Synthetic Worlds

Edward Castronova
Friday, January 20, 2006; 11:00 AM

Edward Castronova, author of "Synthetic Worlds: The Business and Culture of Online Games," was online to discuss the evolution of online games into an extraordinarily lucrative staple of the entertainment industry.

Online games are no longer the exclusive domain of computer geeks. People of all ages and walks of life now spend thousands of hours - and dollars - partaking in this popular new brand of adventuring. But the line between fantasy and reality is starting to blur. Players have created virtual societies with governments and economies of their own whose currencies now trade against the dollar on eBay.

In "Synthetic Worlds," Edward Castronova offers a comprehensive look at the online game industry, exploring its implications for both business and culture alike.

Edward Castronova is associate professor of telecommunications at Indiana University, where he specializes in the economic and social impact of multiplayer online video games.

A transcript follows.


Edward Castronova: HI everyone, and thanks for the questions. very nice of you to take the time to chat with me.


Ashburn, Va.: What should Northern Virginia do to support the gaming and new media companies in the region?

Edward Castronova: Regional authorities (and this is a global issue) can encourage the local game-building industry primarily by addressing quality of life. Gaming is a tough industry. people work 90 hour weeks. it also makes use of folks in the family years, 24-45. local education, housing, transportation, and of course badniwdth. thats what helps most.


Washington D.C.: Given the increasing access to broadband and the decreasing price for that bandwith, what kind of future do you predict for gaming cafes/centers? I know they are quit abundant in South Korea and that country has one of the highest percentages of per capita broadband users in the world.

Edward Castronova: i think gaming cafes are driven more by population density and social structure than broadband. its a cultural thing. kids everywhere like to hang out with one another, and that drives the cafes. here in the US, broadband makes it more likely that online gaming is a way for people who cant get together in the flesh can do so online. i have a colleague here at indiana who lives 10 minutes away from me. both have young kids, so its hard to schedule family times together. i see him more in game than in RL.


Washington D.C.: I have played EQ and EQ2. I am now too busy with family, work, etc. I have seen people online 15+ hours/day everyday. Have you talked to any of these people to understand how they can play so much? What do they do for money? Are they handicapped, etc?

Edward Castronova: we have very little data on who game players are. although dmitri williams, dan hunter, scott caplan and i are going to go for an NSF grant to study them - please call your local nsf department head to help us out haha - but there is this anecdotal evidence that people playing so much must not have anything else in their lives.

i know as a dad that my gaming time is not nearly as much as others'.

but you havbe to understand how wide the distribution of individual circumstancres is in this country. very wide. there's millions of people with jobs going nowhere, who are bright and sociable, but who are trapped in social environments that are not so good. theyre probably the prime candidates for this. and i dont really blame them. society is letting thwem down.


Rockville, Md.: What are the prospects for transnational communities through games?

Edward Castronova: This is already happening. most games are multinational. i play regularly with people from france, korea, australia, japan. we dont necessarily know each other as such, but it comes out. what's wiered is, there's still quite a lot of public xenophobia, that has to get slapped down. some idiot will shout out in the general channel something nasty about [insert racial/ethnic group here]. and then everyone piles on about what a moron he is and how he should shut up or he will get his account banned. so this debate happens. underlying it, though, there's this norm of working together. a silly example: you can't kill a dragon without getting 60 people on the same page. ok, that's going to be a lot of diversity, and it's not like everyone is locked into some pre-existing structure. so its voluntary cooperation. and it works. friendships cross the seas at that point, riding on the internet.

i think the smartest $20m that the state department could spend would be to build a fun multi player game about ANYTHING, that happened to have democracy in it. then deploy it so kids from morocco to myanmar could play in it. that would change the world.

problem is, i suspect that the state dept still thinks videogames are kid stuff.


Mt. Lebanon Pa.: I'm a registered electrical engineer which means I'm a cynic about most things - it comes from battling "reality" continuously.

Simply, what's the difference between an online world where folks wander about believing in shared myths and acting out a set of strategies and folks who sit in front of a television set night after night watching popular entertainment and simulated news?

By simulated news I don't mean Jon Stewart's Daily Show, I mean mainstram media (MSM) productions: Fox News, CBS, et al.

