The value of being powerful or beautiful in games (Ho, Ping-I [Adam]) by Adam Ho

The Computer Games Journal 3(1) Candlemas 2014

The value of being powerful or beautiful in games - how game design affects the value of virtual items Ping-I (Adam) Ho Address: The University of Sydney, Sydney, Australia

e-mail: piho5116@gmail.com

Abstract Virtual economies, in which players use real money to buy and sell virtual items such as weapons and clothes in games, have now become one of the most important business models in the game industry. The success of virtual economies raises controversies and discussions about how virtual items come to have commercial value as intangibles in games. Some follow the traditional labour focused perspectives to argue that the value of virtual items is created by players’ efforts in obtaining them. Others suggest that this value is given by players’ personal preferences. This paper suggests that both the labour focused and personal preference focused perspectives, on their own, tend to overlook how players are still limited and affected by the gaming environment that involves various game mechanics. I argue that we need to reconsider how the game mechanics created by game design play a critical role in generating and affecting the value of virtual items. I therefore examine two significant game mechanics: functionality and aesthetics, and explore how they generate and affect the value of virtual items inside or outside Huizinga’s magic circle. I argue that these mechanics not only build the rules for players to follow, but also contribute to different types of value of virtual items in the context of gameplay. This paper suggests that an interdisciplinary approach that bridges economics and game design will be necessary with the growing development of virtual economies in the future. Keywords: virtual economics, game mechanics, mechanism, value, MMORPGs, virtual assets, items, goods, property Article Information Received: June 2013 Accepted: September 2013 Available: online April 2014 Copyright of the author ©2014 • Reproduction rights owned by The Computer Games Journal Ltd ©2014

1: Introduction 'Part of the issue with virtual-world economies is that they touch on so many aspects of design.' 1 Virtual economies, in which players buy and sell virtual items such as virtual weapons and clothes in games with real money, have now become one of the most important business models in the video games industry. Nowadays, virtual items have become not only useful objects or tools in games, but also assets or goods to be owned or traded by players and game companies. For instance, in a famous multiplayer online game, Diablo 3 (Blizzard Entertainment, 2012), players are able to buy or sell virtual items with real money via the real-money auction house within the game, while the game company takes a transaction fee ($1.00 USD per virtual item) from every transaction between players. In another successful multiplayer mobile game, Clash of Clans (Supercell, 2012), the game company

The Computer Games Journal 3(1) Candlemas 2014

sells virtual ‘gems’ to players for real money. Players use these to reinforce, protect, or decorate their village in the game. 2, 3 Cases like Diablo 3 and Clash of Clans not only set up successful business models, but also raise controversies and discussions around virtual items, particularly about the ways by which these intangibles come to have commercial value in a gaming environment. In the current discourse, there are two main perspectives that focus on how the value of virtual items is generated in games: the labour focused and the personal preference focused perspectives. On the one hand, the labour focused perspective follows the tradition of Marxism, suggesting that the value of virtual items is intrinsic and created by players’ efforts and time cost. For example, in her study Martin (2008) suggested that the virtual goods in Second Life (Linden Lab, 2003) are ‘still the product of labour, for it takes time and effort to develop and code even the simplest of virtual goods.’ In another study, Yoon (2008) also suggested that the investment of time is ‘one of the chief reasons that explain[s] the phenomenon whereby in-game MMORPG items acquire real-world economic values’. In this context, the reason why a virtual item is valuable is mainly because it somehow represents the hard work of a player who might spend hundreds of hours in developing or obtaining the item. 4, 5 On the other hand, the personal preference focused perspective follows the pattern of modern economics, suggesting that the value of virtual items is extrinsic, and given by players’ personal preferences. For instance, in his research, Castronova (2005) suggested that the value of a virtual item is determined and given by players’ individual preferences expressed in a market instead of its objective features. In this sense, a virtual item is valuable because players believe it has such value in a market out of their personal preferences.4-6 Both the labour focused and personal preference focused perspectives provide very useful insights for the understanding of the value of virtual items by focusing either on players’ efforts or personal preferences. To some degree, these perspectives also seem to overemphasise that the value of virtual items is something created and affected by players. However, this paper suggests that both the labour focused and the personal preference perspectives, on their own, tend to overlook how players are still restricted and affected by the gaming environment that results from various game mechanics created by game design. In some cases, players could be quite powerless in terms of the value of virtual items. In 2012, hundreds of players of the famous Taiwanese multiplayer online game, King of Kings (Giant Interactive / Gamigo, 2009), appealed to the Consumer Protection Committee. These players argued that one of the previous ‘updates’ of this game seriously affects the properties of certain virtual items they own, making these items less valuable than they were. Some of these players spent a lot of time and hundreds of thousands of NTDs (New Taiwan dollars) on these virtual items that could not be refunded by the game company.7,8 In the case of King of Kings as shown above, the so-called ‘update’ (or patch) is a common adjusting process in most massively multiplayer online games (MMOGs). One of the important purposes of such an update is to adjust an imbalance in the game. Sometimes, an update could involve reducing the original attributes of certain virtual items (e.g. those virtual weapons that are overpowering) through game design in order to achieve a better balance in a game. Therefore, in a case like King of Kings, the adjustments resulting from an update could seriously affect the value of certain virtual items by changing their attributes. The case of King of Kings demonstrates the overriding influence of game design. Through the adjustments in an update, game designers can change different aspects of virtual items such as their attributes, and therefore potentially affect their value to players. In this sense, the value of these

