Tuesday, January 27, 2015

The Rabbit Hole: Why The Primary Market Is (Usually) Not So Bad

In the first article of this series, I broke down real money trading in MMOGs between that sponsored by game companies (aka the primary market) and RMT conducted by outside parties (the secondary market).  In the next two articles, I expanded on the theory that real money trading is bad for MMOGs due to the potential to encourage activity that causes (or at least worsens) monetary inflation and the denial of content to the average player.

So far in the series, I don't think I have argued that either primary market RMT is either better or worse than secondary market RMT.  While in the area of gold farmers monopolizing content I concentrated on the illicit gold farmers, that was because the botting in the example game of Elder Scrolls Online was so egregious. One can make the argument that a sizable percentage of the botting in Wildstar was conducted by regular players motivated to play the game for free by purchasing C.R.E.D.D., Carbine's PLEX-like item good for one month's game time, for the game's virtual currency.  And in the article on monetary inflation, the two games that experienced hyper-inflation, Diablo 3 and Gaia Online, both had company-run markets which the developers let run out of control.

In this post, I'll explain why I believe that a company-run RMT market is almost always better than the secondary RMT market that springs up around almost every game that utilizes a virtual currency.  The first reason is a matter of immersion.  While I believe that real money trading breaks player immersion to various degrees, a well thought out and implemented primary market is less disruptive than the secondary market.  Examples like EVE Online's PLEX, Guild Wars 2's Gem Exchange, and the sale of Cartel Market items on Star Wars: The Old Republic's Galactic Trade Network are all versions of a primary RMT market that players accept as a natural part of the game world.  Players who purchase virtual currency using those methods aren't looked down upon like those who frequent the secondary markets.  Reducing friction is always a good thing in a game community.

The second reason is that a well designed primary RMT market should result in a slower growth in the money supply than one in which a secondary RMT market flourishes.  Why?  Because regular players who want to purchase items like character unlocks or game time have a monetary goal.  Once they purchase their item, they will stop farming the game's currency, assuming that the currency wasn't gained through normal game play.  Whereas the gold farmer supplying the secondary market has every incentive to farm gold 24 hours a day, seven days a week.  Who is going to increase the money supply more, casual farmers who only play a few hours a day, or professionals working as long as humanly possible, or even longer if bots are utilized?  Please remember, I am referring to well designed markets, not those like the one that Blizzard had to remove from Diablo 3.

Another reason company run RMT markets are preferable to those run by outside companies and individuals is that the primary RMT markets do not rely on a game's communications systems.  The players who want to sell virtual currency for objects originally purchased for real world money can just go to the game's marketplace and conduct their business there.  Those running illicit RMT sites, on the other hand, need to attract customers.  So the illicit RMTers will spam advertisements in a game's chat channels as well as send annoying spam through the mail system.  Interfering with the chat channels is particularly troublesome as in busy zones the spam can prevent players from asking for help or even finding other players to group with.

The final reason why primary market RMT is better than having a player base only have access to a secondary market to purchase virtual currency is that a company run marketplace should use less resources than the load the secondary market puts on a game company.  While players are incentivized to use bots, and will to some extent, regular players will probably not resort to activities like hacking accounts and credit card fraud to finance their purchases.  A company still needs to maintain a good security team, but the staff required is less, as the game company only needs staff to deal with complaints about the use of items bought from the company.  Blizzard made the following statement about their resource requirements due to hacking in World of Warcraft, a game where a secondary RMT market thrives:
"The overwhelming majority of purchased gold comes from stolen player accounts, in which character inventories are stripped of value, liquidated into gold and sent off to be sold. This halts the victims’ ability to play the game and contribute to their guilds.
"It’s also costly for Blizzard, as we task hundreds of Game Masters and account specialists to assist compromise victims, help secure accounts, and restore their characters. These efforts require time and focus that could otherwise be spent addressing player requests more quickly."
Now, the presence of a primary RMT market in a game does not eliminate the secondary RMT market supplied by gold farmers, hackers, and botters.  A game company will still need to deal with the negative effects associated with secondary markets, such as increased potential of monetary inflation, a decrease in immersion, helped by gold spammers utilizing in-game communications methods like chat channels and the mail system, and hacked accounts.  Also, a primary RMT market still incentivizes regular players to engage in bad activity such as botting.  But, hopefully, a company run RMT market will lessen the amount of RMT pollution in the game world by reducing the harmful activities conducted by those engaged in illicit RMT activities.  At least, that's the theory.



  2. “RMT pollution in the game world”

    It can sometimes be difficult to find a truly clear term that gets at what one is exploring. ‘Pollution’ seems to be that clear term. Unwanted RMT is corrosive, poisonous, harmful.

    I'm curious what will be explored when your series gets around to Project Entropia which, if I understand correctly, doesn’t treat RMT as pollution but rather as a (the?) game objective. No rush mind you. Contrast means little if things aren’t properly explored.

  3. I wish I could say I coined that term, but it came from Dr. Castronova. As for Project Entropia? I'm thinking of looking at some of the rules that make it different. For instance, you are only allowed 1 character on 1 account.