Real Money, Fake Property: Live Gamer’s Andy Schneider on Bringing Item Sales in from the Cold

By Steven Crews | April 24, 2009 | | Filed under: Events, Features, Interviews | Tags: Item Sales, Live Gamer, RMT

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For the uninitiated, “RMT” stands for “Real Money Trading,” the act of spending your hard-earned real-life cash on a virtual sword or a purse full of silver coins for your equally virtual character in an online game.

To read a very interesting discussion on the topic, hit the jump for Steve’s interview with Live Gamer’s Andy Schneider.

For years, RMT has existed on the margins of the MMO genre, run by a shadowy and much-maligned network, loosely bound together in the minds of players by the epithet of “Chinese gold farmers.”

But procuring digital items and currency to sell to players with more disposable income than time has now become a multi-billion dollar industry, and publishers are beginning to sit up and take notice, looking to tap-in on this revenue stream by moving the sales out of the cold and darkness, and into their own watchful gaze.

This is where Live Gamer hopes to come in.

The MMO Gamer: First of all, for those among our readers who may be unfamiliar, could you please introduce yourself to us, and tell us a little about what it is you do at Live Gamer.

Andy Schneider: I’m Andy Schneider, co-founder and president of Live Gamer. What we do is partner with publishers to offer legitimate real money trading of virtual items .

We’re currently working with about a dozen publishers. Among them are Acclaim Entertainment, Funcom, Sony Online Entertainment, GoPets, NHN USA, and several others, both in the subscription MMO space as well as the free-to-play MMO space, in addition to virtual worlds.

The MMO Gamer: When people hear that phrase, “real money trading,” their initial thoughts are probably of a dark basement in China somewhere, with men slaving over keyboards night and day, and some guy who whips them if they don’t meet their gold quotas.

I take it that’s not what you have in mind at Live Gamer. What exactly do you mean by legitimate?

Andy Schneider: Well, real money trading of virtual items has been around for more than a decade.

It started in the very earliest MMOs, if not back in the MUD days in a very grassroots sort of way, but then obviously got into a more opportunistic and nefarious industry.

When I talk about legitimate RMT, it’s about a publisher supporting the notion that people want to buy and sell virtual items for real money, and they have decided to proactively support that notion and give their player-base a way to do that.

This is within the terms of service of the games, within the end user license agreements, and moderated by a trusted party, Live Gamer, with everything totally transparent and authenticated.

That’s legitimate RMT, versus what most people think of as “gold farming,” which is obviously not supported by the game publisher.

The MMO Gamer: To be absolutely clear, what you do is sanctioned by the publishers, and you work with them? You are not a third party, working against the wishes of the people producing the games?

Andy Schneider: Never. We only create a marketplace with the publisher’s support, we enter into a contractual relationship with the publisher, and the publisher has affirmatively decided to support a sanctioned RMT marketplace.

It’s all player-to-player, our business model is a transaction fee. There is no concept of farming in our world, it’s one player selling a virtual item to another player, we facilitate the entire transaction, and make sure that we spot fraud, or farming, and shut it down immediately.

The publisher benefits, and more importantly the end user benefits; they don’t have to go to a black market outlet. They don’t have to risk having their credit cards stolen, or their identities stolen, or their game accounts stolen.

They don’t have to risk getting their account banned because they’re in violation of the publisher’s terms of services. In our world, because of the partnership, and because of the publisher support, we’re able to create a much better experience for all that consumer demand that’s otherwise been lost to the black market.

The MMO Gamer: How does this service work, exactly? Where does Live Gamer come into the picture of selling items?

Andy Schneider: It’s very simple. First you link your game account to your Live Gamer account. We don’t require you to give us your user name or password. We do it all through token identification.

Once we have that all set up, you can go and send an item or character to the Live Gamer server. We do that on a server-to-server basis, we pull all the metadata from the publisher.

So all these listings are completely legitimate and pulled right from the game server, there’s no misrepresentation. We pull the item in, and hold it in escrow while we facilitate the financial transaction.

Once there’s a buyer for the listing, we monitor the whole transaction from start to finish. We do a number of different screens and checks, and once we know that it’s an authenticated trade, we release the item out of escrow to the new player.

It takes the manual process out of the equation that most players are engaged in with the black market, and reduces the fraud considerably, which is good for players.

It also reduces customer support calls for developers and publishers, who used to be on the receiving end of a trade gone bad even though they had nothing to do with it. That is really how the system works. We provide the listing service, we provide the escrow, and we provide all the financial transaction.

The MMO Gamer: Isn’t there a concern that creating a legal outlet for selling things that were previously sold under the table is just going to encourage more farming, not less? That gold spam will just pick up and move from “Visit wowgold4u.com” to “Visit my Live Gamer account”?

Andy Schneider: The more legitimate transactions there are, the less need there is to go to the black market, hence the less demand there will be for gold farming.

We take things like fraud and gold farming very seriously. We’ve been very successful thus far in creating a legitimate marketplace and giving the consumers what they want, and redirecting them out of the black market, where they’re just feeding the gold farmer businesses, into something where the publisher, and the developer, and the designers have a say in what’s going on.

The MMO Gamer: To get down to the heart of the matter, RMT is one of the most divisive topics in the MMO genre. What abortion or Medicare would be to real-life politics, RMT is to MMOs.

What do you say to the players, or even the developers, who believe that this is not the way that the games were meant to be played, and that it offers players who make use of your service an unfair advantage?

Andy Schneider: You know it’s a great question, and before we started Live Gamer, we knew this would be the issue. So, we spent a lot of time trying to understand the motivation of game players. Why do they engage in RMT? What are the hot-button issues? Does it break the fourth wall or the magic circle? Does it create an unfair advantage for players who are buying items that are giving them a performance advantage?

We looked at what these motivations are, and certainly there are players who want to get a performance advantage. But, there are also overwhelmingly more players who play MMOs and engage in RMT for social reasons.

The social reasons might be one of they want to play with friends who are leveling up faster than they are and they want to keep up, they want to play the game again from a different character class or race perspective, or they want to customize their experience – so they want to go ahead and buy the items that make them feel better about their character.

There’s also the players who want to explore everything the game developer or designer has created, and they can’t possibly do it because they don’t have enough time.

In the end, all of these people engage in RMT because they don’t have enough time, but they might have more disposable income. And that’s the predominant reason why people that we see are engaging in RMT, and we certainly see all the arguments against RMT.

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