The Computer Games Journal 3(1) Candlemas 2014

affected virtual items is not only related to how much effort players put into acquiring them (the labour focused perspective) or how much players like or enjoy having them (the personal preference focused perspective). More importantly, the value of these virtual items is also likely to be affected by the elements of game design. In this paper, I argue that we need to admit and reconsider how game mechanics created by game design play a critical role in creating and affecting the value of virtual items. In the following, I will therefore examine two significant game design mechanics: functionality and aesthetics, and explore their relationships with the value of virtual items.

2: Functionality ‘Powerful characters are more valuable than less powerful ones, sharp swords are more valuable than blunt ones, and fast steeds more desirable than slow ones.’ 9 Functionality refers to the utility of virtual items which players can use to strengthen the ability or performance of their avatars during their gameplay. In game design, functionality plays an important role in various types of games. In a role-playing game, the functionality of a certain virtual item can benefit game characters in many aspects such as their ‘attributes’ (e.g. strength, agility, wisdom, stamina, etc) or ‘skills’ (e.g. magic spells, attack power, healing ability, etc). For example, in Diablo 3, a legendary weapon, ‘The Paddle’, can cause extra damage, increase dexterity and strengthen one of three random skills of a character. In a car racing game, the functionality of a certain virtual item can improve the performance of a car. For example, in Real Racing 3, a player can upgrade various automobile parts to enhance the performance of their cars in different aspects (e.g. speed, acceleration, etc).10, 11 The functionality of a virtual item is presented in numbers and figures (e.g. +50 strength or +5% speed). These numbers and figures are converted into players' gaming experience when a functional virtual item is used by an avatar in a game. A functional virtual item can make the players who own it more powerful (e.g. strengthening the abilities of their avatars) when they face difficult challenges in their gameplay. Therefore, to players, a functional virtual item is like a shortcut to success in games. This was observed in a 2007 study, in which P.I. Ho noted that the virtual items with useful functions can make the whole gameplay process much smoother and easier. As Yoon (2008) also noted, without powerful virtual items, players might not able to approach hard-to-reach dungeons and fight against ferocious monsters in games. 5,12 The functionality of virtual items not only affects players’ gaming experience, but also has an influence on the actual gaming time taken to achieve certain goals in games. A functional virtual item can bring efficiency to players that could therefore save them a large amount of time (e.g. more efficient monsters killing, quicker levelling up, faster quest solving, etc). This responds to what Lehdonvirta (2009) found in his study that functional virtual items can help players achieve goals in games faster. 9 It is also important to note that the functionality of a virtual item is not only useful when players fight against non-player characters (NPCs) in games, but also useful when they fight against each other. In a player versus player (PVP) combat environment, players heavily depend on the functions of virtual items to win in a battle. In other words, a functional virtual item can make a player’s avatar more competitive, and therefore gives him or her a better chance to win in a combat. This perspective echoes Yoon's (2008) observation that '...[functional virtual] items owned by a character affect far more […] the outcome of a PVP combat than the level or skills'. 5

