On October 9, Gala-Net announced a partnership with PlaySpan to bring peer-to-peer item trading into their games. The deal marks a first step toward the institutionalization of virtual item for real-world currency trades in their games. According to Gala-Net Vice President John Young, his company is just on the forefront of a new trend in the North American MMOG market.
“We’ve been looking at this space really since I joined Gala-net,” Young said. His company handles the North American online distribution of a host of foreign games, including Corum Online, UpShift StrikeRacer, Rappelz, Flyff and Shot Online.
PlaySpan describes themselves as the “game industry’s first publisher-sponsored in-game commerce network,” which is to say, they work directly with MMOG publishers to create marketplaces similar to SOE’s Sony Exchange for their games.
Their solution allows companies to have full control over what their game allows. For example, with this deal, one Gala-Net game could simply use PlaySpan to facilitate item for item trades, while another one could allow full item for cash transfer.
For Young, the decision to work with PlaySpan was dictated primarily by game design. Although he was unable to share details of which games would have PlaySpan’s system plugged in, he did note that at least for the initial implementation, they will not enable cash trades. Instead, the marketplace provides their users with a simple feature most games have – essentially a consignment and auction system.
“We’ll be rolling this out in a measured way to ensure that fun is preserved,” he said. “They will not be able to take real world currency and buy things on day one.”
Young did not hide the fact they would eventually reach that point, although he made it clear they would only enable a real-world cash marketplace in games where it made sense.
“[A real-world cash marketplace] encourages economic activity if players know they can cash out,” he said.
Aside from the player benefit, Young believes it also helps Gala-Net better tune and balance their games. He readily admits that in any MMOG, the players know more about a game than the developers, despite their best metrics. With this system, if they see a specific item has become absurdly expensive on the marketplace, it helps them figure out why and address the balance issues such a situation might indicate. In some respects, it’s the difference between communism and capitalism. Most MMOGs have to resort to top-down price-fixing to make their economies function, but Young believes that the PlaySpan system will help them create a more accurate and fair economic reality in all their titles.
Beyond balance, they also cite customer service concerns as a good reason to institutionalize these kinds of transfers, which happen whether or not their EULA allows it.
“We want to bring that all into the light,” Young added. “By bringing it all inside and not letting shady people into the equation, we bring a lot of quality to our players.”
That means the devs will receive many less customer service calls from people who purchased an item through a third party and didn’t receive it. It’s an impossible situation for game developers as they have no idea whether the person was actually ripped off or made it all up. However, while this is a good thing for Young, he emphasized that the CS benefit is nothing but a happy side-effect.
“It’s a design decision, it’s not something you do only for CS or because players want it and therefore we give it to them,” he said. “We really do believe at the core that trading is fun.”
This is one of the reasons Young believes they need to phase the system in slowly. He does not want to change courses midstream on his player base, and games need to be specifically tailored to such a market or chaos could ensue.
“What we do in one game may not be necessarily at all what we do in another game. Some games may never see this.”
Gala-Net is just the most recent in a series of companies with a North American focus who have opted to bring the so-called secondary market in-house. SOE started the trend on this side of the ocean with the Sony Exchange, and only a week before Gala-Net, K2 Network also announced a deal with PlaySpan.
Traditionally, the trade of virtual items for real-world cash has been a contentious topic among gamers, but increasingly they’ve demonstrated a willingness to purchase items directly from developers. For example, all of SOE’s virtual trading card games use that model, and even before PlaySpan, Gala-Net and many of its competitors embraced a free-to-play, micro-transaction business model where players can pay for small upgrades, in-game cash or items.
Security and legal concerns have slowed the arrival of peer-to-peer transactions. “It’s taken a long time to come to a comfort level with the level of security,” Young said, but noted that with PlaySpan they are very comfortable.
Legally, there has always been questions about people’s ability to sell things that technically do not belong to them – check any EULA. “There hesitation on the part of a lot of companies is because of these issues, there’s a lot of gray area in the law,” he said.
In Gala-Net’s case, Young sees the potential peer-to-peer sales as more of a rental than a purchase. For all intents and purposes, the sword might belong to the player, but legally Gala-Net has total freedom to change its stats, or in an extreme case, even remove the item from the game entirely. Obviously, that is something they strive to avoid.
At a more cynical level, Gala-Net stands to profit from the move. Once real-world cash transactions are enabled, Gala-Net makes some money. Young did not go into details, but did say they would likely have some sort of listing fee, or they would get a portion of the profit from a sale. He did note, though, that no one would have to pay out of pocket for the system.
The PlaySpan system not only allows Gala-Net to decide on the level of integration on a game-by-game basis, but also on a server-by-server basis, if Gala-Net wants. Young also said if it likes, Gala-Net may allow players to trade items from one server to the next.
While there is a benefit to existing titles, Young tipped his hand slightly and admitted that a large part of the decision was with an eye to the future. Without going into too many specifics, he said some future Gala-Net titles will have built-in trading dynamics, similar to card games like Magic or Pokemon, and PlaySpan helps them Gala-Net ready for that.
Gala-Net plans to announce the specifics of how it will implement PlaySpan’s technology in the coming weeks.