Is World Of Warcraft Turning To PLEX?

One story to watch in 2015 is whether World of Warcraft adopts CCP's PLEX model of allowing players to pay for their monthly subscription with in-game currency.  WoW community manager Bashiok indicated that Blizzard is moving in that direction.  In a post on the WoW forums, he wrote:

"We’re exploring the possibility of giving players a way to buy tradable game-time tokens for the purpose of exchanging them in-game with other players for gold. Our current thought on this is that it would give players a way to use their surplus gold to cover some of their subscription cost, while giving players who might have less play time an option for acquiring gold from other players through a legit and secure system. A few other online games offer a similar option, and players have suggested that they’d be interested in seeing something along those lines in WoW. We agree it could be a good fit for the game, and we look forward to any feedback you have as we continue to look into this feature."

Instituting a PLEX-type payment model potentially could net Activision/Blizzard millions of dollars every year.  As an analysis on the Player Auctions website showed last December, the vast majority of RMT sellers look to sell WoW gold.  A pretty obvious conclusion considering that no other MMORPG in the western market comes close to WoW's over 10 million subscribers, but the amounts involved are enormous.  When looking at sales on the site yesterday, I noticed one seller in a half-day had over 3.5 million gold in sales recorded.  The total real cash earned from those sales was in the neighborhood of $2,500 - $3,000.  In comparison, sales of EVE Online ISK on Player Auctions typically result in all sellers earning between $10,000 - $12,000 per month.

Speculation is that if Blizzard institutes a PLEX system that the move would cripple gold sellers.  But would it?  Perhaps in the long run.  But gold sellers could have lighter wallets very quickly if the EVE experience is any indicator.  The RMT website MMOBUX performed an analysis on the price of ISK on the secondary RMT market between 2007 and 2011 and found a dramtic drop in the price of ISK associated with CCP allowing the trade of game time codes for ISK on the EVE Online fourms.

From MMOBUX

The price continued to drop until CCP began taking enforcement steps, the most noticeable on MMOBUX's chart Unholy Rage that occurred in June 2009.  But CCP continues its War on Bots, ratcheting up the pressure on those engaged in RMT to the extent that currently only of of the sellers listed on MMOBUX as selling ISK offers a price competitive with just going to CCP's website, buying a PLEX, and selling it in Jita, the game's main trade hub.  The combination of PLEX driving the price down and Team Security driving the price up through creating a limited supply of ISK eventually made ISK selling unprofitable for most of the websites, although buyers can find ISK to buy in other places.

Of course, the price of gold does not have to drop.  The experience in Runescape shows that prices actually rose.  Over the first 6 months of the existence of Jagex's PLEX-type object, the bond, the price offered by an index of websites I monitored showed that the price of in-game currency rose from $0.41 per million coins to $0.50 per million.

After driving the price down for the first month, the price of Runescape currency rose, both on the bond market and on the secondary market.  But the prices on the bond market have decreased, with the price of coins now at $0.62/million coins.  The index of websites, on the other hand, are still offering a median price of $0.50/million coins.

One big difference between CCP's introduction of PLEX and Jagex's introduction of bonds is enforcement.  PLEX were introduced in the Quantum Rise expansion in November 2008 but serious enforcement didn't really begin until the Unholy Rage operation began in June 2009.  Jagex, on the other hand, has waged an aggressive, although sometimes ineffective, war against bots and RMT for a long time, famously banning 9.2 million accounts for botting and RMT in 2011.

As both CCP and Jagex discovered, just implementing PLEX or just aggressively banning botters doesn't work.  Combating the scourge of illicit RMT in MMORPGs requires a coordinated plan that incentivizes players to not go to shady websites while at the same time works to reduce the profits of those engaged in RMT.  PLEX is not a quick fix for the problem of illicit RMT.  How Blizzard handles the situation in WoW is one of the stories to watch in 2015.

Predictions For 2014

We are at the end of another year.  A time to look back and a time to look ahead.  When the subject is what I am doing in EVE Online my year doesn't coincide with the calendar.  But for everything else I pretty much stick to the calendar of this ball of dirt we call home.  Since this is the time for bloggers to make predictions about things that won't come true, I'll do my part and come up with some prognostications for the upcoming year.

