The MMOG Moneysellers Respond To Your Questions 228
Last week we asked you for questions to pass on to the folks behind the Gamers2Gamers RMT service. The response, from reading the comments, was mixed. The thinking seemed to mostly be that this was a marketing stunt, aimed at getting people to check out their website. There were several good questions, though, and we passed on the hardest ones to Sparter CEO Dan Kelly and CTO Boris Putanec. The response from these executives should lay to rest for you the issue of whether this was a marketing ploy or not. Moreover, some of their answers give insight into the company's grasp of the RMT market as a whole, and their chances of success in the competitive MMOG genre. I encourage you to read on to see how they've responded to our queries. Thanks to the Sparter execs for their timely response.
Marketing by Zonk: Many users expressed annoyance that you wanted to speak directly with them via this venue. Your interest in speaking with users was seen by many as a blatant attempt at marketing. Is your interest in contacting Slashdot motivated more by an interest in talking over the issue of RMT in a public forum, or are you primarily interested in promoting your new service?
Sparter Executives:
We believe Sparter is a product that helps gamers and so of course want to let them know about it. But a core part of our mission is putting a bright light on RMT and promoting a fair and open conversation about gamers' interest in buying and selling game items.
We think there are good things about RMT, but also recognize the bad behavior that it sometimes engenders (though bad behavior in-game is not limited to people who trade gold). We need to sort fact from conjecture and based upon a good debate of the issues work together to build a workable solution. Our point of view is that spammers, bot farmers, hackers and dupers are the real villains. The gamer who has gold to sell and the gamer who wants to buy are not bad people and supporting their needs can help the industry grow. We approached Slashdot because it's a great forum in which to initiate the conversation.
RMT Legality by 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?
Sparter Executives:
Good question. Here's how we see it: publishers do not have the right to tell gamers that they can't accept money from someone outside of the game. Trade can only happen when the game design provides the mechanism for transfer of game items. It's quite common for gamers to barter with each other in game (e.g., I'll give you 5 gold if you'll lead me on a quest, farm these for me while I farm those for you, entry fees to join guilds, etc) but publishers want to say that it's wrong for you to give someone $5 outside of the game?
We hope to convince publishers that gamers should be viewed differently than in-game spammers, bot farmers, hackers and, to some extent, B2C sites. Our goal is to keep RMT between gamers. Buying from another gamer on Sparter is 30-40% cheaper than buying from a professional seller's web site and it puts money in the pocket of another gamer. This is bad for IGE and good for the industry. What's more, healthy secondary markets grow primary markets.
Our ultimate goal is to partner with publishers to protect their rights, reward them for the value they create, and be more effective in banning spammers, bot farmers and hackers from a sanctioned secondary marketplace. Until then, we do our best to make sure our users are aware of the risks that non-sanctioned RMT presents in games where the publisher is hostile to their consumers' needs.
Legal? by pionzypher:
With the recent lawsuit against peons4hire.com, Blizzard appears intent on cracking down against the larger players in the business. How do you intend on avoiding legal suits against the company?
Sparter Executives:
The peons4hire suit focuses on that company's use of WoW's in-game mail system to market peons4hire's services. Gold selling is not part of the suit. As gamers we support Blizzard in its attempts to shut down in-game spamming. We don't advertise in-game and never will without publisher approval.
There are several reasons why we think publishers are not likely to sue Sparter. First, we think publishers realize that they don't have the right to restrict a user from receiving compensation from another user outside of the game. In fact, RMT cannot occur if the game design doesn't allow for one user to hand-off an item to another user. The only difference with RMT is that rather than giving the item as a gift or in barter (e.g., for another item or help in the game), you are receiving real money outside of the game. Second, the risk of losing in court is potentially disastrous for the publisher. This is why we view the lawsuit against IGE by the contingency lawyer in Miami as potentially hazardous to the industry. Sparter is trying to be proactive on this issue by requiring that all our users recognize the rights of content originators and the limitations of gamers' rights. Third, we estimate there are several hundred B2C web sites in operation, most outside of the jurisdiction of US courts. Lawsuits are not going to be effective in shutting down RMT. As long as there is a demand, there will be a supply. So let's figure out the best way for the demand to be served and take control of the situation for the benefit of gamers and the industry as a whole.
