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Sunday, May 13, 2012
The $100 Billion Game
A reader sent me a link to a video of the Rory Sutherland talk at the Oxford Union, which is a very interesting talk mostly about behavioral economics and advertising. In that talk it is mentioned that the total time humanity spent playing World of Warcraft is about 6 million years. I found that interesting, and googled it to sources like this, where it is spelled out that they mean 50 billion hours played.
Now lets say we would have used those 50 billion hours differently, for some economic activity creating value. Now how much one hour of work is worth is a matter of debate, especially since it obviously isn't worth the same in different countries. But assuming that people who play WoW are more likely to be well educated and living in a rich country than African subsistence farmers, and then lowering the amount to take into account the millions of Chinese players, let's go for an arbitrary number of $2 per hour. Which would be considerably less than minimum wage in the US, but more than a minimum wage in China.
Thus by playing World of Warcraft, humanity basically paid an opportunity cost of $100 billion. Or divided by 10 million players, each player chose to rather play World of Warcraft than to earn $10,000. Again, this is an average, there are people in the US who could have earned much more if they had spent their hours playing World of Warcraft with a value creating activity instead.
At the end of his talk, Rory Sutherland mentions a theory that the Internet has not contributed much to economic growth, but has contributed a lot to the increase of human happiness. How does one measure human happiness? Well, economic theory says that if a person does A instead of B, he must value A equally or higher than B. Thus I am not suggesting that World of Warcraft somehow "wasted" $100 billion. Instead it created $100 billion or more worth of human happiness, because we freely chose to rather play WoW than to earn that extra money. Makes you think, doesn't it?
Now lets say we would have used those 50 billion hours differently, for some economic activity creating value. Now how much one hour of work is worth is a matter of debate, especially since it obviously isn't worth the same in different countries. But assuming that people who play WoW are more likely to be well educated and living in a rich country than African subsistence farmers, and then lowering the amount to take into account the millions of Chinese players, let's go for an arbitrary number of $2 per hour. Which would be considerably less than minimum wage in the US, but more than a minimum wage in China.
Thus by playing World of Warcraft, humanity basically paid an opportunity cost of $100 billion. Or divided by 10 million players, each player chose to rather play World of Warcraft than to earn $10,000. Again, this is an average, there are people in the US who could have earned much more if they had spent their hours playing World of Warcraft with a value creating activity instead.
At the end of his talk, Rory Sutherland mentions a theory that the Internet has not contributed much to economic growth, but has contributed a lot to the increase of human happiness. How does one measure human happiness? Well, economic theory says that if a person does A instead of B, he must value A equally or higher than B. Thus I am not suggesting that World of Warcraft somehow "wasted" $100 billion. Instead it created $100 billion or more worth of human happiness, because we freely chose to rather play WoW than to earn that extra money. Makes you think, doesn't it?
- posted by Tobold @ 10:37 AM Permanent Link
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you can't convert each hour played in WoW to an hour of work, because most or a large part of that time constitutes "past time" for the players, which in its turn is essential to productivity.
A couple other things to consider -- a lot of the people playing WoW are students ranging from Elementary School to University. Additionally the 10 million number is current subscribers, I would guess the number of humans who have played WoW is much greater, possibly in the range of 50 million? I wonder why Blizzard has never released that number because I would think the media would jump all over it.
# posted by 
: 13/5/12 11:32
: 13/5/12 11:32
Now just imagine how much effective money is wasted by people watching TV, or sports, or writing comments on blog posts!
# posted by : 13/5/12 11:34
: 13/5/12 11:34
When you look into the behavioral economics of happiness there are 2 types of memories that perceive happiness differently. These are our "experiencing selves" and our "remembering selves".
The peak-end heuristic rule says people remember their experiences by how they were at the peak and the end.
When colonoscopies were first done, patients found the experience so horrific they refused to have it done again. Later it was discovered that leaving the probe in at the end, doing nothing caused patients to remember the experience as being not so bad.
So although wow might have generated $100b of extra happiness, how much of that happiness is retained after the experience. This is the probably the kind of thing that determines whether players return after quitting or not.
It's been discovered that above a salary of $60k more money doesn't buy more happiness but under that amount people get progressively unhappier the poorer they get. Lack of money buys misery.
So the value of $10,000 doesn't necessarily equate to the same happiness.
