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Comparing the value of player donations to Haiti relief efforts to the cost of a titan. (Based on this visualization of relative ship prices.)

Late last month, EVE players were witness to a fascinating economic situation: since January 29th, more than 606 billion ISK worth of items was donated to Haiti from the players of EVE. Of course, Haiti has no use for ISK, so CCP converted that ISK back into USD and donated the money to the Red Cross. As far as I can tell, this is the first time people could use their virtual wealth to better the condition of people outside that world.

This is not the only program of its kind – Massively pointed out that Sony Online Entertainment ran a program where the revenue from the sale of in-game items would go towards aid for Haiti. But there’s a really critical difference between those programs; the items people bought from Sony were bought with USD. Sony was basically making virtual items for people for free, and passing the money along (plus a matching donation on their part). This is certainly laudable, but is essentially the benefit-concert model – they provide a service that people are willing to pay for, and donate the proceeds of that service to a worthy cause. CCP also did something a bit like this back in 2004 – making it easy for people to make donations from their account pages. (Thanks to Kári for pointing this out in the comments!)

In EVE’s case, it’s a bit more complicated than that, but this complexity is why I think what happened is so interesting. It’s not simply that CCP set some arbitrary exchange rate for ISK and made the virtual currency disappear. This is going to seem a bit elaborate, but bear with me for a quick diversion into how EVE subscriptions work and we’ll end up back at Haiti in the end.

If you have an EVE account, there are two ways to pay for it each month. You can either pay a regular subscription fee in USD to CCP or you can buy a “timecard” each month and enter the code on that card into your account to credit the account with a month of play time. Historically, these timecards were created for people who didn’t have credit cards – you can buy these physical cards with cash or use PayPal to buy them from an online retailer. Lots of games do this, especially games aimed at younger players who don’t have credit cards. You’ll see tons of these cards in convenience stores everywhere for worlds like Club Penguin and Gaia Online.

The clever realization CCP had was that they could set up an exchange where players could trade these timecards like an in-game item. The way it works now is that when you buy a time card, it doesn’t get directly applied to your account. Instead, if I bought one, I would receive an item representing that timecard called a “Pilot’s License Extension” (PLEX). This PLEX behaves like any other item in the world. It can be bought or sold on the open market (check out its price history here – about 1800 of these exchanges happened on a recent day).

How PLEXes are created, traded, and help convert currencies.

In practice, what usually happens is that people who want more ISK in the game buy PLEXes and then sell them to players who have lots of ISK, but don’t want to pay normal subscription rates. So when I sell another player the PLEX I bought, he gives me ISK and then consumes the PLEX to keep his account going. This is basically a one way exchange rate. I could buy as many PLEXes I want and sell them to other players who are willing to pay me ISK for them. The reverse isn’t true, though – if you had billions of ISK, it just means you can pay your monthly $15 subscription fee in ISK instead of USD. You could save yourself $15 USD by buying a PLEX with ISK each month, but buying more PLEXes than you can use will do you no good. There’s no way to just convert huge amounts of ISK to USD. It’s subject to market forces, too. If there are substantially more players who want to buy PLEXes with ISK, their price will rise. If there are more players trying to sell PLEXes for ISK, the price will fall. This essentially sets the exchange rate between ISK and USD and is how I calculated my USD prices of EVE ships.

So, back to Haiti. All CCP did is let players donate these PLEXes back to CCP. The vast majority of donated PLEXes were bought with ISK. CCP then makes the donated PLEXes disappear, and applies the dollar value equivalent those PLEXes (recall all of them were bought for USD by someone, and sold for ISK to the person who donated them) to the aid fund. This dance is important, because it means that CCP isn’t spending money on this (beyond administrative costs). All accounts in the system get paid for every month, either by time cards or subscription fees, no matter what. They’re just acting as intermediaries, doing the conversion of PLEX back into USD.

All this means that in a very real sense, the industrial barons of EVE who made their fortunes mining virtual asteroids and moons are turning their virtual wealth into physical life-saving supplies in Haiti.

Truly, we live in strange times.

Ship outlines adapted from Davik Rendar’s . The Haiti outline is adapted from this SVG map of Haiti, produced by Rémi Kaupp. An editable, print quality version of the visualization is available here.

Many thanks to Kimble for copy-editing and accounting knowledge, and Jon for graphical editing suggestions and the inspiration for the post.