In 2003, I joined the online community of Runescape, a medieval-fantasy-themed online game made by Jagex Ltd., and an MMORPG (Massively Multiplayer Online Role-Playing Game), which allowed players to interact with other real-life players by the thousands. The game was divided up by the servers which hosted the players, allowing up to 2,000 players per server, and an individual player could see, talk (though a chat system where they could type a phrase and have it appear above their heads, and trade with these players, using a “trading window” which popped up when both players consented to trade. There, items were offered on either side to be traded. Once both players were satisfied with the trading, they consented mutually to exchange the goods, and then were shown a receipt which had to be confirmed before the trade happened. As you can imagine, it was very safe. In addition, players could form tight-knit communities through the online message board, and through the “friends list”, a function which allowed players to save the names of others (friends), know when their accounts were online, and talk with them outside of the normal chat window, even across multiple servers.
Runescape had been growing for several years, and it made revenues primarily by gaining “members”, that is, people who paid money to be able to use a significantly larger and more expanded part of the game. Membership offered many times the geographical area of play, nearly twice the number of “skills”, such as the ability to fletch arrows and bows, and allowed players to acquire and use items much more powerful than those normal users were restricted to. Normal users, however, still enjoyed a reasonably large world, full of adventure, and had access, like the members, to an area of the game called “the Wild”, a northern area of the game which allowed for PvP (Player vs. Player) combat. Other parts of the game included things like duel arenas, but the Wild was the only unrestricted way that full, rule-less combat (save for a system which didn’t allow overly powerful players to attack lower-leveled players too close to the edge of the Wilderness) could take place.
Runescape was the ideal game for me, even as a non-member player, because it offered a virtual economy that I could take place in, advance in, gain experience in, and one day become an integral part of. Even as a lower-level player, my services were always in demand; a profit was never too far away. While I couldn’t forge the finest armors, I could help mine the ore, ore I could transport the ore from the mines to the furnaces. While I couldn’t create the more powerful magical stones (Runes), I could acquire the raw materials they were made from (Essence), or carry the essence from the mines to the “altars” which they could be crafted at, where more experienced players would wait and exchange my essence for certificates for a replacement of that amount of essence and turn all my essence into runes. They did this, effectively for free, so they could gain experience in crafting runes, and one day be able to craft more powerful runes for monetary profit, or for their own use. In effect, I was useful either in gathering raw materials or moving them from the source, to my bank, which could store an infinite amount of goods, to the places the raw materials were needed. Bringing raw materials to the locations they could be processed at was called “running”, and it made a profitable venture for players unable to use skills and experience for an even greater profit. Entire in-game companies rose up around running, and coordinated players who ran raw materials full-time and the people who frequently waited at the destination to use their skills to turn the raw materials into goods. There was also an implicit acceptance of anyone who wanted to randomly join in as a processor or runner. Profits were made, experience was gained, and everyone was happy.
For runes in particular, the companies that rose up around running and crafting the runes created a tremendous efficiency with which runes could be produced, and as a result, magical applications that required runes, such as teleporting your character from place to place or turning goods into gold (alchemy), became easier than ever, prices lowered for players across the board, and the market allowed players to gain access to cheaper and cheaper goods. It was, in essence, a success of the free market, and prospects looked good, and prices on more and more elite armors and weapons becoming lower and lower. Nor were the prices on the highest goods so deflated that they were useless; the most powerful goods were still unreachable for normal players, which meant that the tier-based system of the goods available to non-member players (as well as members, of course) was still fulfilling its purpose in having a true hierarchy of goods and quality.
