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Valve Hired An...Economist?

A smart move, as the company experiments with new business models.

There are few companies playing with the economics of free-to-play and microtransactions on the level Valve is, so it really isn't that surprising when the company reveals it’s hired an economist.

Valve contacted economist Yanis Varoufakis when Europe's financial turmoil became apparent in 2009. Varoufakis is not a “gamer,” and before being contacted by Valve, hadn’t played a video game since Space Invaders. When Gabe Newell’s email showed up in his inbox, there was no geek out moment.

“I thought to myself: Oh, not another ‘business proposal’ from a crackpot,” he wrote on Valve’s blog. “However, something in my head stopped my finger from pressing DEL while my eyes pondered the next line: ‘We are running into a bunch of problems as we scale up our virtual economies, and as we link economies together. Would you be interested in consulting with us?’

As part of a book tour, Varoufakis booked some time in Seattle and met with Valve, which quickly lead to a relationship where Varoufakis would become, as he puts it, Valve’s economist-in-residence. Varoufakis is working with Valve as its continued economic experiments continue, such as the upcoming free-to-play Dota 2.

“My intention at Valve, beyond performing a great deal of data mining, experimentation, and calibration of services provided to customers on the basis of such empirical findings,” he said, “is to to go one step beyond; to forge narratives and empirical knowledge that (a) transcend the border separating the ‘real’ from the digital economies, and (b) bring together lessons from the political economy of our gamers’ economies and from studying Valve’s very special (and fascinating) internal management structure.”

The post by Varoufakis is totally worth your time, and apparently we can look forward to weekly updates in the future.

Also, while we're talking about making economics understandable, I can't recommend NPR's Planet Money enough.

Patrick Klepek on Google+
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Posted by patrickklepek

There are few companies playing with the economics of free-to-play and microtransactions on the level Valve is, so it really isn't that surprising when the company reveals it’s hired an economist.

Valve contacted economist Yanis Varoufakis when Europe's financial turmoil became apparent in 2009. Varoufakis is not a “gamer,” and before being contacted by Valve, hadn’t played a video game since Space Invaders. When Gabe Newell’s email showed up in his inbox, there was no geek out moment.

“I thought to myself: Oh, not another ‘business proposal’ from a crackpot,” he wrote on Valve’s blog. “However, something in my head stopped my finger from pressing DEL while my eyes pondered the next line: ‘We are running into a bunch of problems as we scale up our virtual economies, and as we link economies together. Would you be interested in consulting with us?’

As part of a book tour, Varoufakis booked some time in Seattle and met with Valve, which quickly lead to a relationship where Varoufakis would become, as he puts it, Valve’s economist-in-residence. Varoufakis is working with Valve as its continued economic experiments continue, such as the upcoming free-to-play Dota 2.

“My intention at Valve, beyond performing a great deal of data mining, experimentation, and calibration of services provided to customers on the basis of such empirical findings,” he said, “is to to go one step beyond; to forge narratives and empirical knowledge that (a) transcend the border separating the ‘real’ from the digital economies, and (b) bring together lessons from the political economy of our gamers’ economies and from studying Valve’s very special (and fascinating) internal management structure.”

The post by Varoufakis is totally worth your time, and apparently we can look forward to weekly updates in the future.

Also, while we're talking about making economics understandable, I can't recommend NPR's Planet Money enough.

Staff
Edited by CaLe

I remember seeing them looking for an economist on their hiring page. I believe they are also looking for psychologists and mathematicians.

Edited by Video_Game_King

Are you saying that their economist is a spy? For who? I DEMAND ANSWERS!

Well, there goes my attempt to screw somebody out of a quest.

Edited by Ravenlight

What is the first pic supposed to illustrate?

@Video_Game_King said:

Are you saying that their economist is a spy? For who? I DEMAND ANSWERS!

Economist sappin' mah spreadsheets!

Posted by TheHT

This sounds fucking awesome. Fascinating even! Definitly going to be following this.

Posted by Video_Game_King

@Ravenlight said:

What is the first pic supposed to illustrate?

TF2 fan f(r)iction?