Most Americans still believe that Saddam was a principal actor in 9/11. Many believe the world is a few thousand years old and was created in seven solar days. Modern people today scan the heavens looking for the signs of the Rapture.

They didn't get that from playing DOOM!

So why is an online world any more fanciful than the dreamworks that image makers in the guise of news cast like a spell in front of the rest of us?

Edward Castronova: i really agree with the spirit of this question.

we're comfortable thinking that theres this bright line between the fantasy and the real, when their isnt.

shakespeare really ahmmered home how much the social world of everyday life is mostly appearances. change the appearances a little bit, and everything gets disrupted.

online games just make that notion - which until now has been kind of a conjecture, a hypothesis - a practical reality. anyone can now go live under different social circumstances. go be a girl, and old woman, an old man, a boy, whatever. black, white, purple. human, troll, zombie. in medieval england or outer space. it's already out there.

once you do that, then you come back and see how we live in these truths that are not true (eg that the civil war was fought to end slavery).

on the whole, i think this exercise is good for humanity, at least as far as judging the social nature of truth goes.


Dover, Del.: When will courts begin to protect property rights of players who have accumulated online wealth against the actual owner of the system? Will courts begin to recognize players' rights by whittling away the rights the system owner expressly contracted to maintain?

Or will the market simply favor online worlds whose real-world contracts give their players more ownership rights to their own online wealth?

Edward Castronova: well, as we say in this business, IANAL. "i am not a lawyer" and i would refer these questions to the brilliant young legal minds like dan hunter and greg lastowka who wrote the first elgal analysis of this stuff. and there's joshua fairfield, who has in my view the most accurate analysis of the property issues.

but here's my take on virtual world items as property.

1. when you play, you sign a contract saying'this stuff is not mine'. courts may well rule that that is something you can easily agree to, and therefore, no, it is not your stuff.

2. if a court says it is your stuff anyway, which they might, we are in a world where we all have property. fine. now the problem is that free disposal of property is not always allowed. yes, generally, i can sell things that belong to me - except when that sale creates a problem for others. when ohio coal electricity plants sell electyricty, that creates a problem for people trying to fish in the adirondacks. acid rain. and when people go to sell things in an online game, that creates problems for others. imagine if youre playing monopoly and somebody sells boardwalk to a third player for $US50. that messes up my game play, even though i wasn't in the transaction at all

point is, even if courts grant players property rights, that does not mean that free buying and selling of game assets is what courts and legislatures will decide is the best thing.

monopoly is a fun game only when people dont use real money in it. i think policy will evolve in that direciton.


Washington, D.C.: What are some casual online PC games that would be good for a novice like myself interested in trying out online gaming?

Edward Castronova: If you really want to get to know this fast, i would go into World of Warcaft. its a breakout hit from last fall and does a better job than any game out there of taking new people through the first steps to finding their virtual selves.

i would recommend role-playing servers too. on Player-v-player servers, especially, the culture can be immature. people who name their characters 'sukme' and things like that. grownups find that obnoxious; on role-play servers, the atmosphere is directly protected by the company, and that kind of thing is banned. it leads to a more mature culture.

beyond world of warcraft: if you like to just make things, go to second life, a fascinating non-game experiment in virtuality. no orcs in that one - just other people.

if you dont have a superduper computer, try yohoho puzzle pirates. also thats good if youre not into orcs and wizards, but puzzles instead.

and then there's runescape, which is really cheap and taking off among the 8-13 crowd.


Bethesda, Md.: EQ became a huge "underground" economy. Gold farming is becoming a bane to player.

How has online gaming redistributed wealth in the real world? What are the ramifications?

Edward Castronova: the gold farming industry being referred to here is the practice of some players and companies of doing nothing but killing the same monster over and over to get treasure from it, then selling the treasure on ebay. that's their 'work'.

in my view, it really wrecks the games. but economically speaking, its understandbale that it happens.

it does redistribute wealth. low-wage workers are most likely to find this a viable thing to do - so wealth moves from people with lots of money and no time here in the states, to people with lots of time and no money in plaes like indonesia, china, rumania.


