Halting State

SUE: Wayne’s World

STATEMENT BY MR. W. RICHARDSON, MARCH 20, 2016 (RAW TRANSCRIPT) :

“We’re Hayek Associates. We were founded three…no, four years ago. Just over four years ago. We’re a diversified economics consultancy and market-maker. We run virtual central banks for ORGs [massively multiplayer online role-playing games]. We stabilize the economies of seventeen imaginary realms with a combined VM2—that’s, uh, a measure of the total virtual money supply—about the same size as Japan’s. We’re primary contractors for a tier-one game, VIRTUOUS GOLD, that has almost 12 million players, paying 120 a year for access and averaging another 260 on extras. We’re primary contractors for three tier-two games in the one-to-five-million-player range, including Avalon Four: also for four tier-three games, a bunch of small fry, and a couple of big development projects I can’t talk about right now without violating commercial confidentiality. What it boils down to is, we’re responsible for ensuring that 20 million players who spend roughly 6 billion a year to participate in our clients’ games don’t see their virtual stake-holdings vanish into mid-air.

“I joined Hayek about eighteen months ago when Barry and Bo Pierson—Bo founded the company, he sold his shares to Marcus last year for a couple of million just before I arrived—figured they needed someone to re-engineer their in-game vision. In my last job I was senior market intelligence officer for Kensu International’s Scottish distributor. I used to work for Disney Corporation’s intelligence unit before that. Marketing and intelligence analysis are closely related anyway, and Hayek needed both. Marcus was on the phone a lot because he was just setting up our working arrangements with Kensu, and we got talking and I did some freelance campaign development work for him, and one thing led to another. Working in this industry is a bit like Desperate Housewives, all looking for the right start-up who’s going to marry you and make you a millionaire…that’s the IPO, I guess. Or am I thinking of the unapproved options scheme? No, the IPO is like pregnancy, the options are the…hell, it’s Barry’s metaphor, he can explain it to you.

“You asked about the business? We manage economies in order to maximize player draw—to make it a compelling experience that sucks players in. Imaginary worlds with millions of players don’t obey quite the same economic rules as the real world—or I guess they obey them differently, because rather than running on money, games run on fun. I mean, if the players aren’t having fun, they’ll leave, and then what’ll we eat? We plug into Maslow’s hierarchy of needs at a different level from a traditional economic system, but a lot of the principles are the same. Money and treasure is always flowing into the game space because you need to reward the users for playing—complete a quest, pick up the treasure. Do you play any games…? No? Just CopSpace? That’s not a game, that’s a metaverse like Real World or Second Life…Sorry, I’ll get to the point, I’m just trying to explain what we do, like you asked. Modern games are infinitely scalable in size and number of players. When a customer clicks through the license conditions to play the game, they’re agreeing to add their phone as a node in a distributed server. More players equal more servers—not for themselves, I might add, we never run a server node for any given game on the same host as a client for that game, that would be asking for trouble—but at the back end, we’re in the processor arbitrage market. The game programmers’ biggest problems are maintaining causality and object coherency while minimizing network latency—sorry, I’m just telling you what our clients obsess over. Necessary background, okay?

“Anyway. One problem with using users’ machines as distributed-processing nodes is that they always try to hack the service. No need to be shocked, it’s just a fact of life. They’re always trying to get into someone else’s gaming pants, and not even running the distributed-processing nodes in a separate VM will stop them. So, to prevent fraud, every item in a distributed game space has to be digitally signed and every significant event in the local game is voted on by at least three peers, and we rely heavily on the phone’s trusted processing infrastructure. Incidentally, this means we’re into the same authorization and authentication business as your credit card company. Because if somebody finds a way to change stuff without our authorization, they can create value from nothing, then sell the results on IGE or eBay. Which is ultimately deflationary, not to mention being a howling whirlwind of No Fun At All for everybody who’s trying to play the game by the rules.

“That’s one way of looking at the picture. Not only is there this whole raft of mind-numbing automated administrative stuff that goes on every time you add a player—which is what the game developers worry about—there’s inflation. Inflation happens when money and loot flow into the game. But to keep the customers happy you have to keep rewarding them. Playing the game is inflationary because they keep burgling the tombs of dead gods, breaking into the governor of Jamaica’s dungeon vaults, colonizing the Andromeda galaxy, and so on. And you know, you can’t tax them or make the money decay, because that would be No Fun, and if the game stops being Fun, why play? That’s the difference between in-game economics and the National Bank—the bank doesn’t have to worry about whether we’re enjoying ourselves. So we have to control this tendency towards galloping stagflation, and we typically do this by offering short deposit accounts for star-ship captains, controlling the after-market in magic wands, providing mortgages for prestige-rank necromancers wanting to build their own crypts, and all that sort of thing.

