Question: Why is 3rd Party RMT Evil?

Tom Mason blogs at the Nosy Gamer and is intrigued by CCP's ongoing efforts to combat botting and 3rd party RMT. It does seem strange, given CCP's libertarian philosophy, they they would actively resist trade in these limited cases.

Years ago I wrote a model that treated botting and farming as a pollution effect. Using hypothetical numbers, I showed that these things can be very costly to ordinary gamers; their fun is degraded. Tom asked me to reconsider and possibly update the analysis. His questions and my responses are below the fold. 

Have you gone back and looked at the numbers since 2006?  How much would those numbers change with, in addition to CCP's PLEX and SOE's Kronos, all of the alternate currencies in free-to-play and buy-to-play games that can be used to convert real world currency into virtual currency? 

The numbers in that article were hypothetical, but there's a mechanical property in the model, as in any model of externalities: No matter how big or small the market may be, if there are externalities, their costs will exceed whatever benefits they may provide. If the external effect remains the same percentage of the quantity in the market, then increasing the market size can only increase the size of the external costs. In the case of RMT, as these economies have grown, the scale and professionalism of farming, botting, and power-leveling operations have grown too. What was once a nuisance for developers is now a core concern early in their development process. Devs understand that the intrusion of 3rd parties is a given. It has to be anticipated and taken care of in some way, whether by designging around it or setting up active counter-measures. Another response is to "join the enemy" so to speak, to become the 3rd-party RMTer and botter, and capture those revenues. Thus you see games designed so that users can always pay to advance and get better gear. These may be wonderful games, but they are simply different games than what MMORPG devs always wanted to make, namely, games where the monies of the real world did not count. If that is indeed the objective (and in many games it still is), then the presence of 3rd party RMT and the like is still a pollutant on the desire core game experience. It is therefore costly, like any external effect.

TLDR: No, nothing's changed on that.

Do you think the whole move to the free-to-play model as well as cash shops in the West have diminished the negative effects of 3rd party RMT?  I'm thinking more about the baseline response than anything.  Are today's players more tolerant of 3rd party RMT and should the baseline be adjusted (perhaps to .02) or is the baseline response used in the paper (.05) still relevant and those turned off by the virtual currency sellers just went on to play other genres of games like single-player RPGs?

The norms on RMT have not changed, I think. But something has changed: The user base. People who are hard-core RPGers and roleplayers are still mighty concerned about preserving fantasy and immersion in their games. Plenty of people still think a game is not fair if the dentist's 12-year-old can whip out Daddy's credit card and buy the best ship in the galaxy on Day 1. Plenty of people find the presence of gold traders and botters irksome and annoying. That's why companies like CCP still face huge customer service costs from this activity; if players didn't care that they got ripped off (to the tune of $2) by an ISK farmer, CCP would not care either.

However, we have learned that there are lots of other people who don't care about this at all. Casual gamers playing casual games certainly don't care. People who dip into a hardcore game for its free-to-play content and then move on, they don't care. But they also don't contribute much to company revenues. It's the people who care about the game who keep the game alive through their contributions. Even though they are a tiny minority of the people playing, they are the ones  who matter in this calculus. The number of virtual world players has not fallen, rather, there has been a massive influx of more casual players. Many of them convert into paying customers. That's why F2P works for products like SWTOR.

So, what do the paying customers think? Note that all of the F2P systems work hard to mesh the system into the game in a seamless way. You don't see a sign that says "Pay $5 to kill this dragon!" But this is exactly the sort of thing that gold farmers do. They do everything they can to get the players' attention, and if that means spamming chat, so be it. The way F2P is handled is actually the best evidence that the people who pay for these games do not want the payment system to pollute their game experience. They want payments and gameplay separate. And the appearance of glaring, obnoxious gold-spam in game must bug them now just as much as it did several years ago. The demand and revenue implications are the same.

TLDR: No, the advent of F2P doesn't change this.

Comments on Question: Why is 3rd Party RMT Evil?:

Brian 'Psychochild' Green says:

Here's a related issue. In Guild Wars 2 they have a currency exchange market where you can trade in-game currency (gold) for microtransaction currency (gems) and vice versa. Yet, they still have gold spammers and problems with botters. I know that Puzzle Pirates had a similar market, and that all but eliminated the gold sellers and botters. I'm wondering why it persists in GW2.

