Replay: The History of Video Games

by Donovan, Tristan

  StarCraft’s mammoth success in Korea was mirrored by another 1998 game: Song’s Lineage. In stark contrast to The Kingdoms of the Winds, the NCSoft-released Lineage embraced a more European vision of fantasy. “When I was creating The Kingdom of the Winds it was very difficult to find all sorts of reference data because it was set in ancient Korea,” said Song. “So I set out to make a conventional medieval European fantasy and the comic book Lineage happened to be published serially in one of the magazines I was reading at the time. I felt online games should provide a playground and that the players create the stories themselves, so I didn’t really make it to relay the storyline of the comic and used only the basics of the world, for example the names of kingdoms or cities.”

  Song sought to make his new role-playing game more accessible than The Kingdom of the Winds by creating simple one-click controls and focusing the game on grandiose battles where dozens of players would co-operate to defend or storm castles in order to gain territory and the resulting tax revenue. “I wanted to create a structure where the users naturally created the content amongst themselves and it made sense when it was continuously repeated,” said Song. “That’s how the concept of players warring over castles came about.”

  These large-scale battles made Lineage a compelling social experience. “These events required intense co-operation between large groups of people and that encouraged people to play as they could build up a guild and then go siegcastle,” said Starr Long, who became a producer at NCSoft in 2001. “Western massively multiplayer games are, a lot of the time, like a single-player game, where you just happen to be with a group of other people – they are built to allow you to play by yourself for a large amount of time. Korean games were about groups.”

  Lineage became a blockbuster-sized hit in Korea. Within a year of its release, more than 500,000 people were subscribing to the game making it the world’s biggest online role-playing game. By 2003, at its height of popularity, Lineage had more than 3 million players. The Korean-made game’s success took American, European and Japanese game publishers by surprise. “We did not believe the numbers,” said Long. “We were very, very sceptical. We started playing it and it was super simple. We were asking ourselves how come it’s doing so well? Why are people so crazy about it? Lineage was huge. Electronic Arts even thought about purchasing NCSoft at one point.”

  For Song one of the biggest surprises about Lineage was how its popularity resulted in players selling virtual items from the game, such as swords or even whole characters, for real money. “When I first heard of it I couldn’t believe it and said ‘no way’,” said Song.

  Lineage was not unusual in this respect. Across the world online game players, especially those playing multiplayer role-playing games, were putting virtual items up for sale and earning real money from doing so. “People were offering real money for objects in the game that were not real,” said Rich Vogel, the producer of Ultima Online. “In Ultima Online, houses and castles were worth real money. If you had a house in a good area of the game you could get $10,000 for it.”

  The belief that items within virtual worlds have real value gained further weight when economist Edward Castronova published Virtual Worlds: A first-hand account of marketing and society on the cyberian front. His 2001 paper was a study of the economics of EverQuest, then the US’s most popular online role-playing game. Castronova concluded that Norrath, the fictional world of EverQuest, had a gross domestic product per capita of $2,266 – more than China and India and about the same as Russia. The California State University professor noted that, if it was a real place, Norrath would be the world’s 77th richest nation based on these figures.

  By 2004 it was estimated that the global trade in virtual game items was worth at least $100 million. And with serious amounts of money to be made, a new industry was born – gold farming. Primarily operating out of low-wage countries such China and Mexico, gold farming businesses employed people to spend their days in the game gathering items that could then be sold for real money. While the scale of gold farming is hard to quantify, some of the better guesses suggest that by 2008 the industry employed 400,000 people who each earned an average of $145 a month.

  Gold farming was a controversial development. Game companies worried that these players’ relentless harvesting of virtual gold and equipment could cause deflation in their virtual worlds as once rare items become widely available or inflation as prices in the game were pushed up by the growth in the amount of digital money in circulation. “Managing economics in games is very hard and you have to think about inflation and deflation,” said Vogel. “Gold farmers do affect this and that’s why you try to look out for those people and ban them when you find them. Most people who buy from the gold farmers buy money. Gold farmers cut the time people have to play – that’s why people buy.”

  Concerned, online game makers started hiring full-time economists to help them manage the macroeconomics of their virtual worlds. Another worry for game companies was that if gold or virtual items became plentiful thanks to the gold farmers, there would no longer be any incentive or challenge to keep people playing.

  These concerns led to numerous attempts to stop or limit gold farming. EverQuest publisher Sony Online Entertainment created an official real-virtual money exchange system to try and control the market. NCSoft threatened to sue gold farmers for violating their intellectual property rights, since they legally own all the virtual items in their games. Blizzard began throwing suspected gold farmers out of World of WarCraft. “Some of the companies steal people’s accounts, go onto their accounts, strip them of all their gold and then sell that,” said Pardo. “That is really harmful to the game and that’s something we work very diligently to stamp out.”

