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Asian Journal of Information and Communications 11(2)
Asian Journal of Information and Communications 11(2)

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Asian Journal of Information and Communications

The effects of social networking and collaborative gaming on the sustainability of virtual world-based online games Gwangjae Jung

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  • 2020-04-14
The success of online games such as “Second Life” and “World of Warcraft” heralds the
expansion of cyberspace into the three-dimensional world, so-called virtual worlds and also
reveals the emergence of economic systems embedded in them. This new economy, like its
counterpart in the real world, has created exchanges of virtual goods, its own currencies
that facilitate such trading, and wealth stocks of virtual goods. This new world economy
does not exist in isolation. Residents in virtual worlds trade their virtual properties for real
money. This real-for-virtual-money trading has become a multi-billion-dollar business. In
this study, I analyze the economic impacts of the trading of virtual properties and strategies
of the virtual economy operators with a stylish two-period game theoretic model. Unlike
typical microeconomic modeling, prosumers in virtual world endogenously switch between
seller and buyer roles. I find that real-money trading benefits game operators, and there
exists an optimal amount in the supply of virtual properties for operators. I also find that
the income disparity in the real world can be reduced when real-money trading is allowed.
An empirical analysis with data from popular virtual worlds also confirms our findings.
Moreover, I find a positive relationship between playtime and the market prices of virtual
properties. Our findings, from both the analytical and empirical analysis, strongly imply the
importance of the embedded economic systems in virtual world operation

Keywords: virtual worlds, social interactions, sustainability, mediating
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