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

Pricing Structures in the Video Game Industry

A tall stack of game CDs next to your console or PC used to be standard sight for any avid player; the oldest games’ cases evermore squished under the weight of each new and redundant instalment of COD. Fortunately, these days are for the most part, gone. The transition from physical game disks to online libraries has been brought about primarily through changes in pricing … Continue reading Pricing Structures in the Video Game Industry

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

Virtual Bulls and Bears

Cyclical booms and busts will occur anywhere that an economy can be found, such is the nature of freely trading markets. Video game economies, however, have far fewer factors than the real-world economy. As a result, the economic forces encouraging booms and busts are both weaker and easier to nullify with ‘policy’. There are many drivers of economic growth in the real world but only … Continue reading Virtual Bulls and Bears

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