Asherons Call: Selling Your Loot: When Virtual Worlds Meet Real Cash

Selling Your Loot: When Virtual Worlds Meet Real Cash
by Mike Smith

It's only been two hours. Maybe three, at most. The next level can't be more than a few kills away, and you didn't really have anything else to do tonight, did you?

Sound familiar? Massively multiplayer online games swallow time like nothing else on earth. Perhaps, like many players, you're wondering if there's a way to turn some of that investment of time into cold, hard cash. Or perhaps you're tempted to skip all the tedious "grinding" to level up your character, and you'd rather buy a ready-made powerhouse?

Buying and selling items, characters, or currency is an attractive option for many gamers - but it's one that carries the risk of sanctions from publishers who assert their ownership of all in-game content. World of Warcraft creator Blizzard has taken a particularly hard stance against the practice, even threatening legal action against participants in a recent news posting.

While the size of this "secondary market" in items, currency, or even fully outfitted characters is hard to measure, it's not difficult to find content for even the newest games offered for sale on auction sites or specialist online retailers. IGE is the largest dealer in MMORPG content -- we spoke to its newly appointed president Steve Salyer about the company's activities.

Salyer is keen to dispel the impression that IGE is a shady, fly-by-night organization. He describes himself as a seasoned industry executive, with credits ranging from helping launch the original Dungeons and Dragons PC game, Pool of Radiance, to six years as a senior VP at Electronic Arts. More recently, he joined Ubisoft in 2000 as president of business development. "The Clancy products, the Myst products and the Prince of Persia products were all acquired under my tenure," he explained. "I have a long history in interactive entertainment."

His new employer doesn't have quite such a spotless reputation. IGE, and companies like it, have long been the subject of rumors that suggest they're running overseas sweatshops full of wage slaves farming MMORPG gold and items. Salyer was quick to refute these allegations, saying, "This is completely factually inaccurate. We have no employees anywhere in the world that are playing games to acquire inventory for resale. We have never done that." While IGE employs over one hundred people, and many of them are based in Hong Kong, Salyer told us they're mainly customer service representatives.

Another frequent criticism of IGE's brokerage operations is that it encourages players to seek ways to exploit games -- creating money or items without going to the trouble of finding them legitimately. Salyer dismisses these allegations as unfair. "We absolutely do not approve of the use of bots or exploits, hacks or cheats," he said. "We don't do it, and the message we are discussing with publishers -- as we speak -- is that we recognize that the secondary market needs to self-regulate, and we are happy to champion that."

One important unresolved issue hanging over IGE's head is the question of exactly who owns the content players find and generate in online games -- whether it's gold, weapons, or even the characters themselves, their legal status is far from clear. All players agree to Terms of Service before creating characters -- terms that typically include language asserting the publishers' ownership of all in-game content. How much legal weight these terms carry isn't currently clear.

"We believe that the publishers' claims are legally inaccurate, and that we do not need a license to do what we do," Salyer explained. "Having said that, I'm a businessman, and I believe that markets are best served if we can enter into normal business agreements with publishers."

In fact, Salyer's already working on it. "I have taken the time to meet with most of the premier publishers since I joined IGE, and there is a very strong indication that it will evolve along business solutions rather than litigation," he said.

"IGE and the publishers have the same goal: To increase the number of people worldwide that participate in the online game industry," he continued. "The secondary market has emerged very quickly and addresses the same customers as the publishers' games, so it doesn't surprise me that there is some level of tension."

So if the publishers don't own the items, as they claim, then who does? "I honestly don't know. Like you, I look forward to seeing how it all shakes out," Salyer said. "I know that emotionally, today, the players feel they own their character and the items of their character in the game."

We took some of Salyer's comments to Janna Burenson, a representative of NCSoft, publisher of MMORPGs like City of Heroes and Lineage II. Unsurprisingly, she disagrees. "As stated in our user agreement, we own the content," she told us. "We take our agreements with our customers very seriously, and expect that our customers do the same by adhering to our user agreements and rules of conduct." Lineage II's user agreement specifically forbids the selling of content.

Bureson also told us NCSoft is prepared to take sanctions when players overstep their boundaries. "When we find hard evidence that someone has been using unorthodox practices to gain an unfair advantage in our games, we take steps to stop it, up to and including banning player accounts," she said.

That's not the end of the problem. Assuming Salyer is right, and players are ruled to own the content they find in their online games, does that imply publishers are liable for changes they make to those items? "Balance tweaks" are commonplace in online games, as publishers respond to the growth and player activity. Sometimes those changes result in items or characters becoming less effective --and hence less valuable. Could this leave publishers liable to lawsuits?

Salyer thinks not. "When you go skiing, you rent skis, and if you hurt yourself, you are liable, not the manufacturer or provider of the tools. You take on all liability. I think that's completely an appropriate kind of solution -- it's unfair for a publisher to have to take on any kind of real property law liability."

Regardless of the legal issues, it's big business. Project Entropia, a smaller MMORPG that accepts and encourages the secondary market, recently announced the sale of an island to a player for almost $30,000, and Salyer puts the annual worldwide trade in virtual items at over $880m.

Some players take it to extremes. Salyer knows of several IGE repeat customers who've spent "upwards of $30,000 to $50,000" -- and they're not resellers. "When I've shared that with other people, they say it's an insane amount of money to spend on something that's not real," he laughed.

A committed player of MMORPGs himself, Salyer went on to share an anecdote from his playing experience. "I owned a house in a popular online game," he explained, "and when I logged in one evening I discovered all the items in my house had been taken. I was at dinner, speaking with my wife, and she asked why I was upset. She laughed, and said, 'That stuff isn't real, don't let it upset you.'"

He continued: "It occurred to me that when I'm in New York for business, my ranch in California is a construct in my mind, and has sort of the same emotional weight as my house online. I know from personal experience that being burglarized in virtual space has the same emotional impact as being burglarized in the real world."

MMORPG aficionados could be forgiven for taking Salyer's story with a pinch of salt. Accepted wisdom is that a game's secondary market contributes to runaway inflation -- perhaps the thorniest problem of MMORPG economics -- so why would Salyer take a position at a firm that is apparently harming the games he professes to have such a personal stake in?

"I don't believe the secondary market contributes to inflation, and the reason that I am fairly certain of that is because every piece of currency and item we sell is generated by someone working to acquire it," he answered. "Where inflation can occur is if someone is acquiring items without the time spent playing, by cheating in some way." Salyer also mentioned IGE shares information regarding possible cheats with publishers.

What about the negative perception of item or character purchasers? After all, it's natural for players who spent long, tedious hours hunting for a rare item to be resentful of those who just opened their wallets and bought one. Salyer thinks these attitudes are on their way out. "As the number of people playing MMORPG games increases, the very vocal minority segment that dislikes the secondary market becomes a smaller and smaller percentage," he said.

Regardless of whether Salyer or the publishers win (or, as seems most likely, they come to an uneasy peace), the secondary market isn't going anywhere. You only have to look at real-world society to see that outlawing a trade doesn't eradicate it: where there's demand, supply quickly follows. All the lawyers in the world won't change the fact that if you can move items between accounts, then you can sell them for real money. While it may be galling for designers to think of resellers like Salyer getting rich from their games, pragmatism dictates that MMORPGs must be built for robustness in the face of the secondary market. Perhaps it's not such a big step from there to acceptance.