I quit ffxi once for several years because the time and effort required to generate money was ridiculous compared to time spent doing other activities. Too much like real life. I was seriously depressed about being poor in game. So I played wow and lotro where money generation is a lot easier. But the funny thing is the peak happiness of those games was never anywhere near the peak happiness of playing ffxi. So eventually I went back and luckily money generation had become easier.
The peak-end heuristic rule says people remember their experiences by how they were at the peak and the end.
When colonoscopies were first done, patients found the experience so horrific they refused to have it done again. Later it was discovered that leaving the probe in at the end, doing nothing caused patients to remember the experience as being not so bad.
So although wow might have generated $100b of extra happiness, how much of that happiness is retained after the experience. This is the probably the kind of thing that determines whether players return after quitting or not.
It's been discovered that above a salary of $60k more money doesn't buy more happiness but under that amount people get progressively unhappier the poorer they get. Lack of money buys misery.
So the value of $10,000 doesn't necessarily equate to the same happiness.
I quit ffxi once for several years because the time and effort required to generate money was ridiculous compared to time spent doing other activities. Too much like real life. I was seriously depressed about being poor in game. So I played wow and lotro where money generation is a lot easier. But the funny thing is the peak happiness of those games was never anywhere near the peak happiness of playing ffxi. So eventually I went back and luckily money generation had become easier.
Interesting way to put it.
I can only comment from my own perspective and from that I would only consider less than half of my time spent in WoW as happiness, the other half was more sticking around due to the amount of time that was already invested and for the fear of losing a perceived value.
I can only comment from my own perspective and from that I would only consider less than half of my time spent in WoW as happiness, the other half was more sticking around due to the amount of time that was already invested and for the fear of losing a perceived value.
# posted by : 13/5/12 14:36
: 13/5/12 14:36
Two comments & thoughts...
1) I would not have earned a single dollar more by not playing WoW, as I have an annual income which is not impacted by the hours I spend with playing games in my leisuretime.
2) I actually pay to play, rather than saving it. That means, I chose to not reaping more income through savings.
But.. by spending it, I created value with a company which pays other peoples income. Does that add more to the total GIP?
1) I would not have earned a single dollar more by not playing WoW, as I have an annual income which is not impacted by the hours I spend with playing games in my leisuretime.
2) I actually pay to play, rather than saving it. That means, I chose to not reaping more income through savings.
But.. by spending it, I created value with a company which pays other peoples income. Does that add more to the total GIP?
I have an annual income which is not impacted by the hours I spend with playing games in my leisuretime
So do I, but economic activity can be something else than your day job. For example I pay 30 Euro a week to a cleaning lady to clean my apartment. I pay some money every month for a car wash. I pay money to get my shirts ironed. All this means I pay money to have more free time, which I then spend doing things like playing WoW.
At any time I could choose to clean my own apartment, wash my own car, and iron my own shirts. That would cost me time, but save me money. Though although my employer would not pay me more if I played less, time is still money for me in other ways.
So do I, but economic activity can be something else than your day job. For example I pay 30 Euro a week to a cleaning lady to clean my apartment. I pay some money every month for a car wash. I pay money to get my shirts ironed. All this means I pay money to have more free time, which I then spend doing things like playing WoW.
At any time I could choose to clean my own apartment, wash my own car, and iron my own shirts. That would cost me time, but save me money. Though although my employer would not pay me more if I played less, time is still money for me in other ways.
If people were perfectly rational, you could say WoW created 100 billion worth of fun, but we know that isn't really true, isn't it?
I'm sure there's a lot of people who have had a reasonable amount of fun and then stopped playing once it interfered with their real lives or got boring. Those people are known as casuals.
Then there's people like me. I don't eat food when I'm depressed. I play video games. That has been my pattern for my whole life, even before MMOS existed. Having spent quite a bit of time in the WoW community, I have to say that I was hardly alone in using WoW to avoid unpleasant realities in my life.
The problem with using WoW as a depression crutch is that you spend so much time playing and are so obsessed with the game that you can't change the things in your life that are making you depressed. You don't even realize your depressed.
How many people have permanently damaged their futures because they irrationally chose WoW over studying, their health, their job, or a relationship, or what have you?
I don't particularly blame WoW for this. I made my choices and honestly if I hadn't had WoW to distract me from how much my life sucked who knows what I would have done. In a weird way it helped me, and if it hadn't existed I probably would have just found something else to obsess about. But at the same time, the simple equation that if I gave up an hour of productive activity, like studying or working out, it's a fair trade that I rationally made, is simply false.