The Subscription Model Is Not Dead Yet - I predict that both Wildstar and Elder Scrolls Online will remain subscription games throughout 2014.  However, the possibility exists that sometime in November or December that ESO could announce a change to a free-to-play model will occur sometime in the first half of 2015.  If I had the courage of my convictions I'd make it a prediction, but I'll chicken out this time.  Well, at least about the announcement.

PLEX-Type Systems Mixed Reception - I think that the news about companies attempting to duplicate CCP's success with PLEX will be mixed in 2014.  I expect Jagex to come out and state that, despite some over-hyped news in 2013, that bonds have not had the desired results and that new systems are needed to deal with Runescape's bot and illicit RMT problem.  On the other hand, after a rocky start, Carbine will announce some success with its C.R.E.D.D. system.  The financial figures will speak for themselves and another AAA MMO in development will announce going to a sub plus PLEX system sometime in the last quarter of 2014.

For EVE Online players, I'll predict that the Jita price for PLEX will make 1 billion ISK worth $26.50.  That is 660 million ISK for a PLEX using in-game currency.

World of Warcraft Does Well, But... - Yes, when making a post about predictions about MMORPGs I do have to include World of Warcraft.  I think that WoW will experience a year that all other game companies would envy.  I think that we will see the new Warlords of Draenor expansion sell 2.4 million copies in the first week and the number of subscribers hit between 9 and 10 million.  Of course, these numbers will have critics exclaiming that WoW is dying and on its last legs.

The expansion will foster controversy with the new offerings in WoW's cash shop.  I don't know what the nature of the controversy will involve, but I expect a backlash from some of the veteran players stating that WoW has gone pay-to-win.

Also, I do expect WoW to suffer another major hacking attack in 2014.  Of course, given WoW's history, the brave prediction is to predict such a security breach would not occur.

Guild Wars 2 Expansion - ArenaNet was pretty firm in 2013 about not needing an expansion for Guild Wars 2.  I think they will stay true to that and not publish an expansion in 2014.  However, I do expect ArenaNet to announce this summer an expansion in the first half of 2015 to coincide with the end of 2014's Living Story.

CCP - I expect that 2014 will prove a bad year for the Icelandic game company.  The number of subscriptions for its flagship game EVE Online will decline for the first time in the game's history (assuming that the number of accounts did not decline in 2013).  CCP will continue to resist pressure to release a "Jesus feature" in 2014, waiting until 2015. 

DUST 514 will continue to limp along throughout 2014.  However, the game will not break the 7,000 concurrent user mark unless CCP stages some sort of marketing event at one of the trade shows like E3.  With a less than expected rush to play, I expect no conversion announcement from the PS3 to the PS4 and layoffs in the Shanghai office at the end of 2014.

The one bright spot is EVE: Valkyrie.  CCP will have the game ready to ship at the time that the Oculus Rift is ready to ship to the public.  The game will receive high marks from players, but the good news is offset by the low penetration of the Oculus Rift into the gaming market.  Also, don't expect the Oculus Rift to release before the fourth quarter.

Star Citizen -  I'm not sure the game actually qualifies as an MMORPG, but I have three predictions.  The first is that the game will reach the $65 million mark in funds gathered in 2014  I would name a higher number but I also predict a major story about the RMT scene surrounding the game will make its rounds amongst the mainstream gaming press and that will depress the donation numbers.  Finally, I predict that during 2014 that Chris Roberts will announce a launch date in the second half of 2015.

Biggest Surprise - I think EverQuest Next Landmark will break out as the big surprise game of 2014.  I know that Landmark is developed by SOE, but given that no one even conceived of the possibility of the game until August 2013 I would rate a successful year a surprise.  Given the popularity of Minecraft, Landmark will emerge as the building game with the best graphics.  I think that could make Landmark a very popular game indeed.

I will make more predictions tomorrow as part of the final Digital Dozen roundup for 2013.  I should add that I hope I am wrong about the negative predictions I made in this post.  I just have the feeling that the gaming industry will not see calm seas in 2014.

