Learning Economics in World of Warcraft

Tony Forster

Licensed Creative Commons, share alike, non commercial, by attribution

Abstract

World of Warcraft is an online computer game with 10 million subscribers (as at June 08). It has an ingame free market economy which allows for market research and the teaching of economic theory by hands on activities. This paper describes how the ingame auction house could be used to teach economic theory with hands on activities to explore the relationship between supply, demand and price.

About the game

World of Warcraft (commonly known as WoW) is a massively multiplayer online role-playing game (MMORPG). People control a character avatar within a persistent game world, exploring the landscape, fighting monsters, performing quests, building skills, and interacting with NPCs, as well as other players. The game rewards success with in-game money, items, experience and reputation, all of which in turn allow players to improve their skill and power. Players can level up their characters from level one to the next.

World of Warcraft uses server clusters (known as "realms") to allow players to choose their preferred gameplay type and to allow the game to support as many subscribers as it does. There are four types of realms: Normal (also known as PvE or player versus environment), PvP (player versus player), RP (a roleplaying Normal/PvE server) and RP-PvP (roleplaying PvP server):

When creating a character in World of Warcraft, the player can choose from ten different races in two factions: Alliance and Horde. Race determines the character's appearance, starting location, and initial skill set, called "racial traits".

* The Alliance currently consists of Humans, Night Elves, Dwarfs, Gnomes and Draenei.
* The Horde currently consists of Orcs, Tauren, Undead, Trolls and Blood Elves.

The game has nine character classes that a player can choose from, though not all classes are available for each race. During the course of playing the game, players may choose to develop side skills for their character(s). These non-combat skills are called professions.

To play, there is an initial purchase price and a monthly fee as shown below

Suggested Retail Price Monthly Fee

Europe E14.99 E11-E13

United Kingdom £9.99 £7.70-£9

North America/Oceania US$20 $13-$15

Video game stores commonly stock the trial version of World of Warcraft in DVD form priced at A$2 or \2 including VAT, which include the game and 14 days of gameplay.

Derived from http://en.wikipedia.org/wiki/World_of_warcraft (retrieved 30/4/08)

About in game trading

To be able to trade effectively, it is estimated that the character would need to be levelled up to level 10. The trial version may not allow enough time for this, it is also uncertain whether the trial version has the full functionality including the ability to use the auction house.

Estimated playing time to reach various levels is shown below.

Level 10, 4 hours playing time

Level 25, 25 hours playing time

Level 55 200 hours playing time

WoW has 10 million subscribers and has a market economy where in game items can be traded for in game currency. There are approximately 150 independent servers or realms, so within one realm there is a market economy of approximately 70,000 players. Goods are traded at an auction house with market forces determining prices. This makes WoW an ideal testbed for testing economic theories of free market behaviour.

Tradeable goods are best achieved through the professions. For example, with professions of herbalism and alchemy, the trader can collect herbs (known as materials or mats) and transform them into potions (pots). There is a market for both the materials and the potions. For example, the player could search for Mageroyal and Stranglekelp and either transform them into Lesser Mana Potion which could be traded or just trade the materials direct. You will find the online database www.thottbot.com invaluable in helping level up and finding materials.

Alternative professions such as mining and engineering may be better, players suggest that mining ores such as copper give easy access to tradeable commodities

The player is able to test theories of supply and demand and influence market prices by trading on the open market.

Activities:

• Discuss, how well does the market mirror the real world?

• What determines the supply of money?

• Is there any equivalent to monetary and fiscal interventions which are practised in real economies?

• If you were Blizzard (the makers of WoW) what market interventions might you do?

• 
  

• Observe long term price trends e.g. at http://www.wowecon.com

• Is there any long term inflationary or deflationary trend?

• Observe the trading history of some commodity which you could trade. Can you estimate the elasticity of supply and demand.

• Having estimated market elasticity, predict the effect of your trade on the market.

• Do a large amount of trading of one commodity. Are the price effects what you predicted? If not, why?

