An Economic Analysis on Online Game Service Export

@article{Huhh:2009, abstract = {This paper investigates an economic problem of a firm that provides online game service. Besides pricing and fine-tuning of its game design, the firm should consider a virtual economic environment of its service, for the policy on this respect can influence its profitability. Among virtual economic issues, Real-money Trading (RMT) emerges as the most important one in online game business, which is defined by players' unofficial transactions between in-game virtual objects such as in-game currencies, weapons, armors, and money in the real world. This paper addresses impact of RMT on the profitability of the firm. This paper addresses theoretical cases that RMT enhances firm's profit. This shows why RMT is likely to be tolerated by the firm despite the fact that RMT may violate contractual agreements between the firm and players. To keep track of reality in online game business, we examine impacts that two variants of RMT have on firm's profit additionally. By comparing four different regimes to price an online game, conditions that each regime earns highest profit are identified.}, author = {Huhh, Jun-Sok}, citeulike-article-id = {5663599}, citeulike-linkout-0 = {http://ssrn.com/abstract=1335120}, citeulike-linkout-1 = {http://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1463258_code538122.pdf?abstractid=1335120&mirid=1}, day = {30}, journal = {Social Science Research Network Working Paper Series}, keywords = {ecra}, month = {January}, posted-at = {2009-08-28 15:41:54}, priority = {2}, publisher = {SSRN}, title = {An Economic Analysis on Online Game Service}, url = {http://ssrn.com/abstract=1335120}, year = {2009} }

TY - JOUR ID - Huhh:2009 L3 - citeulike-article-id:5663599 N2 - This paper investigates an economic problem of a firm that provides online game service. Besides pricing and fine-tuning of its game design, the firm should consider a virtual economic environment of its service, for the policy on this respect can influence its profitability. Among virtual economic issues, Real-money Trading (RMT) emerges as the most important one in online game business, which is defined by players’ unofficial transactions between in-game virtual objects such as in-game currencies, weapons, armors, and money in the real world. This paper addresses impact of RMT on the profitability of the firm. This paper addresses theoretical cases that RMT enhances firm’s profit. This shows why RMT is likely to be tolerated by the firm despite the fact that RMT may violate contractual agreements between the firm and players. To keep track of reality in online game business, we examine impacts that two variants of RMT have on firm’s profit additionally. By comparing four different regimes to price an online game, conditions that each regime earns highest profit are identified. JF - Social Science Research Network Working Paper Series TI - An Economic Analysis on Online Game Service PB - SSRN KW - ecra AU - Huhh, Jun-Sok PY - 2009/January/30/ UR - http://ssrn.com/abstract=1335120 ER -