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Synthetic Worlds: The Business and Culture of Online Games [Paperback]

Edward Castronova
5.0 out of 5 stars  See all reviews (1 customer review)
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Book Description

Oct. 15 2006
From EverQuest to World of Warcraft, online games have evolved from the exclusive domain of computer geeks into an extraordinarily lucrative staple of the entertainment industry. People of all ages and from all walks of life now spend thousands of hours—and dollars—partaking in this popular new brand of escapism. But the line between fantasy and reality is starting to blur. Players have created virtual societies with governments and economies of their own whose currencies now trade against the dollar on eBay at rates higher than the yen. And the players who inhabit these synthetic worlds are starting to spend more time online than at their day jobs.

In Synthetic Worlds, Edward Castronova offers the first comprehensive look at the online game industry, exploring its implications for business and culture alike. He starts with the players, giving us a revealing look into the everyday lives of the gamers—outlining what they do in their synthetic worlds and why. He then describes the economies inside these worlds to show how they might dramatically affect real world financial systems, from potential disruptions of markets to new business horizons. Ultimately, he explores the long-term social consequences of online games: If players can inhabit worlds that are more alluring and gratifying than reality, then how can the real world ever compete? Will a day ever come when we spend more time in these synthetic worlds than in our own? Or even more startling, will a day ever come when such questions no longer sound alarmist but instead seem obsolete?

With more than ten million active players worldwide—and with Microsoft and Sony pouring hundreds of millions of dollars into video game development—online games have become too big to ignore. Synthetic Worlds spearheads our efforts to come to terms with this virtual reality and its concrete effects.

“Illuminating. . . . Castronova’s analysis of the economics of fun is intriguing. Virtual-world economies are designed to make the resulting game interesting and enjoyable for their inhabitants. Many games follow a rags-to-riches storyline, for example. But how can all the players end up in the top 10%? Simple: the upwardly mobile human players need only be a subset of the world's population. An underclass of computer-controlled 'bot' citizens, meanwhile, stays poor forever. Mr. Castronova explains all this with clarity, wit, and a merciful lack of academic jargon.”—The Economist
Synthetic Worlds is a surprisingly profound book about the social, political, and economic issues arising from the emergence of vast multiplayer games on the Internet. What Castronova has realized is that these games, where players contribute considerable labor in exchange for things they value, are not merely like real economies, they are real economies, displaying inflation, fraud, Chinese sweatshops, and some surprising in-game innovations.”—Tim Harford, Chronicle of Higher Education

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Synthetic Worlds is a surprisingly profound book about the social, political, and economic issues arising from the emergence of vast multiplayer games on the Internet. What Castronova has realized is that these games, where players contribute considerable labor in exchange for things they value, are not merely like real economies, they are real economies, displaying inflation, fraud, Chinese sweatshops, and some surprising in-game innovations.”--Tim Harford, Chronicle of Higher Education
(Tim Harford Chronicle of Higher Education) --This text refers to the Hardcover edition.

About the Author

Edward Castronova is associate professor of telecommunications at Indiana University, where he specializes in the economic and social impact of multiplayer online video games.

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5.0 out of 5 stars WIll pull a new economy into perspective for you April 30 2007
I have read quite a few books on online culture but this is the first one that effectively shines a light on economics with a practical eye to the future. It also is interesting to see the description of organic economies developing in a way that you may have learned about in school, but had very little practical model for. It directs game makers to use foresight in developing games as a economic worlds's health directly affects the future success of the game.
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Most Helpful Customer Reviews on (beta) 4.0 out of 5 stars  22 reviews
24 of 26 people found the following review helpful
4.0 out of 5 stars Different tack than I expected... Nov. 15 2005
By Sean G - Published on
I expected something a little more "rigorous" from Dr. Ed. I believe though that he takes an excellent first swipe at virtual worlds.

For people already playing these games the first 50 or so pages are boring. But he obviously covers this material so that even lay people can quickly be brought up to speed on his other topics. He sometimes slips back into these rudimentary explanations but I believe it is an effort to help the larger market.

He covers a wide variety of topics in this book. Discussions of property rights within VR worlds, violence within VR worlds, and the actual value of VR money and items. The variety of topics leads to a slight rambling feel in the book and some thiness on the arguements. However, I thought everything was adequately covered. I was looking for something of a "truer" economic discussion of synthetic worlds but he teased me. He does write an explanation, and defense, of synthetic economies and problems within them. For me though, I thought this was going to be all 300 or so pages when it was just about 75.

