The Costs of Online Gaming

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About Us

Fall 2008 Tutorial 26 Group 4

Members:

  • Lauren Facey
  • Monica Kokoszewski
  • Diem-Anh Nguyen
  • Linh Vuu

Group Name:

e1337 [ee-leet] - Elite spelled in "Leet" [1]

Technology: Online games

Issue: The social and economic costs of online games

History

World of Warcraft

Long gone are the days of the Cathode Ray Tube Amusement Device. Most people in our generation do not even know what this is. It is the original video game, conceived in the 1940’s, where a user is able to control a digital dot on a screen, and simulate firing missiles. And you thought the original Nintendo was old school. Video games have evolved immensely over the past sixty years, but it was with the explosion of the internet over the past decade that has really evolved video gaming. Online gaming has only really existed since the early 1990’s, although you can trace some systems back to the 1980’s and 1970’s. Massively multiplayer online role-playing games (MMORPGs) are among the many types of available games you can play. In the early 1990’s there were only a few MMORPGs available, but in 1995 when the National Science Foundation Network opened up the internet to developers, the revolution of online gaming began. This created the path for the massive cultural phenomenon we see today. Originally stereotyped as nerds and geeks, gamers how now entered the cultural mainstream. Although these names are still attached to gamers, it is now more socially acceptable to play MMORPGs such as World of Warcraft and EverQuest. But this all began with games such as Nexus: The Kingdom of the Winds, which is credited with first populating the genre in 1996. MMORPGs are also found as useful tools in the study of human psychology and sociology. Gaming has created virtual personas for the users, because of their ability to socialize and essentially live as their alter (online)-ego. Gaming creates communities. You can use online gaming to enhance your social life, get beyond your limitations, socialize and meet new like-minded people. There are plenty of unsettled debates about gaming, its effects to the user and the effects of this culture on society. There is one thing that is certain: online gaming is here to stay, and the limits for its expansion remain to be seen.

Introduction

Rappelz

Gaming, and more recently online gaming, has gotten the attention of many people. Politicians, teachers and interest groups all have something to say about this popular pastime, and the effects it has. Our group is exploring the social and economic effects that online gaming has on its users and society. This is a very relevant topic as gaming definitely effects society as a whole, as per the amount of people who take part in gaming. For example, the massively popular game World of Warcraft (WoW) has 11 million subscribers worldwide. It is currently the world’s largest MMORPG, but there are many, many other similarly structured games. Subscribers are paying costs in many ways to advance in this game. What are gamers paying for and buying, and how much money are game users paying in order to excel and advance in WoW, or any other game? More controversial though, are the social repercussions of online gaming. People are saying good and bad things about this community of people. There are arguments saying gaming creates positive results in the user, and also ones saying that gaming creates individuals who are dangerous to society, because of the violent nature of almost all games.

Everquest

Why is this topic is problem?

How does participation in online games affect you and society? There are infinite number of games you choose to play on the internet from thousand’s of websites. These games are all meant to be addicting causing you to return and want to play again. Many people get over involved with their favorite game and go to great lengths to improve within it. Not only is gaming a multi-million dollar industry, but what has online gaming done to the way we all live, gamer or non-gamer. Just the same way the internet changes the way society works, does gaming also have this big of a influence? How different may society if online gaming was not as popular as it is, of even non-existing? Our group explores these questions.



Social Costs

Anti-social

Have you ever began playing an online game thinking that you’d only play for a few minutes, or tell yourself you’d stop once you pass just one more level, and pretty soon you end up playing for hours? That’s one of the major parts to the world of online gaming. The addiction that slowly pulls you in till your mind thinks nothing other than gaming. They symptoms of an addiction to online gaming are quite similar to the symptoms of other addictions. Not only can online gaming become extremely time consuming but also has a huge impact on other aspects of your life. It starts off as just something to do in your free time but the more playing time, the stronger the addiction becomes. Addiction to online gaming is most common in massively multiplayer online role playing games, also known as MMORP games such as World of Warcraft, commonly known as WoW. Many children playing these games enjoy them because they feel they have control and power of what’s going on where they may not have this is real life. They also feel that online they can become different then who they are and feel they can escape reality.


Some symptoms of excessive gamers especially in teens can be large decrease or drop in grades, staying up very late at night to try and continue passing levels, missing school or jobs and withdraw from a person’s social life. Many excessive gamers have admitted to not hanging out or blowing off friends or family members because they would rather stay online, or are too concentrated on the game to stop for meals and often neglect proper nutrition. Some people have shown that excessive gamers when they are teenagers can lead to recued social life even as they get older. If a teenager is an extreme gamer while they are in their teen year by the time they are in their twenties and out meeting people, they will not have the proper social skills since they never learned how to interact with others since they were constantly on the computer. The addiction to these games is gradual and as more hours are spent on them, addiction escalades. For married couples 50% of them say an excessive gamer causes quite a strain on their marriage.