  The game industry also portrayed gold farming businesses as sweatshops, although the evidence to support such claims was patchy at best. In China, where most of the gold farming was taking place, the pay of gold farmers is around the same as the average wage and the working conditions are often better than those experienced by most Chinese employees.

  Not every virtual world developer, however, has viewed the sale of its digital currency with suspicion. San Francisco’s Linden Lab made such exchanges central to 2003’s Second Life – a virtual equivalent of the Burning Man Festival that takes place each year in Black Rock, Nevada, where thousands of people spend eight days building a fantasy town on the dry bed of an ancient lake. Linden Lab’s founder Philip Rosedale saw Second Life as a place where people could connect, do business, socialise and express themselves through their creativity. “I thought there would be a lot of advantages over the real world,” said Rosedale. “You can build things in a digital space that are imaginable but unbuildable in the real world – that could be architecture or more metaphorical things like the ability to move around very fast or to recreate your own identity.”

  Second Life was in many ways the spiritual successor to the text-based social worlds that evolved out of MUD, such as LambdaMOO, which allowed players to create interactive virtual objects. “The text-based virtual worlds that were relatively open-ended and empowered people to create things were definitely precursors to Second Life,” said Rosedale. In keeping with Rosedale’s vision for empowering the users of his virtual planet, Second Life gave players the copyright over their creations and allowed them to sell their creations for real and virtual money.[1] “We just felt that anything you created in Second Life would be analogous to creating your own web page. If you wanted a lot of content in there and you wanted people to be excited and entrepreneurially invested in it, it couldn’t possibly make any sense to lay any claim to the content.”

  The creations of Second Life’s population ranged from clothes for people’s virtual selves to interactive objects that entertained and surprised. “A lot of the creations are at the intersection of art and design, where people have taken real world ideas and gone totally berserk with them,” said Rosedale. “There was this amazing artist who made a magic wand
and if you had it in your hand when you chatted with people, all kinds of remarkable things would happen that were somewhat consistent with things you were saying. So if you said Santa Claus, Santa Claus would fly by with his reindeer. If you were standing next to a person who had one of these things then you were perpetually entertained. The guy sold them for about US$50 each and it was one of the most coveted things people could have.”

  While the population of Second Life could profit from their creations, Linden Lab earned its keep by selling the virtual real estate and running the Lindex, a currency exchange that converted US dollars into Second Life’s Linden dollars and back. “The Lindex trades about $300,000 a day,” said Rosedale. “You can put money in and take money out. It’s a completely open market – the price is not regulated one bit. We actually sell new currency into that market with the goal that the exchange rate remains roughly constant. It’s monetary policy: increasing the money supply to match GDP growth essentially.”

  * * *

  Back in South Korea the explosion in the popularity of video games and PC bangs fuelled by StarCraft and Lineage, coupled with additional government investment had encouraged the formation of many more Korean game publishers. Many of these companies started experimenting with business models in the hope that breaking away from the fixed subscription charges used in Lineage could bring online gaming to an even bigger audience. Several hit on the idea of micropayments where, instead of charging people for the privilege of playing the game, players were charged for buying extra equipment for their virtual characters.

  There were sound business reasons for taking such an approach. Few Koreans had credit cards but most had mobile phones, which could be used to make small payments. Nexon’s hugely popular 2004 game Crazyracing Kartrider, a Super Mario Kart-inspired go-kart racing game with cheery kawaii characters, typified the micropayments approach. While people could play for free, the game offered a vast range of vehicles, accessories and customisation options to buy that ranged in price from new paint jobs for 10 cents to top-of-the-range go-karts for $10.

  By the early 2000s South Korean game companies, cushioned by the huge profits they were making back home, began expanding around the world. As well as moving into Japan, North America and Europe, they also used the free-to-play business model to break into the world’s most populous nation: China.

  Like South Korea prior to Jurassic Park, China’s game industry faced endemic levels of illegal copying that had severely undermined the sales of the nation’s tiny collection of game companies such as Beijing Golden Disc, the publisher of the jingoistic 1996 Korean War-themed PC game Chinese Airforce. But for a population unable to afford their own computers and lacking credit cards, the South Korean free-to-play online games were ideal. Korean games such as MapleStory, Lineage and Crazyracing Kartrider became as popular with the Chinese as they were back in South Korea, encouraging countless PC game rooms to open in China.

  China’s communist government responded by adopting a dual personality when it came to video games. Its nationalistic side, uneasy with the number of Chinese people playing foreign games, decided to spend $1.8 billion over five years on supporting the development of 100 home-grown online games.