The fundamental reason that Runescape lost its luster for me, and many other dissatisfied players was that the parent company, Jagex, misunderstood market economics in the context of their game. Several factors contributed to changing the free market to Socialism, which, by order of their development department, became the new Runescape policy in late 2007. Runescape made it impossible to trade directly with other players, forcing you to use “The Grand Exchange”, a central trading system which acted as a middleman that not only instituted price controls and made it difficult to see who you were trading with, but, perhaps worst of all, forced trading equity, in that all trades now had to exchange a near-equal value. Yep. That’s the end of price competition, gifts, and charity, all in one. In fact, at least Socialism allows you to give away your money, but not Runescape. In addition, Jagex covered every base by making it so that items you discarded could no longer be picked up by others, nor could the Wild exist, where players could kill others and take their items. No; Jagex eliminated trade, competition, and even charity in one fell swoop.
The player response was beyond hysterical; players agreed that Jagex had not only removed a fundamental feature, Jagex had destroyed the very essence and purpose of the game. Now, Runescape was reduced to the level of any other fantasy game, without any economy to speak of. The only purpose of other players was to talk and kill monsters together, something that was more than a little unsatisfying for many long-time players and members of the companies that helped to run materials and items. In-game riots broke out, and once the turmoil was over, 60,000 players left the game. Imagine if US policy because so severe that millions committed suicide, and tens of millions moved to other countries. It was that bad. Even to this day, Q&A sessions with the administration of Runescape are always passively focused on whether Jagex is ever going to reconsider their actions. Jagex always responds that no, they feel secure in their decision. Google trends reports that the word “Runescape” began falling in 2007, curiously alongside their small leaps towards Socialism and elimination of the Wild (to be documented below), having peaked in late 2006, and have fallen ever since. The popularity of Googling “Runescape” has fallen to early-2006 levels, compared to another MMORPG called EVE Online (which advocates near-total anarchy and employs an economist, consequently producing one of the most vibrant virtual markets of any game or online community in existence), which has steadily grown over the past few years. EVE Online still has a ways to go in terms of mass-market appeal, but its prospects are some of the best in the industry. Runescape, in comparison, has a slow-leak of popularity that could bring it down to near-dead levels by the end of the decade, not even considering the compounding decline of growth that it could see if a true cascade of players leaving starts to happen.
How and why did all this come about?
The changes that were effected in Runescape from 2003 to that fateful December day in 2007 were, in truth, continual steps away from the fundamental basis of the game. Jagex seemed to reject the Wild and trading, making increasing changes to cater to inexperienced players by, in the case of the Wild, first instituting a pop-up that would warn you about the dangers of the Wild, then making an in-game ditch that had to be navigated to entire the wild, in addition to the pop-up, and then eliminating Player vs. Player combat in the wild altogether. They like to think that they still kept the wild, in that the filled it up with in-game monsters intended to replace other players and also created an area where players could stake items and go kill each other, but they eliminated the fundamental properties of being able to take all of a player’s items and utilize the far-larger original Wild area, where traps could be set up at bottlenecks. The incentive of being able to kill other players for their items was replaced with “treasure” guarded by monsters, effectively eliminating the defining factor of the Wild altogether, the nearly unregulated PvP combat. In contrast, nearly every other MMORPG provides for this, and in EVE Online, for example, realism is brought up to another level altogether, where anyone can be attacked at any time, but police forces patrol the “safe areas”, and depending on the safety rating of your area, there is less and less of a police presence, all the way to truly unregulated “Wild” areas (called 0.0 space in the game), which make up most of the in-game usable area. As a result, players are forced to band together to defend their territory, creating huge alliances of thousands of players, a prospect Runescape killed in a distinctly amazing fashion.
In terms of trading, Jagex became increasingly paranoid of two things: players scamming each other, and Real-World Trading, abbreviated as RWT.
Despite the aforementioned safe and efficient trading system, Jagex still perceived a huge, system-wide scamming effort, that did exist in fact, but was much less consequential than they would lead you to believe. Personally, I was scammed once, when I followed a higher-level player into the Wild on the promise of getting to “see the temple of chaos”, which was just an excuse for him to kill me and take the bottom-of-the-line leather armor and iron hatchet I had on me at the time. Keep in mind, I was 9 at the time. Still, I learned my lesson about the Wild very clearly, and never again fell into such a trap. Occasionally, I ventured out with no items on me to just explore, and I once dueled another player who I trusted to return my items if I died, (I did die, and my items were promptly returned), but I never fell into the trap of being scammed again.