Rockville, Md.: I used to be an avid gamer in my 20s, but now in my early 30s I can't seem to find the time. However I would still like to give the online gaming a try. Do you have any recommendations on "lite" games that can be played periodically and still immerse the player in that community-based feeling?

Edward Castronova: Again, the lite game to recommend is yohoho puzzle pirates, although that might be too lite if you've done this before.

i have found that world of warcraft is eminentaly playable, fun, immersive and relaxing played for an hour or so at a shot. its very doable for a casual gamer like myself. i would not say that of many games though.


Anonymous: any info on the drop of subscribers to Star Wars Galaxies since the downgraded the game with the NGE (New Game Enhancments)

Edward Castronova: the question is about something we dont often see. a game was designed around the star wars franchise and had a certain spirit to it. recently, the designers dramatically rewrote what the game was all about. there was an uproar. these are not toys - these places really are services. they are persistent, ongoing, community. so if you suddenly rewrite the rules, wow, does that get you backlash.

best source for numbers is bruce woodcock's i suspect SWG is taking a hit; most people seem to say so. no solid numbers yet. but they probably are not interested in keeping current users. they want others, and they are gambling that there are more people interested in the new game than the old one.


Washington, D.C.: Can you talk a little bit more about the long-term social consequences of online gaming? What are the ramifications for people who devote 15, 20 hours a week to this pursuit? What does the introduction of a 'virtual economy' mean?

Edward Castronova: Huge questions.

You have to make a guess. Imagine a future in which your perfect fantasy world was available on a computer. And that was true for everyone - no matter what a person dreamed of, there was a world in which they could live as though that dream had happened. How many people would go for it?

If youre answer is 'few', then there's not much consequence to all this. If your answer is 'a lot', then we have to get ready for a future in which most humans spend a considerable fraction of their time interacitng with others through this technology. and there will also be a considerable number who do this pretty much exclusively.


well, 15-20 hours a week is actually elss than TV watching, so i dont think that many hours is a big deal. stats indicate that most gamers just dont watch TV that much.

where it gets crazy is the 100-hours a week folks. they LIVE there. that's a problem. if their daily life is pretty good, then the problem is their problem. but if they are doing that because their daily life stinks, there's still a problem, but it is our problem, you know? often, i think we can't blame people too mucyh for taking refuge from a world that can be bad.

all of you are pretty successful folks - youre tech savvy, you read the post. no, you would never sacrifice your reality for a fantasy refuge. but youre also a thin slice of the popul;ation.

we have no way of knowing how this technology will change things. but i lean toward it being a pretty big deal.


Anonymous: It amazes me the seriousness some players put into these MMO games. I play SW Galaxies, I am perfectly happy to be good, bad, sell goods or not at a profit etc....

whereas some players seem to want SWG to be their lives. They live and die by there characters in game success and play way more then the "Have a little fun", they forget its just a game.

Edward Castronova: the last answer got into that. yeah, for some people, it's just a better life than what we're offering them out here. its food for thought, and an input to policy, the growth of these games holds up a mirror to our society and economy, and the image is not pretty for everyone.

and as far as realness - i actually think ther eis no hard and fast line between real and fantasy. anywhere people get together, they create a real community, society, economy. its the people that makes things real. the fact that the objectsof discussion and trade are wands instead of dollars is irrelevant.

heck the value of the dollars in your pocket is all virtual, isnt it?


Washington, D.C.: How do you feel about the growing issue of gold farmers in MMORPGs such as World of Warcraft? There seems to be increasing hostilities within the game, especially toward foreign players. Do you think this will inhibit MMORPGs from ever gaining true world-wide, mass market appeal?

Edward Castronova: I think real-money trade damages the gaming experience of all players, and i applaud the devs for trying to stop it. its just very hard to do.

point is, when i play monopoly, i want to make sure everyobody's using monopoly money only.

i dont think this is going to impede the games' appeal, though. thats more of a techno familiarity issue. i'm pretty sure that 20 years from now, this tech will be everywhere.

the issue of anti-foreigner hostility is interesting. this si a place where friedman's flat world is clearly happening. the gold farmers are foreign, yes, but only because they live where earning a dollar an hour is good money. yet US players make the connection, and turn their bile against foreign-seeming players, accusing them of gold farming. a nasty tension. it certianly raises customer service costs!

it also goes against the good thig that games do, which is bring people together.


