Unconventional Exchange: Methods for Statistical Analysis of Virtual Goods

Abstract: Hyperinflation and price volatility in virtual economies has the potential to reduce player satisfaction and decrease developer revenue. This paper describes intuitive analytical methods for monitoring volatility and inflation in virtual economies, with worked examples on the increasingly popular multiplayer game Old School Runescape. Analytical methods drawn from mainstream financial literature are outlined and applied in order to present a high level overview of virtual economic activity of 3467 price series over 180 trading days. Six-monthly volume data for the top 100 most traded items is also used both for monitoring and value estimation, giving a conservative estimate of exchange trading volume of over {\pounds}60m in real value. Our worked examples show results from a well functioning virtual economy to act as a benchmark for future work. This work contributes to the growing field of virtual economics and game development, describing how data transformations and statistical tests can be used to improve virtual economic design and analysis, with applications in real-time monitoring systems.