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Legitimizing Real Money Trading In Games
MMOGamer interviewed Andy Schneider, co-founder of Live Gamer, a company working with several major game publishers (including Acclaim, Funcom, and SOE) to legitimize the real money trading (RMT) industry in online games. Schneider expects this method of customer service to grow much more popular in the West over the next few years, especially after the success it's had in Asia.
"It started in the very earliest MMOs, if not back in the MUD days in a very grassroots sort of way, but then obviously got into a more opportunistic and nefarious industry. When I talk about legitimate RMT, it's about a publisher supporting the notion that people want to buy and sell virtual items for real money, and they have decided to proactively support that notion and give their player-base a way to do that. ... It takes the manual process out of the equation that most players are engaged in with the black market, and reduces the fraud considerably, which is good for players. ... The reason there are gold farmers out there, the reason why there is nearly a two billion dollar secondary market for virtual items, is because of consumer demand."
The Taxman cometh.
See, this would be good, except that say I start a virtual business that somehow generates millions in real income, having to pay taxes on this would be insane
Why? All companies pay taxes. You're not making a virtual business - you're making a real business that just so happens to deal in virtual goods. You should (and will) pay taxes like any other company. In fact, it would probably be in your best interest to incorporate, just like any other company.
A company is a company. You are selling a good or service in exchange for money. The fact that the good or service exists as data in a computer shouldn't matter.
That's a rational, logical, well thought out argument. Good luck selling the taxmen on it.
Where there's a buck to be had, don't assume people are going to be rational about it. And never, ever, ever assume that the legislation that introduces a new tax upon something will be well thought out.
Easy solution though. Just limit yourself to games in which gold-selling is not permitted, and you'll be fine.
Hell, I'm of the opinion that any game economy that allows real world money into it is bound to get out of control with inflation in an awful hurry, and probably won't remain worth playing for long. It's only the fact that the MMO companies don't allow such services (and do everything in their power to curb them) that limits this now - open the floodgates, and you'll see the in-game currency massively and rapidly devalued, and a big chunk of the playerbase leaving in disgust as they find themselves unable to compete without emptying their wallets.
Selling in-game resources for real-world money is simple greed, much like billing by the hour would be. If an alternative game exists that doesn't shaft the customers for every dime, they'll move one. Notice that, without exception, the successful MMOs are the ones that don't pull that crap?
Are they trying to dig their own graves? The reason why the gold farmers and item traders are thriving is because it is not legal under the TOS of many MMO games out there. If it suddenly become legal, what made them think that they can profit from it? I'm pretty sure that gold farmers would cease to exist if the gaming company themselves sells gold for real $$$ at a lower rate.
I'm against real money trading for gold and items because it would definitely create a crazy and lazy in-game economy. It would also remove the sense of common-ground in the game. I would hate it if by any chance Bill Gates decided to play an MMO and would have better items and gear than me instantly. (something along those lines)
I can see why losers would want to buy things they couldn't earn. I can see why the companies running the games would want to take the losers money instead of spending resources fighting gold farming. What I fail to understand is why anyone worth a damn would keep playing a game that openly allows buying their way to the top. And a game filled only with pathetic losers isn't likely to stay fun for even the losers for long.
Democrat delenda est
I've been playing this MMO for about 3.5 years (Entropia Universe, shamelessly) which was based on Real Cash trading/economy. There has always been a fixed exchange rate between U.S. Dollars and ingame currency (PED). Therefore everything you own in game has a real dollar value and can be sold in game. Real life funds can be transferred into the game, and withdrawn back to real life funds. This MMO has been around ~7 years with no 3rd party, nothing new here to me. In fact the parent company Mindark has just been granted a Swedish banking license. Yes maybe soon you can pay your real life bills in ingame currency. We aren't talking peanuts here either, we're talking real cash related to everything you do, so the best items in game fetch a pretty penny. The best healing tool in the game today you can fetch about 40,000 U.S. dollars for. You can buy plots of land in game for about the same that you can tax for real cash. Point is there are games that are based on real cash, and those who aren't. Those who arent it doesn't matter which way you go, private sales, E-Bay, Live Gamer, it's still all 'Black Market'. I'll stick with secure, non 3rd party solutions.
It works for Second Life. Almost too well. In 2007, Ginko Financial, an in-game bank, went bust. Then Midas Bank went bust. This drew the attention of The Wall Street Journal. In 2008, Linden Labs introduced bank regulation. Most of the Second Life banks were actually Ponzi schemes, with huge interest rates. It's still possible for a real-world bank to open branches in Second Life, but nobody has bothered.
>It would be like bribing your DM to let your third level character find a +5 sword. Who would continue to play in a gaming group if such a disgusting thing were to occur?
This happens every week. It is only right to bribe the DM for all his hard work.
Rule #1: The DM need never pay his share of the pizza for he has an infinite number of Tarrasques and magical swords. ^_-
That said though, trust me when I say, "You CAN'T afford a +5 Sword!"
There is "consumer demand" because lazy bum players who "can't be assed" to play the game want to cheat by buying ingame assets and currency with real money.
Once it becomes okay to cheat, only the cheaters will stay around. It's fine to cheat in single player games - all you are really doing is cheating yourself out of the proper experience. Cheating in multiplayer games (especially persistent multiplayer games) you'll just participate in destroying the game you are playing.
The only reason game companies are even looking at this is because enforcing the rules is expensive. Too many lazy bums around that need the banstick. Plus they look at how Asian companies rake in the money from idiots out there who all like to play "whoever has the most disposable income wins"-style game. SOE already tried this with EQ2 and it really didn't work - cheaters kept cheating on the regular servers and the gameplay and community on the "enabled" servers was a cesspit of teenagers trying to convert excess free time into dollars and lazy idiots feeding the teenagers with too much disposable income. Professional farmers stayed on the normal servers as black market prices were always higher and the "consumer demand" was higher on the servers where you could actually buy an advantage.
Cheating with real money is an advantage only when it is cheating. When everyone is doing it, it's just a stupid way to milk more money from all the people who bother to play the "game".
I have to agree, the MMO's i played that were infested with RMT, are having a rapidly devaluated currency, the result being that it becomes impossible to buy items without having to resort to RMT.
And indeed, that's why me and a lot of friends just stopped playing.
Any sufficiently advanced incompetence is indistinguishable from malice - Grey's Law
Ha ha ha, riiiight.
In the UK, and I'm sure this is the case in the US, even if you live by barter you're due taxes according to the value of the services or goods you exchange.
If you pay me 250 chickens a month instead of £1000 UKP then I still owe the tax man about £400 despite not having received any money. And sadly I can't pay him in chickens.
The only way to save is by illegally providing a false tax declaration and hoping no one notices you're working for barter rather than money. Ignorance of the need to declare such things is not a defence either.
No, because those futures investments are taking place in North America, so you'll have to pay North American tax on them.
Note that this may not actually be true. There are several tax treaties signed between the UK and USA, and between commonwealth countries (e.g. the UK and Canada) which give some quite complex rules. On royalty income paid by my US publisher, for example, I pay tax in the UK but for other kinds of income from the USA this specific exemption would not apply. Just to make life more fun, the IRS forms require you to state the treaty and clause that is relevant to your specific case, so you need to look this up yourself (or, if you're lucky, find someone else who has already done the research and blogged the answer).
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