Posted by MordeaniisChaos

@CaLe said:

I remember seeing them looking for an economist on their hiring page. I believe they are also looking for psychologists and mathematicians.

Psychologists and mathematicians aren't new for their hiring methods though. They talked about hiring psychologists for helping playtesting/ guidiing the player in Half life and Portal games. I believe Portal 2's dev commantary says as much.

Posted by RussianDrink

@CaLe said:

I remember seeing them looking for an economist on their hiring page. I believe they are also looking for psychologists and mathematicians.

Aye. I applied to Valve as a statistician and had a phone interview but it didn't work out. Got plenty of suggestions on how to improve, though. Definitely will be trying again in a few years after I have more experience and expertise.

Posted by Agent_Eli

There's another NPR show that I would highly recommend, "Marketplace".

Posted by TheHumanDove

I remember they had a psychologist working with the team for Silent Hill 4 back in the day. True talk

Posted by Demyx

@CaLe said:

I remember seeing them looking for an economist on their hiring page. I believe they are also looking for psychologists and mathematicians.

whoa whao whoa, I'm majoring in psychology. I could work with video games?? What What raise the roof.

Posted by Little_Socrates
Posted by slackrabbit

This guy is really good. I watch him getting interviewed by Max Keiser was impressed at his straight talk over the financial crises back in 2007/2008. He predicted allot of the trouble to come and said the media and governments were in denial about how bad things were. Good one Valve for getting him on the team, this is one economist that lives in the real world.

Posted by supamon

@Ravenlight said:

What is the first pic supposed to illustrate?

@Video_Game_King said:

Are you saying that their economist is a spy? For who? I DEMAND ANSWERS!

Economist sappin' mah spreadsheets!

Pyro! Economist check! C'mon!!

Posted by Matterless

@Luigi8922 said:

There's another NPR show that I would highly recommend, "Marketplace".

And Ezra Klein's Wonkblogin The Washington Post does a great job of explaining the economic issue du jour from a public policy perspective. I'm a big fan of charts and graphs.

Posted by skadave

No Bow Tie? You can't trust an economist without a bow tie.

Posted by ckeats

"Link economies"? Bullshit. Valve is clearly going to make their own currency and buy a country.

Posted by heatDrive88

Jesus christ, that man has no neck.

Online
Posted by AlexanderSheen

@Video_Game_King said:

@Ravenlight said:

What is the first pic supposed to illustrate?

TF2 fan f(r)iction?

Don't do this King, I've been there. Comments like this will just make things worse for everyone involved, but mostly for you.

Posted by mbr2

@CaLe said:

I remember seeing them looking for an economist on their hiring page. I believe they are also looking for psychologists and mathematicians.

I thought they already hired a psychologist for HL2.

Posted by Video_Game_King

@ckeats:

I think you fucked up the order, there.

Posted by SaturdayNightSpecials

That guy looks like he has snapped necks.

Posted by Scratch

Valve is always hiring weird people. Didn't they hire a psychologist in the past? Or maybe that was just in my head.

Posted by ArmedBear

Chariot chariots...those of you hired as economists for the company: good news! We have a much better job for you! It is what we at Valve like to call...a test! Stop by the armory for your crowbar and shotgun. You'll know when the test begins.

Posted by Begilerath

@ckeats said:

"Link economies"? Bullshit. Valve is clearly going to make their own currency and buy a country.

Is the currency going to be hats?

Posted by Chroma_Auron

He sounds like an interesting guy who is not a typical economist but someone who cares about the whole picture.

Posted by mlarrabee

@heatDrive88 said:

Jesus christ, that man has no neck.

And I think he's about to break mine.

Edited by believer258

@ckeats said:

"Link economies"? Bullshit. Valve is clearly going to make their own currency and buy a country.

I hope they do. I'd move there in a heartbeat.

"Valve-topia: Where ridiculous sales are the name of the game".

Online
Posted by dr_mantas

Shmee to Shmay economies whatever.

Where is Half Life 3?

Posted by IanYarborough

I know that MMO's have been dealing with this for years (gold farming, level farming, etc.), but I find the timing for this interesting, what with Blizzard finally opening the Real Money Auction House in Diablo 3. I'm not playing D3, but I'm definitely following this as I'm curious to see what this particular interface between real and virtual economies brings. Especially the boundary zone of difference between the in-game value Blizzard places on items versus the valuation consumers/players place on them.