“Then there’s immigration and border controls. Most modern multiplayer games run on a couple of distributed-processing platforms—Zone runs on Symbian/GDF and Microsoft Arena runs on.NETSpace—and they’ve standardized on a common client engine so they can focus on developing new content. Competition is fierce. They’ve all got scrapers and immigration incentives to persuade customers to migrate from one game to another, taking their characters and loot with them. It’s against the terms of service, but no game vendor is willing to cut their own throat by enforcing it—that’d piss off the customers. So, you’ve got out-of-band merchant sites like IGE and eBay’s Gameboard, and a whole bunch of coyotes who make their living by providing tools to migrate avatars from one environment to another, using the exit game assets as arbitrage against a position in the entry game. Which in turn means there are exchange rates between games—and not just game-to-game, I’m talking game-to-euro rates, game-to-yuan, game-to-rupee. All the strong currencies, you name it, even US dollars. So there’s currency speculation and an external market in gaming currency hedge funds, not to mention the Magic bugs who believe in keeping their loot in the most powerful magic items they can buy, like the guys who keep their savings account in a roll of gold coins under the bed. There’s dirty stuff, too, dirty tricks some of the game companies play on each other, hostile speculation and attempts to dislodge or recruit each other’s customer bases, but we don’t do any of that stuff at Hayek Associates. We play strictly by the rules.

“One way we take currency out of circulation is to sell imaginary real estate. Another is to provide safety deposit services so that players can stash their gold or loot with us for a fee—this works in game spaces with encumbrance rules. If we spot a deflationary sump, we have to create liquidity until we can plug the gap—this is something a real bank can’t do—so we can start offering interest on deposits, handing out free resurrections, that kind of thing. And while all this is going on, we have to keep an eye on how the customers are enjoying their market experience. If people start grumbling, we’ve got a problem.

“My job—well. I commission in-game campaigns to track customer satisfaction, establish hedonic goal posts, and set targets so our programmers and quants know which way to drive things to maximize fiscal stability. It’s like being chancellor of the exchequer, except you can substitute ‘fun’ for ‘profits’—up to a point, until interdomain currency conversion and hedge funds come into the picture. In monkeyspace—sorry, I mean, outside the games—I’m also in charge of marketing and sales liaison with our corporate clients. We each wear three different hats here at Hayek Associates. Making a single sale, even to a tier-three game, is potentially a multi-million euro contract for us, so a lot of work goes into it…what? Yes, I work with Marcus on closing new accounts. Yes, he’s senior to me…I suppose you could say that [he’s in charge]. No, I’m the Marketing Director. I’m only worth.5 per cent of the company’s market cap. I’m insignificant, obviously beneath your notice…

“Okay, yes, I understand that. Sorry. No more sarcasm.

“Let me see…at about a quarter past ten this morning, I was in a meeting with Marcus and…why the hell am I repeating this? You’ve seen the stream. I’ve seen the stream…No, I can’t swear that it really happened because it’s something I saw on a screen. What I thought I was seeing was a bunch, thirty, maybe forty, Orcs—they’re a character race in Avalon Four—march into the central bank. It’s in a magic castle carved out of a diamond the size of a hill, in a city floating on a mauve cloud near the Spinward Mountains, and the bank vaults are—look, they’re not a real physical vault, it’s just a database table that stores a bunch of cryptographic hashes on objects that are registered as being lodged in the bank, okay? The objects are stored in a holographic database on the players’ smartphones and the game engine keeps track of them for us. No, I can’t tell you whose phone stores a given item. They move around a lot, and there are usually copies on three or more phones at the same time. The bank is a different matter, the root authentication keys are locked down and stored in a trusted database on a server…yes, where else would you put a bank? That’s why we’re based in a nuclear bunker. It’s good public relations. Yes, the root keys are signed by the Bank of Scotland in monkeyspace. The real security is all in the firewalls, and the data integrity schemas. Nobody ever imagined a band of Orcs would steal a database table…”

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