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Valve Hired An...Economist?

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

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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+