The Computer Games Journal 3(1) Candlemas 2014

The advantages mentioned above (e.g. stronger abilities, more efficiency, more competitive advantages, etc) of a functional virtual item are important to players, and therefore desirable to them. This responds to what Yee (2006) noted in his research that players have a desire to ‘gain power, progress rapidly […] challenge and compete with others.’ The desirable advantages of functional virtual items also provide an explanation for why they are valuable to players. More specifically, these functional virtual items have a certain value that can help players satisfy their desires for being powerful, competitive, and successful in games. According to Ho (2007), this value of virtual items is the ‘functional value’. As Sheth et al (1991) noted, the functional value of an object is ‘the perceived utility acquired from an alternative’s capacity for functional, utilitarian, or physical performance.’ Applying this concept in a gaming environment, a virtual item with functional value can benefit an avatar’s utility, capacity and performance, and therefore facilitates the success of the player who controls the avatar in a game. In order to obtain such advantages from functional virtual items to be successful in games, in some cases, players are even willing to purchase them with real money. In Lehdonvirta's (2009) research, he noted that ‘performance advantages and new functionalities no doubt have a strong influence on users’ purchase decisions’. 9,12-14 It is however, important to note that game designers have the control of the functionality of a virtual item that makes it functionally valuable to players. Since the functions of a virtual item are codes and data presented in numbers and figures, they are created and can be adjusted by game designers through computer programs. If a virtual item has functional value, to some degree, this value is created by game designers when they design and determine the attributes of this item (e.g. +50 strength or +5% speed) in the first place. Additionally, this value could also be affected by game designers through later adjustments. In an update such as that in King of Kings shown above, game designers could rapidly reduce a virtual weapon's attributes (e.g. from +50 strength to +5 strength) and therefore decrease its functional value to players. In summary, on the one hand, the functionality of virtual items gives players advantages and helps them to make a significant progress and efficiently achieve goals throughout their gameplay. These advantages also make functional virtual items valuable since they create a motivation for players to pursue or even purchase them in games. On the one hand, the functionality of virtual items is still under the control of game design. Game designers are able to determine and adjust the functions of a certain virtual item and therefore create and affect its functional value. However, it would be arbitrary to argue that functional value is the only type of value that exists for virtual items. It would also be arbitrary to suggest that being powerful is the only motive for players to pursue in games. For some players, dressing their avatars with attractive and beautiful virtual items could be another important aspect for them to play in games. Therefore, in the following section, I will introduce another crucial design element for virtual items: aesthetics.

3: Aesthetics ‘It costs a virtual world practically nothing to allow characters to have different color clothes, hair, weapons, and so on, but it allows people to individualize themselves and make personal statements.’ 1 Aesthetics in games refers to the aesthetic design that makes a virtual item attractive to players. This kind of game design includes not only the aesthetic appearance of virtual items but also the effects (e.g. animations and sounds) of using those items. Aesthetics is important ingaming environments that allow players to customise their avatars or properties with virtual items. Many aesthetic items work as ornaments and decorations in such environments. For example, in Second Life, a player can

The Computer Games Journal 3(1) Candlemas 2014

buy different styles of clothes and accessories in the ‘second life marketplace’ such as glasses, belts, or jewellery to customise their avatars. In The Sims Social (Electronic Arts, 2011), a player is able to buy many items such as sofas, paintings, or bushes to customise his or her house in the game world. In this game, some of these items have visual effects and sounds and such as animations on the TV screen or music from a radio. 9, 15, 16 This kind of customisation (e.g. decorating avatars with aesthetic virtual items) has become an important motivation for players to play in games. This can be observed in Yee's (2006) empirical investigation that ‘customization – having an interest in customizing the appearance of their character’ can motivate players to play online games. In the process of customisation, aesthetic virtual items play a crucial part. Aesthetic virtual items such as clothes and accessories provide a variety of choices for players to customise and decorate their avatars according to their preferences and personal styles. This corresponds with Martin's (2008) observation that aesthetic virtual items have become ‘a means of customizing the virtual body’. She also suggested that these items in games can ‘fulfill needs and desires for […] a pleasing appearance within the virtual world'. 4,13 Those aesthetic virtual items with pleasing appearances not only support customisation for players, but also potentially give players pleasant feelings during gameplay. By equipping or dressing avatars with these aesthetic virtual items such as shining armour, beautiful clothes or glittering jewels, certain emotions of players could be evoked. As Ho (2007) noted in his study, players experience feelings such as excitement and happiness when their avatars are equipped with attractive or beautiful virtual items. This observation is supported by Lehdonvirta's (2009) empirical research. In this research, some participants report that aesthetic virtual items can provide pleasureand a feeling of coolness for them. One player reported, "IRL [in real life] I don’t like to wear shorts and a hoodie at the same time, but in Habbo [an online game owned by Sulake Corp.] it somehow pleases my eye." Another player also commented on the ‘enchantment effect’ (a way to make virtual weapons glow in different colours) in World of Warcraft (Blizzard Entertainment, 2004), saying, "It’s not useful, but it’s cool." 9,12 These kinds of hedonistic feelings shown by players make aesthetic virtual items become desirable and therefore valuable. In other words, the reason why an aesthetic virtual item is valuable is because it can somehow bring hedonistic feelings to players. This corresponds to Ho's (2007) suggestion that to players, the virtual items with aesthetic attributes have ‘emotional value’. According to Sheth et al (1991), an object with emotional value means that it has the ability to ‘arouse [people's] feelings or affective states’. Applying this concept in a gaming environment, players’ hedonistic feelings can be aroused by dressing, equipping, customising, or decorating their avatars with those aesthetic virtual items with emotional value. In order to obtain such hedonistic feelings in games, in some cases, players will even be willing to pay for these aesthetic virtual items with real money. This can be seen in Lehdonvirta's (2009) study that virtual items with aesthetic attributes can actually drive players’ real money purchase decisions. 9, 12, 14 It is important to note that aesthetic attributes of the virtual items with emotional value can still be influenced by game design. The appearance, colour, animations, and sounds of a virtual item that can potentially arouse players’ hedonistic feelings have been decided by game designers (or individual designers in an environment such as Second Life) when it was created or designed in the first place. Therefore, the emotional value derived from those aesthetic attributes of a virtual item could be generated by a game designer. Furthermore, the aesthetic attributes of a certain virtual item can be adjusted through game updates or patches. In an update or 'patchaesthetic' attributes, such as the appearance of a certain virtual item, can be changed by art or graphic designers. Therefore, game design has the potential to affect an aesthetic virtual item and make it emotionally more or less valuable to players.

