Looping the Hen

Pot...meet kettle.

I almost laughed out loud when I read one part of this rant. I won't comment on it as a whole as it is a typical empty political screed you will see often from the right and left.

The line I find so funny is this:

A sitting member of Congress threatens the use of the public policy process in retaliation to anyone who supports the other party’s agenda of environmental safety, healthcare access, education, civil rights and most importantly, rejecting special interest politics.

I'm curious when the Democrats started rejecting special interest politics? I must have missed that somewhere. It is the basis of their power. Environmentalism, universal health care, affirmitive action...whether any of these are good or bad, I don't see how one cannot see them as the cornerstone of special interest politics. Toss in globalism, political correctness and the desire for a nanny-state, and I have yet to find something that acts universally in a positive way. Almost everything the political system in this country is about is based on pandering to one or more non-universal constituencies.

It's no surprise that the only party that truly cares about people in a 'treat everybody equal' kind of way is the Libertarians. However, because everyone does not want to be treated equally, and because they want handouts and want the government intervening in our everyday lives, we have political parties. I won't even assert that the Republicans don't do some of this too; however, it is the bread and butter of the Democratic party.

Hmm...

I think I missed something...what part of what the Pope said wasn't true?

It seems the terrorists have embraced western-inspired political correctness as one of their weapons.

New Economy II: Ebay, Part 1, the Value Add

I have a couple more New Economy posts to do. This one will focus very narrowly on just one example of how it is possible to make a killing doing what you love. To be honest, just thinking about what this person (actually, there are a few) is doing on Ebay and how much money he is making for a tiny bit of work makes me almost sick to my stomach.

You won’t need to know anything about gaming other than what I mention here; this is more about how ‘value-adding’ can mean the difference between making pennies or dollars. As an example of value-adding, I will use my brother Todd. For example, say he has a copy of Windows he can sell for $99. That is his cost, and is what he will charge his customer, if his customer will pay him $50 to install it on a PC. The $50 is what I call a ‘value-add’ the customer gets because he doesn’t want to deal with installing the software himself. It is good solid money, and breaks down to a good hourly wage.

On Ebay, I often see people in my hobby selling D&D figures for a tiny markup. They make a very low hourly wage, if one counts the additional time spent packaging, making labels, listing the item, etc. I would bet many of them see only the ‘I bought it for $1.00 and sold it for $2.00, I have made $1.00 profit .’ They don’t take into account that it took them 15 minutes of their time, between listing and getting it out the door. If they can only do only 4 of them per hour, they are making a grand total of $4.00/hour. Woopteedoo! As I showed in my last post in this series, time can be a hugely valuable commodity.

While searching through various game listings, I came across a bunch that left me, well, dumbfounded and awestruck. For example, take a look at this one. These are being sold for a game called Heroscape; however, they are actually DDM figures (the game I play). When sold as figures for my game, they run around $2.00 for the three shown. He made $26.00. Not bad, considering he bought them for $.66 each (and in bulk they cost even less). (Really, go take a look at the links, I'll wait for you to get back.)

So what was the value-add and how much time did it take him to achieve? Just guessing, he had to rebase the 3 figures. He does a ton of these, so he probably has a system to it, either through painting the original base or rebasing with actual Heroscape bases (comparing to my own bases, I would guess he is rebasing). I would say that runs 10 minutes. Printing a glossy stat card to go with it as shown probably costs another $.50 and 2 minutes. Then the packaging and shipping costs the same as any the figure in the other example, or 15 minutes.

So let’s add it up. For a total investment of $2.50 and 27 minutes, he is making $26.00. That is over $55.00/hour. Seems like a better way to spend one’s time than shlucking it out for pennies, oui?

I didn’t take into account a couple of things, but that is because I think they wash. It took him time to design the stat card for the new game. However, it is obvious this seller is a gamer himself, so I will assume he uses these types of figures in his own games, and would have done it regardless of being able to sell it. Even if he didn’t and it cost him 2 or 3 hours to design it, if he makes 2 or 3 of these sales at these prices, he is still making around $45 or $50/hour. At home. By playing games.

