informa
11 min read
Features

SOE's Station Exchange - The Results of a Year of Trading

Sony Online has revealed fascinating results for its Station Exchange virtual item-selling service for EverQuest II, and Gamasutra presents an interview with SOE's John Smedley and a detailed synopsis of the company's White Paper.

John Smedley is CEO of Sony Online Entertainment (SOE) (makers of Everquest 2 and Star Wars Galaxies), and sometimes serves as a lightning rod for debate in the Massively Multiplayer genre. SOE and Mr. Smedley made the bold decision in June of 2005 to roll out a service that would allow players to trade US currency for in-game currency, items, and even characters. Called the Sony Station Exchange, it has caused a good deal of debate and, it turns out, made the company a nice little pile of money.

Today, SOE is releasing a white paper detailing the first full year of trading; how much was sold, how much they made, and the big bucks individuals can get from selling non-existent coins. Mr. Smedley was good enough to answer a few brief questions about the contents of the white paper, and the future of SOE's Station Exchange service.

Gamasutra: When the topic of the white paper came up, you mentioned that your interests here were possibly 'not what we'd expect.' What does interest you in about this topic?

John Smedley: I'm interested in shining the light of day on this subject. It's real. It's a billion dollar industry worldwide and we as game makers need to seriously work to handle it in-game. There is rampant farming in these games (yes, ours included). I believe we should work to include some element of this in some games, but do a better job of cracking down on it in a big way. I have personally had it affect my gameplay and I think it's very negative. Our goal for getting this information out there is to show exactly what's going on so everyone understands. With this kind of money involved, it's not going away. I strongly believe in the idea of separate servers to allow people that want to engage in this sort of activity to do it.

Gamasutra: What was the reason SOE decided to have the white paper drawn up? Was it internal curiosity, or did you always plan to publish the results? Was there anything in the paper's results that out-and-out surprised you?

JS: We had the white paper drawn up because it's a topic we felt was very pertinent to MMO gaming in general. The biggest surprise to me was the amount of money some of the sellers were making.

Gamasutra: The paper's statement that the opening of the Station Exchange 'was a cause for great debate' seems like something of an understatement. Has there been any appreciable backlash from the playerbase as a result of the SE's opening? Do you feel that opening the Exchange generated some
bad will?


JS: There was a very large amount of debate and controversy when we announced it. It became a non-event when it launched.

Gamasutra: Did the sheer amount of money that has passed through the service surprise anyone at SOE, or was the success of the Station Exchange an assumption from the start?

JS: We always assumed it would be successful. We knew the demand was there.

Gamasutra: Despite the paper's statement that revenue for the company from the Station Exchange was 'not a significant source', $274,083 is nothing to write off either. Given the monetary success of the Station Exchange for both SOE and participating players, are there any plans to expand the service to all game servers? If not, what is keeping you from taking that step?

JS: Absolutely not. We said at the start that we would keep it on separate servers, and we intend to keep that promise. In the future we will include some form of Exchange in some of our games, although we are leaning towards only allowing certain types of non-game impacting items to be sold.

Gamasutra: What is your reaction to the statistics showing some players may be making a living wage off of Station Exchange sales? Is this something that was always intended for the service (as it is certainly not unique among RMT services), and is this something SOE has any intention of restraining?

JS: I will admit the amount that some of these folks were making did come as a surprise. I do think it's cool that a person could put themselves through College by doing this. If it's done on servers where other people choose to participate in this kind of activity I think it's a great thing.

Gamasutra: While the analogy of 'movie snacks' is an apt one insofar as impulse buys go, do you think it is an applicable lens for the service as a whole? How would you respond to some who would take exception to that as an analogy for something they care deeply about?

JS: I don't think it's a good lens for the service as a whole. The author was trying to make a point about impulse buying (at least in my opinion).

Gamasutra: The paper ends on a note that some might consider a bit crass. It reads: "Since the income generated from auctions is predictable, and can be controlled, it may offer new ways to monetize game play. It is already clear that the possibility exists of creating an MMO in which the virtual economy is a core component. This would not work for all game types. But in the cases where it does work, would provide a powerful way to keep subscribers glued to the game." How would you respond to those who might take exception to the concept of 'monetizing gameplay' as a means of 'keeping subscribers glued', when they're just there to have a good time?

JS: Hmm.. well, I would disagree that it is a bad thing. I can forsee a game where there is no subscription but you can use Exchange for non-game impacting items (clothing and such) and perhaps the in-game tailors can make real life profit by selling a uniquely designed outfit. Maybe a person could become very famous for making a special type of shirt with an artistic design on it. To me the idea that an out-of-game economy can exist and people can make money by participating in a game they love is
amazing. However, I have to emphasize that I think it's important we design with this in mind. If it's non-game impacting and just plain cool, I suspect people won't mind it.. and if they get a tangible benefit out of it (not paying a sub-price for example) I think people will actually like it. The key is to design games in such a way that "farming" just isn't possible or beneficial. Make it about creativity. Make that the source of rarity. Then I think we're on to something huge.

Gamasutra: On the other side of the coin, the idea of changing the design of a Massive game as a result of these figures is intriguing. Can you share with us any changes you could see being implimented in future games as a result of SOE's experience with the Station Exchange?

JS: Not ready to discuss at this point, but needless to say it's something we're actively working on.


[Gamasutra has summarized the key points of the Sony Online-commissioned White Paper, as follows. The full White Paper is linked at the end of this synopsis.]

