The Neopets Team vs. Users (2015)
Some of my fondest memories back in the day stem from the amount of time I spent playing Neopets as a middle school student. My favorite website to visit (other than neopets.com) was the Neopets freebies and game tutorials webpage, where I developed a routine list of places to visit (Tombola, the Water Faerie..) to collect all of my freebies for the day, and became an expert in a variety of Neopoint-rewarding games. Eventually, I started to make thousands of Neopoints per day. “Finally”, I thought, “I’ll be able to afford the coveted Faerie Paintbrush in a couple of months!”
Lies. When I finally saved up enough Neopoints to purchase the beautiful brush, its price had doubled. Disappointed and discouraged, I quit Neopets for a solid month before dejectedly returning to see if I could “settle” for some other brushes.
Although primarily a virtual land, the world of Neopets (Neopia) models the economic structure and hierarchy that we can see in today’s society. In her article, “Mo’ Neopoints, Mo’ Problems: How That Website We Liked As Kids Became An Economist’s Nightmare”, Victoria McNally analyzes the history of the Neopets site from its founding in 1997 to its status today. Once created as merely a way to keep “university students entertained”, Neopets grew in popularity, fast. In the span of 8 years, Neopets was valued and bought by Viacom for $160 million. The rise in user interest did not come without consequences. Inflation and wealth distribution accompanied the increasing amount of fraud-like actions conducted by users to climb up to a Neopets monopoly on auctions, trade, and rare items. This was discouraging for those like me to had worked hard for our Neopoints, but would never be able to make enough to combat the rising prices due to inflation.
To address this issue, the Neopets Team took over to regulate the logistics of the game. Multiple accounts from the same user were frozen. Sinkholes popped up to entice users to dump large sums of moneys in bets. All these actions were successful in curbing inflation, but actually led to deflation, as the monopolies of the game became discouraged by these actions and often dropped out from the game. Less trade is happening and items are not worth as much as they had been worth in the past.
In this situation, the Neopets Team (TNT) can be seen as the government, and the wealthy Neopoint-hoarding users as corporations. Through the network effect, these users were able to become increasingly rich on the site, due to the increasing amount of users that participated in their auctions for rare items they had purchased for low prices a few years ago. However, to curb the “rich get richer and poor get poorer” situation, TNT modeled government regulation and tried to even out the playing field by shutting down the corruption that wealthy users participated in, and making it harder for wealthy users to keep their monopolistic power. This was a valid intention, yet served to decrease the market size dramatically, as the amount of auctions regulated by the wealthy users diminished in size, and the general body of users was harmed in the process because of this decrease in market activity. JumpStart, as of March 2014, is currently running Neopets, and things seem to be going well, as they are trying to return to its old format while incorporating a few new policies.
There exists a fine line between government regulation and the laissez-faire economy in our world today as well. Today, there are ongoing debates regarding government regulation and 1st Amendment rights in a variety of sectors, including telecommunication, broadband services, and the press. The rights given in the 1st Amendment are often checked by the policies of other Amendments and laws that protect government rules. It seems as if the best way to find a balance is through trial-and-error; being on both extreme sides (inflation and deflation, in Neopet’s case) is helpful to move closer to the perfect economic state.
Source: http://www.themarysue.com/neopets-economy/