The War On Bots & Illicit RMT - 2013 In Review

To tell the truth, I did not expect to write a review post this year.  I was surprised at the amount of news on the subject that actually came out over the past 12 months.  Last year I just included "War on Bots" in the title and just put in illicit RMT as a side issue.  This year covering the illicit RMT trade makes up a good chunk of the the news in 2013.  Also, I started covering the secondary RMT market in other games.  In some ways that was in response to the sheer magnitude of what I saw.  But more importantly, the games industry is starting to look at what CCP is doing to combat the illicit RMT trade and copying elements of CCP's strategy.  In particular, the adoption of PLEX-like objects by Jagex into Runescape (Bonds) and Carbine into the upcoming sci-fi MMORPG Wildstar (C.R.E.D.D.) show how other game companies view CCP's PLEX strategy.

But what about the news from 2013?  The year started out with many ISK selling sites raising prices due to CCP's efforts in the fourth quarter of 2012.

Between 23 December 2012 and 13 January 2013 eight web sites increased their prices an average of 25.1% with six companies raises prices by 20.4% between 6 January and 13 January.

The news in January was not just about the efforts of Team Security.  When the CSM 7 Winter summit meetings were published, an initiative came to light to get better information on players.  In order to gather that information, CCP would need to link users across multiple accounts.  While that demographic information is useful for game designers creating content and tracking the economy, the information would also make it easier to track down botters and ISK sellers to ban more of their accounts when discovered.

In February New Eden saw the great EVE University market bot scandal.  A member of EVE University was detected using a market bot, received a 14-day ban, but did not have any ISK gained from the activity confiscated.  The player then donated 317 billion ISK to EVE University and apparently bio-massed the character and quit EVE.  EVE University then petitions the donation and CCP confiscates the ISK.  What made the story a scandal was a member of the Council of Stellar Management going public and questioning the integrity of Team Security.  Once facts about a ban usually held private were revealed the scandal slipped away.

Also in February an amusing incident occurred involving an ISK selling company and a web designer who left the debug option active.  The resulting errors that displayed for days when attempting to access one website showed the connections between 3 ISK selling sites.  The lesson is that those engaged in illicit RMT aren't above a little trickery to increase sales.

March was an eventful month that saw Team Security add checks for known botting software and other hacks.  The first target was an application called Red Guard.  Red Guard is designed to spoof CCP's digital fingerprinting software so if a botter is caught that Team Security does not ban all of the botter's accounts.  This actually resulted in a call by Red Guard users to restrict access to the public.  Six days later Red Guard went from freeware to a $25 application with an additional $25 for updates.

With Team Security adding software detection to its anti-bot algorithms the question then arose on whether the multi-boxing software ISBoxer was no longer allowed.  This became more likely as CCP had made a ninja edit to a page on the old forums that Lavish Software was using as part of its marketing efforts.  According to bot developers, CCP was only trying to detect two Inner Space extensions, DirectEVE and ISXEVE, and not anyone using Inner Space.  CCP also later announced that ISBoxer users would not receive bans as long as the software was only used for multi-boxing.

 

Partly as a result of Team Security's increased anti-botting measures activity on Tranquility dropped 8.2% from 21 February to 14 March.

The month ended with a change in the penalty for botting.  Instead of a three strikes policy, botters would receive a 30 day ban for a first offense and a permanent ban for the second offense.

In April, the news focused more on hacks affecting the client rather than directly against bots.  For the first time cache scraping was explicitly declared a violation of the EULA but that CCP would not enforce penalties against those engaging in the practice.  Also, 2350 players received a 30 day ban for using an autopilot warp to zero hack.  While the hack involved client modification the decision was made to only impose a 30 day ban because of the lack of enforcement in the past.

May and June were fairly quiet although two events did occur in June that I did not write about.  The first occurred on 2-3 June as EVE Online was the target of a DDoS attack.  Tranquility and associated websites were taken down as a precaution against hackers using the attack as cover for another type of attack.  Later in June Blizzard's Mobile Armory was hacked and hundreds, if not thousands, of accounts stripped of gold.  That the hackers were able to bypass Blizzard's vaunted authenticator system is a warning to CCP for when it opens up the CREST API to 3rd party developers.

Events remained quiet until the end of July when CCP Stillman and the official EVE Online Twitter account released a graphic demonstrating a drop in bot bans.  CCP Stillman attributed the drop in the changes to ice belts and null sec rats introduced in Odyssey.

