17 June, 2009
I want to talk about running a business in a game. Note that this isn’t running a business about games; there’s a handy book about that topic if you want to read about that boring subject. ;)
No, instead, I want to cover the topic of how to make money in games beyond murdering monsters and running packages for NPCs. What does it take to run a business within an MMO world?
Doin’ your business
Most games are set up so that you can make subsistence “wages” by going through content. Getting money and drops from monsters and rewards from quests nets you enough for the basics. A good game always makes you strive, however, so in order to get all the goodies you want you’ll have to push a bit harder. And, some activity in the game (raiding, PvP, etc.) often requires an influx of capital to keep a character in ready shape, so you need to find some income.
The simplest way to earn cash is to just grind it out. Go murder some more monsters and take their stuff, then use your surplus cash to get your epic mount or whatever other nifty thing you want. This is the game equivalent of picking up a few more shifts at McDonalds to afford that sweet moped that mommy and daddy wouldn’t buy you.
For people who want to do more than just subsist, there are more options that require a bit more thinking. In most games, this means finding items or services people are willing to pay for and selling it to them. In other words, you get other people to do the grinding while you sell them something they’re willing to grind for.
Do you seriously expect me to take advice from a goblin?
One of the more… interesting… writers about making money in MMOs is Gevlon the Greedy Goblin. He focuses on World of Warcraft, but in theory you could use his techniques in any game. Gevlon focuses on making money on the auction hall (AH) without having to grind. (I found Gevlon thanks to Tobold’s commentary on his writing.)
The basics of his technique are similar to running a business in the offline world. As I said above, you find something people are willing to pay for and sell it to them for the price that the market will bear above the amount you spent to acquire the item. This could be drops (which are heavily based on luck), items produced through tradeskills, or services provided in the game (like runs through lower-level instances for alts). Gevlon focuses primarily on tradeskills to make his cash.
Game life is not real life
Gevlon’s commentary is interesting, but comes with a few caveats that I think are important to cover. The first is that he tries to draw too many parallels between games and offline life. For example, he believes anyone can be rich in the offline world and he has proven that by the fact that he can reach the gold cap on WoW. He’s also not a social person, he often refers to “social players” in a highly derogatory way and calls offline socialization an “ape subroutine”. Offline business requires a heavy dose of socialization, unfortunately, so take his non-game ramblings with a bit of salt.
He tends to go on diatribes about what he calls “M&S”, or morons and slackers who are the constant target of his ire. Conveniently, he often ignores the fact that games are designed with the intent of entertainment in mind, and that concepts like truly limited resources do not exist in a game. And, as with a lot of people who have experienced success, luck is downplayed if it is even considered as a factor. The only reason you are not rich is simply because you’re stupid, lazy, or both. Being at the right place at the right time has a small effect, if any, to Gevlon’s way of thinking.
Differences between two worlds
The core problem is that in business, larger risk often means larger returns. When all you’re risking is a number on a fantasy character’s database record, it’s easier to throw caution to the wind on a high-risk, high-reward scenario. When that number in a database is your life’s savings or children’s college accounts, it becomes a lot harder to put your money on the table and hope things go as well as they could. Games also provide a safety net that allow players who do get wiped out to get back into the game easier (daily quests in WoW), otherwise players would leave the game. In the offline world, that safety net often takes the form of vile “socialism”, something else Gevlon hates with a passion.
Games also operate under a very simplified economic system. Instead of having to worry about mundane issues like warehouse space for inventory, you can just roll a few alts and your problems are solved. An inventory full of glyphs don’t decay, break, or otherwise become unsalable as goods in the offline world are wont to do. Finding employees is as simple as spamming the trade channel and getting whatever value you can out of the person who can perform the work for you; as opposed to having to deal with issues like employment taxes, minimum wages, and benefits as you do in the offline world. Some people use these reasons to argue for laissez faire capitalism, but again, what works well in the online realm doesn’t always translate into a good thing in the offline world.