Such scams, as well as the straightforward sniping of exploring players by others, were the motive behind Jagex’s actions against the Wild and all it stood for. I, however, believe that I benefited overall from my experience, as I gained a respect for the power of other players and their drive to profit off the stupidity of others, as well as the dangers of losing my items, not only to players in the Wild, but to monsters in the dungeons and the countryside of the far-larger safe section of the game. It also helped me to use my bottomless in-game bank account/safe deposit box that every player had, safely storing my items against any eventuality.
Scams, though, were primarily trading scams. Such scams were a powerful reason for Jagex to eliminate trading, (second to RWT), and proliferated particularly in the lobbies of banks. Frankly, anyone who fell for such scams deserved it, as the scams were always very vocally exposed by Jagex itself, and always followed the same pattern. Essentially, a player would put his faith in a person by giving them an item or making an unfair trade that would supposedly end in a profit for the player. However, by putting one’s faith entirely in the goodwill of another player or a temporary event, players were forced to learn the hard way to always take a deposit when a service was being lent, something which acted as a substitute for contract law in real life.
Traditional scams would be things like a player advertising the ability to decorate armor with gold, “trimming” the armor, and they would offer to do it for free if a player just lent them their armor for a second. Of course, this was stupid on several levels, because even if players could trim armor, they could just as easily steal it once given to them, but beyond that, players didn’t even have the ability to trim armor. Frankly, anyone who fell for this deserved it. A more devious one was where players would offer to cut gems for free, you just needed to trade them the raw gem. Players could actually do this, and sometimes such services were legitimate; however, it was still stupid to trade a stranger your raw gems in good faith. A working solution that too few used was to trade the cutter your raw gem, and have them exchange the cut gems from their own stocks ahead of time, in the same window and same trade. The trade could only ever be legitimate by asking for such a deposit.
More devious scams involved bait-and-switch things, like one particularly infamous scam. That scam involved two players, one who would advertise a basic item, like a wedge of cheese, for a very high price, usually beyond tenfold the market price. A second player would stand somewhere nearby, advertising that he needed a wedge of cheese now, and he was willing to pay several hundred times market price. Naturally, some sap would get sucked in, see a quick buck he could make, and then buy a wedge of cheese for, say, 100 gold pieces (the in-game currency, abbreviated as GP). Once the purchase was made, both players, the seller and the buyer advertising to buy the cheese for 500GP or 1000GP, would disappear. It was a nifty way to make a profit off random, basic items. This taught players everywhere not to buy above market price, ever, unless you personally need the item desperately and are going to use it for yourself.
Despite the valuable learning curve this provided, and the very limited harm it was doing, Jagex railed against scams like there was no tomorrow. They instituted all kinds of trading checks and balances, waged a massive campaign against scammers, culminating in the Utopian elimination of scams, the Grand Exchange and the elimination of trade. Yes, just like Communist Russia, no one was scammed from then on. Except, of course, once prices were fixed and it became impossible to undercut competition, which effectively scammed the entire Runescape community out of cheaper commodity prices, doing much, much more damage in that every player, no matter how experienced against scams, was now subject to price controls. Just like the Soviet Union, where prices and efficiency died compared to “corrupt” Capitalism. In addition, there was much less of an incentive to sell to other players and provide market liquidity, rather than to sell to in-game shops, which would certainly undercut player prices, but were everywhere, as opposed to the Grand Exchange, which was only in one location. It wasn’t exactly a time-incentive to have to make one’s way all the way to the city the Grand exchange, which either required wasting runes to power a teleportation spell, or hiking all the way there, which could take as much as fifteen real-life minutes, depending on where your character was. As a result, large transactions still meant a value in going all the way to the Grand Exchange, in the Runescape city of Varrok, but if a player only had a few items to sell, perhaps clearing space in their personal inventory, you couldn’t just advertise a trade in the middle of some distant bank lobby. No, it becomes either go all the way to Varrok to sell your meager wares, when the time or money it would take would often allow you to more than double the profit by doing something else more local to your position, drop the items, where no one can pick them up, or sell them at an in-game store, where they become an effective dead-end of value by undercutting market prices and overvaluing items you want to buy. The entire system of the Grand Exchange thereby becomes a massive, perverse incentive to introduce inefficiencies in the market, and forces more inefficiency on top of that by introducing an original devaluation of items by costing time or money to sell them at market price, making their overall value less.