In the middle of last year, Sony Online Entertainment (SOE) shocked players of their Massively Multiplayer games by opening an officially sanctioned 'Real Money Transfer' (RMT) service. This fully automated service, called the Station Exchange, allows players of their AAA title Everquest 2 (EQ2) to set up auctions of in-game items, virtual characters, and coins in return for US currency as payment. A controversial decision at the time, the service has gone on to be even more successful than SOE's President, John Smedley, imagined.

His surprise can be quantified, though, thanks to a detailed white paper the company had drawn up. The paper details the hundreds of thousands of dollars that flowed through the system between June 2005 and 2006. It singles out the most successful traders and sellers, and offers some statistical insights into the mind of a Real Money Trader. While the tone of the paper is generally complimentary to the service, and the concept behind it, the real value of the paper is in the data mined by the company. The document, authored by Noah Robischon, is fascinating for third parties interested in the field of Massively Multiplayer Online Games (MMOG).


Sony's Station Exchange Interface

The paper opens with a bit of contextual background, touching on the fervent debate that erupted as a result of the announcement. The long-term result of the service has apparently been positive, from a customer relations standpoint. SOE claims that by offering a secure service, customer dispute issues have been reduced on the two servers the Station Exchange underpins.


EverQuest 2

More interesting is the raw data that the paper offers on financial elements: "Total cash collected between June 2005 and June 2006 was $1.87 million. The daily amount of cash collected, on average, was $2,588." The sheer amount of money transferred through the service disrupted the company's initial assumptions about usage. What was assumed to be a regularly fluctuating marketplace instead had an easily predictable pattern.


SOE itself collected revenue by charging for use of the Exchange. A nominal $1 fee was levied to keep spurious auctions to a minimum, while completed auctions netted the company 10% of the closing price. Over 50,000 auctions were opened during the first year, and nearly 40,000 of those were completed. Revenue for the company, for the first year, was $274,083, with the majority of that unsurprisingly coming from commissions on completed auctions. By far, most auctions were of the 'instant sale' variety, with only 9,421 auctions being of the more traditional format.

Every month, roughly 1500 players participated in commerce on the Exchange, with a total of 9,042 players registered for the service by the end of June 2006. This is roughly 25% of the player base across the two servers SE serves. The average spending per customer over the first year was $143.25. Demographic data collected in the course of using the exchange indicates that, generally, younger players are selling goods to older players. 34-year-olds spent the most as a specific age, accounting for $39,000 in sales. Players older than 33 and younger than 38 accounted for the majority of the purchases, with buying power declining rapidly at 39 and older. 22-year-olds are the most active sellers, with $45,000 in sales. Sellers are active all the way up through the age of 38/39, but 18-22-year olds are by far the most productive.

The majority of all sellers and buyers are physically located in Northern California. California is also the most active state for buyers and sellers, accounting for $326,349 in purchases and $294,975 in sales. Other states active on the Station Exchange include Florida, Pennsylvania, Texas, Washington, Arizona, New York, Illinois, Michigan, and Missouri. The most active traders in a single city reside in Levittown, PA. The town accounted for some 1,121 buys and $13,513 in sales. Individual sellers at the top of the list showed a surprising income level. The top seller participated in 351 auctions, and made out with $37,435.47. Number two on the list was close behind with just a few hundred dollars less in profit and roughly one hundred fewer auctions. Every seller in the top 25 on the Station Exchange made in excess of $10,000. Purchasing power on the Exchange is predominantly in the hands of men, who accounted for over $1.5 million in spending on the site.

Auctions themselves were primarily of coinage, though characters were a valuable commodity as well. Auctions for characters by far netted the most profit per auction, with the average character going for roughly $90. The average price for a single piece of platinum was an astonishing $7.35. The single largest platinum transaction was worth $1,666, and the highest price a single plat fetched was $497. This spike in value occurred after the introduction of a new Station Exchange server, an event that significantly increased interest in the SE and has kept volume on the service high since.

Character auctions fetched as high as $2,000 for a single character, and none of the top 20 character auctions went for less than $1,000. All of the most valuable characters were one form of elf or another, the most-played set of races in the game. Character class did not apparently figure as much into sale price, though the most popular class (the Berserker) drew considerably more money over the course of the year than some other classes.

Character advancement time on the two Station Exchange servers did not seem to be significantly impacted by the introduction of RMT to the game. Characters at high levels on a Station Exchange server are (on average) wealthier than their counterparts on non-SE servers, an indication that coin purchasing via the exchange has risen the average level of wealth.

[Sony Online has also provided us with the full version of the White Paper, written by Noah Robischon - please click here [.DOC version] to download it.]

Latest Jobs

Treyarch

Playa Vista, California
6.20.22
Audio Engineer

Digital Extremes

London, Ontario, Canada
6.20.22
Communications Director

High Moon Studios

Carlsbad, California
6.20.22
Senior Producer

Build a Rocket Boy Games

Edinburgh, Scotland
6.20.22
Lead UI Programmer
More Jobs   

CONNECT WITH US

Register for a
Subscribe to
Follow us

Game Developer Account

Game Developer Newsletter

@gamedevdotcom

Register for a

Game Developer Account

Gain full access to resources (events, white paper, webinars, reports, etc)
Single sign-on to all Informa products

Register
Subscribe to

Game Developer Newsletter

Get daily Game Developer top stories every morning straight into your inbox

Subscribe
Follow us

@gamedevdotcom

Follow us @gamedevdotcom to stay up-to-date with the latest news & insider information about events & more