The drop was not allowed to last as three days later CCP Stillman tweeted about CCP Peligro instituting a new ban wave.  The effort continued throughout August, with ISK selling sites showing the effects in late August as between 18-25 August 9 of the 12 ISK sellers on my watch list raised prices by an average of 17.9%. 

September was another busy month as companies besides CCP made headlines with their efforts against the illicit RMT trade.  Square Enix, the maker of Final Fantasy XIV, seized 367 billion gil, worth between $2.5 and $4.2 million, in a three-week operation in the second half of the month.  Jagex, the makers of Runescape, acknowledged that banning 1.1 million accounts in 2013 was not enough and instituted Bonds, a PLEX-type instrument.  While Jagex claimed Bonds have nearly eradicated gold farming, I'm withholding judgement until more data is available.

But September was also a significant month for ISK sellers as well.  The upwards trend of the price of ISK on the secondary market peaked on 22 September as the median price on my watch list exceeded that of the price obtainable from purchasing PLEX directly from CCP and selling the PLEX in Jita.  At that time, two major secondary market virtual currency sellers, IGE and MOGS, dropped out of the EVE Online ISK market.

The subsequent drop in the price of illicit ISK due to less companies fighting over the available supply was overshadowed by the SOMERblink RMT scandal.  The scandal began with DNSBlack going on the EVE Online forums and declaring his intent to RMT money, items, and characters legally.  While his scheme fizzled out, one enterprising capsuleer managed to become an affiliate of Shattered Crystal and set up shop on the EVE Online forums using the same process as SOMERblink to eventually RMT 188 billion ISK. 

The loophole involved using the EVE Time Code sellers agreement to override the EULA.  That allowed SOMERblink to give those who purchased game time codes from first Shattered Crystal, and later Markee Dragon, 200 million ISK for purchasing each ETC.  The exact amount of ISK laundered in that fashion is not known, but the real world value was $135,000 when SOMERblink was an affiliate of Shattered Crystal.  As a result of the uproar CCP's legal counsel Bill Winter sent all ETC sellers a letter announcing a closing of the loophole and giving the sellers until 7 November to make sure any player affiliate complied fully with the EULA in these matters.  SOMERblink then poured fuel onto the outrage of its critics and held a liquidation sale right up until the deadline.

On the secondary RMT market prices declined throughout October and November as additional companies stopped selling ISK.  The site Safe EVE ISK let its domain lapse in late October/early November.  And two other websites, In Game Delivery and IGXE, stopped selling ISK in mid-November.

Team Security did try to open up a new front on the War on Bots in November with efforts to silence the spambots in the trade hubs.  But the spambots did return and those spotted two weeks into the effort are still present and spamming.

December's main news came from an unexpected source: the latest document leaks from Edward Snowden concerned the efforts of U.S. and British intelligence to infiltrate and spy on Second Life and World of Warcraft.  Since virtual worlds could provide a way to launder money, I looked at a popular player auction site to look at the potential size of the secondary RMT market.

Just based on a one day snapshot the market for WoW gold is just so much larger than all other games combined.  Those wishing to hide any laundering activity could use the secondary WoW market to launder money without leaving much of a trace.  I should add that the size of the market is very volatile, as the amount of ISK for sale at the site jumped from 1.8 trillion ISK to 10.9 trillion ISK in the course of 24 hours this weekend.

In the end 2013 was a rather eventful year when the subject was botting and illicit RMT.  While I write rather extensively on the subject, I hope that next year sees a decrease in the amount of newsworthy activity.  I wouldn't mind writing less.  Honest.

The Global War On Illicit RMT: Charity Case

If I had to name a game whose economy has suffered the ravaging effects of botting and illicit RMT, I would name Runescape.  Despite banning 1.1 million bots and seizing 3.7 trillion gold pieces¹ in the first nine months of 2013, Runescape suffers from a serious inflation problem.  Jagex introduced Bonds, a version of EVE Online's PLEX.  But Jagex still needed to institute additional gold sinks in order to absorb all the currency that bots had introduced into the economy.

In November, Jagex opened up the Well of Goodwill, which allowed players to turn in gold and bonds to raise money for seven charities.  And one of the benefits, besides helping worthy charities?