Indeed, it seems a massive overreaction by Jagex to institute price-controlled Socialism that forcibly devalues items and eliminates competitions just to eliminate scams. Jagex had another reason: the elimination of Real-World trading was their divine mandate, above ALL ELSE.
What was real world trading? It was trading real-world items for Runescape items, most commonly cash for GP. The business was reasonably legitimate, and the common exchange rate before Jagex instituted their Utopia of Happiness was around $5 for one million GP. In-game, it usually took about four or five hours for a reasonable character to earn this much, assuming they were using efficient practices, which market forces drove them to do. Indeed, the price had dropped from a previous level of about 7 of 8 dollars. The earning of this Runescape money usually happened two ways: Bots and sweatshops in Asia. Bots were computer-controlled characters that gathered raw materials for the Bot Herder, the person who managed the bots. Usually, a Bot Herder would manage upwards of a dozen bots on multiple screens as they went about their tasks. At one dollar per hour per character, this equated to about $12 per hour, a reasonable price for limited technical knowledge. The larger organizations streamlined this by coordinating efforts across multiple Herders who each managed more bots each, taking manual control of the bots if players began questioning them or the bot got stuck, or attacked by an in-game monster. Jagex instituted random events, a term for random things that would appear and force the bot to play some type of game before being released. Such events were annoying for normal players, but Jagex only increased the frequency of such things. The Bot Herders had new things to deal with, but some more advanced bots could navigate the simpler trials of certain random events, a useful trait.
The other end of RWT was sweatshops in Asia, a favorite crusade on the part of Jagex. They used the standard arguments of low wages and entrapment/enslavement to work against such sweatshops, which usually employed either Bot Herders, or in some cases, people to individually work each bot full-time, making them effectively not bots. Jagex never released data on exactly what percentage of bots were Asian sweatshop bots, but they said they were numerous, probably the majority of bots a player would encounter. Of course, Jagex here again displays its crushing inability to understand markets.
In the case of low wages alone, having more first-world dollars flowing into poorer countries, providing paying jobs, was a huge benefit for the workers. Many probably were overjoyed to be able to work at all, even for such meager pay as a dime an hour, and many probably also praised the chance to not have to work in, say, the coal mines for similar pay, but have a very safe and low-impact job instead. In the case of enslavement or entrapment, such illegal things would have happened anyway. Jagex had been inadvertently providing the victims the lucky chance to not be enslaved or entrapped in, say, the coal mine or farming job, but instead have a low-impact job. These countries are all likely poor to begin with, and anyone who is enslaved or entrapped would have been anyway, but they would not have had the dual benefit of a reasonable line of work and increased GDP as a product of First-World dollars flowing in. Even if the gang bosses are taking inordinate profits, prosperity is still inching forwards; the gang bosses are more likely to be more lenient with pay if they can have more money themselves. One fundamental thing is important here: the sweatshops that Jagex is creating are good for the prosperity of the country and the people who work there. Such peoples’ wages have no cause to be less because of more money flowing into countries; the market doesn’t work that way. Again, even if gang bosses are getting more money, they don’t spend it on tighter controls on victims to lower wages. Empowering them as employers, even forcible employers, means that they can offer better wages for better performance, an incentive that grows the economy of that country, introducing prosperity, and helping people to take one more step towards the freedom and prosperity of the First World.
