Everything I Learned About Business, I Learned From Online Gaming
Most people who don’t game aren’t familiar with the way online games operate. They know people play it for fun, perhaps take it a bit too seriously, and possibly even consider us a bunch of loser nerds, but what they probably don’t know is that sometimes, in the world of gaming, many aspects of it are similar to real life. You just look cooler and have more adventures.
One example of that similarity is the game’s economy, and just how important it is to have a business sense in both the real world and the gaming world.
In most online games, if not all, there exists an “auction house” or “bazaar” where players post items to sell for virtual currency. Just like in reality, this currency buys you things you probably need to make your character efficient. Without these things, you can’t really do much. Think of it sort of like buying groceries, clothes, and tools. You can’t function without those things (well, you’re not supposed to anyway).
So what, exactly, could a pile of virtual currency have in common with real dollars? Well, let’s take a look.
1. You need to work hard for your money
While this rule obviously doesn’t apply to everyone in the real world, it does to most of us. Collecting this virtual currency requires you to, more often than not, break your back to farm goods, such as crafting materials, to make ends meet. In fact, I’ve found that at times, I’ve worked just as hard in a game to collect these materials as I do to make real money in real life. Just like in reality, you don’t earn gold by sitting on your ass (despite needing to sit down in order to play). You have to work for it. The process can be time-consuming and requires patience.
2. There’s always competition
This applies more to people like me who own their own business. You learn, firsthand, that you’re not the only one doing your job. There are hundreds, and in some cases, thousands of others performing the same craft as you. In gaming, someone may have just posted hundreds of crafting materials of the same type you just spent hours farming, meaning that the chance of you selling your items decreases. Most of the time, you have to advertise, to let people know you’re selling yours, maybe even at a discounted price just to get them sold.
3. Undercutting hurts you, and the entire economy
I can’t stress enough how important this is, not just in games, but in real life (especially online businesses like Etsy), because it means just as much in both worlds. Let’s say you have some stock, some inventory, that you desperately need to be rid of. You want it off your hands, and don’t care about its worth. You have a ton of it available, and none of it means anything to you. Perhaps you need some quick cash to save up for that… bike, or whatever. You post your items, and when doing so, you cut the average price in half, or even more. It’s pretty common knowledge that doing this hurts you, but try explaining that to someone who has no patience, or even worse, doesn’t know how much they are worth. By practically handing your items over for free, you not only eliminate the chance of earning good money for your product, but you tank the market, and force other sellers to drop their average price, making them less money, and making their undercutters less money, and so on and so on until someone decides to bring the market back to normal (and in many cases, that never happens. It stays ruined forever). Know what you’re worth. Know what your items are worth. Nothing is free, not in the gaming world, or in the real world. Chances are high that you spent time to make those items, and time is money (friend), no matter how desperately you need that bike. Sure, you might sell it faster, but you might not, and either way, you just ruined an economy for nothing but your own unwillingness to wait. Have patience, and do some research.
4. You need to do some bookkeeping
Believe it or not, not everything sells, regardless of how cool it looks or how useful it is. Sometimes it could take you months. Most of the time, if not all, that item took a lot of materials and a lot of time to craft. This forces you to consider your expenses. Whatever materials you used to craft that item, they cost you, whether its costing your time or money (and yes, they are both COSTS. Again, nothing is free). You need to always keep track of your expenses, and whether or not you obtained a profit from those expenses. If you only acquire a loss, then you need to keep that in mind for the next thing you sell. You also need to keep trying to sell the old item (while retaining its original price– seriously, don’t undercut, ever). While it may take a while, someone out there will eventually need it. Everything costs something, and you need to keep track of it.
