Virtual items gain online marketplace

Some issues here

Beyond the fact that he is not a disinterested observer in this and has a vested interest in such sales, there are some problems with Mr. Youngblood's analogy to the car industry: - Once the car is sold, Ford, GM or Honda is generally out of the picture. They don?t operate the roads which are required for the car to run on; the sale for the car is for a product, not a service, and the transaction for the car itself basically ends with sale. However, the virtual items sold on the so-called ?aftermarket? are useless anywhere except in the game in which they are created. This is a service that can potentially cost millions of dollars per year to operate and which requires ongoing hardware, software and ?people? resource costs that the publisher/developer has to maintain. These are costs that a car manufacturer doesn?t have to maintain simply to sell new cars to new buyers. - If someone is defrauded by a used car dealer, they don't call up Ford or Honda corporate HQ to complain. On the other hand, there is much fraud and deception in the virtual world ?aftermarket? (non-delivery of the item, delivering something that is different that what was advertised, et al) and since there is only one market and one provider for the item, who do you think the victim calls for satisfaction? In my experience, this kind of thing can eat significant customer service resources, anywhere from 10% to 40% of total CS calls. Even a simple response of ?Sorry, we can?t help you with that because virtual sales by 3rd parties aren?t allowed in the game? takes time. This creates a variable cost that doesn?t exist for car manufacturer in a used car deal and which the game publisher has to absorb. - There is a broad market among car brands; you don?t see companies springing up that send legions of low-paid workers out to try to buy every Honda in the US at a discount to corner the market, for example. However, because there is only one market for a virtual item ? the game it came from ? you DO see hordes of low-paid workers hired to attempt to corner the market on such items, denying them to the legitimate players in the hopes of creating a near-monopoly situation for the items. This is denying both the publisher and the other players the legitimate use of the game and the service. This also creates other issues. For example, to do this effectively, some play areas in the game have to be denied to the legitimate player by using automatic ?bots? to play 24/7, play areas that the legitimate players are paying to be able to use. Using bots for this purpose also sucks bandwidth and server time which the publisher has to pay for. The higher those costs, the less new content and new features the publisher can afford to put into the game for legitimate players. It can also drive up costs for the subscription to the game itself. So, while I agree this is an area in which publishers need to give some thought, virtual worlds are not simple ?product? industries such as cars or widgets. They are also a service with ongoing costs to maintain the game, which is something that Mr. Youngblood and others studiously (and perhaps intentionally?) ignore in their drive to use someone else?s resources to make a buck for themselves. Jessica Mulligan Co-Author, ?Developing Online Games: An Insider?s Guide?

Posted by: Jessica Mulligan 23 May 2006