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

Embezzlement.

[jfisherwa]

This time next year, we should be reading about a nice big embezzlement scam and possible charges filed against employees or associates of one of those MMORPG developers.

Hmm. I wonder if they're hiring? ;)

As a former MMORPG player

[Kethinov]

As a former MMORPG player, I always found the concept of real life value to in game objects to be disgusting. I only played (Ultima Online) for the PVP and that's all I enjoyed about it. A few expansions ago I got fed up with the growing emphasis on player wealth. It got to the point where only the wealthy players could PVP successfully.

So I stopped playing. But like all good opportunists, I took advantage of what disgusts me the most: the value of my in-game possessions. I sold my in-game house on Ebay for $300 and all my in-game gold for a similar figure and reclaimed most of what I'd pumped into the game over the years. I could have sold my account for an equally large sum because it had a veteran status, but I'm only willing to sacrafice so much of my dignity. I don't think I could live with myself if someone was running around in-game with my name. :)

After I stopped playing it really started to dawn on my how much of a shady business MMORPGs really are. They're not about keeping you entertained, they're about keeping your subscription. Although, to be honest, the early years of UO were a lot of fun. I'm just glad I had the good sence to bail out when I realized it was more frustrating than fun.

Psst! Hey you, over here.

[orthogonal]

Psst!

Psst! Yeah, you!

Hey, ah, you wanna buy some, ah, Slashdot mod-points?

Yeah, they're real! Honest to Taco mod points.

I gots some "Interesting"s, some "Troll"s, a "Flamebait", couple "Informative"s, and a bunch of "Funny"s. Well, because the "Funny"s don't increase Karma, so there's an over-supply.

You can have 'em all for 200 simoleons or 75 gold pieces, or a light-sabre, or....

So what stops me from...?

[MarvinMouse]

Setting up some bullshit bot to make as much money as possible in one game, and then just trading it for US dollars?

Like, if there are no prevention on that, then that's what I am going to do, but some stupid Sims Online bot that just makes sure my character stays alive and leave the program running in the background. If I can earn more money than I pay in subscription fees in a month, it's basically free income.

Obviously there has to be some serious restrictions.

Re:So what stops me from...?

[Chester K]

So what stops me from Setting up some bullshit bot to make as much money as possible in one game, and then just trading it for US dollars?

Currency devaluation. Basically the same reason that Bill Gates can't just print off new Microsoft stock certificates indefinately and expect them to keep selling at today's price.

One would assume that the people at GOM have done their homework and have a fluid pricing system that reacts to the changing market desires. If they don't, they'll be broke within the week.

I hope they hire an accountant

[automandc]

From their "Fees" Page:

GOM charges 1% of the total amount deposited as an in-game deposit fee. The fee is payable in the currency being deposited and will be automatically deducted from your deposit upon delivery. For example, if you deposit 101,000 UO gold with a GOM in-game associate, you will be charged 1% (1,000 UO gold) and your GOM account will be credited 100,000 UO gold.

I may be a lawyer because I failed math, but even I know that 1% of 101,000 is 1010, not 1000. So, if you deposit 101,000 you should be credited with 99,990. A better (more accurate) example would be: deposit 100,000 and we will credit you 99,000 (100,000 less 1%).

Incidentally, this is exactly the same incorrect application of percentages that is used in Candadian rest stops along Route 401 in Ontario.

I hope they clear that up before any regulators get involved!

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.

What?

[ConceptJunkie]

No Zorkmids?!

Re:The Ultimate SOE Revenge

[Carnildo]

That'll just screw over the existing players. The GCX won't care -- they're not the ones buying and selling currencies, they're just providing brokerage and escrow services. All they'll need to do is multiply the size of their basic currency block by a million, and they're back in business.

Re:The Ultimate SOE Revenge

[Mike Hawk]

Except they would have to put up most of the up-front cash to get this thing going. They buy the online currency high to get moving, but then the online currency gets devalued. Get it?

Re:The Ultimate SOE Revenge

[PainKilleR-CE]

The only up-front cash they're actually putting up is for the accounts for the 'associates' that handle the transactions in the game, and from the looks of it they may not be paying those costs, either (though I can't be sure).

Otherwise, the only thing devaluation of currency does is effect that particular's game's currency's value on the market. They simply find one person that wants to sell say UO money and wants Sims money, another person that is selling money for another game and wants UO money, and someone that's selling Sims money and wants money for that other game, and arranging the transactions for a small percentage. The simplest example is when someone is selling UO money for cash, and someone else is buying UO money for cash, they simply handle the transaction (again, for a small percentage).

Essentially, the only money they should be keeping around is their cut, because they find a buyer for the money someone is selling before they take it off the seller's hands.

It's not much different from Ebay, except that it's specifically for handling game items, which have specific problems associated with them (like delivery), and they're adding some assurance much like PayPal is supposed to add, that you'll actually get the money in the currency you're looking for. Whether or not you will depends on whether or not someone's selling, and how much money you get depends on the value of that currency.

In the long term, the only way that devaluing currencies can hurt them is if they're stock-piling their cut and playing the market to turn their cut to cash at the best time rather than doing it whenever possible. At that point, they're playing a market just like people do with stocks or real currency markets, and it's their loss if they hold onto significant amounts of in-game currency (and someone finds a way to devalue that currency).