  By the latter half of the first decade of the 2000s China had a thriving game industry producing games geared towards the Chinese market such as Learn from Lei Feng Online, a 2006 game where players had to follow the example of Lei Feng, the People’s Liberation Army soldier idolised in China for his selflessness and dedication to Maoism, in the hope of meeting Chairman Mao Zedong. Most popular of all was NetEase’s Fantasy Westward Journey, a 2004 multiplayer game based on the famous Chinese novel Journey to the West, sometimes known as Monkey, which is set during the Warring States period of Chinese history (475 BC to 221 BC) that ended with China’s unification. NetEase’s online interpretation of the book became a major success, attracting more than 1.5 million active players at its height.

  At the same time, the Chinese government viewed video games as a threat; a corrupting influence on the nation’s youth. In 2004 China’s Ministry of Culture began searching all foreign-made games for content that was “damaging the nation’s glory”, “disturbing the social order” or “threatening national unity”. Swedish historical strategy game Hearts of Iron was banned because it treated Tibet, Xinjiang and Manchuria as separate from China[2].

  Other bans were more puzzling, such as the outlawing of Electronic Arts’ FIFA Soccer 2005. The government also banned video game adverts in the media. And, after an April 2007 report by the Beijing Reformatory for Juvenile Delinquents concluded that a third of inmates had committed crime because of video games and online porn, China’s president Hu Jintao ordered a clean up of “internet culture” that resulted in a blanket ban on the opening of new internet cafés and game rooms from May to December 2007.

  China’s most invasive attempt to control the influence of video games was the anti-addiction system it introduced in 2007. The system monitors how long people play and if they exceed three hours in a day the game switches off or important features are disabled. This tracking software, which companies are required by law to include in their online games, is also linked to individuals’ national ID numbers so the authorities can pinpoint those it regards as playing too much. Originally the system was intended to cover every player of online games but, after objections from adult gamers, the Chinese only applied it to under 18s. China got the idea from South Korea, which introduced a very similar system in 2004 amid growing public concern about young people’s obsession with online games.

  As well as bringing video games to prominence in China, the Korean free-to-play model also had a significant influence on Germany’s game industry. German companies took the micropayments formula pioneered in Korea, but sought to deliver such games via web browsers rather than the Asian-style game rooms that did not exist in Europe.

  One of the earliest German companies to pioneer the approach was Bigpoint. The Hamburg-based company began life in 2002, creating online sports team management games such as Hockey-Manager. “Our key mission is very simple games you can just enter through the browser,” said Nils-Holger Henning, Bigpoint’s director of business development. “You don’t need any download, installation or administrator rights, which means we can offer these games wherever you have internet access – the office, the university, your home, the internet café, wherever. We offer all our games for free and monetise the active users by selling virtual goods or items.”

  Although the initial games produced by Bigpoint and others were static, graphically unsophisticated titles such as Hockey-Manager, as broadband access and web browser capabilities increased Germany’s browser game firms started offering more complex and visually impressive games that emphasised the community and social aspects of online gaming to keep players coming back, such as Bigpoint’s 2010 effort 3D game Pirate Galaxy. These companies have also expanded outside of Germany, bringing free-to-play games to the rest of Europe and North America.

  By late 2009, it was clear that the innovations of South Korean developers in the late 1990s and early 2000s had reconfigured the video game business on a global level. They had pioneered revolutionary business models, provided the foundation for the Chinese game industry, turned game playing into a national spectator sport and ended the hegemony of Japanese, American and European game developers.

  [1]. Unlike most online games, Second Life is a unified whole. All players exist in the same world rather than copies of the world spread across different servers, as is the case with most online game worlds including World of WarCraft.

  [2]. Hearts of Iron is set in the years 1936-1948. During that time Tibet, Xinjiang and Manchuria were not part of China.

  Big brother: Will Wright inspects one of his sims. Courtesy of Electronic Arts

  25. Little Computer People

  Maxis’ executives looked

  on with an expression of uncomprehension. In front of them the company’s co-found
er Will Wright, whose Sim City had kept the game publisher in business for most of the 1990s, was pitching what sounded like a strong contender for worst game ever imagined.

  It’s called Doll’s House, explained Wright, because it’s a bit like one. The executives shifted uneasily in their seats. You have these little people in a house that you design and they watch TV, cook meals, go to work and sleep at night. And then something dramatic happens right, asked the executives hopefully, like someone coming to repossess the house? “No. It’s simulation, there’s not the save-the-world aspect,” replied Wright. Oh.

  Maxis declined to fund Wright’s new pet project. “It sounded so mundane: going to the toilet, taking out the trash,” said Wright. “At that point most games were about saving the world or flying a jet fighter. It didn’t seem like an aspirational game. People were very conditioned to the idea that if you had a game about specific characters there had to be a story.”

  The idea for Doll’s House, which would eventually be released as The Sims in 2000, grew out of Christopher Alexander’s A Pattern Language, an architectural theory book Wright had been reading. “Alexander is a physics guy who went into architecture and was frustrated because architecture wasn’t enough of a science for him,” said Wright. “He wanted all the principles of architecture to be clearly reducible back to fundamental principles, which was what this book was.”