This is an exclusive interview with IGE’s President, Steve Salyer. This revealing interview covers questions from the gamer’s perspective of EULA’s, their efforts to work with game publishers, and the future of the secondary market.
The selling and buying of items in gaming is a hot controversial topic these days. There is an abundance of information out there discussing the cons of such services, and numerous message boards topics speculating on the subject.
I’ll let you judge for yourself, but this interview should prove to be informative to hear from one of the leading multi-million dollar companies in the secondary market for MMORPG virtual property on their views and reason for dominating the marketplace.
Q. Please explain more about the secondary market.
A: Currently, millions of MMORPG gamers around the globe are directly involved in trading, buying and selling virtual items using real currency in real markets. Items bought, sold and traded include gold or other forms of virtual currency, items such as weapons and armor and even entire accounts. IGE is the leader in providing gamers with a market to facilitate their transactions.
Q. How big is the secondary market?
A: Today, the secondary market for virtual items exceeds $880 million annually worldwide and is expanding rapidly.
Q. Do you believe that the game publishers will eventually delve into the secondary market? And if so, how will this change your business model?
I’m certain that publishers will have more direct involvement with the secondary market. It is in their best interest as well as in the best interests of game players. As an example, it is very important for us to work together to reduce the potential for fraud which results in unhappy customers, damages customer goodwill and increases customer service costs. On the other hand, I don’t expect that publishers will enter the secondary market as “market makers”, buying and selling virtual items. That defeats completely the concepts behind a free market. If publishers generate endless amounts of currency and items for sale to their subscribers, it will result in runaway inflation and deflation and destabilize in-game economies. See also this post on the best console (or so you think).
The work standard which sets the value of items is the time spent playing to acquire or produce the items. Customers are, in my opinion, going to demand that free market forces prevail. Publishers may build auction platforms in-game and link those platforms to real-world economies, taking a commission or brokerage fee on each transaction. In that event, we predict a tremendous increase in our business.
Q. Do you believe you are violating any EULA’s or promoting the violation of EULA’s by offering to sell and buy virtual items?
We do not believe that we are infringing the intellectual property rights of publishers, nor are we promoting the violation of EULA’s. As you know, most of the games have in-game economies which are designed to let players produce, trade, buy and sell. It seems overreaching to me for publishers to then prohibit a player from accepting any form of value they are legally able to get for their efforts. I’m not an attorney, but I am an avid gamer and have spent 20 years helping to build the interactive entertainment industry along with my peers. If secondary markets were bad for gaming and gamers, I wouldn’t be doing it.
Q. Is all of this buying and selling of virtual assets for real money good for the industry or will it eventually do harm to the MMORPG space?
A: The existence of a secondary market is good for the industry in a number of important ways. It increases the gaming experience for the majority of gamers and it increases the overall size of the MMORPG market. The secondary market attracts subscribers who otherwise would not play the games, and extends the “shelf-life” of games considerably. We believe there is a strong link between successful games — measured both in the number of subscribers and the length of time the game retains a meaningful number of customers — and healthy in-game economies that are linked to real-world markets.
Q. What type of gamer is out there buying and selling virtual assets?
A: The secondary market is used by gamers primarily to increase their enjoyment of the games. For example, some gamers utilize the secondary market to transfer in-game wealth between servers and even different games. Many gamers like to experiment with different character races and classes without having to create a new character and spend time “leveling up.” Like in real life, a number of gamers like to collect things and the secondary market allows them to more easily purchase virtual castles, starships, swords, etc. Finally, and I think most importantly to a large number of gamers, the secondary market helps players spend their valuable time the way they choose, such as practicing crafting or other skills instead or running around collecting incremental amounts of gold.
Many would be surprised to learn the extent to which even “hard-core” gamers participate in the secondary market. IGE has hundreds of thousands of customers, many of the leaders in top guilds. Our experience is that many, many players want the ability to receive real-world value for the time they invest in MMORPGs. I’m aware of surveys that show that approximately 80 percent of gamers want the benefits that the secondary market provides. So I guess its time to move on to the next gen stuff and say bye bye to the past.
Q. Recently a few publishers have gone public with the fact that they do not want gamers buying and selling any of their in-game assets and currency. What is your reaction to this?
A: As the market leader, we speak with publishers and developers regularly, both to prevent abuses as well as to bring new features and benefits to our customers. Our goal is to work with them to reduce abuses and to increase the overall size of our industry. As more publishers become aware of the many very valid reasons why their subscribers want the benefits of the secondary market, and as we demonstrate our willingness to cooperate, I believe the secondary market will become sanctioned by publishers and developers.
Q. With the secondary market becoming more well-known and prominent, how are attitudes changing toward it and what does the future hold?
A: We believe that it will continue to rapidly grow and that the market will inevitably move toward a model where publishers work with responsible secondary market makers in sanctioned relationships to provide the benefits that the majority of players want.