Ask the MMOG Money Traders

Late yesterday, Sparter Inc. announced the Gamer2Gamer virtual currency trading platform. The goal: to provide a secure currency trading environment for players of Massively Multiplayer Online Games. Rather than purchasing currency outright, the goal of the project is to cut out the middleman and (implicitly) the gold-farming consortiums that supply larger for-pay sites. We were contacted by a representative from the company before the release went out, looking to speak with the Slashdot community about the service. In his words, the folks at Gamer2Gamer "are devoted gamers themselves and are well aware that not everyone will like the idea -- but we think plenty of folks will like a world where Real Money Transfer is workable and unintrusive." And so, you get the chance today to put the hard questions to them. One question per comment, please, and we'll pass on the best of the lot to be answered as soon as possible. Update: 06/14 17:58 GMT by Z : Howzer points out that there is an extensive FAQ on the service, that you can use as a springboard for questions.

Taxes

[hardburn]

Inevitably, when Governments hear about money being passed around, their first thought is how to tax it. MMOGs can take the position that their currency isn't real, and therefore shouldn't be taxed. However, being able to transfer virtual currency for real cash weakens that argument.

I personally don't want to play a game where I have to pay sales tax on buying items, or income tax for an in-game business, and I'm sure I'm not alone. Given this, do you see any foreseeable ways to keep taxes out of games?

Something unforseen:

[CaptainPatent]

If this does fly it could produce a method to invent and earn money by paying attention to the up-and-coming games and investing when they're undervalued or overvalued and additionally, their popularity. Unfortunately this will also prompt an age minimum and consumer taxes, but it would be interesting to see if it would even fly on a global level.

RMT Legality

[Cirak]

I'm concerned that this platform is devoted to promoting activity that the largest game (WoW) explicitly forbids. How do you plan to handle the fact that the entire premise of your site is one that could get your "customers" banned from the games they play?

Re:I think the name answers that

[Red Flayer]

They didn't call it gamer2company. :-)

And yet nothing is there to prevent a company from having a representative post on the site to sell gold... and commercial gold farms will likely be able to undercut individual gamers' prices.

I think they are trying to fill in, where Ebay like companies have failed, and that's to allow one person to trade with another person (more personable), rather than having to deal with a company.

Ebay did not fail to provide a marketplace. They chose not to, stating that they were trying to reduce their users' exposure to risk (assumedly, from both fraud and legal action by the game companies). I'm certain they were also reducing their risk and expenses, both from dealing with fraud (in-game currency transactions have a high rate of fraud) and from legal fees if asked to C&D by game companies.

Re:MUDflation

[Howzer]

Selling in-game cash for real cash is not the primary cause of MUDflation! I know you've heard a lot of people say it is, but that doesn't make it true.

Think about how most MUD game economies work from first principles for a minute: you "harvest" unlimited resources mostly to sell to in-game "vendors" that have unlimited cash. That's what causes the inflation -- an unlimited supply of money!

Consider, too, what most purchasers of in-game cash use it for: to pour into the in-game money sinks (buying your "spells", buying your "horse") which instantly removes it from circulation.

MUD economies are broken, and primed for massive inflation from the get-go. In-game money-sinks are efforts to stave this off, but whenever there is infinite supply of money, there will be inflation.

Most MUDs also have players of widely disparate levels (and thus "incomes") playing "together" which further exacerbates the inflation (Eg. It's worth less to me, a high level, to haggle with you, a low level, about some in-game resource I'm buying from you than to simply pay you whatever you're asking. Pretty soon the "accepted price" for whatever it is rises.)

All the above considered, gold farming might slightly increase the inflation rate --- but this is dwarfed by factors that are built into the system.

Re:Taxes

[hardburn]

from my point of view there can only be a taxation for the transaction that actually involves real money.

That's your point of view. The point of view that really counts here is the government, which tends to make up whatever rules will maximize its revenue without (we should hope) seriously impacting the overall economy.

Re:Cheating Your System

[MalleusEBHC]

What happens if I make a delivery but the buyer claims otherwise?

We anticipate this scenario being extremely uncommon, particularly since Sparter uses state-of-the-art technology to root out fraud and to create a clean and safe marketplace. However, in the rare event of alleged buyer-fraud, we provide a dispute mechanism process to help you resolve the situation.