• Classic market theory works on the assumption that the market is perfectly informed. How well informed is the market?

• How is the market informed?

• Are there delayed effects as the market adjusts? What do you think the mechanism is?

Useful references

www.thottbot.com invaluable in helping level up and finding materials

http://www.wowecon.com/ market information and statistics

http://www.warcraftriches.com/ Derek's Gold Mastery Guide

http://www.youtube.com/watch?v=peR8Hs9s_wY “

http://www.youtube.com/watch?v=6PDRLnmCLyQ World of Warcraft Gold Farm be Rich (auction house)

http://www.youtube.com/watch?v=d2jDVsFVXE0 World of Warcraft auction house

Sample trades

I am told that for most items, they are sold at the buyout price, rather than the auction price. The item chosen for trade was Stranglekelp. It was commanding a good price at auction.

Typical WoW wide prices were listed at www.wowecon.com at 20s to 30 s. (100 copper = 1 silver, 100 silver = 1 gold)

The auction house listed 19 units for sale at 21s to 173s I had no information as to whether it was actually selling at these prices or in what volumes. I listed at a number of units at a range of prices.

Date	Bought	Sold
20 May		3 @ 16s
		3 @ 30
		3 @ 33
		6 @ 40
		5 @ 51
		10 @ 52
		5 @ 54
21 May		25 @ 53
		10 @ 80
		10 @ 100s

At this stage I realised that Stranglekelp was selling as high as 153s for a patient seller and my cheaper sales were being bought and immediately relisted at a higher price.

Date	Bought	Sold
22 May	11 @ 11s	90 @ 100
23 May	6 @ 80	40 @ 100
	20 @ 21	60 @ 100
	12 @ 91
	20 @ 95
	4 @ 60	4 @ 125
26 May		100 @ 1.00
29 May	74 @ 40	148 @ 100
2 June	19 @ 75	20 @ 100
	95 @ 50

I adopted this strategy and was able to maintain a market price of 100s per Stranglekelp and sell most if not all the market volume. The volume was approximately 460 units in 11 days or 40 units a day. The market seemed to be unresponsive to price. Purchasers would buy at any price so that high priced stock would eventually clear when no cheaper stock was available. Sellers would sell much more cheaply than the market could support.

The kids are alright

Here I continue discussion of readings for Instructional Simulations & Games, IDT 545, http://www.idt.und.edu/index.html

Beck, J. C., & Wade, M. (2006). The Kids are Alright: How the Gamer Generation is Changing the Workplace (Paperback). Boston: Harvard Business School. 978-1422104354


Having read the introduction and chapter 1 of this book and skimmed the rest here are my thoughts. The authors believe that the "gamer generation" is a distinct group, more distinct than generations X and Y. They have been shaped by playing games and as they enter the workplace, they will think and behave differently to the generations that preceded them.

They make the same assertion as Prensky that their brains are actually wired differently.

Prensky has been criticised for this and other bold claims by

Kerr http://learningevolves.wikispaces.com/nativesImmigrants
Siemens http://connectivism.ca/blog/2007/10/digital_natives_and_immigrants.html
Mc Kenzie http://fno.org/nov07/nativism.html
Livingstone http://learninggames.wordpress.com/category/twitch-speed/
and
http://learninggames.wordpress.com/2008/01/23/google-generation-is-a-myth/
and others http://knowledgegarden.usq.edu.au//tiki-index.php?page_id=622

They base much of their assertions on a survey of 2500 Americans which asked 16 questions. The survey does indicate that those who describe themselves as game players do hold different attitudes to those who don't. They are more competitive, more motivated, better networkers and bigger risk takers. What the survey does not indicate is causality. Did the games cause these traits or are people with these traits more attracted to games? I am unconvinced.

The book was published in 2006 but written earlier. It possibly suffers from the delays of publication. For example, there no discussion of World of Warcraft (that I noticed). Some of the thinking may have groundbreaking when written but it has been eclipsed by more recent web based discussion.

