(Bloomberg opinion) – The advent of gambling, especially computer gaming, marks a fundamental break in human affairs. Gaming is fundamentally changing two central aspects of the modern world: culture and regulation. There will be no going back.
Culturally, the West has been in a dialogue with itself for centuries, even millennia, which goes back at least to the Bible and the ancient Greeks. Literature, music, cinema and the visual arts offer a common knowledge that intellectual elites should be familiar with. If you know one part of this canon, you can usually master the other parts. Verdi resorted to Shakespeare, who influenced Orson Welles, and so on. Culture was never about self-contained worlds. But on the contrary.
Games break this continuity. Typically, a game is a closed system that requires a great deal of time and attention to master, thereby encouraging specialized consumption. It’s easy to become a world class player without knowing much about the general culture. For the same reason, most of today’s cultural experts know very little about gaming and get along well. The worlds of culture and play are largely separate.
This is not a criticism of the gaming that has enriched millions of lives. It is easy to note that the mixture of digitization and immersion – combined with the closed, world-forming, proprietary structure of the gaming company – has created something new. Games very often use interesting music and visual effects, and in that sense they are cultural objects. But the basic allure of gaming has more to do with performance and focus. Gaming is more about attending an event than watching an event.
And make no mistake: gaming wins as a sideline. The games sector has worldwide sales of approximately $ 179 billion, more than that of global films and North American sports combined. Gaming has increased and become resilient during the pandemic.
Other cultural products seem to be on the decline, so to speak. Are there many books today that have attracted the attention and discussion that the Harry Potter series, for example, received at the turn of the century? Will art exhibitions have the same impact after the pandemic as they did before?
The distinct nature of games also means that they will break government regulations. There is already a lot of trading going on in games – with currencies, markets, prices and contracts. Game developers and gamers set and enforce the rules, and it is harder for government regulators to play a pivotal role.
The lesson is clear: if you want to start a new business institution, put it into a game. Or how about an app that gamifies stock trading? Would you like to experiment with a new type of exchange or security outside of traditional government regulation? Try the world of gaming, perhaps combined with crypto, and eventually your “game” could affect events in the real world.
To date, regulators have tried to be strict. It is difficult right now to build fully realized new worlds without creating something that is legally defined as an unregistered security. These regulations don’t get much attention from the mainstream media, but they quickly become some of the most important and restrictive rules on the books.
At the same time, the regulators are already lagging behind. Just as gambling has overtaken the world of culture, gambling will surpass US regulatory capacity for a number of reasons: encryption, the use of cryptocurrency, the difficulty of monitoring virtual realities, different rules in foreign jurisdictions, and not by chance, a lack of expertise the US regulators. (At least the Chinese government’s attempt to limit youth gaming to three hours a week is foolhardy, but it reflects a perceptible cultural conservatism.)
Both the culture-weakening and the regulation-weakening properties of games result from their one basic property: They are self-contained worlds. So far, human institutions and structures have been dependent on relatively open and overlapping networks of ideas. Gaming is the division and privatization of these spaces. This shift is the big trend that hardly anyone outside of gaming and crypto is noticing.
If the much-touted “metaverse” ever happens, gaming will devour many more institutions or create opposing versions of them. Whether you belong to the world of gaming or not, it comes to your worlds. I hope you are ready.
This column does not necessarily represent the views of the editors or Bloomberg LP or their owners.
Tyler Cowen is a columnist for Bloomberg Opinion. He is an economics professor at George Mason University and writes for the blog Marginal Revolution. His books include “Big Business: A Love Letter to an American Antihero”.