I had the same question and found this on their FAQ. It all sounds like a bunch of marketing BS to me. So my question is, what assurances or explanations can you give, technical or otherwise, that there actually is a plan to deal with this situation. Right now, there is no reason I would have to trust them.

Re:The Assured Protection of Human Rights

[misleb]

It all depends on what has more value to you, the time you spend at work, or the time you spend at home.

I find ironic that the most popular online *game* in the world is so readily compared to work.

-matthew

Re:The Assured Protection of Human Rights

[MBraynard]

I'd reckon they'd be better off not working a menial job that contributes nothing to themselves or society in general except to perpetuate a system of victimization. It's true they could starve but at least then they wouldn't be making the problem worse. One would hope instead that they'd do something productive and help change the system.

The farming job is the one they choose and the one that THEY Decided was the best choice for them.

FYI - I use to work at one of these 'victim' jobs and so have many others like me who went on and started successful businesses and have attained relatively great levels of prosperity. You must be one of those 'college know it all' hippies.

They live in mud and have no money. A foreign company comes in and offers them jobs with no skills - which are the only kind of jobs they can do. And you want to take those jobs away?

Besides, suggesting that they are just as well of starving doesn't help your arguement.

Re:The Assured Protection of Human Rights

[WuphonsReach]

If *I* were running an MMORPG, I'd give it a working economy similar to EVE Online. WoW is big enough to have a player run economy with a limited (but not quite finite) amount of total cash, isn't it?

I suspect that WoW shards aren't large enough to have the critical mass needed for a real economy. Even in EVE, with everyone crammed into a single "world / shard / server", it's still possible that you can't find item X for sale. Or that a few producers have banded together and created a monopoly on item Y. (Although, at least with EVE and the roughly 30-45k active players, it's rare that it happens.)

The usual problems in MMO economies are:

- Crafting / manufacturing is not as profitable per hour as adventuring. Often because NPC vendors sell identical product too cheaply (worse, with infinite inventory). EVE handles this by making nearly everything as player-made, NPC vendors sell only a small handful of base goods.

- NPCs that buy goods. This gets more into the money supply issue. But it causes problems for producers. If NPCs are buying a raw material at price X, that sets a floor on the raw material price. Often that floor price is out of sync with what the market really feels that the raw material is worth. Which leads to problems obtaining raw materials. In EVE, NPCs don't buy raw or finished materials.

- Item destruction is a required aspect. If items never wear out, players never need to purchase new items. Which means that the economy grinds to a halt. Soul-binding of equipment isn't the answer. Equipment needs to wear out, with the option to repair it - but repairs should cost money and possibly a *lot* of money. In EVE, because of PvP and the death penalty, equipment is constantly being destroyed (you might get back 5% of your gear after a ship loss).

- Single markets = 2-dimensional economies that don't work. Distance and location need to be part of the economy. Travel in the MMO needs to require time / effort or money. That allows multiple producers to compete without one producer getting 100% of the volume because they undercut prices by 1 copper. EVE handles this by limiting markets to Regions (and there are 50+ regions). You can only search pricing within a region, so you have to travel a bit in order to check on prices in other regions. There's no "fast travel" - 20 jumps is 20 jumps. So often a buyer will pay a premium to purchase goods that are physically closer.

And that just glosses the surface of what is required to have a "working" economy in an MMO.

Re:Same argument used by cheaters

[Bwerf]

Gear doesn't matter much when levelling up, true, I never cared except maybe buying a weapon from ah at lvl 10. But once you hit the max level it sure do make a difference. My main is a lvl 70 warrior and I wouldn't be able to play many instances if I had lvl 55-60 equipment unless it was the absolute best lvl 60 stuff (and that of course means putting a lot of work/money into getting it). Otoh I've never felt the need to buy gold, all the items that you can buy for gold is often easily replaced by quest rewards and drops.

For real hardcore gamers the problem is more that of repairs and consumables though rather than gear. I have a friend that used to play in Nihilum and he had to grind for pots and such about all the time he wasn't raiding.

The root of the problem is a bit different though. I personally don't want to keep up with the joneses, I want to keep up with my friends so that I can play with them at all. Since most mmog games (all?) reward effort in some way and also allow trading you easily get a situation where you have to play about the same amount as your friends, give each other stuff or buy it for RL money if you want to play together. This of course only handles the tradable part of the game, but that was what we were discussing, right?