Not only are there many social affects harmful to the individual by physically it can also be detrimental. After many extended periods of time spent gaming on the computer can lead to physical effects such as carpal tunnel syndrome as well as migraines becoming much more common. This can also cause irregular eating habits, troubles with sleeping, and many times proper personal hygiene is neglected. Gamers are too busy and focused on the game to take time out to even do simple tasks such have a shower or brush their teeth.

Extreme Gamer


Economic Costs

Not only does online gaming taking up countless hours but also has an extremely high cost. The online gaming industry makes unbelievable amounts of money each year through the costs of gaming online. For many games in order to access them or begin playing you must pay a start up or membership fee. These can range from a one beginning fee or continual fees such as paying monthly in order to maintain access. A popular way to interest gamers is so proved a trial period where no fees need to be paid. This is a way to draw players in while not having to pay so when the trial period is over they will be interested enough to pay for playing now.
Cheat Codes
Not only are there membership fees but costs for in-game credits or hidden costs. , can buy new levels, etc. Many of these MMORP games have ways that by spending more money you can advance your characters in order to make them stronger and pass more levels. All of these costs are most commonly paid by using credit cards which makes it very easy to lose track of how much money has been used and usually results in large overspending. This is a very quick and easy way to lose money and is very common for extreme gamers to accumulate large debts. Because of the millions of people worldwide using these gaming sites and the millions of dollars being spent, many credit card companies have prohibited the use of using credit cards for paying for online gaming. This is due to high levels of fraud and great chances that these bills will not be paid and debts will continue increasing. Not only can the games themselves become exceedingly costly but as well as all the additions to the games. Such things can include the costs of strategy books or programs as well as gaming codes, hints, tricks, and bonuses, or gaming magazines. There are also book that out can buy that can teach you how to play properly and keys in order to succeed. In addition, the costs of extra equiptment required for certian games, such as special headphones or other electronics are also quite expensive. All of these things can quickly add up to much bigger costs then initial intended which makes it very likely to acquire increasingly large debts.


Although there are many negative consequences both socially and economically, there have been a few positives found in children. Children who have done some gaming have shown better hand eye coordination and fine motor skills, as well as good problem solving skills compared to others who haven’t done any gaming.


Statistics

Social Costs

“217 million people worldwide play online games, according to new figures released by comScore, occupied 28% of all people online.”

http://www.techcrunch.com/2007/07/10/217-million-people-play-online-games/


While male video gamers still outnumber women 2 to 1, women have the edge in online games, a survey has found. Of the 117 million active gamers in the U.S.: 56% play games online, 64% of those online gamers are female, according to results of the survey. Also, the survey defined active gamers as those who are 13 years or older.

http://news.cnet.com/2100-1043_3-6123172.html


Average hours of online gaming per week:
Adults: 9.1 for women, 6.1 hours for men.
Teenagers: 7.4 hours

http://terranova.blogs.com/terra_nova/2004/02/survey_women_ov.html


A recent AOL Study claims that women over 40 are more likely to play online games than any other demographic. Even though men spend more time on the Internet each week than women (23.2 vs. 21.6 hours), female game-players over 40 spend the most hours per week playing online games (9.1 hours or 41% of their online time vs. 6.1 hours - 26% of their online time - for men). These women were also more likely to play online games every day than men or teens of either gender.

http://www.watercoolergames.org/archives/000073.shtml http://arstechnica.com/news.ars/post/20061006-7922.html


China's Statistic:


66% of the online casual games fans play games every day and 22% play at least three times a week, according to the survey.

http://news.softpedia.com/news/Online-Casual-Gamers-Would-Play-More-Mobile-Games-69539.shtml

“In China Internet Network Information Centre’s (CNNIC) 17th Internet survey released in January 2006, there were 111 million Internet users, of which 33.2% surveyed played online games. If China's Internet population growth follows China's 11th Five-Year Plan for 2006-2010, China should have 200 million Internet users by 2010.”

http://www.pacificepoch.com/uploads/docs/20060124_Sample_-_Pacific_Epoch_Online_Game_Report_PreRelease.pdf

Moreover, the number of online gamers in China rose 23 million to 40.17 million last year, according to an industry survey. Industry analysts estimate that China's online gaming population will hit 84.56 million by 2012.

http://english.sina.com/china/1/2008/0116/141893.html


In USA:


Kids can't seem to get enough of games, as 87% of them are likely to play games online. And, when asked what they would miss most if they had to give it up forever, 20% said online games.

http://findarticles.com/p/articles/mi_m0EIN/is_/ai_108269360


1,000 online casual games players responded to the survey out of which:

• 19% are between 18 and 24 year olds
• 20% between 25 and 34 years old
• 17% between 35 and 44 years olds
• 21% are 44 - 54 years old and
• 25% are gamers over 55 years olds.

http://news.softpedia.com/news/Online-Casual-Gamers-Would-Play-More-Mobile-Games-69539.shtml


72% people in USA play games and half of those play online.

http://blogs.chron.com/gamehacks/2008/04/survey_72_of_us_population_pla.html


Online mkt.gif
Figure 1. Online Game Market Growth by Global Region - 2002-2007

The chart above shows estimates and forecasts of the world market for online games made by Goodmorning Shinhan Securities in their study published in December 2004. Revenues are mainly derived from subscription fees paid by those who play the games. The 'Other Asia' region is dominated by South Korea where some 75% of households have broadband installed (as at end 2004).

http://www.video-games-survey.com/online_gamers.htm

Economic Costs

In China, sales of online games topped 10.57 billion yuan (about 1.45 billion U.S. dollars) last year, up 61.5%. Industry analysts estimate that China's online gaming population will hit 84.56 million by 2012, with regular subscribers totalling 50 million and sales of 26.23 billion yuan.”

http://english.sina.com/china/1/2008/0116/141893.html

According to DFC Intelligence, a leading research firm in I-Play, the mobile entertainment company estimates that by 2011 subscription revenue from online casual games will reach $6.8 billion, from $2 billion in 2005, while Informa Telecoms & Media predicts the global revenues from mobile games will grow up to $11 billion by 2011, from the today $3.4 billion.”

http://news.softpedia.com/news/Online-Casual-Gamers-Would-Play-More-Mobile-Games-69539.shtml

“In 2007, sales of entertainment software and hardware in Canada reached $1.7 billion, up more than 50% from the year before.”

http://ca.news.yahoo.com/s/capress/081112/technology/technology_games_parents_kids_1

Billy Pidgeon, a IDC’s program manager for games research presented his report on October 19, 2007 in North America, the amount that gained from online gaming was $583 million in 2007, which was tripled from $133 million in 2006. This booming market created by online-capable consoles.

“In 2007, game-related downloadable content derived from manufacturers’ proprietary online console networks will reach $296 million, while subscription revenue will increase from $107 million in 2006 to $277 million,” said Pidgeon. “While software sales are still significant -- increasing from $8 billion in 2006 to $9.5 billion this year -- content sold, accessed, or downloaded online to video game consoles over manufacturers’ proprietary networks will remain the industry’s most exciting growth opportunity in this hardware cycle.”

http://www.gamasutra.com/php-bin/news_index.php?story=15932

“In Korea, there was about $1.5 billion last year, almost half of the worldwide online game market.”

http://www.businessweek.com/magazine/content/06_37/b4000070.htm

And these are some of the basic spendings that the gamers have to pay before accessing to the site:

"World of Warcraft"

Wow.jpg

1. Game software (20 dollars plus expansion packs of 40-60 dollars)
2. Game subscription fees:

Is there a monthly fee to play the game?
Yes. After the end of the free month included with the game, you need a subscription in order to continue playing the game. There are three subscription options: a month-to-month package at $14.99 per month, a three-month plan at $13.99 per month, and a six-month plan at $12.99 per month.

http://www.worldofwarcraft.com/info/faq/general.html
http://www.shaw.ca/en-ca/ProductsServices/Internet/High-Speed/



"Second life"

Second life.jpg

1. software cost : Free
2. Subscription: Free for 1st basic and $9.95 one time subsequent account and $9.95 for monthly fees with Premium feature(allows you to get land on which you can build, display, entertain and live)
3. land maintainance: $5 to $295/month

http://secondlife.com/whatis/pricing.php
http://static-secondlife-com.s3.amazonaws.com/corporate/Second_Life_Pricing_List_20081112.pdf)



Applications to the Real World

Case Study 1: Revenue

Although there are many online games nowadays, most of which are free, there is one particular game which has had some recent media attention. MapleStory is a massive multiplayer online role-playing game (MMORPG) which attracts children and adults alike. With cute avatars which are customizable by the player, there are literally infinite possibilities. With features such as marriage, pets, clothing, and much more, MapleStory has become very popular across many countries. Currently, there are 11 versions for a variety of countries in Asia, Europe, South America, and North America.

Although technically, MapleStory is a free MMORPG, it allows players to purchase their special currency, Nexon Cash (NX) through the use of Paypal or through the purchase of their Nexon Cash Cards available in stores across North America. This game, being popular with virtually every age group, pulls in a lot of revenue yearly. There are cases where children steal their parents’ credit cards in order to purchase Nexon Cash.

