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Simon Ludgate, Blogger

August 28, 2009

5 Min Read

In my previous blog entry, I described how adding PLEX to EVE Online failed to stem RMT in CCP's MMO. I concluded that the game operator would simply be better off selling in-game currency directly to its own players because they would not only be able to beat RMT at their own game, but would monetize the demand for their in-game curreny.

So why don't they? Well, it might infuriate players who think the practice is unfair or that it will destabilize the market or that it might just be plain evil. I'm in no place to psychoanalyze perceptions. What I can do, at any rate, is explain the effects selling currency would have on the in-game player-driven market.

MMO markets are (usually) in perfect competition

The most important thing to keep in mind is that MMO economies, by and large, are in perfect competition. There are many "firms" (each player acts as a firm), the goods are homogeneous (all goods are identical copies of each other), there are low entry barriers (every player could potentially get/produce every good), and there is limited restriction on access to raw materials (by and large, everyone can get what they want from the game world).

In such an economy, a player always has the choice to either buy something or go get it for themselves. Given such a choice, the price of everything is the amount of money you could get in the time it would take for you to get that thing.

Rate of Money / Rate of Stuff = Cost of Stuff

So, for example, say you're playing World of Warcraft and you want some Flasks. You can either go gather herbs and make the flasks, or do daily quests and use the money to buy the flasks on the AH. If it takes 1 hour to get the herbs for 5 flasks, and in 1 hour you could get 100g from daily quests, then it would make sense that flasks sell for 20g each.

If they were more expensive, then players would farm them rather than do dailies; and would farm enough for a surplus to sell and profit from the price imparity, thereby increasing supply and, since players are in perfect competition and underbidding each other on the market, prices go down. Conversely, if flasks are cheaper, people just buy them and quickly buy up the stock on the market until all that remains are market price flasks.

Controlling the Rate of Money and Stuff

By and large, the Rates of Money and Stuff are strictly controlled in a game world by the game's design. How often harvestable resources or monsters spawn, how often monsters drop loot, how often a player can do a quest or dungeon, and how long it takes it do any of these things. This is why it seems like anyone who bypasses the limits set by the game's designers is cheating, because that player is getting something outside the normal rates.

But would buying currency actually destabilize the market? Well, it could, but only if too many people do it. As it stands, an MMO market is already a fragile thing, and players could potentially play havok if they were sufficiently dedicated to do so. If enough players harvested enough money and bought every good on the market, and had enough money to keep on buying every good on the market, then normal players would never be able to buy anything on the market. The market would be ruined. It's possible to do, but it would be rediculously time consuming, and you'd have to have a lot of people working on it.

Directly selling currency could also have the same effect, and it would only take one really rich player, but again you'd have to spend a tremendous about of real money to make it happen. Maybe there are people out there who would spend a hundred thousand dollars to destroy the market in a game, but frankly if they just want to throw money at pissing off people there are far more effective and direct ways of doing it (maybe spend that money hiring hackers to take control of everyone's account?).

Selling Money is less harmful than RMT 

For players who want a "pristine" game environment to play in, the most important thing to keep in mind is that players buying currency directly from the game is less harmful to the game experience than the presence of RMT. RMT doesn't only sell currency, it also has to acquire that currency in the game, and they often employ exploits, cheats, or abusive practices to get it as fast as possible. In EVE, some asteroid belts are permanently stripped clean by RMT miners, meaning that regular players are denied the opportunity to mine there by RMT.

On the other hand, players are rarely affected negatively by people who actually buy the money from RMT. RMT is HUGE. Don't try to hide from it. There's a good chance that you've run across dozens of players in whatever MMO you play that buy in-game currency. And somehow, they don't ruin the game. As it happens, as huge as RMT is, there are far more players who just want to play the game without buying currency, more than enough to make the effects of buying currency miniscule on the economy itself.

The Actual Consequences of Selling Money

So what would happen if Blizzard or CCP or any of the other main MMO companies started selling their currency directly to players and ran RMT out of business? The short answer: not much. Oh, sure, there would be some people up in arms because their fragile ideals of how the game ought to be played would be shattered, but most people wouldn't notice any change at all.

So why don't companies do it? I have no idea. They should. Good money to be made there.

What do you think? Would you quit a game if the company started selling currency directly? Would you buy any? Or would like just go on like normal? 

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Simon Ludgate


Simon Ludgate has worked at numerous game companies, including Strategy First, Electronic Arts, and Gameloft, as well as a journalist and radio personality with GameSHOUT Radio. He recently obtained his Master of Information degree from the University of Toronto iSchool, with a focus on Knowledge and Information Management. His areas of expertise are broad, though he has a particular interest in massively multiplayer online games, both subscription- and microtransaction-based. He currently maintains a blog at soulrift.com and can be contacted through that site. Twitter: @SimonLudgate

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