Other comments,
they do not clearly define the term "gamer generation",
there are some slippery terms, eg 92% have regular access to games while only 80% live in houses with computers
"the gaming experience is basically solitary" try to sell that to a WoW player!
"gamers learned how to manipulate electronic information" my links above dispute this assertion, the gamer generation is not good at this.
"gamers, who intuitively understand each other" really?

OLCC2007 How the Read/Write Web Challenges Traditional Practice

Todays session of OLCC2007 was not about the learning theory as such but more about the oportunities for connected learning or as one chat comment said: I don't think there is a completely distinct line between this theory and others--for myself, I see this as one more set of tools to use

We see the undeniable effect of Web2 or public authorship tools creating an engaging and relevant context for learning. Students who would never write an essay contribute to Wikipedia, Youtube, Myspace etc. Players of World of Warcraft are heavily dependant on text communication. The old school will criticise it for bad spelling and grammar but it is effective communication, suited to modern times.

I have written previously on this blog on the value of WoW, as a programming environment, an example of economics but mostly as a supportive global village where children learn management skills from a community.

Second Life was mentioned in chat. I think that the attempt to re-create traditional learning spaces in SL is misguided, it remains a creative space with much potential.

The internet has given access to a wide range of educational material, Maths Demo's, Applets and Virtual Manipulative this is really fun stuff,

Networking creates the opportunity to meet people of common interests. The edublogging community is great for teachers, but have students benefited? We need to teach students to be lifelong learners, teachers need to model this, teachers need to be transparent learners. For example, kids need to be shown how they can set up RSS feeds.

The opportunities for collaboration have increased. My experience with kids learning mathematics and programming through making computer games is that you create an environment where peer tutoring arises naturally but that experience is not universal .

The concept of “trusted sources” worries me. The advice was to assemble a network who think like us. That could lead to isolated extremist thinking.

Creating addons in WoW

In the search for relevant and authentic tasks for young programmers, I have been looking at programming addons for World of Warcraft. Addons are used to customise the game's user interface. There are a number of popular addons including CT Raid Assist.

Blizzard warn that creating addons is not easy: "The creation of AddOns is a very technical endeavor, and you should not attempt it unless you have a good working knowledge of XML and Lua " Nevertheless, I was able to easily follow the Hello World tutorial. All I needed was Notepad and of course WoW to test the addon.

Getting Started
Go to http://www.blizzard.com/support/wow/?id=aww01671p and download the World of Warcraft Interface AddOn Kit.

WoW addons are written in Lua and XML. The kit extracts the XML files and Lua files for the addons and the user interface into directories. To see how the WoW interface is programmed, see the user interface directory "FrameXML".
The kit also installs the tutorial files.

Do the Hello World tutorial

Read about WoW Interface Customisation at WoWWiki in particular the API

Addons all have an XML file which describes the visual features of the addon, where more detailed programming is required, functions are called from a Lua file.

Lua
Lua is an extension programming language designed to support general procedural programming with data description facilities. It also offers good support for object-oriented programming, functional programming, and data-driven programming. Lua is intended to be used as a powerful, light-weight scripting language for any program that needs one. Lua is implemented as a library, written in clean C (that is, in the common subset of ANSI C and C++)

Lua is freely available and can be used for both academic and commercial purposes at absolutely no cost. You can experiment with the stand alone version of Lua.

XML
XML stands for EXtensible Markup Language
XML is a markup language much like HTML.
XML was designed to describe data.
XML tags are not predefined in XML.
You must define your own tags.
XML is self describing.
XML uses a DTD (Document Type Definition) to formally describe the data.

Slash Commands
Slash commands such as /sit and /dance can be entered in game in the chat window, two notable ones are /macro and /script

Macros
Slash commands can be put into macros

Scripts
Using the /script command, Lua scripts of API calls can be executed from the game chat window. This can be used to test code fragments immediately, prior to using them in addons.

