Sony scores with Station Exchange

After only 30 days, the online marketplace does surprisingly well as a one-stop shop for "EverQuest II" virtual goods.

A correction was made to this story. Read below for details.
If you play the online game "EverQuest II" and happen to have an extra Iksar (Fury)/Level-50 Sage character you don't need, you could soon be $2,000 richer.

That's how much one EQ2 player got for the powerful, nature-controlling, ancient-language-proficient, reptilian character on Station Exchange, Sony Online Entertainment's official auction system for the game's virtual currency, characters and weapons.

And judging by the results of Station Exchange's first 30 days of operation, during which the system saw more than $180,000 in transactions, quite a number of EQ2 players have cashed in on the exchange, which allows gamers to trade real cash for virtual items used in the game.

News.context

What's new:
A month ago, Sony Online Entertainment introduced an experimental auction system called Station Exchange, where online game players pay cash for virtual weapons and other such goods used in Sony's "EverQuest II" multiplayer game. While most game publishers have banned virtual exchanges, unauthorized ones are nonetheless abundant on the Web. Station Exchange is a first for a big publisher, and with more than $180,000 in transactions so far, it has proven a success.

Bottom line:
It is not yet clear if other large online-game companies will follow Sony's lead. But smaller and emerging developers just might, launching a new era of online gaming in which players may earn virtual goods by playing a lot of games, or simply use a developer-sponsored transaction system to buy their way into advanced play.

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"This is a first for us and a brand-new thing in the massively multiplayer universe," said Chris Kramer, a spokesman for Sony Online Entertainment. A massively multiplayer game, or MMO, typically allows a large number of people to play a game simultaneously inside an Internet-based, virtual world like the hugely popular "EverQuest." "We're seeing players come in, look around, see what they need, figure out how to get it and pick it up very quickly," he said.

Sony is the first major publisher of MMO games to enter into the lucrative world of gaming's so-called secondary markets. For years, however, a vast number of MMO players have bought and sold their virtual battle axes, high-level wizards and platinum for real money through online exchanges such as eBay and IGE. By some estimates, the traffic in virtual goods is worth as much as $880 million in real cash every year.

Here's how the exchanges typically work: Because most MMO games allow players to transfer their virtual gaming possessions, enterprising players can temporarily leave the gaming world and go to the exchanges to use real money to buy and sell their virtual items.

In order to transfer the fantasy goods, they have to meet up back in the gaming world for the handoff.

Until Sony launched Station Exchange on July 19, however, almost all secondary market trading--though common--was officially banned by nearly all publishers of MMOs in their terms of service or end-user license agreements. Among many reasons publishers cite for these policies is that secondary markets encourage players to use money to reach higher levels of game play or to acquire equipment that otherwise would have taken dozens or even hundreds of hours of game play.

But with the launch of Station Exchange, Sony ushered in a new era in online gaming: Players who want to partake in such transactions can go to two servers in the EQ2 network specifically set aside for them, while others can remain on the 31 other publicly-available EQ2 servers where such buying and selling is still forbidden.

"The theory would be that Station Exchange pulls the non-role-playing people out of the system, and that should purify the game play elsewhere."
--Ed Castronova, MMO economies expert, University of Indiana

"We know that there's a pretty good chunk of our player base opposed to the idea of people buying their way up the ladder," Kramer said. "That's why Station Exchange is enabled only on the two new servers."

According to Kramer, the average Station Exchange participant spent more than $70 during the system's first 30 days, and to one observer, that number is the most impressive to come out of the experiment.

"If you think about it, if you had an industry with 5 million active people (as there are in online games), and they spent $70 a person per month, that would be a $4 billion-a-year industry," said Ed Castronova, an expert on the economies of MMOs and a professor of telecommunications at the University of Indiana.

Sony takes a 10 percent commission from each sale, and charges a $1 listing fee for currency or other items and a $10 listing fee for characters, according to Kramer. But he wouldn't say how much money Sony is making overall with the new service.

Castronova said the results of the first month of Station Exchange are particularly interesting because the system is run by Sony, one of the largest publishers of MMOs, and therefore could be seen as representative of the industry as a whole.

"I hope it isn't representative," said Castronova, who has long been opposed to secondary market trading in most MMOs because he feels it ruins the purity of game play. "I hope what's happening is that people who are interested in going through the game without grinding through it are going to the Station Exchange servers.

"I hope and suspect that that's what's really happening. On the role-playing (non-Station Exchange) servers, it's the best role-playing atmospheres I've ever seen. The theory would be that Station Exchange pulls the non-role-playing people out of the system, and that should purify the game play elsewhere," he said.

For its part, Sony said it has no immediate plans to expand Station Exchange to its other MMOs, such as the original "EverQuest" or "Star Wars Galaxies," or even to add more Station Exchange-enabled EQ2 servers.

But Kramer did say that the company is examining the idea of implementing Station Exchange from the get-go into any future MMOs rather than adding it after the fact, as it did with EQ2, which launched last year.

Castronova said that most other big MMO publishers are too entrenched in how they run their businesses to try their own version of Station Exchange. But he said smaller companies may well choose to follow Sony's lead.

"I can tell you that small developers contact me and ask things like, 'Would it be better to do a monthly subscription like everyone else or capitalize on the virtual item trade?'" he said. "People clearly understand that the nature of virtual gaming is changing."

 
Correction: This story incorrectly stated the number of servers Sony has dedicated to the "Everquest II" game. Sony has 33 publicly available servers dedicated to the game, with two from that total running the Station Exchange service.
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