This stuff can only become more and more important as so much of what we do goes online. In an age where the value of virtual and non-physical goods and intellectual properties seems to be the focus of intense scrutiny and legislation (SOPA/PIPA), I'm glad to see that Valve takes the issue so seriously. Not that I'd expect any less from them.

Posted by louiedog

Why did that guy steal the lower half of Bruce Willis' face?

Posted by Sharpless

So they hired The Heavy to be their economist? Seems legit.

Posted by hardindr

Yanis is a good guy to listen to about Greece, but Planet Momey on NPR? Not so much, more to come later...

Posted by Morph89

@Sharpless said:

So they hired The Heavy to be their economist? Seems legit.

I applaud you sir.

Posted by TheDudeOfGaming

Valve hired him because they want to purchase a country and they need that dude to get the economy up and running.

Edited by hardindr

Hey, I'm back. If you are interested in hearing Yanis talk about the mess in Greece and the EU, go to this URL http://www.leftbusinessobserver.com/Radio.html and search for Yanis for several in depth interviews. Doug Henwood, a Marxist economics journalist who has covered Wall Street for 25+ years, explains why Adam Davidson of NPR's Planet Money is a bum here http://lbo-news.com/2012/01/15/npr-hack-apologizes-for-wall-street/ . For an hour long chat between Henwood and Davidson about Henwood calling him a bum, please see here http://lbo-news.com/2012/06/10/my-chat-with-adam-davidson/ .

Edit: Put links in.

Posted by EchoEcho
Posted by Jugglerman

Great, thanks for the update Patrick!

Posted by dezvous

Hey Patrick, just a heads up. Fourth paragraph.

Varoufakis is working with Valve as its continued economic experiments continue, such as the upcoming free-to-play Dota 2.
Posted by EpicVandal

I just read that blog then came here and saw your story, it was a great read and I can't wait to keep following it. It looks like these blogs are something the company is going to start offering its employees as if you go to the main page there was another one from member of the VALVe family. Haven't read that yet and I hope it's not just another "I'm a game designer" blog. Time will tell though!

Posted by Toxeia

@believer258 said:

@ckeats said:

"Link economies"? Bullshit. Valve is clearly going to make their own currency and buy a country.

I hope they do. I'd move there in a heartbeat.

"Valve-topia: Where ridiculous sales are the name of the game".

Imagine how long it would take for a public works project to be completed though.

Posted by sBlacksmith

I suppose Valve needs someone to reply to all the 'valve is devaluing games with its sales' accusations.

Posted by Subjugation

Economist is credit to team.

Posted by Christoffer

This sounds really interesting, as anti-cool that may sound. Economists and market economy have catched my attention more and more the last few years and I don't know why. Understanding the market must be a suppressed desire of mine.

Though I could probably never tell the difference between Gabe Newell and a crackpot so I think I stay out of that profession.

Posted by StressedOutCat

Step one: in game Hats!

Step two: ......

Step three: Profit!

Posted by swedmiro

So now they transform to the Evil Empire..only Notch stands firm against the forces of darkness!

Posted by 2HeadedNinja

@Scratch said:

Valve is always hiring weird people. Didn't they hire a psychologist in the past? Or maybe that was just in my head.

There were looking for one, not sure if they hired yet ... makes perfect sense to me too.

Posted by spartanlolz92

smart idea considering that they have dota and tf2

and will probably start working on tf3

Posted by Eviternal

@Video_Game_King said:

Are you saying that their economist is a spy? For who? I DEMAND ANSWERS!

Well, there goes my attempt to screw somebody out of a quest.

For that, I'm going to point out that you spelt "whom" incorrectly. Also, GB should scrap that quest as it results in asinine comments and fruitless responses. Just like this one.

On topic, this news is interesting, but hardly surprising given Valve's fiscal choices.

Posted by Patman99

Hiring a Greek economist who was an advisor to the president that led Greece into the trouble it's in today. Hopefully this works out for them.

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