socalfunplaces Chapter 285 Virtual Economy
Chapter 285 Virtual Economy
March 20, 1998, 7:20 a.m.
In the main conference room of the Xingyu product team, eight laptops were placed on a long conference table, all with their screens lit up, displaying different versions of the Xingyu test interface. The whiteboard on the wall was covered with formulas, flowcharts, and user behavior models.
Ling Yun stood in front of the whiteboard, a marker in his hand. The pen tip hovered above the words "Level System," the ink already dry. He stared at those words for a few seconds, then turned away.
There were seven people sitting in the conference room: Xingyu CEO Carly, Product Director David, Technical Lead Eric, Operations Manager Catherine, the new data analyst Li Ming from the Marketing Department, and two core product managers. Everyone was staring at him.
"Go live today." Ling Yun put down the marker, his voice steady.
David's finger slid across the laptop's touchpad, opening a file. "Final data verification complete. The experience value algorithm for the leveling system, the permission unlocking logic, and the pricing model for paid items have all passed simulation tests. The server stress test has also passed; the maximum concurrent user capacity is expected to reach 500,000 users upgrading online simultaneously."
"What about the user onboarding process?" Lingyun asked.
Catherine opened another document. "After registering, new users will see a three-page short tutorial: the first page explains the basic concept of the level system—gaining experience points through chatting, logging in, and completing specific tasks; the second page shows the permissions unlocked at different levels, such as unlocking personal space at level 5 and creating groups at level 10; the third page mentions the existence of paid acceleration cards and diamond memberships, but will not force a recommendation."
"Pay-to-pay conversion rate forecast?"
"Conservatively estimated, the percentage of paying users in the first month is between 3% and 5%." Li Ming pulled up a chart, "Based on sample data from 3,000 users in the internal testing phase. Young users (18-25 years old) have the highest willingness to pay for virtual outfits and level indicators, with an estimated average monthly spending of five to eight US dollars per user."
Ling Yun walked to the window and asked, "Are the media ready?"
David nodded. "The product launch is at 10 a.m. Forty-two media outlets have confirmed their attendance, including the ones that were sued last time. They'll definitely ask some pointed questions."
"Let them ask," Ling Yun said. "The data will speak for itself."
By 9:40 a.m., the press conference room was already packed. Reporters chatted in hushed tones, cameras propped up at the back. The atmosphere today was different from last time—less confrontational, more curiosity and skepticism.
Michael Roth of The Wall Street Journal sat in the third row, his laptop on his lap, his fingers tapping rapidly. A reporter from the San Francisco Chronicle was talking to the person next to him, his voice not loud, but the words "flashy" and "hype" could be heard.
In the reserved seats in the front row sat representatives from several investors: Chen Wenhao from Goldman Sachs, an analyst from Morgan Stanley, and Dr. Leila from the Abu Dhabi Investment Authority. They looked serious as they flipped through the product brochures in their hands.
At 10:00 AM sharp, the side door opened. Ling Yun walked onto the podium, followed by Carly, David, and Catherine. Today he was wearing a simple gray sweater and black trousers; there was no suit, no podium, only a wireless microphone.
"Good morning, everyone." He stood in the center of the stage, the lights shining on him. "Today we'll only talk about the product."
The large screen lit up, displaying the Xingyu logo.
"Since its launch, Xingyu has grown to over six million users in just ten months," Ling Yun said. "We've been constantly thinking about one question: besides chatting, what else can instant messaging software offer users?"
He pressed the remote control in his hand. The screen switched to a simple interface: the left side was the chat list, and the right side was a cartoonish avatar with "Level 3" above its head and an experience bar next to it displaying "120/200".
"This is the new version of Xingyu, launching today," Lingyun said. "We've introduced a level system. Users gain experience points through chatting, daily logins, and completing small tasks. Each level unlocks new privileges."
He continued the demonstration: Level 5 unlocks personal space, allowing users to upload photos, write blogs, and decorate their space; Level 8 allows users to create groups of up to 50 people; Level 12 allows users to set group administrators and use group bot functions; and Level 15 unlocks advanced skins and effects.
"At the same time," he switched to the next slide, "we've introduced the 'Diamond' system. Red Diamond: $4.99 per month, unlocks all personal space decorations and an exclusive badge. Yellow Diamond: $9.99 per month, allows users to unlock group creation privileges in advance and create large groups of up to 200 people. Blue Diamond: $14.99 per month, includes all the benefits of the previous two, plus dedicated customer service and a free monthly acceleration card."
A soft murmur arose from the audience. Reporters lowered their heads to take notes, while some shook their heads.
"What is an accelerator card?" a reporter from the San Francisco Chronicle asked loudly.
"Speed-up cards are paid items," Ling Yun replied. "One speed-up card can double, triple, or seven times the experience points a user gains in a day, depending on the type of card. Prices range from $0.99 to $4.99."
“So,” Michael Ross stood up, “you turned a free chat application into…a game? Making users pay for virtual levels and skins?”
"It's not a game," David continued, "it's a community incentive system. Levels and permissions provide users with growth goals and social capital, while virtual avatars allow users to express their individuality."
"But these are all flashy but impractical things," another reporter said. "Why would users spend money on these things for chat software? Especially young people, who don't have much money to begin with."
Catherine stepped to the front. "According to our research, young users—especially high school and college students—have a strong need for self-expression and social recognition. They are willing to spend money on things they can show off to their friends. A unique personal space, a high-level rank badge, a cool chat skin—these might be hard to obtain in the real world, but in the virtual world, they can be had for just a few dollars."
"So you're exploiting the vanity of young people?" The question was sharp.
"We are providing value," Ling Yun said. "If users don't feel it's worth it, they won't pay; it's all voluntary."
Whispers arose again from the audience. Some sneered, others shook their heads.
"Any other questions?" Lingyun asked.
"Yes," a bespectacled male reporter stood up. "I'm from Wired magazine. Have you considered that this paid model might alienate users who don't want to spend money? Could it create a class divide between 'paying players' and 'free players'?"
"We've considered it," Ling Yun nodded. "So we'll ensure that all core features—one-on-one chat, basic group functions, and file transfer—are free for all users. Paid features are value-added services that won't affect basic usage. Moreover, free users can also gain most of the privileges through activity levels, it just takes more time."
"But paid users can get it faster."
"Yes," Ling Yun said, "Time is money; it's a simple exchange."
The Q&A session lasted twenty minutes. The questions became increasingly pointed, and the skepticism grew louder. The reporters clearly did not approve of this model, considering it "naive," "shortsighted," and "a departure from the original purpose of communication software."
The expressions of the investors in the front row grew increasingly grave. Chen Wenhao spoke in a low voice to his Goldman Sachs colleague next to him, while Dr. Leila frowned as she looked at the briefing in her hand.
The press conference ended at 11:00 AM. Reporters hurriedly left, rushing back to write their articles. Their murmurs as they walked out of the hall could be heard:
"Fancy and over-the-top..."
"The Silicon Valley bubble really knows how to come up with anything..."
"Just wait and see the data; I bet nobody will buy it."