What the Video Game Industry Really Needs!

By Christopher Espinal

It’s a brave new world out in the video game world. Every month all of these software developers make new high caliber games that provide an incentive for hardware companies to keep developing more powerful PC components. We always need more RAM with a higher bandwidth, a newer video card with a faster GPU, or larger amounts of video memory. Let’s not forget that we may need to update our CPU chip to something as fast as a Quad Core, with a higher front side bus speed for over-clocking capabilities. This stuff costs money!

Why do I complain? The graphics are improving as the video game environment becomes more real and picturesque. When I shoot my M1 Garand, the gun moves against the direction I prefer, making it tougher to grapple. When I look into the sun, the screen almost goes blank just like real human eyes. A breeze passes and the trees and weeds move. My Springfield sniper rifle requires that I hold my breath to improve accuracy. But there’s one problem that remains: the artificial intelligence of, say the Nazis in Call of Duty, remain with a greater number of holes and an unrealistic magnitude of predictability. Video game characters just aren’t human enough! I complain because the benefits of video gaming don’t necessarily outweigh or clear the costs. To me, this market just doesn’t clear.

This got me thinking, what about these characters just doesn’t make any realistic sense? Aha, I figured it out! These characters and video game developers just have flat out horrible economics!

If video game developers were to take a course in microeconomics, they would discover the almost God-like tool available to human beings: the incentive. As the opportunity cost of some good changes, human behavior changes as well:

I see the enemy run across the tall grass fields, knowing that I’m watching. He must be one risky fellow or one who demonstrates a future preference utility function such that he perceives the probability that he will survive the run despite my accuracy with automatic, the Thompson. But when he runs, he obviously has a constraint in his utility function – he’s flat footed or has a wound in his right leg. This constraint limits the maximum utility he receives by running to another corner or seeking to reunite with his unit. He just might not run since the probability of survival in his future preference function is small.

There’s another one of “Charlie,” kneeling underneath the window panel on the second floor of the destroyed barn. The enemy knows the true cost of raising his head just another inch – because the cost is nothing more than his life. So he crawls to another window rationally expecting another bullet to travel through his previous position. Why wouldn’t he know, when I’ve been shooting there for about 20 seconds trying to finish him off?

But there are some who are the opposite of risk averse, and will charge at you from behind regardless of the number of bullets flying across the field.

To raise the cost of my unit and I standing ground, and to lower the cost or the probability of death in advancing toward Allied trenches, Charlie tosses a smoke grenade in the middle of the field.

This game would sound tough wouldn’t it? The player must learn to outsmart the enemy. But in today’s games I can die again and “retry” by reappearing in the same corner, with the same enemies positioned just like before previous outing. The problem is that rational expectations would override the point of dying and starting over. I will remember the position of the enemy and then easily finish off that stage in the level until I reach unknown territory.

In today’s video games the enemy will shoot through the window regardless of the number of bullets flying through. In other words, the enemy hasn’t responded to the increased cost on his life from moving just a couple of inches. They will toss smoke grenades as “planned” by the video game developer – but not out of the mere intelligence and freewill of the enemy. Just as Friedrich Von Hayek argued that there exists a calculation problem with pricing in a centrally planned economy, the video game developer makes the same mistake – he or she can’t perceive the costs associated with the gaming environment. Just as centrally planned economies can’t manage to develop proper incentives for growth in an economy, the video gaming environment fails to do what it’s supposed to do – challenge the strategic and responsive abilities of the gamer.

All of this follows from the idea that economics aims to model human behavior, and software developers ought to understand that. Just as humans respond to incentives, the video gaming characters must do the same. Aiming to defeat a computerized opponent is comparable to the card game of I Declare War, but playing against another human seems closer to a game of Chess – because both are responding to incentives. It is the theoretical mission of video gaming developers to bring the game as close to chess as scientifically possible.

There is one objection that may follow: developers are constrained to the tools and technological capabilities available. Perhaps giving each character a unique utility function or set of ranked preferences is as committed, audacious, and grandiose of a task that it should be categorized as Godly.


Christopher Espinal is an economics student at the University of Chicago. He can be reached at espinalc@uchicago.edu