The Determinants of Monetary Value of Virtual Goods: An Empirical Study for a Cross-section of MMORPGs

• Main Authors: QIU-HONG WANG, Mayer-Schonberger, Viktor, YANG, Xue
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2013
• Subjects: Massively multiplayer online role playing game (MMORPG); Virtual world; Real-money trading; Computer Sciences; E-Commerce
• Online Access: https://ink.library.smu.edu.sg/sis_research/3220
• Institution: Singapore Management University

This study investigates the monetary value of virtual goods in the context of 24 most popular massively multiplayer online role-playing games (MMORPGs). Building on classic economic theory, we approach this issue through a combination of experimentation and cross-sectional time series data analysis. Our findings suggest that more intensive social networking and flatter social hierarchical structures are associated with lower monetary value of virtual goods across various MMORPGs. Instead, a larger base of active users increases the potential demand and thus the monetary value of virtual goods in the short run. A steeper social hierarchical structure further strengthens the effect. The implication is that social networking and hierarchical structure can be two effective angles for game developers or policy makers to address the issue of real-money trading of virtual goods.