If there were more books like this published I would have given him 3 stars but since this is going to be the start in a long, long, long series of books I will give him 4 for breaking ground. He probably should have milked the material for two books. :)

If you have play these games and have and a tidbit of economics in you then buy the book and enjoy. I am going to read his papers now in an effort to get that fix.

26 of 31 people found the following review helpful
5.0 out of 5 stars The New Face of Gaming explored inSynthetic Worlds Oct. 17 2005
By Robert E. Murena Jr. - Published on
I first came across DR. Castranova after reading a paper he had written on the cost variance between male and female Avatars (characters) sold on Ebay for the game "Everquest". As a recovering ex-gamer I found this material interesting. Anyone who has ever played a game that is within a synthetic world should understand exactly how engrossing they are.

(A Synthetic World is a gaming landscape that is always running in which gamers can interact with each other and play within a virtual reality that has loose rules and the characters can nearly do whatever they want)

Dr. Castranova's book "Synthetic Worlds" explores the new technology of role playing games set within these virtual realities and what they mean to the players and to society at large. It all started in the later 90's when the video game classic Ultima was created as "Ultima Online". From then on there have been more and increasingly complex virtual world games including "Everquest" and "World of Warcraft". Gamers who want to have good characters in these games can play for many hours and build their warriors, mages etc into powerful players OR they can buy them on Ebay. This is one way in which the game world has real world implications. But on a deeper note it seems that gamers many of whom put in many hours a day within these synthetic worlds, often seem to care more for their synthetic life than their actual one. There are several problems with this and while the majority of people can cope with the separation of synthetic and actual worlds there are a few that cannot. Either way these synthetic worlds have become a great new form of escapism that lets the user do things they could never do in a very real feeling way.

Castranova further looks into the video game industry and poses the question of what happens when the gaming company cannot make money on the game any longer and wishes to "pull the plug" on the synthetic world. Obviously people would be annoyed and he suggests that possibly the game could be turned over to the players but this too poses difficulties.

I found this book to be a very interesting read and as we spend more time in front of computer interfaces each day I think we can all learn something about they way we interact with technology from reading this book. Certainly reading about the gamers themselves is very enlightening and anyone interested in the way people escape will also find this an interesting read. I think anyone interested in sociology or technology will find this book worthwhile.

Ted Murena
6 of 7 people found the following review helpful
4.0 out of 5 stars Important Questions, Mostly Uninspired Answers Oct. 25 2006
By Peter McCluskey - Published on
Castranova is one of the first intellectuals to notice the importance of new societies that are being created in cyberspace. Much of this book is devoted to (sometimes redundant) explanations of why they are more than just games.

Around the middle of the book, he switches from describing a typical world for the benefit of those who doubt the importance of virtual worlds to describing how to design good worlds. This is where I started to find the book interesting and the questions thought-provoking, but the answers often unconvincing.

His most important discussion is about the near-anarchy that prevails in most virtual societies. He attributes this partly to the "Customer Service State" of for-profit world builders who are too cheap to pay for as much government as he assumes citizens want. But he seems to believe this is too inevitable to be worth much analysis. His more interesting question is why don't the world's citizens organize a government of their own? His answer is that citizens don't have enough power over each other to enforce laws they might create. But he doesn't convince me this is true (are boycotts useless? is repeatedly killing an outlaw not punishment?), nor does he explain why the designer face little pressure to change the design of the world to make it easier to enforce laws (what would happen if the world were designed to enable one person to effectively banish a person she doesn't like from her view of the world?). I suspect part of the answer is that there's less demand for government than he expects. I see some hints that his desire for government in cyberspace is a simple reflection of his desire for government in the real world. Yet I'd expect the analysis of whether government is desirable to be nontrivially affected by such differences as whether poverty and death cause much harm.

He claims "A fun economy should have property, theft, and jail too", but only gives a few cryptic hints about what theft and jail add to an economy.

He claims "there should be no goods which never depreciate", and partly justifies that by pointing to some benefits of a continuing need to produce new goods, but leaves me wondering why the rule should be universal or even close to universal.

He hints at the desirability of creating p2p virtual societies so that control over them can be decentralized instead of being determined by a corporate owner, but I'm disappointed that he fails to analyze whether this is practical.

One insight I liked was this description of how to deal with the desire for everyone to have high status: "How do you make a world in which everyone is in the top 10 percent? The answer: AI."

He has a disturbing idea about the military uses of virtual worlds - an aggressor need not be hampered by unfamiliarity with the land he's invading if he has unlimited ability to practice the invasion in simulation.

