This article examines the sociological implications of the different reward systems used in virtual worlds.
The original WeeWorld article attracted a lot of feedback from WeeWorld’s users. One common question was, why do we have to pay for points? Or even, “WHY DOWE HAVE TO PAY FOR POINTS!!!!”
- WeeWorld has 2 kinds of points: Gold points we buy with Dollars (“monetary rewards”), and green points we earn by doing things in the world (“achievement rewards”).
- Gold points can buy more things in WeeWorld than green points. So the things we want most, tend to be bought with gold points. In other worlds, achievement rewards (like green points) are more important.
- The things we want are things that not everyone has. We want those things because it helps us make friends. To stop everyone having them, those things cost points. If those things were free, everyone could have them, and then we wouldn’t want them.
- Gold points are bought with our parents’ money. So some of our friends have less points, because their parents don’t have as much money. We may want to help them by giving them some of our points. That helps us keep friends.
- Unfortunately, in WeeWorld, gold points cannot be easily shared. So WeeMees with lots of things tend to have those things because their parents’ have lots of money to buy them. This is “unfair”.
- In other worlds it is easier to earn achievement rewards (like green points). This means we could earn our own rewards, instead of our parents earning them for us. But those rewards cannot be shared. That means we cannot help our friends who have fewer rewards. That might also become “unfair”.
- Perhaps gold points would work better if we could share them, and we could earn gold points ourselves?
That’s the simple answer. With apologies for “we” and “our”. This article explains and expands those ideas. On this page:
- Why we Pay for Points
- Points Mean Prizes
- Monetary and Achievement-Based Rewards
- Pimp My Mount
- He Thought of Cars
- My Daddy is Richer than Your Daddy!
- Kurtosis of Wealth
- Circle of Equalities
- Death of Altruism
- Towards a Virtual Ecosystem
- Virtual Earnings
Why we Pay for Points
This simple question is like “where does money come from?” The more you understand about the modern banking, the harder the question becomes to answer. Eventually we realise that a currency’s worth is based on our collective trust in that worth.
In this case, you have to pay for points because you want points. If you didn’t want points, they wouldn’t have value, and you wouldn’t have to pay. Simple, huh?
WeeWorld has 2 types of points, gold and green:
- Gold points can be purchased with physical world money – Dollars. Gold points can sometimes be earnt by completing non-world activities, such as commercial surveys.
- Green points are gained by completing activities within the world, particularly for regular activity over days or months.
Comments about “paying for points” seem to refer to gold points, not green points.
Points Mean Prizes
It seems that gold points can be used to buy any item within the world. Green points can only be used for certain purchases. Gold points are exclusively required to buy (non-free) furniture for an avatar’s “room”, and branded “celebrity” goods.
Both sets of points earn money (revenue) for the world operator. Gold points transfer money directly from parents and corporations. Green points earn revenue from the display of advertising.
Assume gaining 1 green point triggers 2 adverts to display. Based on current low-grade advertising display rates, awarding 1000 green points would generate around 20 cents ($0.20) of revenue. In contrast, purchasing 1000 gold points costs $2 (commonly sold as $10 for 5000, but there are other methods, including subscriptions). Third parties (such as stores selling pre-paid cards) must be paid a proportion, 1 green point does not always equate to 2 adverts, and the analysis is a bit “approximate”. But gold points still probably have a higher “Dollar” value than green points. That difference helps explain why gold points are still required for certain purchases (although not the only reason), and why green is still the poor woman’s gold.
I am told that there are no free clothes that “look nice”. To my eyes, visually, they look fine. But that misunderstands “nice”. Nice is based on the opinions of the people around you. Like conventional fashion, it’s an inherently social concept.
But “nice” is not entirely random – if it was, some free clothes would be nice, and we would all wear those. So if everyone had nice things, they’d no longer be “nice”. It’s inherent in this microcosm of consumerist society, that we cannot all have what we want: For an item to be desired, it needs to feel a little bit exclusive.
In Weeworld, exclusivity is controlled by points. Some green, most gold. An item that costs 1000 points won’t be worn by everyone, because not everyone has 1000 points to spend. So “nice” clothes tend to be exclusive items, which tend to cost points.
Box: Dedicated Follower of Fashion
The fashion industry sells the latest “designer” wares to wealthy celebrities at a high price, then over time, cascades down designs as cheaper garments for the masses. A similar gradual reduction in the price of virtual goods, with new items always added at a high price-point, may similarly allow the market for those goods to evolve over time. For the fashion industry, “Fast Fashion” has made “gradual” far less gradual in recent years: Seasons have become weeks, as businesses like Inditex (“Zara”) perfect the very rapid design, manufacture, and sale of garments. They are able to imitate the designs worn by celebrities faster than their competitors. And rapid changes in the clothes sold give customers more reasons to visit their stores, and more reasons to buy their clothes. In the closed economies of many virtual worlds (just one monopoly supplier of all goods), it is easy to control the availability and price of goods. But in a contestable market – where anyone can sell anything – fashionable virtual goods could rise and fall in popularity in days: The only restriction on imitation is design – manufacture and distribution are instant, and use no materials. Is there a limit to the amount of fashion that people can consume without dying of oniomania (shopaholism)? Or could we create a marketplace where the opinion-leaders are dressing up in designer (virtual) garments in the morning, which are copied by lunchtime, the height of popular fashion by the afternoon, and “so 9am” by the evening?
