At first glance, using economics to study video games seems counterintuitive. After all, is not economics all about work, and are not games about play? How much do they really have in common? It is certainly true that when we talk about economics, we are usually speaking about our commercial lives: buying and selling, our jobs, the interest rates on our mortgages, and lots of other things we rarely think of as fun or entertaining. But our economic decisions are about much more than what we do in the marketplace, and economics actually has a lot to say about how and why we play.

Economics is the study of human action and choice, and it applies nearly everywhere in life, including games and entertainment. Whether we are playing the stock market or The Legend of Zelda, we are always making economic decisions and living out economic principles, even if we do not realize it. More important for this book, our actions when we play also help to create large, complex economic systems that rival real-world economies. Virtual worlds develop specialization, division of labor, trade, money, entrepreneurship, and even legal institutions that enforce social norms and protect property rights. Thus, virtual economies are often anything but simple simulations, and their economic development gives the lie to the claim that they are little more than diversions from “real” life. In fact, if we look at them from a wider perspective, a picture begins to emerge of an extraordinary order that exists in and around games. This order develops from the actions of individual gamers and developers, who together create a vast system of social cooperation that links millions of people around the world and influences even the highest levels of industry.

The purpose of this book is to explore this (often hidden) order. It asks what economics can teach us about video games and reveals the intricate economic logic that underlies so much of what happens in games and the gaming industry. Whether we approach video games as researchers, industry professionals, gamers, or something else entirely, knowledge of economics is valuable and even vital. Thinking of games in an economic way helps explain their social implications and opens up new possibilities for academic research, but it also allows for greater communication between gamers, professionals, and academics.