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Want to dominate a virtual world? It takes real money
By Scott Kirsner  |  June 25, 2006

If you're a Rogue who is desirous of the Scarab of Protection, two choices confront you: earn it by playing the game Dungeons & Dragons Online, or simply shell out $199.95 and buy the coveted object from the website IGE.com.

How did scarabs get so precious? Internet commerce in virtual objects, from clothing to real estate to weaponry, has become a big business, and it's increasingly vexing to the players of online games, as well as the companies that develop them.

First, a quick primer: According to analyst Bruce Sterling Woodcock, about 12 million people pay monthly subscription fees to participate in MMOs, an abbreviation for ``massively multiplayer online games."

A major lure is the ability to create an alternate persona and enter a fantasy world, advancing by creating alliances with other players, earning gold, obtaining objects like the Scarab of Protection, and completing quests. The most popular of the games, Blizzard Entertainment's World of Warcraft, with about six million players, owns about half of the MMO market.

Sony Online's Everquest is so addictive that some players refer to it by the nickname ``Evercrack." Most of the games, like Dungeons & Dragons Online, developed by Westwood-based Turbine Entertainment Inc., charge subscription fees of about $15 per month.

Originally, the games were all about expertise: players progressed as their skills improved. But over the past few years, a secondary market has developed -- perhaps as large as $1 billion annually, according to IGE.com -- in selling items like virtual ``gold" and even prefab characters that can help players advance much more quickly.

(Fifty-thousand pieces of platinum, legal tender in Dungeons & Dragons Online, can be bought for $24.69 from MySuperSales.com). That can be frustrating to players who feel that others are purchasing progress in the games, and to game developers like Turbine, who wonder how they might capture some of this value from the secondary market.

Turbine chief executive Jeff Anderson characterizes his company's dilemma this way: ``Some people want to spend 40 hours a week playing the game, but some can only play four hours a week," Anderson says. ``Some players have more money than time, and they want to experience the advancement curve at a faster pace."

He likens the dilemma to the one the record companies faced when the Internet emerged as a delivery mechanism for music. They still wanted to sell complete CDs at full price, but listeners wanted to be able to purchase songs individually. Enter Apple's iTunes Music Store, and the 99 cent legal download.

``When you buy the Sword of Doom, you're circumventing some of the game play, but from the player's perspective, you're telling us, `I don't want to buy the rest of the crummy songs on the CD -- just the one hit song,' " Anderson says. ``As a company, we're doing lots of surveys and research about how we want to address this problem going forward."

(Most game developers, including Turbine, officially ban the resale of virtual items and currency from their games, but they can't do much to stop it.)

What's the source of all these swords and scarabs being sold on the secondary market?

Often, they're collected by people in foreign countries who play the games for a living; they're sometimes called ``gold farmers." Their hard-headed scavenging for items of value can spoil players' fun.

As a high school student in Acton, Lincoln Quirk spent his summer a few years ago selling items from the game Diablo II. He and two friends earned about $3,000 offering virtual crossbows and other valuable items from the game.

``It's a legitimate style of play," he says of buying game objects, though Quirk acknowledges that it can make pricetags skyrocket in the virtual world. ``People buying items on eBay are willing to spend more than their market value, so you get inflation in the game, which can be a little frustrating for people who play legitimately."

Quirk is now studying computer science at Brown University and planning for a career in the games industry.

Julian Dibbell, a writer on gaming, says that RMT (or ``real-money trading") may actually make the games more realistic.

In our world, not everyone starts with the same set of assets and advantages; some are born sucking silver spoons. But so far, players have gravitated to the games as an escape, and the splash of reality may not be so appealing.

``Players want a fresh start," says Dibbell. ``They don't want to bring all the inequalities of real life into the game. They're a Paladin on the Field of Strife, and suddenly they're facing this Shaman who's a corporate lawyer in real life, who kills them with his awesome arsenal that he paid thousands of dollars for."

Dibbell's book ``Play Money," out next month, chronicles his year-long attempt to earn a living by selling items from the game Ultima Online.

Sony has already set up a kind of eBay for virtual items called Station Exchange, where players can sell characters, currency, or items online, with Sony taking 10 percent of the transaction.

Like eBay, it reduces the risk of scams, and players who choose purchase items actually play the game in separate areas from players who want to earn their advancement.

``It purifies the game play, parsing it according to individual tastes," says Indiana University economics professor Edward Castronova, who has studied online gaming. ``It's a signal that this moment of these third parties capitalizing on [real money trading] is coming to an end. Developers are going to capitalize, one way or another."

Turbine already seems to be considering how it might capitalize, perhaps by eliminating or reducing its monthly subscription fees, and selling items to players à la carte, for about $1 to $5.

Anderson, Turbine's CEO, believes that business model could ``open up the gaming market to a much larger audience, where today's monthly subscription price is a barrier."

But Anderson knows that getting into the business of selling cloaks and swords will be a high-wire act for Turbine and other game developers.

Players don't want to feel they're being nickeled-and-dimed, and the games could potentially devolve into a place where the kids with the biggest allowances dominate any duel.

There are some points to clarify on that item. The reporter called us to discuss virtual economies and business models, and we talked with them. Of course, individual item sales came up, since there is an established market for them already. Since we talk about a lot of things here in the building, it is natural that a few times, somebody has mentioned selling items. That was then part of our conversation with the Globe.

But what you need to know is that we aren't planning to sell uber items in DDO. To qualify that, the business of MMORPG's is changing. Where it used to be a market of $10-$15 a month subscriptions, people are starting to experiment. Guild Wars, Anarchy Online, PlanetSide and others are starting to look at ways to offer different subscription models while still running a business off the games.

To be in this business, we have to watch what others are doing and think of ideas we could possibly use in the future. The reporter was interested in that kind of thinking, and so they came to talk to us. It doesn't necessarily mean we are going to do any of it.

Why the fuck do supposedly respected journalistic entities still think Woodcock is any kind of legitimate source for anything other than how to fuck a man in a fursuit?

Why the fuck do supposedly respected journalistic entities still think Woodcock is any kind of legitimate source for anything other than how to fuck a man in a fursuit?

He likens the dilemma to the one the record companies faced when the Internet emerged as a delivery mechanism for music. They still wanted to sell complete CDs at full price, but listeners wanted to be able to purchase songs individually. Enter Apple's iTunes Music Store, and the 99 cent legal download.

Bruce's figures are at *least* as accurate as anything I've seen in "White Paper" reports costing thousands of dollars ....
All of this is irrelevant to what he does with his personal life.

Lies!

Every time someone references Bruce's chart, God kills a sheep, a kitten and a panda....

Bruce's figures are at *least* as accurate as anything I've seen in "White Paper" reports costing thousands of dollars (which are frequently wild ass guesses dressed up in statistical language), and far more accurate than most.  And I've seen Bruce collecting some of his data, usually by the simple expedient of finding someone in a position of authority in an MMO company at a convention and asking them.

He uses the best data available, rates the quality as best he can, and puts it out there where it can be seen.  In the absence of an official "Online Game Operators" industry group, he's the best source available. 

People are doing better, they are just charging for the data.

I can make a really bad free game with a huge churn rate by mass advertising and getting millions of people to log in once. DISCUSS.