Anyone who’s ever played a roleplaying game for any amount of time will tell you stories about their money. Maybe it’s how they had to grind 500 sewer rats to pay for their new wooden sword, or maybe they were up for 9 days solid in some obscure part of the world where “no one’s ever been” collecting a rare harvested material to price gouge in the marketplace to fund that new mount. Whatever the details are, it becomes very obvious that people treat their in-game money just as defensively (or even more defensively for the younger age groups who don’t have as much experience with earned “real”-life currency) as they treat the money they earn in their real jobs. Many players don’t even realize that they’re actively contributing to an economy that lives, breaths, and behaves just as one would expect under “real”-world conditions; they just want that new piece of gear, or to repair the gear that they’ve been fighting in for the last 12 hours solid.

Virtual money, just like the currencies used to fund nations in the “real” world, can be explained using extremely rudimentary economic concepts. The models of markets, of supply and demand shocks, of counterfeiters and others can all be used with some accuracy to predict (with varying accuracy) fluctuations in the economic conditions of a game world. However, there are several things which are markedly missing from today’s role-playing environments that any real, sustainable, thriving economy should have, and this does much to undermine the day-to-day reality of the game itself.

The most obvious thing that the roleplaying and other massively multiplayer games are missing are banks and other financial institutions. Banks in today’s games are a joke: most of the time they’re simply a geographically separated version of your wallet. Some games opt to not even offer this wallet service and instead find it O.K. to specialize only in providing a lock-box service for in-game items.

The ironic part of this whole mess is that even in the time periods during which some of these games are taking place (think: medieval, feudal) there were strong banking implements in place. Why is it that we have an auction-house or a broker that will take a certain percentage of your profits, but we don’t have a bank or money market that will pay a nominal rate of interest? Why is there magic, and the ability to have thriving cities and metropolitan areas in some of these worlds, but yet we have no means through which to invest our hard-earned money? Clearly there are people playing these games who have enough time invested such that their banking contributions would be non-negligible; for every workaholic you show me, I can show you a gamer who spends just as much time in front of their character.

Think of these possibilities: Guild, faction, or city banks. Guilds, factions, businesses and individuals within a city or region need natural resources to grow their empire. Buildings need wood, castles need bricks and mortar, and these two things need tools with which to be built. Who will provide this for them? Why not set up a faction banking system? Members of the guild deposit their funds in the short- or long-term to fund the project at a certain interest rate (a fair market rate of return based on what marginal value the newly funded resource will bring), the faction can use the funds in the interim for their benefit, and then will have to pay back the principal and the interest when the term expires. It works every day in real life, why not in the role-playing world? The entire financial infrastructure could be implemented on the server side (meaning that players wouldn’t have to keep track of what it is that they owed) and would have no less chance of failure than today’s modern auctioning systems.

Currently, the primary way to expand one’s own resources is to lend to other players (and collect interest), which may or may not work since online worlds are distinctly lacking legal systems as well (another day, another topic). Another way is to perform arbitrage within regional markets: that is, to buy something from someone low in one area, and sell it to someone else high without adding any value to it somewhere else. This is the meat-and-potatoes of the entire World of Warcraft economy, and it’s no secret. A third way, popular mostly to those with rare patterns, etc, is to buy the materials or required ingredients for a low price, craft them into usable resources (thereby adding value to the items) and reselling them for more than the sum of their parts.

Furthermore, a good financial intermediation system could allow new players to get up and running more quickly. Imagine being able to deposit your funds in a bank as an experienced player. This benefits you, as you’re now earning a nominal amount of interest on your money, rather than just keeping it in your inventory. Now, say Mr. Newbie comes along, and he really wants to buy that horse. He’s just the slightest bit short. So, he takes out a loan from the bank, buys the horse, and pays back the money he borrowed plus a little bit of interested when things are going better for him. Now we have three parties benefiting from this situation: First, the lender is earning interest on his money, so he’s happy. Second, the bank is earning interest on the money they loan out, so they’re happy. Third, Mr. Newbie gets his horse (because he’s willing to pay the bank back), so he’s happy. Without a good financial intermediation system like a bank, this situation would never arise. Simple in-game implementations of this could include taking a percentage of every unit of currency Mr. Newbie makes until his loan is paid off, as well as giving our original lender (the one earning interest by depositing in the bank) a slightly increased amount of money for each kill he makes.

Now, there’s nothing here that says the banks themselves have to be completely controlled by the players; that would leave to extremely ill-founded practices in some instances (praying on new players, among other things). It seems like it would be a safe assumption to say that the game designers, or the controllers of the game itself would have very in-depth knowledge of the inner-workings of their game’s monetary system. Even now, when dupes are found with currency, the problems are retracted relatively quickly. This hints at a monetary system which is at least somewhat secure (or, if not secure, prepared for the worst). Why not expand this?

Consider the scenario where the player above defaults on his loan. Well, in the real world, the bank would be out the money. The original investor would be shielded from this event by the bank and the FDIC, so the bank would take the hit. However, game companies are very good at filling out the details of certain situations. We now have extremely complicated PvP systems, extremely detailed and complicated raid zones for drones of mindless raiders to waste away in at night. Could not some of this energy be applied to creating a strong financial system? If done in a black-box fashion, a defaulted loan could simply result in a lower interest rate for future investors (in the short run), causing the bank to recoup its losses in a relatively quick manner (though there would likely be many defaults and thus many interest rate fluctuations in a given time period).

Of course even then there are downsides to all of this, but: aren’t there downsides to any aspect of any game? A simple implementation of this kind in a future game could set a trend that would make it a norm in online games. Money could grow, and it could encourage new players and the younger masses to not only use it to their advantage, but, in so doing, teach them valuable lessons about money and banking. That way, next time Mr. Newbie’s mom is screaming at him to get off of the computer and go to bed, instead of screaming back he can say “O.K., mom, just let me make this last deposit!”