In this new article series, The MMO Gamer in cooperation with Stratics takes you deep into the subject of real money trading, or RMT. Guest contributor Dan Rosenthal from Gameslaw.net and Stratics.com takes you on a case study of the RMT in EVE Online.
Most MMO gamers should be familiar with CCP’s space MMO, EVE Online. One of the more successful western-style MMO games, EVE is known for having a detailed market economy, with contracts, commodities trading, and player run corporations with ownership shares and IPOs. EVE is also relatively unique among western-style MMOs due to the level of acceptance the developers have for player-to-player RMT transactions.
While some games feature integrated market trading (perhaps with companies like Live Gamer, which The MMO Gamer recently featured), they typically don’t allow direct player-to-player transactions, preferring to use some sort of escrow service. Other games, especially with free-to-play business models prevalent in many eastern-style MMOs and becoming increasingly popular in the U.S., offer RMT transactions directly from the developer.
Typically these games will ban player-to-player transactions, which would detract from the developer’s bottom line (and in free2play games, their main source of income). EVE, however, is a little bit different.
EVE has a developer-sanctioned outlet for player-to-player transactions. Players can sell or auction characters to other players on the EVE forums to other players through a series of standard steps; all backed by the ability of the community managers to intervene in case one player attempts to screw over the other.
There’s a catch, though. Players need to make the purchase in ISK, the in-game currency.
CCP allows players to purchase 60-day time cards from their virtual store using real currency, and those cards can then be securely sold to other players for ISK. The only downside is no effective way to re-convert the ISK into dollars without utilizing a third-party. The result gives players a lot of flexibility in how they acquire in-game content.
Want to buy or sell an item in game for ISK? The in-game features take care of that already. Out of ISK but still want to buy or sell something? Pick up a time card sell it for a quick infusion of ISK. Got a character you no longer have time to play? Sell him off in exchange for potentially billions of ISK. The relatively tolerant atmosphere in regards to RMT results in fewer players having to resort to gold farmers, or complain of having accounts hacked or banned.
EVE’s system, while certainly more forgiving than most games, is not without flaws. For one, the time cards take time to be shipped from CCP to the player. The exchange rate isn’t great either — currently time cards sell for around 600 million ISK for 60 days, or around 17 million ISK per dollar.
ISK sellers, however, provide much better exchange rates: one site sells at 25 million ISK per dollar, or better in bulk. Why would players want to wait for their time cards to be shipped (not to mention the international service fees charged by the bank due to CCP being an Icelandic company), and then be hit with a sub-premium exchange rate. For 35 bucks I can get 600 million ISK with a time card, or for 27 bucks I can get 1 billion ISK from a reseller. Of course, there are some sanctioned time card sellers that cut out the shipping process for a faster deal, but that doesn’t mitigate the entire problem.
The other major problem is that there is no sanctioned way to convert the ISK back into real world dollars. EVE is known to have a high rate of burnout among its players, some of which may have amassed tens of billions of ISK. If the players choose to quit the game, they’ve now lost any real way of pulling the ISK back out of the game. There are some unofficial gold/ISK-sellers that also have a purchasing component, but like any business they offer absurdly low rates, not to mention that third-party ISK sellers and buyers violate the game’s EULA and can result in the player’s account being terminated.
To test out the RMT system, I spent the past month exploring various ways to spend my hard-earned money in EVE. First, I decided I wanted some cash. I went to the EVE Online store and picked up 5 game time cards — and promptly ran into my first snag. Game Time Cards may only be ordered in quantities of three or less, meaning I had to make two separate purchases.
The second snag came when I found out that each purchase triggered a $5 international service fee. Wachovia informed me that this is actually a Visa-wide fee, due to CCP’s registration as an Icelandic company (despite their having offices in the U.S.). My next problem came from trying to sell the GTCs through the “Time Code Bazaar” on the forums. While I quickly found buyers, none of them actually went through with the deal.
This is the inherent problem with developer sanctioned RMT. Unless true, unfettered, player-to-player transactions are allowed without developer “regulation”, the market will inevitably be operating inefficiently. Consider gold-farmers for a moment. Setting aside the moral or legal aspects of the trade, and considering from a purely economic standpoint, gold-farmers are the RMT equivalent of large corporations. They operate on the concept of “economies-of-scale”, which basically means that up to a certain point, the larger a company is, the cheaper they can produce that product.
Of course, companies that can produce a product more cheaply can undercut the competition while maintaining the same profit margin; meaning they’ll make more sales, giving them more overall profit, and supporting the corporate growth, which furthers the economy of scale. This is the market at its most pure. The sellers eventually hit a point where they cannot reduce their prices any further, and an equilibrium is reached (this is when prices for gold standardize). With most sellers offering the same prices, customers can then choose for themselves to not buy from unethical or disreputable sellers, or those that exploit their workers.
We all know that this doesn’t happen in the real world–the companies that exploit their workers gain a competitive edge, and can continue to undercut the competition. Think sweatshops and child labor. The solution, however, is not to ban industry. We don’t ban shoe sales because Nike used a few sweatshops. We don’t even do more than slap Nike on the wrist.
Games are the same way. We should be doing what we currently do with child labor laws: we outlaw the unfair business practice. Obviously this isn’t something that we can fix in a day, and extensive study and cooperation between RMT experts, game publishers, and government will be necessary. But the time for an international standardization of RMT is drawing near, and the first step in that standardization is making sure that the practice is in compliance with global ethical standards.
Update: Clarification: There has been some confusion on this article, so I hope to clarify it a bit. This article is a case study – it is a summary of one particular experience I had, and not intended as an end-all discussion on RMT in EVE. For instance, the article does not discuss PLEXs, an alternative form of RMT. This is intentional; for a pure newbie to EVE looking to get into RMT, they are more likely to find time codes before they find out PLEXs. Finally, I’m aware of third party time code sellers that cut out the shipping delay; the article explicitly mentions them, albeit briefly.