Virtual World Currency Exchange Launches

Thanks to Terra Nova for the news that a MMO currency exchange website now allows cross-trading of virtual world currency, meaning you can trade your Ultima Online gold directly for simoleans from The Sims Online. Terra Nova notes that the site, the Gaming Open Market, "plans to cover [currency for] Ultima, Sims Online, There, EverQuest, Camelot, Star Wars Galaxies... and of course the US dollar." The FAQ page on GOM's site explains that "...in-game commodity transactions are handled by meeting a GOM representative (called an "associate") in your game", and explains the service's alleged advantages: "the GOM Currency Exchange (GCX) gives you the speed of a real-life discount stock brokerage, and provides the security of an escrow service, while bringing together buyers and sellers of common goods."

Comments

Re:I hope they hire an accountant

[Sylver Dragon]

It depends upon how its charged. If they tell you to come up with a sum to be deposited, and then they charge a 1% fee of that, you would, in fact, give the GOM 101,000 GP to end up with a deposit of 100,000 GP. Which is a much nicer way to go about it than telling people that a 1% charge will be levied against the monies given. Which would end up with some screwy numbers. For example, to get 100,000 GP final deposit, we would have to do something like:
X * .99 = 100,000
X = 100,000 / .99
X = 101010.10101010........
Do you really think they want to put a customer through this?

Re:I hope they hire an accountant

[automandc]

Further explanation about the Canadian crack, since I was asked:

The problem has to do with confusing ratios with percentages. If you go to the rest area, they have (used to have? I haven't gone in 10 years) a sign that says something like "Exchange rate: $1.00 CD = $_.__US" and have a little adjustable number. For instance, it might say $1.00CD = $0.75US. This indicates a conversion ratio of 4:3.

So, say you have an order that totals $10CD. When you say that you want to use $US the employee looks at the sign and says (to themselves) "OK, the $US is 75% of the $CD, so subtract 25% from the $CD to get the $US." They punch into their calculator "10 - 25% =" and get $7.50(US), which is correct. This logic is induced by the sign's using $1.00CD as the base, and the fact that both currencies have 100 cents to the dollar, making it easy to (incorrectly)think in percentages.

You hand over a $10US. Now you are owed $2.50US change, but since they only return change in $CD, they have to convert the $2.50US back to $CD. The correct way to calculate that would be to multiply it by the 4/3 (1.33) ratio, yielding $3.33CD.

Unfortunately, the McEmployees figure "I subtracted 25% going one way, I just add 25% going the other" This results in them reversing the transaction on the calculator thusly: "2.5 + 25% = ". So, instead of $3.33CD, you get $3.13CD (2.50 + 0.625). The fundamental flaw is that the sign reflects a ratio not a percentage. You end up being shortchanged $0.20CD, which is $0.15US (or 6% of the total change owed in that example).

Depending on the current conversion rate, and therefore the numbers on the sign, the stronger the $US is against the $CD, the worse it becomes. For instance, if the sign says $1.00CD = $0.62US, for $2.50 US change you should get back $4.03CD. Instead you get $3.45CD (2.50 + 38%), which is $0.58US less than you are owed(or 23% of the value of your change).

Of course, if the $CD is stronger than the $US than it works to the $US currency user's advantage, but that rarely happens. Also, I haven't driven the 401 for 10 years, so maybe they have figured it out.