Validating the Virtual Market

Via Wired.com

After all this time complaining that the buying and selling of virtual goods in Massive Multi-player Online games was illegal, immoral and destructive for gameplay, Sony Online Entertainment has announced that it is launching "Station Exchange," an auction site that allows players to spend real world money on game world items and characters. Initially, the service will be restricted to the Everquest II game, with Sony promising separate servers for those that wish to play in a game without pre-bought characters.

Players are often cheated by shady traders who don't deliver as promised or who rescind payment after getting an item. As a result, SOE claims its customer service staff is constantly bogged down with angry players who have been defrauded.

"Sony has finally dropped the other shoe," said Dan Hunter, a professor at the Wharton School of Business and an expert in virtual economies. "Finally, we understand what their reluctance (has been). It's not that the gameplay has been affected by (virtual goods trafficking), but rather, their objection has been that they can't monetize it."

One company that SOE's move may not be good for is IGE, the world's-largest seller of MMO virtual goods. That's because IGE -- which sells items bought both from players looking for a little cash for their extra weapons as well as from "farmers," hourly employees whose sole job is to earn weapons, currency and other items in MMOs like EverQuest II -- is likely to see SOE undercut its business.

But IGE founder Brock Pierce said he welcomed the advent of Station Exchange.

"I'm pleased to hear of SOE's announcement," Pierce said. It "provides further validation of the secondary market for MMO virtual assets."

The whole "Money for Nothing" thing is nothing new. It's just new that a company has actually taken this approach. Not surprising, given the possibilities for big bucks to be made brokering auctions for Flaming Swords, but definitely new.

John Tynes: Grand Theft Influence - One player's experience at the whole buying stuff in a game thing.

Many Hands Project: Money For Nothin' - Some good links to articles on the subject.

Wired News: Sony Gets Real on Virtual Goods