Sure, there are some variables and risk at work here, but one has that in any business. The game could stop selling. Other people could start competing. Heck, I’ve thought of lifting his entire ad, printing out the stat cards, rebasing some of my own figures, and doing this myself. However, no need to make enemies needlessly when I might be able to enlist his aid in doing the same thing he is, but the other way around. In any case, he'd never need be out more than $75 in materials, which is pocket change to people who hang around Ebay. Where else can you literally run a business making $80,000 a year with an exacto knife, some glue and a big pile of little people? (Yes, I know realistically there might not be a market for that many custom figurines, but you get the idea)

So I am going to try taking common Heroscape (or any other game in that genre) figures and making them into custom creatures in my game. No one is doing it as far as I know, so there’s no competition to start. If I can get 15 or 20 unique models going like he did before I even start to try to sell them, I can get a good jump on the competition that will definitely spring up, as based on the number of listings there are far more people playing my game than are playing Heroscape. There are a ton of places on the web where I can download the stat card; a little work in a photo-editing tool and I should be able to create decent replicas pretty easily.

The question is, does the market exist on my side like it does on his? I don’t rightly know, but I would guess there is a portion of the market that likes having something no one else does. Collecting is a huge part of this hobby. And for me, so is playing with them. So if nothing else, if my gaming group accepts the figures as playable, I can use them regardless.

(Rodney, if you’re interesting in helping me design some cool figs for this, let me know! I have a Mage Knight figure set on the way, I am going to see if I can find some common ones to try this on.)

New Economy I: Virtual Worlds

For those who have not recognized it, in the past 5 years or so gaming in general, and video-gaming in particular, has gone mainstream. Revenues for the video-gaming industry rival those of the motion picture industry. The average age of video game players continues to increase as those who spent time in the 80’s on their Atari 2600’s and Colecovisions come into their income-earning prime and drop significant dollars on what used to be a childhood hobby. They play with their friends, and pass the hobby along to their children. A single game, World of Warcraft, has become a phenomenon, with over 6.6 million players, more than 2% of the population of the US, generating revenues for Blizzard (one of a handful of premiere video game companies) of over $1 billion annually.

Video games are not just for kids anymore. As huge as the World of Warcraft number is, many times that number of US adults regularly plays online games such as Tetris, Bedazzled, Scrabble, Solitaire and Backgammon online at sites like MSN and Yahoo. Add in another couple of million who play poker online, and it is easy to see that gaming is in our blood, and we’ve proven our dedication with huge tithes to our digital deities.

In 1972, playing pong with one other player was the dizzying peak of technology. Now, that peak is more like Richard Dreyfus’ pile of mashed potatoes compared to the mountain Spielberg’s (a side note on pop culture: Word’s spellchecker recognized that I spelled ‘Spielberg’ wrong) alien ship actually landed on. The average online game (MMOG) has 2000 people playing on a single server in one ‘instance’ of a game, and gaming companies have dozens, hundreds or sometimes thousands of servers running; Eve Online has gone one step further and has single shards, or unique universes, with peak concurrent records of over 30,000 players.

Those types of numbers are easy to read and say ‘neat’, but visualize what that really means. I grew up in a town of 5,000. My high school graduating class was a paltry 189. It is hard to imagine, but more people than the population of both Tennessee and Connecticut combined plays World of Warcraft daily. The equivalent population of the entire county where I lived most of my life plays Eve simultaneously.

Is it surprising then that these digital worlds that draw such huge populations, should witness the development of vibrant and sophisticated social conventions, such as language and economics? Each of these may be limited by the constraints of each game, but they are by no means simple. That they do develop as fully functioning economic microcosms is beyond question, but let’s take a look at why. From there, we can go into how in-game stuff comes to involve real-world bucks.

Remember Monopoly? If you do, then you have the basic formula for every Massively Multiplayer Online Game (From now on abbreviated MMOG). In Monopoly, each person starts with basically nothing, and through time and effort, begins to acquire. St. James Place, Marvin Gardens, Waterworks, Boardwalk. Those were a great start and generated income if another player landed on them. However, the real magic began when you owned a ‘set.’ Boardwalk and Park Place. Illinois, St. Charles and that other purple one. And my favorites, Mediterranean and Baltic Avenues. Once you have a set you receive a bonus, and get to charge double rent when someone lands on it! Great! However, it gets even better. When you have a set, you get to put up houses, and then hotels, which generate the most income.

Online games work almost exactly the same way, even if the window-dressing is more intricate. Let’s presume you start as a lowly knight. Your goal is to acquire the best imaginable armor and weapons (like individual properties in Monopoly; like Baltic vs. Boardwalk, some are better than others) and the prettiest horse (sets of properties) and a castle (houses and hotels). That is greatly simplified and I am stretching with the metaphor, but there it is.

