Why Online Gaming Matters to the Digital Economy

Economists study virtual game economies to learn about digital assets, the future of economic growth in the virtual world

Did you know there are people in Venezuela that play video games 11 hours a day farming digital goods for resale in foreign currencies? They do it because their sovereign currency is worth less than what they can earn “gold farming” in a virtual game.

Massive multiplayer online (MMO) games like World of Warcraft have been around for many years. People from all over the world join these virtual communities to compete, have fun, and build communities.

But over the past 20 years, these communities became interconnected socio-political breeding grounds of economic activity.

The communities within these games have evolved to form real economies. Gamers assign value to virtual goods based on their utility and status within the community and they transact these digitized goods in real-time.

Economists started to take notice. Why?

Because these digital communities represent a unique opportunity to study economics where its possible to track all the inputs and outputs. It creates an opportunity to understand real economic behavior in…