I'm sure there's a lot of people who have had a reasonable amount of fun and then stopped playing once it interfered with their real lives or got boring. Those people are known as casuals.
Then there's people like me. I don't eat food when I'm depressed. I play video games. That has been my pattern for my whole life, even before MMOS existed. Having spent quite a bit of time in the WoW community, I have to say that I was hardly alone in using WoW to avoid unpleasant realities in my life.
The problem with using WoW as a depression crutch is that you spend so much time playing and are so obsessed with the game that you can't change the things in your life that are making you depressed. You don't even realize your depressed.
How many people have permanently damaged their futures because they irrationally chose WoW over studying, their health, their job, or a relationship, or what have you?
I don't particularly blame WoW for this. I made my choices and honestly if I hadn't had WoW to distract me from how much my life sucked who knows what I would have done. In a weird way it helped me, and if it hadn't existed I probably would have just found something else to obsess about. But at the same time, the simple equation that if I gave up an hour of productive activity, like studying or working out, it's a fair trade that I rationally made, is simply false.
# posted by : 13/5/12 18:13
: 13/5/12 18:13
As others have pointed out, this wrongly assumes that the opportunity cost of leisure is more work. No one in their right mind is going to work 16 hours a day for $2/hour, at least no one in a developed nation. WoW is leisure, and you can't compare leisure and work in these terms. It's a poor argument to assume this false opportunity cost. Why not just count all the time humanity spends sleeping and include that, too?
Well Jon, as anybody who has played WoW knows, there's really not a whole lot of leisure, is there?
There's a lot of grinding, farming, crafting, waiting around for other people, etc.
I'd say that if you have a 1:1 work/fun ratio in your WoW time you are doing spectacularly well.
There's a lot of grinding, farming, crafting, waiting around for other people, etc.
I'd say that if you have a 1:1 work/fun ratio in your WoW time you are doing spectacularly well.
# posted by : 13/5/12 18:39
: 13/5/12 18:39
There is also the argument about speed & reliability similar to a Steve Jobs comment. E.g., what if WoW loaded 10 seconds faster? That might save 1000 person-years, say 12 people's lifetime every year.
If you include EVE Online, it is a lot more dificult
to argue that MMOs created a net positive of human happiness. :-)
If you include EVE Online, it is a lot more dificult
to argue that MMOs created a net positive of human happiness. :-)
What firefox, spinksville, jon have said.
You can't count work not done as the opportunity cost of leisure activity, unless this leisure activity was interfering with what would be typical work time (e.g., M-F 9-5) because even if someone wanted to work all those hours without rest, their productivity would suffer.
It's more complex that how the research aims to model the true cost (or value) of playing WoW.
You can't count work not done as the opportunity cost of leisure activity, unless this leisure activity was interfering with what would be typical work time (e.g., M-F 9-5) because even if someone wanted to work all those hours without rest, their productivity would suffer.
It's more complex that how the research aims to model the true cost (or value) of playing WoW.
My work productivity while PLAYING WoW is essentially unaffected, since I play at home.
However, it wouldn't surprise me to find that I spent 5-10 hours a week reading wow related blogs and websites, and posting auctions while at work.
At the same time, over the past 10 years my work productivity doubled with use of technology. I work in a large healthcare system that is now completely computerized. No more waiting for charts to be delivered, prescriptions are sent electronically, all lab data and patient info at my fingertips.
Productivity is a slippery fish to get your hands around.
However, it wouldn't surprise me to find that I spent 5-10 hours a week reading wow related blogs and websites, and posting auctions while at work.
At the same time, over the past 10 years my work productivity doubled with use of technology. I work in a large healthcare system that is now completely computerized. No more waiting for charts to be delivered, prescriptions are sent electronically, all lab data and patient info at my fingertips.
Productivity is a slippery fish to get your hands around.
I once heard a statistic that in terms of hours of effort, we could re-create Wikipedia in the amount of time the USA spends in a single weekend watching just the commercials on TV.
I think WoW and other computer games cut into the amount of TV watched far more than the amount of potential productivity.
I think WoW and other computer games cut into the amount of TV watched far more than the amount of potential productivity.
I had a part time job where I could play Wow while I worked (hotel clerk), how does that figure into the equation?
Was it worth it? - *Well, from what point of view?* I'd answer. The economic numbers sure are impressive. But I daresay they add only a small part to the equasion. I also found the comment by the depressed person intriguing. How much has wow added to worldwide happiness? Tough call.
I always thought of it as the best game in the world. But in the last years of my playing, it had become a major waste of time.