Monetary and Achievement-Based Rewards
Gold points will be familiar to scholars of Real Money Trading. They are a “monetary-based” reward. A degree of transferability exists between currencies, which allows physical world wealth to be transferred into virtual world wealth.
Green points are an example of an “achievement-based” reward. Achievement-based rewards are earnt by an individual’s actions, and are not transferable. They cannot be used for the exchange of goods, but can still be used for the expression of an individual’s accomplishments.
Different virtual worlds place different emphasis on monetary and achievement-based rewards.
The World of Warcraft example below shows the increasing emphasis on achievement-based rewards within that game. While “gold” remains within the game as a monetary-based reward system (transferable between players), gold increasingly does not buy a player anything to be proud of. To attain status among the wider community increasingly means you will actually have to do something yourself.
Pimp My Mount
The Amani War Bear (pictured left, with gnome rider) is a simple example of how an achievement-based reward becomes more valuable than “gold”. This personal mount was available to World of Warcraft players who emptied a particular dungeon (called Zul’Aman) within a time limit. The timed activity could only be completed by well-equipped, well coordinated, capable groups. And after about a year the mount could no longer be gained.
Riding an Amani War Bear soon conferred status within the wider player community. The mount (in theory) was something that money could not buy: It marked the rider out as a capable (“skilled”) and dedicated player.
In practice there were a few ways to buy an Amani War Bear: Either trading the entire account containing the character riding the War Bear, or paying a highly capable group to “carry” a character through the entire activity. A few intermediary websites even appeared, offering to match wealthy individuals to veteran guilds. So World of Warcraft’s implementation of achievement-based rewards is still not perfect, but it is sufficient to ensure items like the Amani War Bear convey status.
He Thought of Cars
“…and where to drive them; who to drive them with…” [Blur]
The spirit of the Amani War Bear could be seen in British company car culture:
“It used to be so simple. If you were a sales rep you drove either a Ford Cortina or a Vauxhall Cavalier. The better a salesman you were, the longer the badge on the boot – top dog in the company car park [parking lot] was the guy with a Ghia and metallic paint.”
Within one part of one company, reward is tied directly to the activity, in a very visual, but non-transferable manner. The slight differences between individual sales representatives are noticeable. However differences are not radical. For example, poorer performing reps are not issued with bicycles. Slight differences are possibly important because the rewards cannot be transferred: There is no way for that community of sales reps to transfer this form of wealth between one another to counter inequalities (expanded in “Circle of Equalities” below).
While that metallic Cortina Ghia might have been a status symbol, remember that the majority of a sale reps’ wealth was (is) still conventional money. Achievement-based rewards don’t pay the mortgage or feed the kids. And that may explain why monetary-based rewards are far more common in the physical world.
My Daddy is Richer than Your Daddy!
Rich kids impose the “social superiority” of their parents’ wealth directly onto their child peers. Without knowing it. The kid that is chauffeured home in mummy’s Chelsea Tractor, past the kid that has to walk. The child that got the My Little Pony Amusement Park as a birthday present, against the child that had to decorate their own. The only thing the rich kid did to gain this advantage was to be born into the “right” family.
Children will have to deal with the same inequalities and consumer pressures once adults, so perhaps they should get used to now? I suspect, like much of parenting, the answer is “in moderation”. Children that are confined by a utopian ideal, where everyone is equally wealthy, might be unable to survive adulthood: They won’t develop mechanisms to cope with the world. At the other extreme, a child whose peers have everything they cannot have, risks becoming detached from the community around them. Perhaps with a diminished expectation of their role in society (see box).
So, the issue is not whether children should be exposed to inequalities of wealth, but by how much.
The risk is that online communities have a broader “kurtosis of wealth” (explained below) than other communities the child might be exposed to, making them more likely to experience more inequality.
Box: Monetary and Achievement-Based Education
Declining social mobility (reduction in the proportion of poorer families that spawn wealthier children) is much debated in the United Kingdom. In the period after World War II, social mobility increased. Then, my father was educated through the grammar school system: An “achievement-based” education, where children were selected based on ability and given a “higher” standard of education than others. In my family’s case, this allowed a shift from a poor, low-skilled family background, to highly educated, more comfortable position somewhere in the middle of society. I was educated within the private school system – a monetary system, where most students’ parents paid fees that were beyond the means of most “normal” families, including my own. Standards of teaching were probably very similar for both myself and my father, but the community of students would have been very different: The post-war East End of London grammar school would not have been dominated by the children of parents who had made a lot of money in the financial sector… while the 1980s private school system was. Critically, the grammar school environment was full of children that were there due to their own achievement, while the private school system was dominated by children who were there due to their parents’ ability to make money. I was largely excluded from a peer group whose lifestyles I could not share. Had a great formal education, but never learnt anything about people. And was slowly indoctrinated with the belief that I was never as good as “everyone else”, with a complementary down-grading of expectation of my role in the world. A rather personal example of what can happen when not-so-wealthy children are raised with wealthy children.
