I love video games. I love them as much as Kanye loves Kanye.

Written By: Jeremy Frodl

I love video games. I love them as much as Kanye loves Kanye.

True Love

They are my bread and butter, my burgers and fries, if life gave me lemons, and I couldn’t play soccer with them, I’d ask where they are plugged in. In short, pathetic or not, I am a person who considers himself a (rather handsome) gamer. I have often been told that videogames are a waste of my time, and despite the fact that they are, I am here to prove, to the critics that, using basic economic concepts, videogames are not a total waste of time.

All things that are purchased in economics that bring a person some sort of pleasure are governed by the Law of Diminishing Marginal Utility. The law of diminishing utility states that the more units of something I purchase, the less utility (essentially happiness) I demand from it. Take for example a graph of me buying donuts, my favorite food.

On this graph I purchase and eat five delicious donuts. With each donut I eat I gain satisfaction, upon my first donut I receive twenty utils (measurements/units of utility), on my second I gain fifteen (The donut is good, but I already ate one), on my third I gain ten, and fourth I gain five (at this point I’m kind of sick of eating donuts), but once I eat my fifth donut, I well, throw up. It is safe to say I do not enjoy throwing up, and my utility shoots down by ten.

Pictured: Me after my fourth donut.

Video games do not apply to this universal law, the utility I derive from each unit I purchase is completely independent from the other, should I buy a new game, I receive a completely different experience than the previous unit provided. Should I grow tired of every genre of video game, product differentiation (what makes two otherwise identical products different, for example, Pro Evolution Soccer 2014 and FIFA 14 are both games dedicated to raising my self esteem by allowing me to make a soccer player named Jeremy and tear up the professional soccer leagues like I do in real life, however they each have different game modes and controls) allows me to enjoy the various games each genre offers.

Video games, as well as being exempt from the law of diminishing marginal utility, often come with their own online markets within, forcing the player to unknowingly adapt to various market situations that they will encounter in real life.

“I’m  learning Mom I swear!”

For example, the post last week regarding the FIFA Ultimate team transfer market. The FIFA Ultimate Team transfer market is actually an excellent, if not the best, example of market laws in action in video games. For more in depth information regarding the “Mini market” see Jack’s post from the previous week. Many other games pack similar player-controlled markets that end up being carbon copies of real life markets.

All in all, Video Games are exempt from many of the more negative basic laws of economics, and assist the player in understanding mechanics that drive the markets everywhere. Not so much of a waste of time now eh?

….Yeah they probably still are.