Monday, 19 April 2010

The idiot tax

Billions of innocent pixels have lost their lives this week across the blogosphere as debate raged over the merits of a virtual horse. Some raged against it, as Totalbiscut did in his TRH video, but hundreds of thousands more (as many as 700,000 if internet rumour is to be believed, which it frequently isn't) spent real world money to acquire it. At 25$ each, that's a revenue of $17.5M straight into the already over-stuffed Blizzard bank. If Mike Morhaime wasn't gold-capped before, he surely is now.

So what kind of fool would spend $25 on a cosmetic item that provides no substantial benefits? Well, pretty much the same kind who would spend a fortune on a pair of Jimmy Choos or an Armani suit when the alternatives offer far more functionality at a lower price. The same ones who spend money on wine when tap water is both cheaper and healthier. The same ones who spend $15 a month to play a video game when they could be saving it up for a rainy day. Fools like us, in other words.

Now you may not want to buy the magic sparkle pony (I think it's hideous), but that doesn't mean it's a bad thing if other people do. There's no impact on game balance and it's extra revenue that supports the game you are playing, keeping your subscription down. The WOW subscripton in the UK hasn't risen since the game was introduced, not even in line with inflation, which averaged around 3%. If they had done that, prices would be 16% higher. Cosmetic in-game items and other services like paid realm-transfers help make up that income, which is falling in real terms.  Effectively, the people who pay for these things are subsidising the rest of us.

This sort of "idiot tax" is common in the real world. Taxes on alcohol or cigarattes help fund vital public services and national lotteries fulfil a similar role. They are entirely optional - if you're short of money or don't think it's fun, you don't have to pay the tax.

So there's no need to mock or be angry with people who do. Be grateful. They're saving you money.

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