An Introduction to Economics with Eve Online

The rise of the internet has proved to be extensively influential in our day to day life. Along with the creation of a global village that enables interconnection through the great information superhighway, today’s internet has completely changed the way we used to lead our lives. In fact, over the past couple of decades, the internet has introduced us to a huge array of virtual worlds with many people becoming citizens of these worlds every day.

Perhaps one of the best examples of such a virtual world is Eve Online – a Massively Multiplayer Online Role-Playing Game (MMORPG) that’s not just a virtual world but an entire universe called New Eden, spanning about 5500 unique solar systems (and 2500 random wormholes) with over 300,000 players exploring this intergalactic domain. As with many online multiplayer games, new players or Capsuleers of Eve Online start their journey at the bottom of the ladder and will have to fight their way up to make their mark in New Eden.

However, one of the features that is unique to Eve Online is its’ extremely realistic and complex economic system that helps the player to gain economic control over their rivals through trade and commerce. Yes, there’re plenty of politics, spaceship warfare and technological charms, but it’s this economic system that sets Eve Online apart. In fact, this MMO’s virtual economy is so complex and vital to the game that the mother company, CCP Games, recruited a full-time economist back in 2004 to monitor and control the system dynamically. The economist, Dr. Eyjolfur Eyjo Gudmundsson, gathers and evaluates the economic data, publishes them in quarterly economic journals and in case of an economic downturn, he immediately makes the management aware about the situation and also provides them with remedial measures.

Wait, there’s a real life economist for a virtual world? Yes! That’s the case here, suggesting the extraordinary level of resemblance that Eve online has to real-world economics.

Eve Online’s currency is ISK (Interstellar Kredits) which is freely exchangeable within the game. Just like the real world, this space-industry dominated virtual universe has a demand-supply mechanism that balances the economic system. Fueling this are valuable minerals (Zydrine, Megacyte etc.) which are collected, refined and later used to create brand new products such as ships or weapons and players have the option to learn and create more advanced technologies in due process that’ll help them to gain superiority. Like real-world colonies, players are also able to build starbases and outposts which provide them with a further advantage of gathering more exotic planetary resources. As a result, Eve Online has a bustling virtual market mechanism, with trillions of ISK exchanged daily by means of trading products between individual players, corporations and large alliances.

“There’re plenty of politics, spaceship warfare and technological charms, but it’s this economic system that sets Eve Online apart. In fact, this MMO’s virtual economy is so complex and vital to the game that the mother company, CCP Games, recruited a full-time economist back in 2004 to monitor and control the system dynamically.”

However, despite such a realistic presentation of economics, EVE Online is still a virtual platform; it, therefore, has some lackings too and its downfalls should be considered. For example, this MMO has full employment and equal education (ability to train skills) which is not a real life phenomena. The education or skill sets are also perpetual in nature, so these attributes don’t diminish throughout the course of time. Moreover, there’s limited energy cost (doesn’t add up all possible costs), questions towards inflation, and no humanistic weaknesses like hunger, sickness, death, and obviously, no obsolescence.  Furthermore, the resources are frequently replaced and thus, keep balance in the economic system which is not viable under the real-life circumstances. Also, there’s always the option of playing in High-Security space where there’s no competition for property like land, and industrialists can mine relatively risk-free.

That said, providing we accept the limitations of Eve Online (it is designed to be a game and not a prefect representation of real life), there is still some value in its use as an economic teaching tool. For example, all of the market data can be downloaded from the client and imported into spreadsheets providing a different source of data for educational exercises with a more interesting backstory than data found in most textbooks. Additionally, factors such as inflation in Eve Online are a continued topic of debate as market prices fluctuate with time. Certainly, the cost of Plex (Game-time that can be purchased with in-game currency) has only increased over the past 10 years.

So, despite considerable real – life resemblance, Eve Online is not a perfect virtual model for understanding and experimenting with economics. However, it can be argued that this MMO is still quite impressive as a most comprehensive learning tool for macro-level economics.

Disclaimer: This article was written for Project EduGaming. It’s republished here as the project website is not accessible these days.