Five Devastating Virtual Economic Collapses

Any time you put users inexperienced with the nuances of economic development in charge of monitoring and nurturing their own economy, you’re courting trouble. In certain players, the nature of video game currencies breeds a lawless mentality. They are able to act upon their basest, most venal desires with full knowledge that they are free of the legal repercussions that might come looking for them in the real world. The result is a digital recreation of the Wild West, a place where law refuses to tread and any criminal with a building can become a banker.

There have been several approaches to rectifying problems that arise in virtual economies. Some companies, like Linden Labs, have gone so far as to require real-world certifications in order to provide certain online services. Others have taken a decidedly off hands approach. Recently, Jon Lander of Crowd Control Productions (CCP), the creators of EVE Online, said “I tell you what, it's going to be f***ing brilliant” in response to a plot hatched by the game’s Mittani Goonswarm alliance to destroy the most populated hub in the game. CCP even prepared for the event by switching servers around and dedicating more processing power to the Jita system.

Whether invited or discouraged, many games — and many people — have suffered at the fickle hands of video game economics. Some fell prey to the empty promises of the classic Ponzi scheme. Others were innocent bystanders, led astray by a kind stranger with an overflowing coin purse and a silver tongue. In the end, the result is almost universally the same where real money is tied to virtual currency: real people lose real money.

So, from the temperate plains of Diablo III’s Sanctuary to the cold, sterile corridors of EVE Online’s Strategic Cruisers comes a list of five major virtual economic collapses.

5 Diablo III’s Gold Duplication

In 2013, trouble rode a pale horse into the land of Sanctuary, the fantasy setting of the Diablo series, and lo! he came disguised as an angel of light. Following an update in May, players discovered a glitch that allowed them to double their gold when canceling auction house transactions.

In mere hours, gold was flooding into the game by the trillions. An infinite supply of little yellow bits began chasing after a limited quantity of goods. Inflation took hold and the price of items rose exponentially. In transaction after transaction, dirty gold was received by clean players.

Within 24 hours, Blizzard took the auction houses offline but the damage was already done. Over 350 trillion gold had materialized out of thin air. The economy was in shambles and players — already wary of the real-money auction house — flooded the game’s forums with requests to rollback the servers to before the update. Blizzard took a different route, instead attempting to identify players who used the exploit for personal gain, eventually removing the majority of the excess gold.

On September 17, 2013, Blizzard announced that the auction houses would be shut down in March 2014.

4 MapleStory’s Packet-Forging Woes

In 2011, MapleStory Europe had a problem. Intrepid players — already employing packet-forging exploits to alter their damage output — discovered an interesting interaction with the “Meso Guard” skill. Meso Guard converted damage done to the player into loss of the game’s currency, meso.

Players of the “what if” variety found themselves asking, “Well, what happens if I’m hit for negative damage?” The answer was a devastating economic collapse. Using packet-forging to trick the game into hitting them for 2 billion damage, players were able to turn every swing of a sword into 2 billion mesos.

So what do you do in a game centered around crafting and trading when you find yourself with a practically unlimited amount of money? You buy everything. Players spent their illicit gains wantonly, clearing out the shops of random players and distributing the meso amongst a vast population of otherwise uninvolved parties.

Nexon, the publisher of MapleStory, responded by distributing trade-bans across a wide swath of the game’s population, banning the guilty and the innocent alike while claiming that a rollback wasn’t possible. The exploit was left unpatched, and players continued to flood the economy with illicit meso for days.

3 Second Life’s Virtual Ponzi Scheme

Ginko Financial was a classic case of sounding too good to be true. Promising users an interest rate of more than 40 percent, thousands of Second Life users opened accounts with the bank and began depositing their Linden dollars. Over a hundred million Linden dollars, valued at $0.004, were stored in Ginko Financials virtual vaults.

When Second Life’s publisher, Linden Labs, placed restrictions on in-world gambling, investors — long suspecting the bank’s investments were backed by in-game casinos — flocked to the bank to withdraw their money. Unable to pay up, the accounts were converted into perpetual bonds, and an estimated $750,000 in US dollars simply vanished.

In the wake of the event, Linden Labs announced that in-game banks offering interest-paying accounts would require real-life banking licenses. The company, furthermore, issued a statement to “caution our residents to be wary of anyone offering extremely high interest rates at no risk, either in the real world or in Second Life.”

2 RuneScape’s Case Of Infinite Hats

In 2003, a player named Sixfeetunder just wanted to trade in his scythe. RuneScape, however, decided to make it difficult for him. Resorting to a third-party programmed called AutoRune, Sixfeetunder inadvertently stumbled upon a glitch that would forever alter the course of RuneScape’s economy.

While trying to trade his scythe, Sixfeetunder discovered a glitch that allowed him to spawn any item in the game. By entering the item’s number into AutoRune he was able to fool the game into placing that item into his inventory. As a gamer, Sixfeetunder was a naturally social creature and, therefore, decided to share this arcane knowledge with a select few close friends.

Within a few days, hundreds of players became aware of the glitch and focused their efforts on creating the most expensive — and most foolishly named — item in the game: the pink partyhat. The spontaneous, repeated generation of the game’s rarest items caused their individual values to plummet. The pink partyhat, once a symbol of the RuneScape cognoscenti, became like the purple partyhat, now the least expensive hat in the game.

Jagex, the game’s publisher, was unable to identify the mechanism behind the glitch. The issue was finally resolved after it offered a bounty in the form of a lifetime membership to anyone who could explain how the bug worked.

1 EVE Online And The Collapse Of EBANK

EBANK had its fair share of heartache even before it announced, in August 2009, that it was 1.2 trillion ISK — EVE Online’s in-game currency — in the red. Earlier the same year, EBANK CEO Ricdic had embezzled 250 billion ISK in order to pay his son’s medical bills and put a down payment on a house.

EBANK Chairman Ray McCormack explained the rocky history of the financial institution, saying, “Controls were not enforced, auditing was never completed and reporting was almost non-existent.” In combination with Ricdic’s embezzlement, the bank was saddled with an estimated 380 billion ISK in defaulted loans and a run of withdrawals after Ricdic’s actions were exposed. Further examination revealed a staggering history of defaulted loans with individual loans often exceeding 5 billion ISK and reaching as high as 275 billion ISK.

In light of the bank’s growing deficit, McCormack froze all accounts with EBANK, effectively disallowing withdrawals and halting the accumulation of interest. In the shuffle, a minimum of 1.2 trillion ISK — the equivalent of roughly $37,000 US dollars — simply evaporated and drifted listlessly into the endless vacuum of virtual space.

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