Eve Online Fraud Shows That You Can’t Escape The Financial Crisis, Even In Your Parents’ Basement

Even in Eve Online, you’re no longer safe from crooked bankers keen on pocketing a few billion of other people’s cash; the “massively multiplayer” online game set in deep-space is the latest economy to fall foul of a rogue banker screwing people over. And subsequent talk of in-game bail-outs, and the folly of an unregulated system, pushes this highly user-involved game universe one bit closer to real life.

Like the hugely popular fantasy game World of Warcraft, Eve Online is an online multiplayer game set in a “persistent world”–action doesn’t stop when you quit. Serious gamers play for in excess of 30 hours a week, and thousands of pounds sterling can be won and lost during the game’s frequently dramatic and totally unpredictable course. In this sci-fi world players trade, fight, mine, build, and explore. Gamers spend real dollars on cards that pay for game-time, then trading these cards for in-game currency, creating an exchange between real and ingame currency. “Corporations,” groups of players, control and fight over sections of the huge galaxy, giving the game a loose thread and objective.

Only last week a rogue agent tore apart one of the most powerful corporations in an elaborate plot to which game-developers provided nothing except the architecture. And an 80bn ISK embezzlement by online investment banker “Xabier” is the latest in a series of high-profile events to hit the online community (ISK being the in game currency, not the beleagured Icelandic Krona). An amount totalling a few thousands pounds was taken by a player placed in charge of a large amount of currency in their position within on of Eve Online’s banks. It goes far beyond an act of smart-theivery: gameplay on Eve Online forces players like the chairman of the bank in question to issue statements calming investors, trying to avoid a run on the bank getting any worse, promising that “Dynasty Banking will get over these times and we will continue to strive to earn the public’s faith as one of the leading banks of Eve Online.”

With so little regulation, and massive frauds, this parable for the financial crisis is close enough before you consider the nationality of the game’s directors: Icelandic. Both the Icelandic banking and gaming industries like their games played with as little regulation as possible. Worldwide recession continues to hit online games’ profitability with the collapse of Iceland’s banking system and currency restrictions threatening Eve Online’s business model, tempting them to relocate to safer harbours, whilst at their customers thrive on the authenticity of their in-game economy — doesn’t sound very escapist, does it?

Whilst the game has weathered losses ten-times greater in the past – amounts somewhere in the region of $25k-$100k – talk of bank liquidity and the potential of a bank being bailed-out by their in-game competitors, mark Eve Online’s system as a little friendly. Despite the intense rivalry and double crossing between in-game corporations, players have invested a little more than cash into this game – their time and their lives. None of them want a whole universe fail because of a few greedy bankers, even if the game increasingly plays like the real world writ-galactic.

Posted by Mike Smith in Hot Money | February 9, 2009 10:22AM |