Diminishing Marginal Utility – The Gamer’s Bane

Without constant and original stimulus, people become bored very quickly. Yet somehow, video games keep some players engaged for hundreds of hours while offering relatively similar content throughout. How is it that developers manage to keep players glued to their screens for so long, when it is in our nature to eventually lose interest? I believe the answer lies in one of the textbook’s most … Continue reading Diminishing Marginal Utility – The Gamer’s Bane

The Decline of Split-Screen Gaming

When Mikey the Gamer got his first Xbox in 2002, he and his friends couldn’t wait to come home after school and fight side by side against the forces of evil. They huddled around his 30-inch CRT television which flickered whenever his mum had the oven on, each of them peering eagerly at their own division of the screen. These were the early days of … Continue reading The Decline of Split-Screen Gaming

The Prisoner’s Virtual Dilemma

The prisoner’s dilemma is a basic piece of game theory which can be applied to virtual economies, particularly in the context of my recent discussion of third party trading sites. I would like to briefly discuss how the prisoner’s dilemma can become a roadblock to gamers’ utility maximisation, i.e. fun, while playing video games. Bear with me, I will first have to explain the prisoner’s … Continue reading The Prisoner’s Virtual Dilemma

Price Elasticity in Video Game Economics

Video game economies, or virtual economies, obey many of the same rules as real world economies. They are driven largely by scarcity, and the price of items is determined by market forces. Larger in-game economies even have managers who act as the ‘government’, enforcing new rules and regulations regarding the supply of money (usually virtual gold) to the market. There are, however, several crucial points … Continue reading Price Elasticity in Video Game Economics

The Value of Virtual Items

Virtual items are not apparently real. They are intangible, infinitely duplicable and can only be used in a make-believe world. So how could a sequence of ones and zeros combine to create an item of any real value? The following is a discussion of how time investment, prestige, scarcity, utility, and business all combine to draw Mikey the Gamer into spending hundreds of hours in … Continue reading The Value of Virtual Items