What are the real measures that will be taken? by moderatorrater:
A lot of MMO content is less enjoyable because of gold farmers and others looking at playing the game for monetary gain rather than enjoyment. What measures, if any, will be used to make sure that the sellers are 'legitimately' playing the game? If not, how is this service actually helping the gamers for whom gold selling is an inconvenience?
Sparter Executives:
Sparter does not buy or sell game items and we don't have an in-game presence. As a result, we cannot know for sure how our sellers behave in the game. But if you believe as we do that the truly damaging behavior is exhibited by the spammers, bot farmers, hackers and dupers, then the more we migrate the market to a true gamer-to-gamer exchange, the harder it is for those folks to profit from their actions.
We designed Sparter to give the gamer every opportunity to compete with the professional seller. They play for love of the game, don't have any overhead, marketing costs or customer service operations. The gamer will always be able to undercut the B2C. There will always be sellers of different sizes, but gamers are selling on Sparter and taking business away from the B2Cs like IGE and peons4hire (some of whom not only spam in-game but, we suspect, are the primary currency outlet for the dupers, hackers and bot farmers). In fact, our typical seller undercuts IGE by 30-40% and is making enough to pay for his WoW subscription.
Without a partnership with the publisher, we have no way of knowing how our sellers are behaving in game. That's why we're talking with developers and publishers and asking them to partner with us to help regulate the secondary market and, when justified, ban those who behave badly from not only the game (e.g., publisher shuts down their account) but also the marketplace (e.g., Sparter bans their selling account for all games). We are well positioned to view trading activity and supply levels by game, server and seller. If we see something suspicious, we would gladly flag this for a publisher for further investigation. Our goal is to be the marketplace for good gamers; the truly bad actors of the RMT world can sell their gold elsewhere.
Heavyweight Perception by Zonk
The heads of several Massive development firms have come out squarely against the concept of Real Money Transfer in current AAA online games. For example, Mark Jacobs of EA Mythic has been particularly vocal in his opinion of the practice. Given the negative view of RMT by these companies, do you have any plans to attempt to sway their opinions? Ie: will there be any attempt to have game companies 'buy in' on the Gamers2Gamers concept, in a theoretical rather than financial manner?
Sparter Executives:
We definitely want to get publishers and developers on board with Sparter and Gamer2Gamer trade. We're talking to many publishers and explaining our perspective on the situation. We spend a lot of time asking questions and listening to their concerns. We think Sparter is on the right path to create a workable solution for the industry, but if there are better ideas we want to hear them. That is also why we approached Slashdot, so we could hear from gamers other than those using our service.
We think it's certain behaviors such as spamming, bot farming, hacking and duping that cause the most concern. Many see the B2Cs such as IGE as supporters of these behaviors; we see B2Cs as unnecessary in the long term if we can turn this into a C2C market. If publishers can help us do this we can keep the purchasing power that is going to B2Cs in the pockets of gamers. That's good for publishers and good for the industry. There are many issues wrapped into how RMT is perceived and we need to start breaking the problem down and creating solutions.
Cheating Your System by eldavojohn:
How will you protect against 'buyers' who put the money in the escrow service, receive the goods and then claim they never got them and demand the escrow back? In Warcraft, I could forward the gold to another character and claim I never got it. Then you have two customers in a dirty dispute. Wouldn't it be smarter (but more work) for you to also have an intermediary account in game to hold the goods and money at the same time? How do you plan to resolve these issues that auction sites like eBay have to deal with?
Sparter Executives:
Our first goal is to protect the buyer; we do this by escrowing the buyer's funds and not paying the seller unless they deliver. As a result it is impossible for a seller to profit on Sparter by defrauding a buyer. The "lying buyer" is a different problem. We do have systems in place to catch fraudsters and identify suspicious patterns of behavior, and we use this information to ban buyers we suspect of lying (a costly ban since they can never buy on Sparter again). But we cannot entirely fix this problem without help from publishers. By choosing to not support their consumers' needs, publishers have cast gamers into a very risky grey market dominated by B2Cs and replete with fraud. Organizing a clean and sanctioned market is the best way to protect good gamers.
