Book Report: Managing in the Next Society by Peter F. Drucker

Well, you got me. This is actually more of a commentary than the kind of book report you dreaded in high school. I've extracted some brief portions and commented on their relevance to online games and their economies. Drucker's text is in emphasized text, follwed by my blathering. See the sidebar for a link to this book's Amazon page.

p.xi Irreversibly the Next Society is already here.
The millions (over ten million subscribers globally) who are playing online games know it, but those “outside” the gamer culture are simply unaware how much time and energy is devoted to gaming. As suggested in my Opening Volley, hundreds of thousands of dollars in transactions are silently taking place each day under the noses of those who make it their business to watch, guide, consult and invest in currency and economies.

p.12 In the mental geography of e-commerce, distance has been eliminated. There is only one economy and only one market.
This is not yet true among virtual worlds. Each has its own isolated economic and currency systems. As time progresses, however, expect assets and currency to be more freely exchanged between them - first among games with a common producer/operator (Sony and NC Soft, for example).

p.15 New distribution channels change who the customers are. They change not only how customers buy but what they buy.
Over time, it will be interesting to compare, for example, what the profile is of the buyer and purchases versus how and what people are buying and selling through eBay.

p.20 The next two or three decades are likely to see even greater technological change than has occurred in the decades since the emergence of the computer, and also ever greater change in industry structures, in the economic landscape, and probably the social landscape as well.
I will eventually expand on this observation in one or maybe more separate posts, but briefly, we are already seeing people who earn their living through virtual worlds and those who leave their “regular” jobs to do so. The ways in which our societies measure and report wealth, employment and economic strength will inevitably have to account for online role playing gamers.

p.74 How do you turn transition to an advantage?
By looking at every change, looking out every window, and asking “Could this be an opportunity? Is the new thing a genuine change or simply a fad?” And the difference is very simple: A change is something people do and a fad is something people talk about. … Don’t dismiss something simply because this is not what you had planned. The unexpected is often the best source of innovation.
Profiting from online gaming is something millions of people are doing, participating in economies that rival and exceed many real-world countries. Financial institutions did not plan for this, but have before them an opportunity to provide innovative service that can be valuable to those who call a virtual world their “home.”

p.105 There are only a few large banks today in this country that make a profit out of doing the things banks traditionally do.
p.140 Banking is not about money, it is about information.
So, for banking institutions to effectively serve online gamers’ needs, they need to know about online games, that is, what is taking place socially (e.g. demographics), technologically (e.g. operation and maintenance of the game world software) and economically (e.g. systems for trading and purchase).

p.150 Most of what passes for transnational economic money, of course, is only virtual money.
Ha! All along we have been dealing with “virtual money” and didn’t even realize that. Over time, more and more people will suspend their disbelief and embrace virtual worlds as a workplace or second job. Likewise, new investors will emerge who maybe initially only trade between game world currencies, but eventually will trade “real” world and game world monies interchangeably.

And finally, I leave you with this bombshell:
p.187 Floating exchange rates have created extreme currency instability, which in turn has created an enormous mass of “world money.” This money has no existence outside the global economy and its main money markets. It is not being created by economic activity like investment, production, consumption or trade. It is created primarily by currency trading. It fits none of the traditional definitions of money, whether standard of measurement, storage of value or medium of exchange. It is totally anonymous. It is virtual rather than real money. But its power is real.
Hmm…maybe I have it all backwards… Maybe the game world money is “real” (created by investment, production, consumption and trade), while what we are calling “real” money is demonstrated by Drucker to be “virtual” in chapter 12 of his book!