Just as in Monopoly, the overriding motivations for each player are all in MMOG’s as well. While little Johnny might play to win and stomp on his little sister Sara; Sara’s motivation might be to neatly line up her houses on the colored lines, not really worried whether she wins or loses. Mom and Dad play to socialize and spend time with their kids.

The equivalents in World of Warcraft and Eve Online would then be power gamers (Johnny), paper-doll players (Sara), and social players (Mom and Dad). They all play the same game, but each has an overall motivational component that it indivisible from the game; once that motivation (or motivations) dissipates, they will eventually lose interest in whatever game they are playing. The best MMOG’s are very good at pushing these buttons and maintaining or shifting these emotional drivers, in a suspiciously Pavlovian fashion.

So how does our new knight begin to acquire these things? Well, he generally starts small, killing rats (for fun, easy reading about a number MMOG’s, including Eve, check out the appropriately named KillTenRats), or goblins, or other not-very-challenging or interesting critters. Each kill grants the player a few Experience Points as well as a tiny bit of treasure, like cash, fur or bones. I’m not exactly sure where these rats get silver, but it’s best we not worry too much about suspension of disbelief at this point.

When the knight finally gets enough Experience Points by slaying the many rodents terrorizing innocent civilians, he ‘levels up’, or ‘dings’. This means the character becomes a little stronger, gets a few more hit points (how much damage he can take before he dies), and often means he can carry a bigger weapon. With all the fur and money he collects, he can go to the local merchant, or another player, and trade for or buy a stronger weapon.

This acquisition of better weapons and armor is one of the focal points of the game for many players. Of course, for those who want to nitpick, this is a much-simplified version. There are other things players can do to get Exp (Experience Points) and cash, such as going on quests, crafting items (creating in-game items such as clothing) and trading. However, the over-arching goals all typically involve increasing a player’s power (either physical or social) in the game.

Based on the conventions of one of the original Granddaddies of all MMOG’s, Everquest, most fantasy-based MMOG’s allow players to gain between 50 and 70 levels, or ‘dings’. Sound time-consuming? It is, and this leads me to the point this very long post. In the beginning of a characters life, it might take only 30 minutes to Ding, but the higher one goes, the longer it takes. Going from level 39 to 40 might take 2 weeks of playing 2 hours a day. (No ‘get a life’ comments please!)

Due to the way these games are structured, that often means much of the content (read: fun) is specific for higher-level characters. There is even a term for the often tedious, repetitive leveling of a low-level character: Grinding. Yes, it’s often as boring and obnoxious as it sounds.

Now, let’s imagine two scenarios: the first, a father who likes to play this game with his son when he can. However, while the father is at work, the son is Grinding away, and after 3 weeks the son is level 25 while the father is stuck at level 10. Although sometimes this isn’t a problem, often a large level difference makes it hard on one or both players. The father will not be able to participate in more challenging quests, while the son, if he adventures with his father, will find things too easy.

In the 2nd scenario, instead of Grinding and leveling his character, the son decides to become a merchant and spends the extra time in 3 weeks making a ton of gold and buys the very best armor and weapons in the game. Although he is still technically level 10, due to the great equipment, he can take on challenges like average level 20 characters.

In either case, there is inequity between the father’s character and the son’s, but they still want to play together. So what is the solution? There are several. However, one that becomes more popular by the day is the father pulls out his credit card, spends $50 on Ebay, and buys a full suit of Zeutronium armor and weapons, which are as good as his son’s. The father meets the person he is buying from in-game, where the weapons and armor are transferred to his character.

Now, before any gamer purists have a puppy, I am not here to discuss the ethics of purchasing in-game items for cash. If there is any interest, I could do another similarly long post on that topic alone, but it is too much of a knee-jerk subject to work in here.

Anyhow, problem solved, and the father and son set off happily again, mowing down Orcs and Trolls like Orlando Bloom and Viggo Mortenson.

So what makes Zeutronium armor worth $50? I am probably on the verge of losing some of you who still can’t fathom anything virtual having that much value. To simplify, let's convert the Zeutronium armor to what it really is: time.

The father is really paying $50 for time. Time to socialize and adventure and laugh with his kid. If the father wants to be at the same level and power of his son, he really only has a couple choices. He can play for 25 hours to get his character up to an appropriate level, or be a trader for 25 hours to make enough money in the actual game to match his son’s equipment. So, for $50, he has purchased 25 hours of someone else’s time.

