Video Games

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.

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  1. Point taken but it’s possible that the rent payment wasn’t “accidentally” forgotten. Yes, EVE is that scary. Trust no one.

    1. I’ve been looking at EVE for a couple of weeks now, and am thinking of getting in. However, I would not keep playing if I was scammed/killed every time I logged in. So, my question is, are there any Reasonoids playing with whom I could join up? At least at the beginning until I am confident to go out on my own?

      1. I’ve never played EVE but I’ve heard the learning curve is pretty ridiculous, even more so when you’re walking into a world that’s been around as long as EVE has. I’m considering Star Citizen, as that hasn’t released yet and I’d feel like at least I can learn with the rest of the noobs.

        1. Its not *that* hard – easy to learn, hard to master.

          You can be PvP effective in a pretty short time.

      2. At least when I played, there was a good sized area where player aggression would be met with somewhat swift and overwhelming computer controlled police response. You can hang out there until you figure out what is going on and make some friends. I rarely left as I was mainly making and selling fiddly bits in the main market system.

      3. I’d recommend you check out Brave Newbies Inc. ( I’m a member of one of Brave Newbies sister corps inside the Brave Collective alliance, but BNI is a great place to get introduced to EVE because they’ll have you exploding ships the day you join.

        They recently pushed into “true null” which is basically as close to an endgame as exists in EVE, so you’ll even get to experience some of the political nonsense as you fly arond with a hundred other dudes is disposable tackle ships.

      4. EDG,

        I second the recommendation of Brave Newbies. Fly safe o7

      5. 1. There’s a carebear zone (the starting area) where its more like a traditional MMO. In that area there is a strong NPC police presence that will come down hard on any aggressors.

        2. Sign up with Eve University or the Red and Blue corps – both are set up specifically to help new players out.

        1. Oh, and remember – don’t fly anything you can’t afford to replace.

  2. dozens of ships, each worth thousands of real-world U.S. dollars, were destroyed.

    This is rather misleading; no one actually paid a dime for any of those ships. It’s based on the fact you can buy playing time with live currency or in game currency, and then figuring the dollar value of how much playing time you could buy with the in-game currency spent on the ship. But there’s no way to convert the in game currency into actual dollars, so it’s not clear what the actual market value of them would be.

    It’s like estimating the market value of my vaction photos based on how much it would cost someone to go make a similar set themselves.

    1. I dont know about EVE, but in other online games, there are external markets for trading this stuff.

      Or for selling entire accounts.

      So its quite possible someone paid real dimes and dollars for those ships.

      1. The grey markets aren’t where the “ships worth thousands of dollars” is coming from though.


    I cant believe Im first with that comment

  4. For some players it is the more nefarious activities allowed in EVE Online, such as piracy and scamming, that are the most interesting.

    And I am sure these nefarious activities will be more prevalent in that universe than in real life because the risk-reward ratios will be different (you don’t risk bodily-harm playing with virtual starships, for instance, while you can end up very dead if you scam the wrong person in real life.) However, I am not so sure this is a real problem when studying human interactions within such universe. The laws of economics will always hold whether people trade goods and services in the real world or in a virtual world. If you see interesting patterns of commerce happening in a virtual world not hampered by an overbearing government, I could find the results fascinating albeit not surprising.

    1. It *is* an interesting look at a future where cheap immortality is available though.

  5. If the ships cost thousands of dollars and are destructible you can forget me joining.

    1. Its not like yo *pay* money for these things.

      The ‘thousands of dollars’ comes about because you can convert in-game money to game-time – essentially you can play-to-pay for your subscription.

      So, say its 365 million ISK for a month’s game time (which you pay $15 for in real life) then if you ship and its outfitting cost 365 billion ISK you have the equivalent of $15k tied up in that ship.

      *If* you can get someone to buy it, and even then its $15k worth of *game time* (basically a thousand months) you have.

      **numbers are pulled form my arse and are not indicative of actual costs or exchange rates, merely for illustrative purposes.**

  6. I played EVE in the beginning. It was like having a second job. You sat there and mined (Which was slow), to buy a better ship so you could mine more. As someone pointed out, there is a ‘safe’ zone, but to get good ore you need to go to the 0.0 lands. That’s where the pvp players crush you for existing.

    Skill training was also based on real time. Meaning you didn’t practice a skill, you brought it and your character took an x amount of real time to level up. So if it a skill took 4 hours. You come back in 4 hours and you level up. Some skills took weeks, and you could only do one skill at a time than.

    Guild owned areas of space and would crush any player jumping though their gates.

    I left and claim back years later. They start you off with more skills, and most of the asteroids in the safe zones were mined. Not much changed.

    Yes there is a sense of accomplishment getting a ship but it takes why to long and unless you join a guild you are toast. Guild might be too strong a word. They call them corporations, but they are gangs.

    Corps would stock pile items than flood the market etc. It was unique in that way.

    500,000 subscribers is a big different than 500,000 active users btw.

    EVE wasn’t worse than some but it’s community is horrible. My reference – Everquest 1&2, WOW,Earth Above and Beyond, Star Wars Galaxies, and Dark Ages of Camelot to name a few (or too many). There really isn’t a good space MMO out there actually. Every game has it’s hard core fans.

    1. Oops left out that if you died, and you didn’t have a clone – you would lose all the skills points at the time.

  7. Annenberg School for Communication and Journalism. “Where its players like the

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