Station Exchange - Nickel and Dimes at a Cost

It’s all the rage, a twenty-one page dubbed white paper titled Station Exchange: Year One is floating around, (warning: msword doc) drafted by Noah Robischon, shows a data mine therein SOE’s Station Exchange. The results total one year’s worth of farming, from June 05 to June 06, and stir up some RMT chatter. Michael Zenke’s summation and interview with John Smedley about the white paper may be of interest along with this forum thread where Smedley asks for feedback and Scott Hartsman, Senior Producer on EverQuest II, posting under the moniker Gallenite, also responds to comments.

Back to the basics: What is RMT? Real Money Trade. SOE provides a service allowing EverQuest II players to engage in the buying and selling of characters, coins and items in exchange for real-money in a safe environment on separate “RMT servers.” I say safe environment because many players engage in illicit RMT activity making them prone and vulnerable to unsanctioned and fraudulent transactions, players risk their accounts in the process since SOE is actively pursuing illegal RMT activity (buyers and sellers) on all server types and banning those caught. SOE has mainstreamed and provided the RMT option on two servers, condoning it if it’s done through their service on these servers all while making their streamlined “RMT” service very efficient. SOE isn’t directly selling, supplying or creating the items, coins, or characters for sale on the Station Exchange; they are acting as the enabler, a harborer, and the facilitator – tapping directly into the secondary (black or gray) market by collecting commissions from transactions and listing fees.

Station Exchange: Year One Highlights:

• One piece of platinum trades for $7.35 when averaged for the year.
• 34-year-olds spent the most money on virtual goods, accounting for nearly $39,000 in purchases.
• The zip codes with the biggest buyers and sellers are both in Levittown, PA.
• A high level character in EverQuest II is worth as much as $2,000.
• A single seller made $37,435 from 351 auctions in the first year.
• A total of 51,680 auctions were opened during the first year, and 39,743 were successfully completed.

My RMT stance and thoughts on Station Exchange and the white paper continues…

I’m surprised, omgwtfbbq hot sauce! SOE divulged this sensitive receipt data, I looked at Station Exchange as a virtual economic science experiment, sometimes evil, depending on player perception given their staunch anti-RMT stance in the past, but the results are something I’ve wondered about. There is a lot of veddy veddy intriguing information to weigh and some other information not present but I’m sure SOE knows.

How should the white paper be viewed? What is the underlying ulterior motive? Is it a slap in the face? Is Smedley running around his office screaming, “I told you so!” and flipping off the game designers who don’t indulge in the spoils? Is it a marketing move to drum up some press? Is it a campaign to show what SOE is accomplishing with Station Exchange and a desire for players to accept RMT and most of all participate in it? Maybe a little of each, but what I find most important to discern from the white paper and John Smedley’s comments on the forums and his station blog; RMT is here to stay and expand, SOE is going to embrace RMT, it will be a top priority and a main focus as long as Smedley is SOE’s lead pioneer.

“After having seen Station Exchange running for over a year now, I’ve come to see RMT in an entirely different light and I believe the real future of RMT is actually a really bright one if we can work on our game designs in such a way as to make it a cool part of the games.” - John Smedley, “RMT – What it is now, and what it can become!”

Station Exchange is opening a cool new door, whenever Smedley talks about RMT, I see through this totally-cool door. I envision (soul-sucking machines) businessman running virtual worlds amok, influencing design decisions with their bean counting sets – also, tons of suits made out of money and the table they sit at drips blood. The target audience is no longer a playstyle, it’s all about money and how these game business developers can infiltrate player pockets. Smedley oozes his ecstatic pro-RMT ramblings making it obvious the man is obsessed about ingraining RMT into the NA/UK mmog userbase. This is his vision, the direction he wants to head in. Not only does he want to tether those money bags already being exchanged, he wants to establish new tethers.

A closer look at the numbers show that SOE didn’t make all that much money and the number of users who engage in RMT isn’t in as high as demand as I thought.

Total cash collected between June 2005 and June 2006 was $1.87 million. The daily amount of cash collected, on average, was $2,588. Recognized revenue for the first year was $274,083. The amount of recognized revenue was as predictable as the cash flow. Commissions accounted for the majority of revenue, totaling $187,353.

There are 40,663 players on the two SE servers as of June 2006. Not everyone who plays on the servers is a registered auction user, some do not take part in buying or selling at all. The additional registration step reduces the chance of fraud and enables one of the most compelling features of the sanctioned service: instant delivery of goods to the purchaser upon completion of the financial transaction Despite this barrier, almost 25% of users, 9,042 in total, have registered to participate in the service.