One explanation is that GW2 is a much larger game from a well-known company that has botters and gold sellers in other games. The gold sellers just expanded to the new game when it was released. But, I assume they stick around because it's profitable to bot and sell gold.

The other reason is because the market seems opaque. In Puzzle Pirates you could put in buy and sell orders for each currency. In contrast, GW2 only allows you to buy or sell at the current rate, and it's not clear how that rate is established.

It just seems strange that people would buy the game, but then prefer to deal with risky 3rd party gold sellers rather than using the in-game system. Curious if you had any insights on this from your models and experience.

Posted Feb 8, 2013 1:17:26 PM | link

Edward Castronova says:

I found it hard to work with GW2's market, it was not easy to buy and sell currency there. Not sure what was going on.

Posted Feb 8, 2013 1:22:47 PM | link

Dave Rickey says:

They want payments and gameplay separate.

That, right there, is the key design lesson for F2P: The natural price point of gameplay is free. People don't want to pay for gameplay (as opposed to cosmetics, content, etc.).


Posted Feb 8, 2013 2:25:15 PM | link

Mike Jenkins says:

"People who are hard-core RPGers and roleplayers are still mighty concerned about preserving fantasy and immersion in their games."

Yes we are, and it's why 10 year old games still have active communities - there are so few games released now that value player immersion since it comes at the direct cost of having a cash shop. Sadly you can't have both.

Posted Feb 8, 2013 7:32:49 PM | link

Tom "NoizyGamer" Mason says:

I think where Guild Wars 2 is concerned it depends on how much lower the RMT shops can underbid the price in the official economy. I read an article back in the summer in which GW2 gold sellers were not happy with their margins, and that was before the big crackdown on bots by ArenaNet.

I've been following the 3rd party ISK market over the past 3 months and the ISK sellers are undercutting the price you get by doing your PLEX/ISK conversion in Eve Online's main market hub of Jita by about 25%. But I've found that some sites list their sell price for ISK for much more that players would play just going to CCP. I sometimes wonder if the sites just say they sell currency for a game, be it Eve, GW2, or WoW, to make themselves look legitimate but actually don't sell it at all because of their pricing.

Posted Feb 10, 2013 10:54:59 PM | link

Stabs says:

It may be that there's perverse people out there who will never do something legally if there's an illegal alternative option that doesn't risk punishment.

Posted Feb 16, 2013 2:05:08 AM | link

Rits says:

1) Should we be reminded that some of the top tier MMOs, towards the end-game content that gold can't buy you gear development? Extreme cases like GW2, the tournament PvP everyone has equal access to all gears at the start.

2) ArenaNet also invested a lot of resource on banning bots and gold spammer (at least for half a year ago, i quit for a while).

3) People who have a lot of time to play, to the point that they obviously don't have school/work, means they are well off (either wealthy or living on minimal). So even if you prohibit RMT, it would still be an unfair experience to those who have work/school, "you're not wealthy enough to climb to the top of the social strata. keep grinding while economically suppressed by the top players". Only if there's RMT that people with real life responsibilities may pay to compensate the time disadvantage.

Ideally speaking, players who fall behind in game shouldn't be suppressed economically, or experienced ruined in any other ways by those who have more time.

Also ideally speaking, RMT or gold in general should give only enough boost in game but not completely OP. How much grinding is fair anyways? Classic example like Ragnarok, or maybe Aion, grinding was about everything. In GW2, you can grind all you want to get that super end game weapon, which only gives like minimal upgrade in performance, so it wasn't necessary.

Posted Feb 16, 2013 5:27:41 PM | link

Arvid says:

When you say that gamers don't want to pay for gameplay you are looking at what gamers say, not what they actually do. In games with cash shops the best selling microtransactions are the one that impact gameplay, whether it's stash tabs or better gear. And the gamers that spend the most money in the cash shops are the ones that are the most active on the game forums where the consensus is that paying for gameplay is bad.

Posted Feb 23, 2013 8:42:55 PM | link