The Assured Protection of Human Rights by eldavojohn:
So you say you work out the middle man in this horrible scheme of capitalism. But I'm still concerned that the people who are farming right now at a severely reduced pay rate are doing so because they don't have the money to front for the operation and they have no choice but to remain a pawn. They make very little money and the real profits go to some American guy manipulating them all and paying for their accounts. Tell me again how your service does not promote this middleman from acting like a player? How am I assured that some innocent kid who is doing this as a job to make money does not earn my gold? How am I assured this isn't still some cog in a scheme to exploit foreign workers?
Sparter Executives:
We believe that C2C markets like Sparter's Gamer2Gamer exchange empower and help the people you mentioned. By lowering the cost of entry, Sparter allows everyone to be listed and compete in an integrated, open marketplace. Just as eBay and others have made it possible for thousands of small home-based businesses to flourish, we believe a C2C approach to RMT will create entrepreneurs out of the people who can only be employees now.
In recent years, a lot of folks have come to connect RMT to goldfarming sweatshops. We fully recognize that many gamers have hard feelings toward farmers, but the sweatshop assumption has been blown out of proportion. Our experience is that the reality is far more complex. It is important to keep in mind that farming produces a competitive wage and is not a low-quality job in the countries we are talking about. To see what we mean, check out the recent article about this subject in the New York Times Magazine by Julian Dibbell (http://www.nytimes.com/2007/06/17/magazine/17lootfarmers-t.html).
FraudStopping by Howzer:
You claim you use (quoting from your site) "state-of-the-art technology to root out fraud". Since simple fraud -- I say I didn't get something that someone says they gave me in game -- can't be checked by you unless you have the keys to WoW or EQ2 or SWG (or whatever) what "state-of-the-art technology" would you be talking about?
Sparter Executives:
This question is very similar to the earlier "Cheating Your System" question which outlines the fraud problem. As mentioned there, we have systems which look at all aspects of the transaction to gauge its likeliness to be fraudulent. Our strongest long-term weapon is the ability to ban participants from the marketplace, a tactic which is much more effective in the C2C world where a scammer cannot just move on to the next gold selling B2C website. Since gamers on Sparter tend to under price the B2Cs by 30-40%, getting banned for bad behavior is stealing from your own pocket.
Market Control & Conversion System? by eldavojohn:
Will your site will work out converting currencies in one game to currencies in another game--so that if I play Warcraft and Final Fantasy I can spend my gold for gil? If you are doing this, how are you going to keep these markets in check? Will it all just be normalized against the dollar? Bottom line question is whether or not you'll control dumping of virtual currency or if you'll institute ranges. If you're not instituting limits or regulating in a Federal Reserve type manner, how are you going to protect against a single person running the market (buying all the gold and sitting on it while letting it drip out slowly at an extreme amount of USD)? Will you post graphs of each MMO's currency so we can watch currencies like SWG's credit against Warcraft's Gold?
Sparter Executives:
We are always evaluating new features and functionality for Sparter's platform, and some gamers have asked for direct currency to currency trades. As you suggest, the current solution is to trade one MMO currency into USD and then buy the other MMO currency with USD. The current per game/realm/faction currency graphs against USD would allow you to synthesize cross-currency graphs if you were interested in a particular combination.
Your "control of the market" questions raise a very interesting point that bears some careful analysis. There is a good reason why the Federal Reserve is separate and distinct from the SEC and the banks--this allows each to make the best decision for their area of responsibility. Internally, we have discussed implementing curbs on certain activities, but those actions have not been taken to date. This is an area where we would welcome input from developers, publishers, traders, gamers and economists on the best set of rules to follow. The right rules for environments where production theoretically is infinite are not always easy to determine.
Taxes by 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?
Sparter Executives:
We cannot give tax advice and anyone who has specific questions about their situation should consult a tax professional. However, as we see it this issue is much bigger than just RMT, with governments thinking very hard about how to tap the revenue from all forms of online commerce. The constant debate about charging sales tax for Internet transactions is a perfect example--maybe a hopeful one since the catalog/online industries have managed to avoid that so far.
As to your question about income tax, because our typical seller is earning roughly enough to pay for his WoW subscription, we see selling on Sparter as analogous to selling on eBay, putting on a garage sale, or running a great lemonade stand.
summary (Score:5, Funny)