game and that’s generally it. All this talk about translating losses in this battle to money is link bait. 99.99% of the assets that exploded in this battle were not purchased with real money but with in-game currency, obtained doing in-game activities. It’s true that you can spend real money to obtain in-game currency but this is little compared to what major game alliances obtain doing normal stuff so “this spaceship costs $5000” is just not accurate however much it makes for good headlines.

    That said, EVE is an incredibly interesting virtual sandbox and how it resembles the real world and how it gives an space to express certain attitudes could be (and probably is) the subject of serious study. The organization, leadership and meta-gaming aspect of it alone is fascinating. For example, the leaders of the most powerful alliances, whose decisions impact the game as a whole and have literally thousands of people at their orders usually don’t even need to play the actual game much. They mainly just discuss strategy in voice chat rooms and delegate responsibilities. Some of them run a kind of dictatorship with full blown personality cults, others are more like a casual corporate meritocracy, others are just anarchy. The game is deep enough to allow this level of engagement.

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