"A second benefit of adding the Well of Goodwill is that it will also act as a massive gold sink for the game: something we promised with the launch of Bonds that's still needed, which will have a huge impact on improving the game's economy."

That's right.  Jagex turned a charitable event into an event that could help heal the ravages of botting and illicit RMT.  But I won't knock the Runescape communities efforts, as they helped raise over $90,000.  The fact that players also donated over 544 billion gold pieces and 7,000 bonds also helped remove some of the excess currency that was injected into the economy by the bots.

Quite frankly, I'm glad that Runescape has an external page that I can do lookups of bond prices every week as part of my research into the effects of PLEX-type systems on the price of secondary market RMT.  If not, I would have had to actually start an account and start playing in order to get information.  When the game company puts out figures that 40-50% of players in any given month patronize a secondary market RMT site, that's a game I want to have no part of.  Hopefully Jagex's latest plans will help bring the RMT problem into some semblance of control.



Notes:

1.  Using Sunday's bond price, 3.7 trillion gp is the equivalent of over 19,700 years of game time.  In EVE that is the equivalent of over 237,000 PLEX.  As a comparison to EVE, in October and November of this year, 186,779 PLEX were sold in The Forge, home of EVE's main trade hub Jita.

Jagex Joins The PLEX Parade

Has anyone noticed just how many game companies are turning toward CCP's PLEX system?  In August 2011 En Masse introduced Chronoscrolls into Tera as a way to fight gold sellers.  In October 2012 SOE followed with the introduction of Kronos into EverQuest, EverQuest 2 and Vanguard but only advertised the new object as a method of payment using in-game currency.  Last month Carbine made the surprising choice of not only going with a subscription model for its upcoming game Wildstar but introducing the PLEX-like CREDD.

What CREDD Does

The latest company to hop on the bandwagon is Jagex, makers of Runescape.  The browser based game has a long history of problems with bots and grey market gold sellers.  In 2011 the company banned over 9 million accounts for botting.  On "Bot Nuking Day", Jagex banned 1.5 million accounts and in the following week was banning 9,000 accounts every minute.  In January 2012 Jagex won a lawsuit against Impulse Software, the maker of the iBot in a Boston court, for copyright infringement, circumvention of technological protection measures and computer fraud.

But Runescape's bot and RMT problems continued.  In an announcement yesterday, Jagex CEO Mark Gerhard stated that so far in 2013 that over 1.1 million botting accounts were banned and 3.7 trillion gold pieces seized from gold farmer accounts.¹  But that has not slowed down the botters too much.  Jagex identified 150-170 billion gold pieces injected into the game's economy over the past few months.²  That's what they detected.  Who knows how much was produced that was undetected.

At the end of the video Gerhard announced the introduction of Bonds, an item that players can use to pay their membership fee.  The idea, like CCP's in 2008, is that players will use the approved method of purchasing in-game currency through the company and shun the gold selling sites.  According to a live stream on Twitch, the final straw that made Jagex create bonds was the discovery that 40-50% of their active player base (i.e. members) were purchasing gold from the grey market sites.

I've watched part of the live stream and I really think that Gerhard and his team have underestimated how fast and effectively a PLEX-type system will work.  I base this not only on CCP's experience with PLEX but with the ease of finding sites that sell Runescape gold.  When I went to put together a list of sites selling EVE Online ISK in July I first did a Google search on buying EVE Online ISK and found four sites through the Google Ads that appeared.  When I did the same for Runescape gold yesterday, I found ads for 13 sites.  Finding gold selling sites for Runescape, at least compared to EVE, is extremely easy.  If that many companies are actively advertising on Google, then business is probably good.

As I've written before, high ban counts don't necessarily mean much if the prices the gold sellers is not affected.  So what is the price of Runescape gold?  Looking at the sites advertising on Google, the median price was $41.11 for 100 million GP.  So that is the price players need to watch as the months go by to see if Jagex' efforts work.


NOTES:

1.  At the median price found from the RMT sites found advertising with Google Ads, the real world value is approximately $US 1.5 million.

2.  At the median price found from the RMT sites found advertising with Google Ads, the real world value is approximately $US 60,000 - $US 70,000 per month.