I’m Bid four Quatloos for the One ring; Do I hear five?

Edward Castranova, Associate Professor of Telecommunications, Indiana University (Economist)

Daniel James, Designer & CEO, The Three Rings (Pirate Guy because he made Puzzle Pirates)

Steve Salyer, President, IGE

Jeff Anderson, President & CEO, Turbine

I expected this panel to be much more controversial than it actually was. Although it did almost degenerate into a Jerry Springer show when the IGE rep (who actually has a lot of really impressive game industry credentials, which surprised me) started talking about the secondary market actually helps the economy and does not cause inflation because the value of in game money and items are driven down (in dollars) and that can be seen at a game’s launch when people are willing to pay the most for the items/money. The economist on the panel interrupted him and pointed out that that is in fact the definition of inflation. The IGE rep got all hot and bothered and said “Can I finish please.” And the economist bellowed, “SAY TRUE THINGS.” I got all excited and thought we’d see the slugfest I was expecting, but unfortunately, the rest of the discussion was pretty clam and civilized.

The guy from Turbine actually hit on a point that I thought everyone was going to miss, which was that in large part, the secondary market is driven by shitty game design. For example, a player needs to go from point a to point b to point c to progress their character. A is OK but C is really fun. But b, which they must do to get to c, pretty much sucks. When developers design games like this, it feeds the secondary market because people play the game to have fun and not do the same sucky thing over and over again just to get to their goal. Hopefully in the future, we’ll see better game design so that the entire game is fun, but I am quite frankly, not holding my breath. Why?

Well the feeling that I got from the panel is that the real problem the game companies have with the secondary market is not that it exists. They really don’t care about it except for the fact that somebody else is making money off of their creation. The pirate guy discussed his game a little and how they built their economy specifically so players can buy a second form of money for RL cash. This essentially eliminates the third party secondary market and has apparently worked well as a solution to it. The IGE guy poined out that the secondary market existed before IGE and if IGE went away, it would still exist. This points to inherent problems in game design, in my opinion.

However, its only a problem for the companies because the games were not designed that way. In the future, I would expect game companies to build their games around the secondary market in order to get a piece of the pie that is currently largely controlled by IGE. As I said, the problem the companies have with the secondary market, despite whatever they tell their customers, is NOT that people are trading virtual items for RL cash, its that they are doing it and OTHER PEOPLE are making money off of it and not them. You must remember that yes, these are games, but to the companies that make the games they are their business and nobody takes kindly to somebody else making money off of their business when they could be making it directly.

Thus far, companies have been reluctant to enter the secondary market because of the business consequences of doing so. There is a segment of the gaming population that is adamantly against it and any company that fully embraces the secondary market will inherently exclude those who feel that personal character development is paramount. Since these games are role-playing games, that is a sizeable portion because the secondary market by its very nature cheapens the sense of accomplishment of anything players obtain in the game through playing instead of buying the same thing.

The Sony Exchange program is a perfect example of this where they implemented a direct secondary market but still allowed those who wished to play outside of that to do so. They actually had someone from Exchange get up and say a little something about their program and he is lucky we were indoors because if we were outdoors I would have picked up a rock and winged it at his head because he spouted the company BS line, which pisses me off. He related that they found a large portion of the CS was going to dealing with the shady secondary market transactions and that they introduced Exchange to reduce their CS load. That is complete bullshit. Implementing Station Exchange opened up a whole new realm of customer support and they still have to deal with the non-sony sanctioned transactions and the support that arises from it. If they weren’t making money off of it, they would not have implemented it. Pure and simple and if anyone tells you otherwise and that they, or any future game company who directly implements secondary market trading in the game, did so for other reasons, they are flat out lying to you. This is their business and they’re in the business to make money. I’m not retarded, don’t try to blow sunshine up my ass by telling me it will improve support and that’s why you did it.

The panel all agreed that the issue will “resolve” itself in about three years. I personally find that kind of hard to believe. If it truly is a game design issue then that would mean that the games that are out in three years would have to address and resolve the issues. Since the games in three years are already being designed, they would have to radically change from the initial design in order to adequately resolve the issue. Moreover, if past games are any indication, the games that are most popular today will still be popular and played in three years and these games would also need to radically shift. The secondary market issue may very well be resolved somehow within the next decade but I think three years, which is approximately the development time for MMORPG, is very unrealistic.

Another point the economist brought up was that any game company that directly implements the secondary market must deal with the real world governmental policies that arise from it and that players may face the same in the future if it becomes the standard. Money or items coming in from China? Need the customs duties. Money gained from selling an item? Has to be declared and taxed by the IRS (this is not so far fetched as you may think because ebay sellers are already required by law to declare it as income if they sell a certain amount).

One issue with the secondary market that the panel basically ignored was the professional farming aspect. When pro farmers exclude players from entire areas and from developing their characters on their own, that is a huge issue. Yes, it is a flaw in the game design and more recent games are implementing instancing to curtail this sort of issue but instancing opens up a slough of other problems and does not address the problem of professional farmers at its source. Until it becomes unprofitable for professional farmers to “play” the games, they will persist and most likely, game companies are counting on this because that is a guaranteed extra few hundred subscribers per month per server minimum. As I’ve said before, this is the game developers’ business and I do not believe we will ever see a main stream MMORPG that has the elimination of professional farmers as a key game design decision because it is simply not a good business decision. Do I think that they cater to the farmers and the games are designed specifically for professional farmers? No, I don’t. But I also don’t believe that any company will drastically alter their game design specifically to eliminate the pro farmers because it simply is not a good investment, especially if you can accomplish your goals of player satisfaction through other means such as instancing, which you were including anyways.

After the panel, spam and I talked to Terra (who writes for MMORPG.com) a little a bit about the panel because I really thought she was going to explode when Salyer dodged her question about MMORPGs already having commerce and not needing to tie the real world economy to MMORPGs since commerce is built into them by design. She seems like part of the 20-30% that has a big problem with the secondary market and really hates IGE and her article/editorial about this panel should be pretty interesting. I think she definitely got pissed at me when I pointed out that she works for a site that supports IGE (they advertise on mmorpg.com) so I guess everyone has their price (they flew her there).