Devastating price crash in the Diablo III hamburger-dagger market

The market for a virtual hamburger which can be used in as a dagger in a popular video-game plummeted over the last week

Keeping on the hamburger theme, here's a sentence which will make sense to about two of you: the economy of Diablo III has fallen through the floor after a glut of Horadric Hamburgers (a burger which is also a dagger) for sale on the game's real-money auction house pushed the average price from around £90 to just £7.50.

The Horadric Hamburger is a "legendary" item in Diablo III. It's hard to get, and can only be found in a secret level, "Whimsyshire". And yes, it's a Hamburger which is also a dagger. The game provides only the cryptic description:

The Horadrim wandered far and wide to gather the finest ingredients for their feast. Only the lone traveler sent to the Moo Moo farm failed to return. Diablo had laid a trap for the Horadrim, the Hell Bovine, who struck the traveler down before he could gather the final ingredient: cheese.

The problem with the Horadric Hamburger is that although it's classified as an extremely rare item by the game, it's actually a bit rubbish. The game models stabbing someone with a hamburger relatively faithfully. That is to say, it doesn't hurt very much. As a result, no player who is practiced enough to find the damn thing is actually going to use it. It's a bit like a solid gold tennis-racket.

So the natural reaction of all the players was to take this immensely rare, precious, thing which they didn't actually want and use a new feature of the game which debuted last Friday: the real money auction house. There, they could sell their valuable trinket for cash money, and use it to buy real hamburgers which they can eat, rather than stab NPCs with.

Unfortunately, it seems everyone else had the same idea. As PC Games Network reported, three hours after the auction house opened, the burgers were listed at an average price of £87.91, with 12 chancers going for the maximum price of £200. By Tuesday, it appeared that they had realised their folly. Although it's impossible to tell how many sold, the average price had plummeted to just £7.50.

Virtual economies are increasingly interesting to economists, because of the sheer wealth of data they can produce. Valve, the makers of the Half Life and Portal series, recently hired Yanis Varoufakis, who rose to fame analysing the eurocrisis, as their "economist-in-residence". The President of Valve, Gabe Newell, laid out his pitch to Varoufakis:

I have been following your blog for a while… Here at my company we were discussing an issue of linking economies in two virtual environments (creating a shared currency), and wrestling with some of the thornier problems of balance of payments, when it occurred to me "this is Germany and Greece", a thought that wouldn’t have occurred to me without having followed your blog. Rather than continuing to run an emulator of you in my head, I thought I’d check to see if we couldn’t get the real you interested in what we are doing.

The Diablo economy is far simpler than the one that Valve appears to be setting up, but there's still no shortage of teachable lessons. The key one from this story is the fallacy of the idea that goods have some "intrinsic" value. Produce - even a legendary hamburger-dagger - is worth what people are prepared to pay for it. No more, no less. In this case, the labeling of the item gave faulty signals, which convinced sellers that there would be more demand than their actually was. As time went on and none sold, they were forced to cut prices to a more realistic level.

The auction house has now settled down a bit. If it goes the same direction as the auction house in Blizzard's previous game, World of Warcraft, expect to see some very interesting case studies indeed.

A hamburger. Not a virtual hamburger. Certainly not a virtual hamburger-dagger. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Interview: Momentum’s vice chair Jackie Walker on unity, antisemitism, and discipline in Labour

The leading pro-Corbyn campaigner sets out her plan for the party.

As Jeremy Corbyn’s supporters celebrate after his second win, Jackie Walker – vice chair of the pro-Corbyn campaign organisation Momentum, a Labour member and an activist – talks about the result and the next steps for Labour’s membership.

Walker is a controversial figure in the party. Her history as a black anti-racism activist and advocate for Palestine, and her Jewish background on both sides of her family, did not keep her from being accused of antisemitism for a February Facebook post about the African slave trade. In May, she was suspended from the Labour party for her comments, only to be reinstated a few weeks later after a meeting of Labour’s National Executive Committee.

