Simple Economics of Real-Money Trading in Online Games

January 24th, 2008 Jun Sok Huhh

Simple Economics of Real-money Trading in Online Games
Huhh, Jun-sok
Seoul Nation University

Abstract

This paper is to provide a theoretical investigation on real-money trading (RMT) observed frequently in online games. To overcome former studies focused much on description itself, economic incentives behind RMT are modeled and identified by reconsidering economic studies related. Firstly, RMT is analyzed by its modes of trading. It is shown that two modes of trading, the continuous and the discrete, have different consequences on the configuration of RMT market. Secondly, economic impacts of RMT are explored in the context of network externalities. Thirdly, two issues of RMT, gold farming and micro-payment, are shortly addressed as an application for the analysis.

Download latest revised version here.

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PC bang Inc.: The Culture and Business of PC bangs in Korea

March 20th, 2007 Jun Sok Huhh

If you would refer this paper seriously e.g. for academic purpose, contact me via anarinskATgmailDOTcom. The abstract is following:

In this paper, I seek to explore culture and business of PC bang (PC room) in
South Korea (hence forth Korea). As an integral component in the culture of Ko-
rean online gaming, the PC bang has only recently gained academic interest. A
PC bang is distinctive from Internet cafe in that it puts much more emphasis on
online gaming. Evolved from a convenient spot for high-speed connection, the PC
bang has become a space for facilitating and nurturing online gaming cultures.
This paper addresses two cultural specificities of PC bang. Firstly, as a space that
nurtures the negotiation of offline and online relationships around online gaming
cultures in Korea and, secondly, as a site for the emergence of MMORPG play-
ers. In respect of business, the collaboration and coordination between PC bangs
and game publishers has been a key part for Korean online gaming. A specialized
pricing policy for PC bang different from an ordinary flat subscription had made a
better business environment both for game publishers and PC bangs. Recently, the
conflict caused by the micro-payment business model of free-to-play online games
made the former cooperative relationship disturbed.

For downloading full-text, go to http://ssrn.com/abstract=975171.

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Dark Side of Casualness

March 2nd, 2007 Jun Sok Huhh

As you already know, the casual game in Korea is not Poker/Puzzle-like but easy to learn action-based game. many experts here has asserted that subscription model be replaced by micro-payment model with free-to-enter. It is not hard to guess that micro-payment model matches casual games very well. The larger use base is, the higher revenue the company get. It's simple economics of online gaming.

But, most of comments on this misses one point. It is two hidden engines that make users and their sponsors to pay money. The one is age differential, and the other is sex differential.

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Effects of RMT on the MMOG Demand

October 24th, 2006 Jun Sok Huhh

I've finished my research paper named "Effects of RMT on MMOG demand." My method is based on economics, but some parts might be interesting to you. Do not hesitate to do any comment/criticism on that.

http://ssrn.com/abstract=943368

If there be any problem to download, contact me.

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Virtual World or Virtual Vegas?

May 3rd, 2006 Jun Sok Huhh

Gambling is a hard business to do in Korea, for the law about gambling is very strict. Nation-widely, only one place called 'KangWon Land' is allowed for lawful gambling activities for the domestic. Undoubtedly, Online gambling is also under square prohibition. The real face of the business, however, is somewhat different with clean-cut world of law. For latest two years, many ill-legal or half-legal places for gambling are thriving vigorously with various forms.

RMT in MMOGs is one of most interesting and stormy areas that are connected with real world. We could find many kind of motives for RMT, but it is generally true that online game designs/mechanics could facilitate or disturb RMT. What the inner objectives are is not to be dealt with here. I'm to introduce a weird case that a small ticking in game design make a scandalous swing in RMT.

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