A Video Game Economy the Size of a Small Country

And with a larger population than Iceland.


Last year EVE Online, the massive multi-­player online game set in the fictional universe of New Eden, welcomed its 500,000th subscriber. (For comparison, Iceland, the country where EVE Online developer CCP Games is based, has a population of about 320,000.) A video game with a nation-sized economy throws off an awful lot of data, but can economists draw real-world lessons from the buying, selling, stealing, and destroying of virtual space gear?

As in-house economist at CCP, Eyjólfur Guðmundsson oversees all of New Eden's trucking and bartering. As Guðmundsson told the blog Massively in 2009, New Eden's economy behaves very well according to economic theories seen in the non-virtual world. "I have not found any example of an economic theory that does not apply to a virtual economy like EVE," he said. "And in all honesty, it looks to me that it even applies better than to the real world because there is less distortion in the EVE universe than there is in real life." Still, it would be unwise to think that New Eden's economy provides easy lessons for real-world policy makers.

For starters, EVE Online players are not demographically representative of a nation. The culture of New Eden appeals to a fairly specific sort of player, observes Dmitri Williams of the University of Southern California's Annenberg School for Communication and Journalism. "Where its players like the lawlessness," Williams says, "it's also famously hard to learn and is not for the faint of heart. Its players are anything but typical and representative of other games. Your Candy Crush-playing masses are not going to be happy (or welcome) in EVE."

EVE Online

Those brave enough to venture into New Eden can expect to reap some of the rewards of a game designed by people who understand the attraction of economic freedom and the value of community. EVE Online is a "sandbox" game where players create content, making it different from many other video games. Observing the emergence of trade there offers interesting insights on how market institutions might take shape against a relatively anarchic legal background.

But the history of New Eden is full of stories of loss as well as gain. For some players it is the more nefarious activities allowed in EVE Online, such as piracy and scamming, that are the most interesting. Games here are less a mirror of real life than a projection of how comparatively anonymous people will behave given the freedom to act out on fantasies that have little if any real-world impact.

"If you play games online you run into a lot of people—maybe a 12-year-old who doesn't get out much and doesn't have much outlet for his aggression—that will just be horribly awful to anyone he perceives as different or inferior, or even people he's insecure about comparing himself to," says Kyle Orland, who covers games for Ars Technica. "There's no lack of cruelty in online games. Just like in the real world, there's people who are going to be jerks like that, only it's exacerbated because people in these games are anonymous. There's really no repercussion for social malefaction."

Still, for many players, in-game economic behavior all too closely mirrors real life. In fact, one of the most notable battles in EVE's history began because of a forgotten bill.

When one alliance forgot to pay rent on a space station in the B-R5RB system earlier this year, the region exploded in a massive battle that involved more than 7,000 characters. During the 21-hour melee, now sometimes known as the Bloodbath of B-R5RB, dozens of ships, each worth thousands of real-world U.S. dollars, were destroyed.

Not every lesson learned in EVE Online can be applied to the bricks-and-mortar world. But the Bloodbath of B-R5RB provides at least one that can: Pay your rent on time.