Anger was reignited at an event hosted by Momentum that she spoke at during Labour party conference, on whether Labour has an antisemitism problem. Walker said the problem was “exaggerated” by Corbyn’s critics, and used as a “weapon of political mass destruction” by the media. (We spoke to Walker before this debate took place).

After a summer plagued by suspensions of Labour members, accusations of hateful speech on both sides, and calls for civility, Walker discusses what steps need to be taken forward to help bring the party together.

Jeremy Corbyn spoke in his acceptance speech about wiping the slate clean and the need to unite the party. What steps can members from all sides take to unite the party?

I think people have got to stop using antagonistic language with each other, and I think they’ve got to stop looking for ways to undermine the democratic will of the membership. That has now been plainly stated, and that’s even with something like 120,000 members not getting their vote because of the freeze. He has increased his majority – we all need to acknowledge that.

Is there anything that Corbyn’s supporters need to do – or need not to do – to contribute towards unity?

I can’t speak for the whole of Jeremy’s supporters, who are numbered in their hundreds and thousands; I know that in my Labour group, we are always bending over backwards to be friendly and to try and be positive in all of our meetings. So I think we just have to keep on being that – continue trying to win people over by and through our responses.

I was knocking doors for Labour last week in support of a local campaign protesting the planned closure of several doctors’ surgeries – I spoke to a voter on a door who said that they love the Labour party but felt unable to vote for us as long as Corbyn is leader. What should we say to voters like that?

The first thing I do is to ask them why they feel that way; most of the time, what I find is that they’ve been reading the press, which has been rabid about Jeremy Corbyn. In all the research that we and others have done, the British public agree overwhelmingly with the policies espoused by Jeremy Corbyn, so we’ve got to get on the doorstep and start talking about policies. I think that sometimes what happens in constituency Labour party groups is that people are saying “go out there and canvass but don’t mention Jeremy”. I think that we need to do the opposite – we need to go out there and talk about Jeremy and his policies all the time.

Now that Corbyn has a stronger mandate and we’ve had these two programmes on Momentum: Channel 4’s Dispatches and BBC’s Panorama, which were explanations of the group, Momentum’s role will be pivotal. How can Momentum contribute towards party unity and get its membership out on the doorstep?

I think we have to turn our base into an activist base that goes out there and starts campaigning – and doesn’t just campaign during elections but campaigns all the time, outside election time. We have to do the long campaign.

The Corbyn campaign put out a video that was subsequently withdrawn – it had been condemned by the pressure group the Campaign Against Antisemitism, which has filed a disciplinary complaint against him. What are your thoughts on the video?

I find their use of accusations of antisemitism reprehensible – I am an anti-racist campaigner and I think they debase the whole debate around anti-racism and I think they should be ashamed of themselves. There is nothing wrong with that video that anyone could look at it and say this is antisemitic. I would suggest that if people have doubt, they should look at the video and judge for themselves whether it is antisemitic.

There’s been a compliance process over the last several months that’s excluded people from the party for comments on social media. Now that Corbyn is in again, how should compliance change?

One of the issues is that we have gotten Jeremy back in as leader, but control of the NEC is still under question. Until the NEC actually accepts the recommendations of Chakrabati in terms of the workings of disciplinary procedures, then I think we’re going to be forever embroiled in these kinds of convoluted and strange disciplinary processes that no other political party would either have or put up with.

There have been rumours that Corbyn’s opponents will split from the party, or mount another leadership challenge. What do you think they’ll do?

I have absolutely no idea – there are so many permutations about how this game could now be played – and I say game because I think that there are some who are Jeremy’s opponents who kind of see it as a power game. I read a tweet somewhere saying that the purpose of this leadership election – which has damaged Labour hugely – has nothing to do with the idea that actually Owen Smith, his challenger, could have won, but is part of the process to actually undermine Jeremy. I think people like that should really think again about why they’re in the Labour party and what it is they’re doing.

Margaret Corvid is a writer, activist and professional dominatrix living in the south west.