The market for virtual goods in massively multiplayer online games and virtual worlds is worth billions. Not all of this is grey market, and more games are now being designed with microtransactions in mind. Live Gamer aims to bring greater legitimacy to microtransactions through a regulated secondary market providing benefits to companies as well as the players themselves. Thus far they've worked with EverQuest II, Vanguard, and GoPets, with Acclaim's 9 Dragons on the way.
Bethke and Schneider kick off their talk by explaining the fact that RMT in MMOs is inevitable, explaining how developers can be proactive about incorporating RMT into their titles rather than having it exist outside of the game. Live Gamer works with developers to create a legitimate system for trading virtual items for real money, one that's safe and secure. Of course, legitimizing RMT can also stir up controversy.
Schneider says, "When Live Gamer first launched in 2007 we knew that we were tackling a somewhat polarizing subject in the online game space. Despite the fact that RMT is somewhat polarizing it still continues to grow to be nearly a 2 billion dollar market. It's been around for almost 10 years, as long as there's been online games. What we saw in the driving behavior for people who engage in RMT is really social. They wanted to play with their friends, they wanted to level up with their friends and explore the different types of environments the game developers have created."
Players engage in RMT for various reasons, namely to enhance status and gain in-game advantages. Learning what players like and why they follow certain patterns wasn't necessarily a straightforward process, which was where Live Gamer came in.
Schneider says, "GoPets were one of our first clients and we learned a lot about valuable lessons in terms of introducing a secondary market into a primary market. When done right, you can optimize a primary item sales market. Items that are collectible, give you performance advantages, or are rare naturally extend into a secondary market." If done right, Schneider says, it's a more engaging experience for the end user and it's terrific from a game design and publishing perspective because there are two monetization opportunities.
Bethke says, "I've talked in the past about the '7-11' gamer concept. The more people invest their time and energy and creativity into playing online games, the more they're seeking to validate their leisure time, to validate their hobby. If they have access to real money trades they can feel good about what they're doing and feel motivated to do more of it. That's good for you on the publishing side." Publishers can also indirectly monetize the non-paying players. They can grind out the non-monetized gameplay and then trade with other players who are willing to pay.
Introducing players who already conduct grey market transactions for goods isn't always an easy thing to do. In the case of GoPets, they added specific quests to the game that instructs the player in how to link up their game account with Live Gamer. By doing so, the player would receive a token redeemable for an in-game item. It generated a lot of interest from the GoPets playerbase, paving the way for further integration of regulated RMT into the game.
The items themselves are a real driver for activity, Bethke says, and not just in games that use microtransactions. "World of Warcraft is obviously a sub game, but the whole thing that drives the entire economy of WoW is the items. They have a new level cap, a new arena season, whatever it is there are new items that come out and propel player activity," he says.
Item design, then, is crucial. Do you create items that are linked to status and appearance, or do you take the more controversial step of designing items that provide in-game advantages?
Items sold for limited durations sell very well, but items designed for status don't sell as well as they used to, Bethke notes. The novelty for many players has long since worn off, so now the bar is raised to find clever ways of designing items. It's even possible to sell UI elements like game recorders. When it comes to items that provide (combat) advantages, however, they'll certainly sell, but the challenge is developing those items in such a way that the time-rich, highly-skilled players aren't angry about their time investment in the game being of less value than what paying players get out of the game.
The free-to-play business model is a catch all phrase, Bethke says, and not a business model at all. "It's a name for thousands of different business models, a classification for an infinite number of ways you could build and package your game," he says. Those myriad choices that a game developer needs to make can lead to mistakes, however.
Bethke imparts some advice on how the common mistakes can be fixed in terms of balancing. You can charge for things that are defensive in nature and the less skilled players with more money can buy them, while offensive items remain free of charge. The more skillful, more time-rich players won't resent the advantages the other type of players has, as it won't really stop them from doing what they want. Some companies have buyback programs for overpowered items, but this can set a bad precedent.
Allowing for multiple in-game currencies also provides advantages to developers, different ways to reward players. Bethke says that designing a game for RMT should factor in time currency (for people who are time-rich) and money currency (for those who are able to simply pay for their items and currency). He also says it's important to find ways of rewarding creativity, and even more importantly, reward those who bring new players into the fold. Game designers can create incentive for existing players to recruit new players through these rewards, ensuring viral growth for an online game.