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SOE / Live Gamer Deal Explained

Today we learned that SOE will be replacing their Station Exchange program, a program that helps players sell in-game items for real life cash (RMT), with a third party company called Live Gamer. Managing Editor Jon Wood spoke to both SOE President and CEO John Smedley and Live Gamer Inc Co-Founder and President Andrew Schneider to try to clear up misconceptions that people might have about the announcement.

Back in December, MMORPG.com published an article titled, “Live Gamer RMT Sales Partner With SOE, Funcom and Others”. In that article, we learned that Sony Online Entertainment, along with Funcom and a number of other MMO publishers had partnered with a company called Live Gamer Inc., a company that provides RMT (real money transactions) services.

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From the original article:

“During a brief conversation this afternoon, Courtney Simmons, the Director of Corporate Communications for SOE, told MMORPG.com that while SOE was indeed a partner, “to what extent [the company will be involved] has not been determined.” During the same conversation, Simmons pointed out that SOE’s current Station Exchange runs at a ratio of 28 non-RMT servers to the two that currently sanction the practice.”

Today, we learned the extent of the partnership in a press release issued by SOE:

“Live Gamer, the premier operator of a publisher-supported marketplace for real money trading of virtual items, has entered into an agreement to utilize Sony Online Entertainment’s (SOE) Station Exchange technology, the industry’s first proven, fully legitimate platform for secure buying and selling of virtual items. The resulting new, independent service, called Live Gamer Exchange, combines the Web-based accessibility of Station Exchange with Live Gamer’s proprietary Wall-Street-developed in-game application, giving players a flexible and convenient way to access the virtual marketplace anytime, anywhere.”

The press release goes on to say that the partnership will see current Station Exchange customers being migrated to the new Live Gamer system, called Live Gamer Exchange. During a phone interview on the subject, Sony Online Entertainment President and CEO John Smedley stated quite strongly that the Live Gamer partnership will be limited to the current Exchange servers in EQII only, and that there are no plans to spread beyond that. When asked if other games would become active in the partnership, Smedley answered that they are starting with EverQuest II and will see how it goes from there.

When news first broke back in December that Live Gamer, an RMT company, would be partnering with large publishers to offer their services in certain games, there was some concern among players that Live Gamer would function as a sanctioned RMT seller, complete with farming, adding to the already prevalent issue of in-game gold farming and similar practices. In an interview, Andrew Schneider, the Co-Founder and President of Live Gamer Inc. put some fears to rest:

“We will never farm,” he said, quite adamantly. “We will never buy from gold farmers. We will only facilitate official transactions.”

Live Gamer, it turns out, is not a farming site but rather functions purely on player to player transactions. Both Smedley and Schneider emphasized the importance of the company being publisher sanctioned. The hope is that with publisher-sanctioned RMT sales, the market will begin to dry up for the farming RMT sellers as players who wish to use these services move toward the official sellers who can provide security (that is often absent in other RMT deals) as well as protection from the bans that can result from using an un-sanctioned service.

During his interview, Smedley told us that gold farming is a number one reason that people give for leaving SOE games. Obviously, putting an end to the farmers is in the company’s best interest, as well as the players’. The hope, as mentioned before, is that sanctioned services like these will eventually drive the farmers out of business.

Smedley referred to Live Gamer as a kind of “white knight” in the battle against farmers, but was realistic about the idea of getting rid of them entirely. “I don’t think this is a short term fix,” he said. This is, rather, the first step in a battle against farmers. It will, he said, take years.

When asked why SOE didn’t simply continue with the current Station Exchange system, Smedley cited the desire to combat farmers as a strong incentive to join with Live Gamer. In the end, they feel, it is the power of numerous publishers coming together and partnering with a service like Live Gamer that they hope will be most effective in their conflict.

The entire system relies on the diligence of both Live Gamer and its partner publishers like SOE to keep an eye out for suspicious activity and abuse of the system that might end up inadvertently helping the farmers. Both parties in their separate interviews made reference to the fact that any players who have been flagged as farmers will be barred from the Live Gamer service and both parties will be keeping close watch.

To tell you just a little bit more about Live Gamer as a company, they were founded a year ago, in February of 2007. The company, we are told, was founded “in response to the illicit secondary market” and is made up of both gaming people and financial folks who, according to the company, work together and with their publisher partners to facilitate the sale of in-game items for real world cash between players.

In terms of how Live Gamer works, it might be best to think of it like your in-game auction house. The players are the ones who set the price for their wares, not Live Gamer. When I asked Schneider whether they were concerned that even a non-farming RMT seller might do harm to in-game economies, he told me that, when they engage a publisher (to talk about implementing in one of their games), they do spend time looking into the specific game, its design and economy to find the best way to proceed.

Still, even with these apparently altruistic intentions, Live Gamer is a business, and I couldn’t resist asking where the company’s revenue came in. It turns out that they place a small transaction fee on each transaction that is based on the settlement price.

While there are a number of players who would prefer to see RMT eliminated from MMOs entirely, the real situation is that there is a thriving market for the services that they provide. Partnerships like that between SOE and Live Gamer could be an avenue of curtailing aspects that can be damaging to game worlds and economies.

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