Nexon cash cards: Available in $5, $10, and $25 cards

Here is the amount of subscribers to MapleStory. Imagine if on average 50% of the players purchase an average of 5,000 Nexon Cash per month. ($1 US = 1000 NX)

  • Korea Since 2002 14 million
  • Japan Since 2003 9 million
  • China Since 2004 25 million
  • Taiwan Since 2005 3.5 million
  • Thailand Since 2005 550 thousand
  • South East Asia Since 2005 550 thousand
  • North America Since 2005 3.5 million

“As of February 2006, Wizet has generated $200 million US from the game service in South Korea. Wizet received $110 million US for licensing the games to other parts of the world.” (Note: Nexon is the publisher, Wizet is the developer)

Case Study 2: Online games in the workplace

Professor Mark Claypool suggests the effect of playing online games in the workplace. Often in office environments, employees have access to computers and the Internet, and therefore online games as well. Studies have shown that games in general, be it online or video games, engage the players’ minds. As a result, their concentration and focus is very high and ideally, it would be good if the concentration and focus could be transferred to work.

However, it is often the case where the person is too deeply immersed in the game that he is cannot easily return to his work. As this is often the case, many companies have spent money on software that block online game which distract their employees and decrease their productivity. It is estimated that as high as $50 billion is lost (through purchase due to workers playing games when they should be doing their job.

Case Study 3: Online games vs. Reality

A MapleStory wedding

What happens when the line between online games and reality becomes unclear? In a very popular game among children and adults alike, MapleStory is becoming more and more like reality. One particular characteristic of MapleStory is that it has the option for characters to get married.

USA's professional gaming team

In one recent case, a man gets a divorce with his online wife. The wife was so outraged at the sudden divorce “without a warning” that she logged onto her ex-virtual-husband’s account and deleted his character. Although not formally charged, if she is convicted she will face charges up to $5,000 for “suspicion of illegally accessing a computer and manipulating electronic data.” This is an example of when people are so immersed in a game that they take what happens online as though it were reality.

Case Study 4: Professional gaming

In South Korea, professional gamers are the equivalent of professional athletes. Not only do they become well known for being very good at a game, but they can make over $100,000 a year. There are corporate-sponsored teams of gamers who are paid to practice in game all day. The well-known professional online gamers literally become celebrities—their normal everyday life is basically taken away. As a celebrity, these pro-gamers acquire many fans and the paparazzi take away their privacy. According to one pro-gamer, their lives are extremely tiring: their job consists of playing in tournaments, constantly being interviewed, and being recognized on the streets by average people.

Case Study 5: Gold Farming

A gold farming organization in China

Gold farming is common in many MMORPGs. It is a term used when a player takes advantage of a repetitive aspect of the game in order to obtain items and/or the game's currency easily. There are organizations which hire players to gold farm for them in order to sell the items and currency to other players and make a profit. These organizations are often referred to as "sweatshops."

Manchester University has conducted a study on the business of gold farming. Often, it is the case where gold farmers choose certain monsters in the game that drop the most efficient amount of currency. They might hire players to "farm" this currency for them, or even use bots. These bots are scripted to farm the currency without anyone manually controlling the player. In almost all games, this is often against their terms of service.

The currency accumulated is then sold on online sites to players who are willing to pay actual cash. The gold farming business has a great impact on the in-game economy: it devalues the currency in the game. Not only that, but this business encourages slave labor in developing countries.

This problem is mainly in China: about 80% of the industry lies there. Gold farmers employ about 400,000 people who earn £77 (about $175 US)per month on average, coming to a global market worth $500 million US. However, "the true size of the sector was hard to estimate - it could easily be twice as big. "

Online Games

Here are a few online games that are quite popular, which you can try out for yourself. You can also check out MMORPG.com [2] for more massively multiplayer online games.

Free

E nexon.jpeg
E ijji.jpeg


These well-known developers and publishers offer many free online games that are quite popular and successful. We also offer a suggestion of some of their most popular games, which you can find on their websites.

  • Nexon [3] - MapleStory, Mabinogi, Audition
  • ijji [4] - Gunbound (Revolution), Gunz, Luminary
  • Softnyx [5] - Gunbound (International), Rakion
  • Ntreev [6] - Grand Chase, Trixter
E acclaim.jpg
  • Acclaim [7] - 9Dragons, 2Moons, Dance Online
  • gPotato [8] - Rappelz, Flyff




E guildwars.jpg
E wow 01.JPG

Regular Payments:

  • World of Warcraft [9]
  • Ragnarok Online [10]

One-Time Payment:

  • Steam [11] (Offers many games)
  • Guild Wars [12]


Conclusion

Although many conclusions could be stated about the effects of online gaming to an individual and society, finding any definite facts about it will take years of more research as this phenomenon is still quite new. There is one question that you can answer: How does gaming affect you?

Lineage

References

Lauren

Monica

Diem

Game Sites

Linh

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