For example,
/script message("Hello World") will bring up a message box
/script SendWho("gold") will list all players with gold in their name
/script message(GetMoney() ) your held money in copper in a message box
/script message(GetMapInfo()) will display your current location in a message box
/script RandomRoll(10,20) rolls a random number 10<20>
/script OpenAllBags() Open/Close all bags
/script x,y=GetCursorPosition() ; message(string.format("x%d y%d",x,y)) gives cursor position


In Summary
Lua is a powerful open source programming language which can be used to write addons for the World of Warcraft user interface. WoW is a popular MMORPG game with subscription costs of $A20 (US$15) per month. There are currently 7 million subscribers.

For one purchased game, the installation disks can be used to install WoW onto a number of computers though one account would only allow one computer to be online at a time for testing of code. Typically 10% to 50% of an Australian school will be existing WoW account holders. The challenge should be achievable for years 11 and 12.

World of Warcraft, learning economics

13 year old "what I don't understand... is when WoW was new and nobody had much money, and a really good item dropped, how its price would be determined at auction"

Emergent* understanding of supply and demand and the effect of the money supply on market prices by a 13 yo.

More evidence (not that we needed more) of the educational value of WoW in its own right, in addition to the ways it could be used for teaching.

*emergent http://en.wikipedia.org/wiki/Emergent Emergence is the process of complex pattern formation from simpler rules OK I'm misusing the word but its my blog.

Chinese Gold Farmers

It was interesting to watch the video of chinese gold farmers with my 13 year old son. About half his class are World of Warcraft players and many have purchased in game gold from chinese farmers using real currency.

I thought the video would be a good conversation starter in class,
comparative culture,
trading and exchange rates:

• in game
• game - world
• intercountry

social equity
entrepeneurs

The Kuurian Expedition

The Kuurian Expedition is a guild on War of Warcraft for teachers, education researchers and so on.

"The first Kuurian Expedition has been founded in World of Warcraft, on the Silver Hand server, Alliance side. To join, speak to a guild officer and give the secret word, which you can obtain by contacting SWI directly."

So I joined the guild and became a WoW player rather than an observer. What have I learned that I did not know as an observer? I already knew that WoW developed leadership skills , that fantasy worlds can develop new literacies, that virtual worlds are powerful tools for social research, there are big skills and conceptual age skills, that WoW could develop moral values, that raids take hours of meticulous planning, that a guild master must be adept at many skills, and that WoW has more population than Israel Denmark Finland NewZealand or Ireland.

What I have learned is that playing WoW is a continuing complex decision making process. You have to make judgements on incomplete information (or maybe the info is complete but you cant possibly remember it all) you have to decide which items to keep and trade, which quests to do and when, which attack and defensive moves to do in which order and in which circumstances, where to go and how to get there, mapreading skills, navigation skills.

I have an increased respect for WoW players

Plutarchus
Kuurian Expedition
Silver Hand

Plutarch
Frostmane

Australis Gondwana
Secondlife

Learning in MMORPG's

Nick Yee's survey of MMORPG's makes interesting reading.

The Psychology of Massively Multi-User Online Role-Playing Games:
Motivations, Emotional Investment, Relationships and Problematic Usage
by Nicholas Yee link

"a prime candidate for acquired skills is leadership skills. In emergent groups within the MMORPG environment, leaders deal with both administrative as well as higher-level strategy issues, most of which arise and have to be dealt with spontaneously. Administrative tasks include: role assignment, task delegation, crisis management, logistical planning, and how rewards are to be shared among group members. Higher-level strategy tasks include: motivating group members, dealing with negative attitudes, dealing with group conflicts, as well as encouraging group loyalty and cohesion. These issues are even more salient in long-term social groups, such as guilds, which have formalized membership and rank assignments. In other words, MMORPGs provide many opportunities for short-term and long-term leadership experiences. "
......
"10% of users felt they had learned a lot about mediating group conflicts, motivating team members, persuading others, and becoming a better leader in general, while 40% of users felt that they had learned a little of the mentioned skills."