5. There Are Fees
Yes, there are fees in games with virtual currency. You pay fees. To be honest, I admit this is actually ridiculous. In the real world, the fees go to a person charging that fee. In games, the fee doesn’t go to anybody– it’s just a deduction of your gold (or platinum, or whatever) meant to balance the economy. Regardless, just like in the real world, you have to pay them. There are fees for all sorts of things: sending mail, posting auctions, buying materials, you name it. Consider them sort of like game taxes. Selling something via auction takes out a percentage of your currency– it keeps that percentage. You have to consider this percentage each time you post something. Sometimes, you have to post it a few silver or gold over your original price to make up for the extraction. It works sort of the same way with selling something online, sometimes with listing fees and shipping costs.
6. There are scam and rip-off artists
Yes, even in a virtual world, people are looking for a “break” from having to do any actual work. This is why bots exist (an automatic program that does work for you without you having to play). There are people who steal accounts from others to take their gold and items. There are people who promise you items and don’t follow through. There are people who take things for themselves unfairly. Just like in real life, people will try to scam you. It’s just as transparent in the gaming world as it is in real life, but what can really annoy you about them is how badly they can ruin the economy, and how quickly. As you can imagine, someone who is using a bot can “farm” materials more efficiently than someone who isn’t cheating at the game. They can post twice as many auctions, a lot of the time, undercutting prices severely. You might see this sort of thing on Ebay once in a while, where things are priced much cheaper than they should be. It can also happen the other way around– someone posting an item for much higher than it’s actually worth, attempting to fool people who don’t know any better. It’s a lot like seeing a silver-plated bracelet that is priced about the same as a bracelet made from pure Sterling. You have to know when people are trying to rip you off, whether you’re buying materials, or buying items. Always do research before buying something. You might be able to get it from a vendor for half the price someone is trying to scam you for.
7. The rarer the materials (or items), the higher the price
Just like in reality, some items, or materials, are rarer than others, and you’d better believe that the richer folk are willing to drop tons of money on that. However, the time has to be right, and the customer does, too. It becomes especially imperative with rare materials to never undercut them. It’s inevitable that someone is going to drop the price way too low, but because it costs you so much to get it, whether it’s time or materials, reselling something you make out of those materials is important, and you have to know how to price it. In the gaming world, it could cost you hundreds of gold (or whatever the currency is in your particular game) to buy rare materials. If you make something out of those rare, precious materials and plan to sell it, you have to price it higher than what it cost you, always, or obviously, you lose a ton of money.
8. Sell enough of something, and you will have customers coming back
If your prices are good, and your items are good, people will continue to buy from you, especially if you’re pleasant to deal with. Always remember to treat your customers with respect– they’re the ones making you money.
9. You need to have fun doing what you do
Chances are, if you don’t like to work, you aren’t going to (in a gaming world, that’s an option, unlike reality). Some people are, for lack of a better word, “lazy”. It’s difficult to explain to everyone who asks me how I can keep doing the same things over and over, but I can do it best in this way: the repetition is comforting, and making new things is fun. I like to go on endless searches for materials to craft new things. I like to put stuff together. I like to work with my hands, to create, to work. If it’s not any fun, you’re likely to abandon it before getting very far with it. Sometimes it can be frustrating if you can’t get things just right. Sometimes you’ll be angered that someone else is ruining your shop by lowering their prices too far. Sometimes you won’t sell something for a while. But I honestly could never give up what I do. It’s fun, and it passes the time. I always play music, or listen to something amusing, or watch a film while working, in both worlds. It’s best, when running a business, to take it seriously, but it’s also important to relax.
10. Your friends will always support you
Assuming you have more friends than I do, and you probably do, you will have plenty of people there to help you if you get stuck. If I needed materials and didn’t have the money for them, someone was kind enough to give me or buy me some. Someone was there to influence me and encourage me to continue. In return, I provide them as much information as I can about how I do things, and how successful I am, as well as craft them gifts or loan them gold. Nothing beats a supportive group of people.
I’m absolutely a nerd for getting so involved in intricate things like this in games, but it taught me a lot about business before I opened my own one in the real world. Online games have been training wheels for me to be an entrepreneur, and continue to be, even to this day.