From personal experience, I believe you can learn important lessons in games, but it’s dangerous to think that you can take the lessons learned and apply them immediately offline. I’ve mentioned before that I learned how to extrovert well in games before I became better at talking to people in person, but in games I can log out when I started to feel overwhelmed. Face-to-face socialization requires a bit more finesse than claiming your internet connection dropped. Not that Gevlon thinks face-to-face socialization is important.
Skills required to succeed
So, what skills are required to succeed at business in a game?
The first, and most important, is knowledge, just as you need in the offline world. You need to know what goods and services are in demand. You need to know what items will sell, and which items are eclipsed by better quest rewards. You need to know what stats a specific class or type of character will want in order to know if the stats on an item are worthwhile or not. If you find a caster weapon with physical stats, that might be better to sell to a vendor rather wasting auction fees hoping someone will buy it.
Another bit of knowledge you’ll want is to know what price the market is willing to pay for an item. Some of the first AH businesses in WoW dealt with buying up underpriced items and selling them closer to the going price. Enchanting materials were especially popular, since they cost nothing to list on the AH in WoW. The person willing to take a longer term perspective on selling the item (instead of the adventurer who just wanted to get an item out of his or her inventory) can make a fair amount of money. Learning what the going price is, and how that price can change over time, is important to knowing what will make money.
With this knowledge, it’s time to choose your business. Following Gevlon’s lead, you might choose inscription as your tradeskill in WoW. Find something that is in demand and that you don’t mind doing. Find out what other people are selling, and try to avoid getting into too much direct competition. Be ready to adjust your strategies if someone else tries to move in on your territory.
It’s also important to take advantage of opportunities as they arise. During the festivals in LotRO, I spent a fair amount of time collecting gift boxes in the game which had random items. Some of the items were rare recipes for cosmetic items that people will buy for quite a bit of money. I was able to make most of my money for my character’s horses by selling extras of these recipes on the AH. (This is part of where luck comes in. I wouldn’t have nearly as much money if I had not been able to get a few of these prized recipes.) Of course, keeping these recipes meant that I had to have inventory space to store the items if I got them while the market was glutted with the rare item.
All is not rosy
Of course, it’s easy to focus on the positive aspects, just as it was easy to think housing prices could rise forever when people bid up house prices. Where there is risk there is the chance for failure. Buying up the supply of an item only to have it nerfed in the next announced test realm patch notes can hurt your bottom line. Following bad advice and speculating on items that are rumored to become better can be harmful.
Once your business becomes too large to do by yourself, you introduce the risks of social elements. While alts and automated tools can make sure misanthropic goblins don’t have to deal with other people, some businesses just can’t work with a single person. EVE Online has a lot of corporations set up to make money, and has had a few high-profile issues with trusted individuals running off with shared assets. A recent NYTimes article (registration required) talks about one “bank” in EVE having some troubles when the executive in charge decided to walk away with a chunk of funds. The article draws parallels between the in-game bank and the bank problems we’ve come to know and love over the past year.
The other bit of warning here is that if you can do it, so can others. Direct competition from someone willing to settle for a lower profit margin can spell trouble if you’ve invested a lot of money in setting up a specific system for producing goods. And, think about this: a smart gold seller could read Gevlon’s site and easily make tons of money without having to resort to hacked accounts or automated bots. It would suck for a gold seller to copy your technique then get the company to nerf that way of making money in order to hinder gold sellers.
You can do it!
Really, making money isn’t too hard in games, despite all the problems, as long as you have access to the knowledge required. As I said above, most games are designed to make it easy for you to make enough money to get by. The “broken” economies in games make it more fun than trying to eek out a middle class living on a middle manager’s salary. After all, if the game starts to feel like real work, then most people agree that it won’t be fun. Knowledge and a bit of luck can help you on your way to some virtual wealth; that, plus four bucks, will get you a cup of coffee at Starbucks.
What do you think? Do you make gold by selling things in games? Or is that a level of gameplay that just isn’t interesting to you? Are the lessons learned in games easily transferable offline as some goblins might suggest?