Powerful tools for social research

Graham questions the value of blog statistics, he says its better to listen to people. Arti questions why we measure at all. Though we can waste a lot of time with vanity statistics, now that we are electronically interconnected, we can do research that previously seemed impossible. On insufficient data, I have analysed the national interest in game programming using Clustermaps and Google Trends, with questionable accuracy I can say that Australia is a world leader in educational use of game programming.

See http://www.blogviz.com/blogviz/ for a statistical analysis of the transmission of memes.

There was a study which looked at guild size in MMOG's like World of Warcraft to test Dunbar's theories of human organisation.

Yes I spend too much time massaging my ego looking at my cluster map and Googling myself, but we have a powerful research tool there too.

Games for the Web: Ethnography of Massively Multiplayer On-line Games

From Bill Mackenty

term papers written by undergraduate students in the class "Games for the Web: Ethnography of Massively Multiplayer On-line Games."

These students used a combination of quantitative and qualitative research methods to explore sociological issues associated with massively multiplayer virtual worlds. Each student in the class pursued a different research question.

http://www.trinity.edu/adelwich/worlds/students.html

eg.
Second Life and School:
The Use of Virtual Worlds in High School Education
Manny Alvarez
Trinity University, San Antonio, TX1
Abstract
This paper explores the possibility of the use of virtual worlds in high school education to teach or supplement classes. Scholars have for some time discussed the benefits of role playing, technology, and social learning in the classroom, while games have been used recently as models in the classroom. The author interviewed the players of major virtual worlds about their views on using virtual worlds in classes, while also interviewing teachers for their professional advice. The fact that virtual worlds combine technology, social learning, role playing and games make them a “sleeping giant” in education, despite concerns of cost and widespread acceptance.

“Conceptual Age” Skills

On April 23, 2006 I posted on the Pedagogy of World of Warcraft discussing Clark Aldrich 's "big skills".
For another perspective see “Conceptual Age” Skills , right brain “senses” successful workers in a post-information age economy will need to have.

Leeroy Jenkins

Why WoW is a educational game:
"I think leeroy was so selfish he spoild all the plans if we paled a game
like this it wold make us better team workers and stuff"
coreyf the Miniligends, grade 3
http://alupton.wordpress.com/2006/05/30/leeroy-jenkins/

Leeroy Jenkins

World of Warcraft raids take hours of meticulous planning with up to 40 players meeting online to plan and execute a raid. Raid groups are carefully composed with a mix of skills and with VoIP communication, players carefully coordinate their attack.

It is a nonsence to portray gaming as a solitary exercise of the socially inept or to ignore the learning that is involved.

See how Leeroy can destroy all this in minutes. Play the 2.5 minute video at http://www.leeroyjenkins.net/

You Play World of Warcraft? You're Hired!

In Wired Magazine http://www.wired.com/wired/archive/14.04/learn.html the following quote:

"To run a large one, a guild master must be adept at many skills: attracting, evaluating, and recruiting new members; creating apprenticeship programs; orchestrating group strategy; and adjudicating disputes. Guilds routinely splinter over petty squabbles and other basic failures of management; the master must resolve them without losing valuable members, who can easily quit and join a rival guild. Never mind the virtual surroundings; these conditions provide real-world training a manager can apply directly in the workplace."

Which is better, playing COTS games or building games?

Thanks Bill for your comments to my previous blog
"So, why do you think building games is better than playing off the shelf (COTS) games?
v. interesting to see world of warcraft in action the other night, with a young expert in control. Has he learnt more from playing or building?"

COTS games or game creation
Well firstly, what I see with WoW is different learning than I see discussed in relation to COTS. The COTS enthusiasts talk about using RollerCoaster Tycoon to look at kinematics or Age of Mythology to look at history. Its a bit of a square peg in a round hole, an attempt to sugar coat instruction.

What I see in WoW is that the game is the education, not the game is used for education. The learning relates to the social structures in WoW. Children get to interact with adults in teams and undertake team endeavours which require a high level of planning and coordination. They buy and sell at auction and learn about a market economy and much more.

Drama, art, music and sport have long been recognised as activities with educational value. The COTS stuff is a bit like saying that we'll use football to teach newtonian mechanics or use the school play to teach the times table!