Kurtosis of Wealth
Kurtosis is a measure of the “peakedness” of the distribution of data. Or in English, the tendency of similar things to cluster together.
You probably live close to people that are like you. Same sort of income, same sort of social status. You probably know the same sort of people. Not always, but probably.
The internet would seem to broaden the range of people you can meet and experience. For example, by creating “communities of interest”, that transcend conventional physical and social barriers.
There are still significant income and literacy barriers to using the internet, particularly for more immersive virtual worlds that require extensive use of a computer. And English-speaking internet users are unlikely to mix with most of the residents of Phnom Penh, because of underlying language and cultural differences.
But in theory, poorer kids are more likely to meet richer kids on the internet than in the physical world. This awareness of inequality might breed less content children.
Of course, if the gap between rich and poor becomes to large within a community, the group may fracture. Being poor in a wealthy group, doesn’t feel like “fun”:
“Everything is so dang expensive!! … I’m starting to not like weeworld anymore.”
So, which is the dominant force? The one that brings us together, or the one that splits us apart?
Circle of Equalities
Not seeing or directly experiencing inequalities may explain why we are prepared to accept them. The rubbish-pickers of Phnom Penh aren’t in my immediate social circle, so I’m not especially concerned about their welfare.
Within groups, humans become more Egalitarian – wealthier members of a group tend to give some of their wealth to poorer members of the group:
“Subjects reduce and augment others’ incomes, at a personal cost, even when there is no cooperative behaviour to be reinforced. Furthermore, the size and frequency of income alterations are strongly influenced by inequality. Emotions towards top earners become increasingly negative as inequality increases, and those who express these emotions spend more to reduce above-average earners’ incomes and to increase below-average earners’ incomes.”
Or in the words of Taylor (and several others, who made similar comments),
“How does another weemee give some of its points to their friends?”
Death of Altruism
There are 2 apparently contradictory desires within Wee-society:
- To buy “nice” clothes (that by definition, everyone cannot have), and thereby gain lots of friends and “social standing”.
- To normalise the wealth of friends, reducing inequalities between them, and thereby allowing everyone to buy nice clothes.
The only method of transferring wealth I could find within WeeWorld was the option to send a gift (an item) to another WeeMee.
Many virtual world operators seek to prevent their customers using virtual currency as a method of exchanging physical world wealth. Not least because national governments tend to regulate such activities as banks, or in the case of China’s popular QQ Coin, restrict how the currency can be used (possibly for fear that a secondary economy might develop in the country that was outside the direct control of the state).
Without the ability to transfer wealth, the dominant desire is to buy “nice” clothes. So in the WeeWorld example, not only is inequality within the world being driven by the use of monetary rewards (that allow physical world wealth to be transferred to the virtual world), but limiting the ability to transfer wealth within the virtual world suppresses the natural desire to reduce those inequalities within the our communities.
In Why Have Gold Anyway?, Raph Koster suggests that transferable currency in online games is intended to foster a sense of altruism:
“A core philosophy of a world with transferable stuff is that you can help out anyone, anywhere.”
I never expected to conclude that the reason we have money is so that we can give it away. Have we become confused about the role of monetary currencies? By picking and choosing specific aspects of the transferability of currency, do we risk creating a less altruistic society?
Towards a Virtual Ecosystem
Looking at the theoretical differences between achievement and monetary-based rewards (used without restrictions), 2 themes emerge:
|Theme||Monetary-Based Reward||Achievement-Based Reward|
|Acquiring wealth||Individuals can transfer wealth from the physical world to the virtual, allowing “inherited” wealth to be imported into the virtual environment.||Wealth is earnt by the individual within the virtual world.|
|Equalising wealth||Individuals can transfer wealth to offset inequalities within the community.||Inequalities cannot be balanced by transferring wealth.|
In the first case, achievement-based rewards tend to result in greater inequality. And in the second case, monetary-based rewards tend to result in greater inequality. So while it might seem “fairer” to have to earn your own social status though achievement-based rewards, transferrability of wealth gives flexibility: Wealth can be inherited, not earnt. But that wealth can also be transferred to offset the inequalities created.
Perhaps the choice of reward system is not so important? Perhaps we are confusing the concept of non-transferability of wealth, with the ability to earn within the virtual world? Maybe the underlying weakness is still the lack of “parity of earnings” between worlds: It seems easier to earn wealth in the physical world than in the virtual. And so “the problem” with virtual goods becomes the lack of an underlying virtual economy.
“I keep searching on google for a weeworld moneymaker but there is no one!!!!”
While there are some limited methods of earning virtual currency to buy the “nicest” clothes, such as undertaking surveys, the system primarily relies on wealth creation outside of the virtual environment.
If we are moving towards an economy based on nothing, eventually wealth generation will primarily flow from “virtual activities”. But it is perplexing that virtual worlds still tend to be a place to spend money, not to earn it. Still rooted in entertainment and learning, rather than doing.