I always thought of it as the best game in the world. But in the last years of my playing, it had become a major waste of time.
I know it's a bit late to comment on, but this touches on something that
lessened an otherwise heated confrontation between two parties, neither
of whom was 'right'. Hell, how many of us know family or friends' relatives who have been on their case about 'wasting their lives'? And it's not video games which this is new to. Back a few generations, parents used to consider their children were wasting their lives on liberal arts or music (or women and drink). The instruments change, but the song remains the same.
It's about expenditure of time. Or more broadly... the expenditure of
your life.
Current Fact: You are worm-food in under 100yrs. This might change when
we're able to download your brain into a computer but that is unlikely
to happen in our lifetimes, so for now, accept the fact of mortality.
You will die.
What is the one thing that the garbage man, homeless drifter, astronaut,
physicist and world-class athlete all have in common? In 100yrs, they're
all going to be dead. It's been happening for a long time. There have
been a LOT of great politicians, thinkers and heroes who are now dead.
How much they contributed to society, what great works they left behind,
how many people knew their name... let's ask them how much that means to
them right now - ohwait. It means nothing to them. BECAUSE THEY'RE
DEAD. Even if their legacy is so great that you still know their name
some hundreds of years later, and even if anthropological and historical
studies have been able to pin-point every moment of their lives so that
anyone can feel like they knew who they were as a person... those guys
still don't care. BECAUSE THEY'RE DEAD.
People need to stop thinking that what they do will matter. On a long
scale, it doesn't. You're not securing immortality, you're not evolving
the human race, you're not securing our species' existence on a galactic
scale. One good, random asteroid in the right spot and all this is
over, as if it never was.
Even IF you subscribe to the theory of some kind of afterlife wherein
your brief time on this world DOES mean something on any kind of
long-term scale? The general religious consensus seems to be that the
best seats in the afterlife aren't being reserved for the wealthy, the
powerful, or the famous. That seems to be reserved by just being a
decent person.
So chill the fuck out and live for RIGHT NOW. And right now? If you
aren't hurting anyone and you're happy? Good job. You've done your
part. The species exists and is content. All the expectations that
people lump on you about what you SHOULD be doing with your life are
tangled up with their own delusions about what will help you escape
mortality, and the reality is that nothing will. So ignore it. Do what
makes you happy.
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lessened an otherwise heated confrontation between two parties, neither
of whom was 'right'. Hell, how many of us know family or friends' relatives who have been on their case about 'wasting their lives'? And it's not video games which this is new to. Back a few generations, parents used to consider their children were wasting their lives on liberal arts or music (or women and drink). The instruments change, but the song remains the same.
It's about expenditure of time. Or more broadly... the expenditure of
your life.
Current Fact: You are worm-food in under 100yrs. This might change when
we're able to download your brain into a computer but that is unlikely
to happen in our lifetimes, so for now, accept the fact of mortality.
You will die.
What is the one thing that the garbage man, homeless drifter, astronaut,
physicist and world-class athlete all have in common? In 100yrs, they're
all going to be dead. It's been happening for a long time. There have
been a LOT of great politicians, thinkers and heroes who are now dead.
How much they contributed to society, what great works they left behind,
how many people knew their name... let's ask them how much that means to
them right now - ohwait. It means nothing to them. BECAUSE THEY'RE
DEAD. Even if their legacy is so great that you still know their name
some hundreds of years later, and even if anthropological and historical
studies have been able to pin-point every moment of their lives so that
anyone can feel like they knew who they were as a person... those guys
still don't care. BECAUSE THEY'RE DEAD.
People need to stop thinking that what they do will matter. On a long
scale, it doesn't. You're not securing immortality, you're not evolving
the human race, you're not securing our species' existence on a galactic
scale. One good, random asteroid in the right spot and all this is
over, as if it never was.
Even IF you subscribe to the theory of some kind of afterlife wherein
your brief time on this world DOES mean something on any kind of
long-term scale? The general religious consensus seems to be that the
best seats in the afterlife aren't being reserved for the wealthy, the
powerful, or the famous. That seems to be reserved by just being a
decent person.
So chill the fuck out and live for RIGHT NOW. And right now? If you
aren't hurting anyone and you're happy? Good job. You've done your
part. The species exists and is content. All the expectations that
people lump on you about what you SHOULD be doing with your life are
tangled up with their own delusions about what will help you escape
mortality, and the reality is that nothing will. So ignore it. Do what
makes you happy.
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