The final reason Jagex presented for destroying its economy was that the bots were decimating it, so they needed to take action before it was too late. Jagex complained of the unfairness of the money the bots were introducing by the millions; they had completely forgotten about the concept of inflation. Inflation had indeed been happening in Runescape; the value of gold lowered as evidenced by its dollar exchange rate and price trends generally showed the value of items going upwards. Jagex considered this somehow unfair; they thought that random players would be empowered to buy items beyond the grasp of others, and the parity of people who bought gold and the people who worked for gold would be increasingly distorted. What they forgot was that the prices of raw materials were also inflating. It became easier and easier to make money fast as more and more players could afford to spend more money on higher prices. The wealth was in effect, trickling down as a result of inflation. I personally experienced this, as the value of the un-tanned cowhides I liked to gather went from 100GP each, to 120 GP, all the way up to 140 or upwards of 150GP towards the end. Even though players who were buying money from people doing RWT, and therefore gaining these ridiculous sets of armor that put me at a disadvantage, the universal commodity of transportation was still valued the same to people with more money. Prices rose, and I found that upgrading my items became easier than ever. I was glad for the inflation.
Jagex rejected this, though, never even considering the Trickle-Down economics that applied to it all, and forced in the Grand Exchange to force “equality”. Prices were locked at the current inflated levels. Equality? Equality of what? Earning potential? Now everyone who frequented the cow pasture I liked that came to kill cows and collect the hides they “dropped” (slaughtering was a bit too brutal for the programmers) was unable to sell their cowhides as easily, because demand severely dropped for cowhides that were held at prices higher than the market value. Instead, players who had previously used cowhides to make leather armor and advance their experience in the Crafting skill turned to more inefficient alternatives that had previously not been as popular, such as jewelry-making or more gem cutting. When Jagex realized that the prices were held artificially high, they lowered them to between 117GP and 123GP. Of course, cowhides had already taken a hit, and although some people returned, no one was able to undercut their competition. When cowhides were 120GP each, I frequently sold at 100GP each to ensure a fast sale. In my opinion, the decreased wait time was worth it in terms of how that added time could be used to get more cowhides. Not any more, though: with prices locked at within 3 GP of 120 GP, there’s no undercutting, no incentive to sell low, and no guarantee of a quick sale.
Jagex rejected Trickle-down economics and prosperity of other, less fortunate countries for price controls and coal mines. They rejected freedom to go to a place to risk one’s life for treasure for safety-first dungeon crawling monotony that is a staple of the lower end of the fantasy RPG genre. Jagex rejected freedom of trade and freedom to learn market concepts such as deposits and competition for faceless, price controlled monotony, like selling to a central government pool, the needless middleman which is the Grand Exchange. They rejected my right to set up a lemonade stand for the alternative of forcing me to work harder for the same amount of value in a controlled industry, by not allowing me to set my own prices. They rejected my right to sell in order to protect those who they said were vulnerable; they rejected Capitalism for Socialism.
Runescape had been an interesting, median MMORPG until that fateful December, though it had not been the top of the barrel in terms of freedom and innovation as it was. Now, they moved to the bottom of the barrel. I quit the day they announced their new policy of price controls and illegality of trade: I quit the day they announced Socialism. Their statistics have shown a general decline of interest as of late, and, as a player sorely disappointed to give up my character I had spent more than four years bringing up to a high level of power, I see their loss as justice. Feel what you may, Jagex has accomplished the opposite of their intent. They condemned third-world workers to a lower GDP, working in non-computer conditions, and more limited opportunity of work. They eliminated market adjustments in favor of price controls. They replaced one-time scams with across-the-board devaluation of effort. They destroyed years of dedication to the materials-running companies. They replaced Capitalism with Socialism, and the results are inevitable and unavoidable.