He has some ideas about how virtual worlds might help deal with threats such as <a href="[...]">grey goo</a>, but doesn't develop them as well as I would like. His ideas on using virtual worlds to make AIs more friendly appear to anthropomorphise AI in a rather naive and dangerous manner.
2 of 2 people found the following review helpful
3.0 out of 5 stars Synthetic Worlds: The Business and Culture of Online Games April 7 2008
By Eric Jain - Published on
Format:Paperback|Verified Purchase
This book was written for people who have heard about online "synthetic" (the author avoids using the over-hyped term "virtual") online worlds such as "World of Warcraft" or "Second Life", and are curious, but assume it's just some nerds in basements, not tens of millions of "ordinary" people engaged in near-billion dollar economies.

If you already have a rough idea of what's going on (you don't need to be an active "citizen" in any of these worlds for that), then the book doesn't have all that much to offer, though there is a great chapter on economics that discusses strategies for avoiding inflation ("MUDflation"), and the chapter on politics may stimulate some thoughts.

The book could have been more interesting if the author had been able to go into more detail and compare different online economies, and get an insider's perspective on why it is that things are the way the are (incl. failed experiments etc). I'd also have liked to see a less shallow discussion of the psychology behind all of this -- is the reason people kill each other online when they can just because that's the nature of humans, and is the reason South Koreans are way ahead online simply down to bandwidth rather than cultural differences?

The book is also (inevitably) a bit outdated. The author frequently mentions how virtual items are traded on Ebay; Ebay prohibited sales of items from World of Warcraft and EverQuest beginning of 2007. There is no mention of the "farming" phenomenon. And I was surprised that the book didn't mention Second Life (which I'd imagine should be more interesting than most fantasy worlds from an economist's point of view) much except in passing.
8 of 11 people found the following review helpful
2.0 out of 5 stars Bad reasoning, capitalizing on hype Jan. 2 2008
By Q. Dombrowski - Published on
Were this book explicitly a marketing tool for virtual worlds, I would say job well done. But as a work of scholarship, it is downright embarrassing. The only thing I have to say for it is that the economic analysis in part II does not seem patently ridiculous, but the same cannot be said about the political analysis, and both are predicated on the validity of part I's predictions of the growth and impact of virtual worlds. His logic explaining this predicted growth can only be referred to as spurious.

Published in 2006, this book is already dated, and in ways relevant to the author's predictions. His prediction that passive TV watching will decline in favor of virtual worlds is only half-true: instead, we have a flourishing YouTube where people interact with passive media by creating more passive media. The niche of on-line communication medium has been filled by social networking sites. The author predicts that people who grow up with technology will be drawn to virtual worlds, but this has not been the case. The adoption rate of virtual worlds among teenagers pales in comparison to the use of text messaging, social network sites, and other available technologies. This comes as a surprise given how inherently compelling he portrays these virtual worlds.

Castronova does not seem to take into consideration the reality of differing preferences. He claims the "natural" place for getting together is cyberspace, and there's no reason to type when you can talk. This kind of thinking permeates his discussion of the future growth of synthetic worlds. Because they can offer, for a certain value of "offer", interaction with a potentially more pleasant world, this does not mean that everyone down on their luck will flock to them-- regardless of how realistic the worlds may get. I think it would be difficult to argue that even enough of a critical mass for the phenomena he describes in part II has the right kind of inclinations to "live" completely in virtual worlds.

Castronova frequently employs the rhetorical device of referring to these worlds and everything about them as "real". Certainly, they are "real" in the sense that they are something that people occupy their actual time with, but this does not make them "real" in the sense of an equal alternative to actual life. Throughout the book he uses terminology to blur the line between the two meanings of "real", presumably with the goal of validating his claims about the importance of virtual worlds. He talks about it as a "way of life", about the players as "migrants", and that they have the "potential to become permanent homes for the conscious self" (p. 238). He claims game makers should allow avatars to have all the same human rights in-game as their players do in the real world. It's an argument that only makes sense if you accept that there's no fundamental difference between virtual worlds and the real worlds, and that's a claim that has a much higher burden of proof than his tricky rhetoric can meet.

Virtual worlds are a hot topic, and the buzz surrounding them has allowed a scholar to put out absolute crap, assured that the audience will call it "stimulating", "important" and "insightful". If you're going to read this book, cut through the hype and read with an eye towards the logic of his argument. But other than as a first-hand view of the type of faulty reasoning used to convince people that virtual worlds are the Next Big Thing, it's not worth the read.
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