The report fails to mention Station Exchange’s overhead costs, it’s possible the player’s monthly subscription doesn’t cover those extra expenditures needed to operate Station Exchange. Another thing to consider is all the fluctuating dynamics in the game and EverQuest II’s longevity and how they effect the RMT economy. Short term, the first year will look good, but the second probably won’t since their base is barely retaining.

Another question is how active are those 40,000 players on the two servers, do they actually play or are they counted because their account is active and they dabbed on the server at one time? The 40,000 number may be inflated based on motive alone, what is concrete is the fact that only 9,000 players in total have registered to participate in RMT. If SOE’s user base peaked at 200k, (be nice an add another 100k) overall only 5-8% of their EverQuest II playerbase decided to engage in RMT, opposed to the huge percentages touted in the past from such and such assumption survey or study.

Now, I do agree more than 30% of any user base doesn’t really care as long as RMT doesn’t effect their playing experience, but that doesn’t mean they are going to start throwing real-money away at an uber broad sword of $9.99 slaying, do you want some troll fries with that? I tend to believe many players against purchasing items are more willing and enticed to sell their accounts and items when canceling out so they may leave with something tangible aside from their memory banks.

I call bullshit on the following:

The introduction of Station Exchange did, however, have a marked effect on SOE’s ability to mediate problems that arose as a result of illicit trading via third party auctions. Prior to the introduction of Station Exchange, 40 percent of customer service time was spent on disputes over virtual item sales. Since the debut of the Exchange, the overall customer service time spent has dropped 30 percent.

I’ve read this numerous times, before EverQuest II’s release. Again and again, Smedley overstates this in his pro-RMT stances, customer service is fuxored because players petition about RMT transactions gone awry or farming issues in general. So what is it? 40% across all your games, EQII, just EQ? Maybe you just have less bugs in EverQuest II and corpses aren’t rotting so your customer service representatives don’t have spend up to an hour digging through logs when they restore lost or decayed corpses. Does Station Exchange alleviate RMT and farming discrepancies, I’m sure it does a little… but 30% across the board solely in part of Station Exchange… I’m sure all those carrots on a stick motivate players to move along and stop monopolizing areas. Don’t forget the advance tools to track farming activity. I believe Station Exchange plays a smaller role in the overall decrease in these types of petitions than the report leads on.

Even so, Station Exchange has had little if any effect on the popularity of trading EverQuest II goods through third party auction houses. While it is difficult to gather authoritative and accurate data from such sites, a simple comparison of current prices for basic items shows that sales prices on Station Exchange and third party auction services are about equal. This appears to be due, in part, to the fact that Station Exchange is only available on two servers. The remaining 28 EverQuest II servers are likely to see just as much illicit buying and selling as in the past.

(emphasis mine)

So, customer service issues should remain at an all time high on these non-RMT servers? No, one failue with Station Exchange is that it was launched half a year after EverQuest II went live, frustrating for those players who wanted to participate in RMT activity but not willing to cut the bonds already made on non RMT enabled servers. Another thing to consider is the illegal facilitators and the fact they have built up a positive reputation for those seeking a RMT service long before Station Exchange’s launch. IGE used to be king of the secondary market, and IGE and Yantis had a relationship long before Station Exchange, IGE even going as far as throwing extravagant parties at SOE’s fanfares, the right people were in communication trying to strike an agreement according to Yantis.

I don’t believe those who believe they are pioneering at SOE have the player’s best interests, those people aren’t designers, they are businessman concerned with profits. There is a demand for this activity, always will be unless the game is hindered in some fashion, where the economy is stripped and the design regulated and monitories, more or less making the world very restrictive, which is why we haven’t really seen harsher compromises to combat it and more developers are announcing unique subscription models and experiment. As long as player’s can trade anything, including a service, a black market will exist.

I pontificated against Station Exchange when it was first announced, my opinion on RMT has changed a little since than, now it’s more or less up to the developers and it depends on the game, after all its theirs and I don’t have to play it. I boycotted SOE for a couple reasons (mainly being fed bullshit and unfinished content) for over two years and I know others have too and still do over RMT alone. For games like World of Warcraft and EverQuest II, I do not want to engage in RMT activity, I’m indifferent on separate servers, as long as it doesn’t drive the design, and that’s what I’m most afraid of because it opens a can of worms; however, there’s a few exceptions where I find it acceptable – game is free to download, free to play, and RMT is necessary to keep it running, – in games where it’s more or less an appropriate business model. (Magic: The Gathering, Downloadable Songs for Guitar Hero).