Do you learn more from playing or building?
Is 10 apples > 15 oranges??
Its different learning. Game creation for mathematics, physics, metacognitive strategies and affective gains. WoW for the social skills that Clark Aldrich refers to .

WoW is worlds 98th largest country

With 6 million inhabitants, World of Warcraft now is larger than
Israel 5.7m
Denmark 5.3m
Finland 5.1m
NewZealand 3.6m
Ireland 3.6m
So you cant say that OMFG is not a real word if a nation of 6 million have it in their vocab

Pedagogy of World of Warcraft

Thanks to Clark Aldrich for documenting his "big skills" I think that these are the kinds of skills learnt through playing games such as World of Warcraft which I think is badly overlooked as an educational game:

• business process improvement and business process reengineering
• contracting, sourcing, and outsourcing
• communication
• conflict management
• cost benefit analysis
• creating and using boards and advisors
• creating new tools
• decision-making
• ethics
• innovation/adaptation
• leadership
• negotiation
• nurturing/stewardship
• project management/program management
• relationship management
• researching
• risk analysis, management/security
• solutions sales
• teamwork
• turning around a bad situation.

Get off the computer and go outside and play

I am still impressed by the learning in World of Warcraft. I did some research on my 13 year old son's guild. They include:

• a registered nurse in Florida
• a health and safety co-ordinator in Australia
• a health care worker in Alabama
• a manager in Kansas
• a marketing production/designer in Nashville and
• a network manager somewhere in cyberspace

I wish he'd go outside and play with some kids and get some social skills

Birthday / LAN party

My son's birthday, sleepover & LAN party. Thought I'd play with the immediacy of web self-publishing so the photos went online throughout the party.
Saturday 3pm extra keyboard required, thanks Mike for the emergency delivery.
Saturday 1opm, Rhys broke a mouse with his head, not really his fault, the others were hitting him with it.
Saturday 11pm intermittent power supply problems.
2:30 AM ultimatum "get of the computers and go to bed"
3:30 AM pulled the internet plug
Sunday 1pm remove adware/spyware

Engage Me or Enrage Me

Engage Me or Enrage Me

I liked this podcast, particularly the second half, the first half was a bit slow for me.

Prensky says "Content is going to go away, what will last is the engagement of learning." This sounds right to me. This is very like the sentiments in the overview to the Victorian Essential Learning Standards "students need to develop a set of knowledge, skills and behaviours which will prepare them for success in a world which is complex, rapidly changing, rich in information and communications technology, demanding high-order knowledge and understanding"


Later he says "Whats different about the new technology is that its programmable...whenever you do a Google search you are programming, whenever you create a word document you are programming ...... .in the middle ages, if you wanted to write a letter, you went to a scribe ..... programming is the new literacy of the 21st century." I like that, Prensky is a good communicator. Like Papert, when he says something, you think "I already knew that, I only wish I could have put it so well myself".

I had to laugh at the quote "the cookies on my daughter's computer know more about her interests than her teachers do"

Re MMORPG's (such as World of Warcraft) , he talks of the social organisation of up to 200 people self organising to fight a campaign. This rings true to me. My 12 year old son has learnt how to buy and sell at auction in WoW. He regularly organises into big parties and has learnt the necessary social skills to be accepted into parties and guilds. He installed Teamspeak with the help of his American friends, meanwhile I am spending $300 on a teleconference. His friends said "charge your dad $200!" We were both surprised, when we could hear them, to discover that his friends were adults including a mother of two. I am impressed with a game that teaches the necessary social skills that will allow a 12 year old to work co-operatively with adults.

Look at the photo of Tim Rylands, I love it. I had always imagined him at a desk at the front of the class. Look at the photo, he's in the body of the class looking to the front. Did he read Papert “there is such a thing as becoming a good learner and therefore … teachers should do a lot of learning in the presence of the children and in collaboration with them.” What is Logo? Who Needs It? © Logo Computer Systems Inc. 1999