At $2/hour, does this purchase seem so crazy? Let’s assume the father is an investment banker and makes $300,000 a year working 60 hours a week. He gets paid the equivalent of $100/hour. His time is then worth just that, $100/hour. He doesn’t have 25 hours just to get to his son’s level in-game, let alone the desire, so he pays someone else $2/hour for theirs.

Still doesn’t make sense? How about this then. He pays a maid $12/hour for 2 hours a day to clean his house so he doesn’t have to. He pays his CPA $125/hour so he doesn’t have to keep his own books. He pays the lawn guys $10/hour each. He pays the daycare people $75/day to take care of his infant daughter. He pays his auto detailer $35/hour. Many people regularly pay for other people’s time.

Could the father do all of those things? Sure he could, if he wanted to spend all his free time doing so. However, he places an inherent value on free time, and he would rather spend it socializing and slaying dragons with his son, and to him that time is worth much more than $2/hour.

For those who have never considered their free time as having monetary value, think about it a little. You are here reading this blog post instead of working a minimum wage job (well, some of you may be reading from work, but you know what I mean). So I would make the argument that your free time is worth at least $5.15 an hour. More likely more. I know that after my regular job, I could work part time doing various things for at least $10.00. As I choose not to, I have to assume I value my free time at more than that.

So it’s possible Zeutronium armor is actually a bargain!

Let’s look at another example. A 35-year old Purchasing Supervisor decides he wants to play with his friends an hour a night in one of these games. However, his friends are all 40th level. Gadzooks, it would take him 300 or more hours to get to 40th level, almost a year of his available play time. In this example, the value of the game is $0 if he can’t play with his friends, and he really wants to play with them. He takes out his credit card and buys a $400 41st level character. Again, many people are thinking this is pure craziness. Really? He just paid $1.33 an hour for someone else’s time. In my book, that’s a steal.

Now, we get to one of the more interesting aspects of all of this. The dad in the first example, being an investment banker, doesn’t throw money away easily. Due to his schedule, he soon finds himself behind the power curve again in a few weeks. Also, an in-game event during those weeks has made Zeutronium even more rare than it used to be, and thus more valuable. He manages to sell the original set of armor he bought for $60, making a profit of $10, and buys a new set of more powerful armor for $100.

In the best games, in-game items are consistently valuable. They are assets, just like a diamond ring or grandfather clock. It is true that often these items lose some of their value over time as a game becomes less popular or the population of the game becomes more powerful overall or when the designers of the game introduce new and even more powerful items. However, say the father only manages to get back $40 on his purchase of the Zeutronium armor. On the other hand, he got 10 hours of good time with his son before it lost its value. His total cost for that? $1/hour (($50-$40)/10 hours). Movies nowadays set us back $4/hour. Playing pool can cost $5/hour. An amusement park can be up to $10/hour.

Who wouldn’t (or doesn’t!) pay $1/hour for quality time with their children?

I haven’t even taken into account the actual entertainment value of the game itself. We have already determined that our free time has value. Does that not mean that the things we do during our free time have inherent value as well? Let’s say I purchase a new videogame for $40, and I play it for 20 hours before I complete it and put it on a shelf. That means the game provided me $2/hour entertainment. Again, in comparison to your average movie, not too bad.

Now let’s look at World of Warcraft. Not only do I have to pay $40 for the game, I also pay a $15.00 per month subscription fee. This is another one of those things that some people may scratch their heads over. Who on earth would pay a monthly fee for a game they’ve already bought? (Never mind those 6.6 million folks who do exactly that) Assuming someone plays the game 2 hours a day, the first month they bought the game they are paying around $.91 an hour for their entertainment. However, during the 2nd month they also play for 60 hours but only pay the $15 monthly fee. Their entertainment cost has suddenly dropped to a mere $.25/hour. Anyone else know someplace other than the local park you can go to for $.25/hour? Heck, at $3.00 per gallon gasoline, even that might cost more than a quarter per hour.

I don’t know about the rest of y’all, but next to my family and my honey, my free time is the most important thing in my life. $500 or $1000 is a lot of money in terms of pure dollars; however, when you equate it to how much time you are buying, the numbers don’t seem so out of line. Not counting food or other tangible purchases, my trip to Vancouver cost me $6.00/hour, even the time I was sleeping.

And my most brutal example? My skydiving experience cost me the equivalent of $3,600 an hour, and it was worth every penny. Many, and I would venture to say even most, already spend more money on a per hour basis for your entertainment than the person who paid me nearly $1700 for a character I put 3 years of my time into. (Try to figure out the per hour cost of this one!)

Personally, I think they got a steal.