Rochester, Mich.: Where might this online gaming trend take us in 5 or 10 years? What might it mean if 'virtual worlds' are becoming more 'real' than 'reality'?

Edward Castronova: They already are as real as reality. Again, the same social forces that uphold the dollar are the ones upholding the gold piece! We're not facing a choice between fantasy and reality, actually. The choice is 'how do we structure our social relationships?' DO we want to playt he game of Earth, or the game of, I don't know, Camelot (Dark Age of Camelot is based in Arlington, btw - a place washingtonians might want to check out. Mythic Entertainment).

Long run, this is going to make us rethink what the game of earth iis all about.


Rockville, Md.: I feel sorry for whomever has to proof read your books.

Edward Castronova: HEY! lol. I am trying to hammer out answers. I am much more carefuly when writing for an editor.

My fingers are sore already.


20906: I am not a game player (I prefer to read)and have no problems with those who do however, don't you think that the proliferation of gaming is contributing to obesity and social isolation of kids (and some adults)?

Edward Castronova: Nah. I understand this concern, but your stereotype of the typical gamer isn't true any more. You're thinking of that fat kid in his mom's basement who doesn't talk to girls. Not true any more.

1. Online games are social. If you can't get along with people, you can't do anything

2. Haptic devices and interfaces are getting people off the couch. Do you dance when you watch TV? No. but when you play Dance Dance Revolution, or use your EyeToy, you move around all the time. Gamers are going to end up being more physically fit than non-gamers.

3. The average age of gamers is now 30. My surveys indicate that the average age of these persistent world gamers is 25. You have to be socially and economically and systems-savvy to play these. they're not kid stuff.

You know what? the most freqwunt online gamer is a married womn in her 40s. she's not playing world of warcraft, though. she's playing puzzles at yahoo games, chatting away.

a lot of conceptions are going to change over the next three years i think.


Silver Spring, Md.: How many hours do you spend playing each week and what are you playing?

Edward Castronova: I am playing in a guild of professors and researchers in world of warcraft. i get in about 90 minutes a day. my kid is having trouble going to sleep, so i spend most evening putting him back into bed these days. before this episode, i might get 2 hours or so, at night. my wife's a TV person, she watches design shows. i play games./shrug.


Washington, D.C.: Can we step back just a do games like 'World of Warcraft' work?

Edward Castronova: o god, that's huge.

technically, they work like a game where there's a game space but multiple people can play in it at the same time. and they connect online.

socially, they work by giving you game challenges that are best met by teams. you have to tyeam up.

economically, they work by charging you $15 a month for access to the service. WoW cost $100m to develop. but it is making money hand over fist through these subscriptions.

Games a re business of big front-end costs, recouped by sales.


Anonymous: Also recomend Guild Wars for new MMO players its got no monthly fee and can give people a feel for the type of experience you may find before really spending a ton of money on fees

Edward Castronova: Guild wars is pretty fun. player base is younger, but yes, you dont have to pay a monthly fee for that one. you will have to pay for expanded content as they roll it out, though.


Mesa, Ariz.: By deliberately failing to punctuate and spell correctly, you're perpetuating the myth that all gamers are lazy, poorly educated teenyboppers who have little respect for their audiences. You may be an "associate professor of telecommunications at Indiana University", but no one would ever guess from the way you write. Disappointing.

Edward Castronova: Let's have lunch!


Edward Castronova: Actually, on the issue of punctuaion and chat spelling - there's a language war going on. some people readily adopt 'chatspeak' with all its time-saving conventions, such as not capitalizing, using 'ur' for you're and 'ne' for any, and so on. some people are really annoyed by that. in game (and here) i am in the middle. not as careful as some, not as loose as others.

i think it does point to a change in writing conventions, though. something to think about.

OTOH, VOIP is going to obviate the chat interface anyway.


Edward Castronova: To close: Thanks for the questions and your time, thanks to the Post for opening up this forum.


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