The Computer Games Journal 3(1) Candlemas 2014

To sum up, on the one hand, the aesthetics makes virtual items attractive to players, and supports a way for players to customise their avatars in games. This customisation provided by aesthetics not only motivates players to play games, but also potentially arouses players’ hedonistic feelings during gameplay. An aesthetic virtual item that can bring the feeling of pleasure to players also makes it emotionally valuable to them. On the one hand, the aesthetics of virtual items is still affected by game design. When game designers create and adjust the aesthetic attributes of an aesthetic virtual item in a gaming environment, they also generate and affect the emotional value of these intangibles.

4: Conclusion In this paper, I examine two fundamental game mechanisms, functionality and aesthetics, and explore their relationships with the value of virtual items. These two mechanisms not only define the functions and aesthetic elements of virtual items, but also potentially generate and affect the value of these intangibles in a game. On one hand, the functionality of virtual items gives advantages to players and therefore benefits their progress and gaming experience. The advantages provided by functionality have become an important motivation for players to pursue or even purchase functional virtual items in games. The functional virtual items that provide advantages to players therefore become functionally valuable to them. On the other hand, aesthetics make virtual items attractive to players. Through aesthetic design of virtual items, players are able to decorate and customise their avatars. The customisations and decorations with aesthetic virtual items arouse players’ hedonic feelings within a game world. This makes aesthetic virtual items desirable, and therefore emotionally valuable to players. It is important to note that both functionality and aesthetics mechanics of virtual items are created and controlled by game design. On one hand, the functional attributes of a certain virtual item (e.g. +50 strength or +5% speeds) are created and can be adjusted (e.g. increase or decrease) by game designers and programmers. On the other hand, the aesthetic design of a specific virtual item (e.g. the appearance, colour, animations, and sounds) is also decided and can be changed by game designers, artists and graphic designers. Through the examination of these two game mechanisms, functionality and aesthetics, I therefore argue that the value of virtual items can be generated and affected by game design. Through the processes of creation and adjustment, game design potentially generates and affects the value of virtual items to players, whether functional or emotional. In this sense, game design not only defines the rules and regulations in a game world for players to follow, but also has a huge influence in terms of the commercial value of virtual items. The value of virtual items in a gaming environment is therefore not only generated and affected by players’ efforts (the labour focused perspective) or their individual preferences (the personal preference focused perspective), but also by the game mechanics driven by game design. The purpose of this study is to improve the understanding of how the value of virtual items is generated and affected in gaming environments. By examining two important game mechanisms functionality and aesthetics - and their relationships with the value of virtual items, this study suggests that an interdisciplinary approach that crosses game design and economics is necessary in the field of virtual economies. This paper demonstrates that the phenomenon of virtual economies not only involves economic activities, but also activities created and affected by game design in a gaming environment.

The Computer Games Journal 3(1) Candlemas 2014

Therefore, both economic and gaming activities should be taken into consideration in the field of virtual economies. The field of virtual economics should thus include other significant disciplines such as game design, computer science, art, graphic design, etc. Further research in virtual economics could draw on theories from other disciplines in order to provide a deeper insight and therefore enrich the knowledge in this field. References 1

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