According to the community, a titanic struggle is underway. The self-appointed Forces of Light man the ramparts, defending the walls as an onrushing, all-consuming tide of gold farmers and virtual property sellers threaten to engulf All That Is Good in the World. Lines are drawn, sides are chosen, and players enforce vigilante justice against suspected gold farmers, ready to pick up torches and pitchforks if an oddly named character kills too many foozles in a suspiciously preset way.

The old way of doing business teeters as the last remnants of the way the world used to be struggle to uphold the status quo. A few years ago, virtual property (VP) sales were shady; someone private messaged you, offered money and leveling for a quick Paypal. Something funny happened along the way. Despite vociferous protests from the hardcore, an army of someones bought gold and items, giving the sellers enough money to go legit. Nowadays, they’re all-but-mainstream, competing on price and customer service like any other business. Sure, they get their merchandise from sweatshop legions of Asians, but then, so does Nike, and the mainstream still buys sneakers. Enough money changed hands that the big boys started sniffing around, with Advanced Characters going for $30 on Ultima Online‘s official site and entire Station Exchange servers in EverQuest 2 devoted to buying and selling items.

Outright assimilation and normalcy loom on the horizon as developers resist and find people buying and selling anyway, or adapt and design their games around the new economic reality. One company pursuing the new way is a U.K. firm called RedBedlam. They’ve been quietly toiling away (apart from the occasional crucifixion) on Roma Victor. RV is different, an MMOG built not on the picked-over corpse of a dead English linguist turned author, but on the far more mundane field of economics. Those who’ve spent time with the young Turks in Asia and Eastern Europe will recognize their model. Pay a tidy sum, receive a decent amount of in-game currency and forget about the monthly fees.

I sent the requisite smoke signals, and soon, I was invited to talk to the legendary KFR. The President and Managing Director of RedBedlam is Kerry Fraser-Robinson, a grizzled industry vet with “20-something” years of experience, including time served as an IT consultant, editorial roles with the U.K. versions of CGW and other big-name magazines, and even a stint at Vivendi Universal. His travels in the industry brought him in touch with – here he does a very British little chuckle that’s not quite evil, but definitely implies something is afoot – “a bunch of people who sort of suited my needs.” Feeling the market was ready for their model, they “kicked off the project and that’s how RedBedlam started,” built not on a vision of elves-but-better, but on something else.

“The company was founded specifically to do virtual economics,” he says, “And the game came after that.” So, they started the company based on virtual property and economics and the game came after that? “Precisely. Precisely. And I think that’s pretty important.”

What inspired KFR and those “who suited his needs” was something far more bland, but far more interesting than another fantasy novel: economics. “I sort of predicted [the virtual property boom], as it were. I remember discussing virtual economics back in the mid-’90s with an economist friend of mine when we were playing Meridian 59. We realized the shillings, or whatever it was in the game, had value, because people wanted them and people would exchange them for stuff. That’s value. If you’d said to someone, ‘I’ll give you 100,000 shillings if you give me five bucks,’ they would’ve, surely. That, to my mind, was the birth of virtual economics, when players all over the world went, ‘Hang on, this is real money.’ If you [build a game] without that in mind, you’ve got a problem. [However], if you’ve designed the game around the concept of virtual economics, then it’s a very, very different story. It’s a different kettle of fish. You don’t have to worry about twinking or inflation. It’s a very natural, very organic sort of economy.”

KFR thinks the resistance from existing players and companies – I used Mythic’s very public stand against VP and gold sellers as an example – is “quite natural, a sort of teething. I think what it is, from Mythic’s standpoint … they have a certain game, a massively multiplayer game that people play, and there’s an inherent value in the time people spend in the game. Mythic has the problem that they designed these worlds to be non-virtual economics worlds, so yes, of course, there are inevitably people churning out money, that’s kind of inevitable.” In a very literal kind of way, time spent in these kinds of games is money.

I asked if there was anything Mythic and their allies in the anti-VP camp could do. “To be honest, from my perspective, [and] I have a great amount of respect for Mythic … but from my perspective, it seems a little … well, you’re sitting on the beach, trying to get the sea to turn back. And it won’t. It cannot turn back. There’s all sorts of things you can’t get away from and that’s one of them.” The solution is to “embrace it from the get-go. If they’d designed their games with virtual economics in mind from the first place, they wouldn’t have a problem. They could produce gold faster than the farmers. They’d be able to manage it in a way the farmers couldn’t. That would kind of cut the farmers out of the question. [Mythic has] virtual, economically viable content, but they haven’t got a hang [on it]. They haven’t got their hands on that.”

Are they fighting a losing battle? “Well,” he begins in a hesitant, wanting-to-be-diplomatic tone, “yeah. But I think it’s only a problem for them with the current generation of games. If they redesigned or remade those games, or in the next generation of massively multiplayers.” He pauses to gather his thoughts, then shifts gears. “People know now. People know that people will turn whatever game currency into real money. So you have no choice, whether you’re a virtual economic developer like us, or a more traditional developer like Mythic, you have to make sure that one of the central architectures of your world is [accounting for] virtual economic conditions.”

That brings us to Roma Victor. Their virtual economic model is a very simple one: Players purchase an account key, which comes with a small amount of game currency, to access the game itself. Rather than a monthly fee, players can use their credit cards to purchase “sesterces,” RV‘s in-game currency, if they need or want more money.

Those with moral objections to virtual property sales and real money transactions can play the game without spending any real money. “Well, you can do. It’s not the,” KFR hesitates, being diplomatic again, “… chosen … method of character development, but you certainly can. To be honest, there’re so many players, and there’s money flowing around – the economy works – so when you log on, it’s not uncommon for players to say, ‘Who are you? New guy, go fetch me some firewood. Here’s 10 sesterces.’ It’s a trickle-down economy.” He laughs, adding, “Republicans all over the place will be happy.”

That leads to the usual anti-VP argument: Rich players will dominate the game. How will they avoid that? “The Republicans?” He quips, still laughing. “Well, there’s certainly an element of that, but it’s not the whole story.” Rather than launching into a prepared spiel, though, he adds an unexpected comment. “But it’s part of, you know, welcome to real life.” It’s not all hands-off, though. He continues, “However, the truth of the matter is, I’ve got the world right here. It’s got people in it and some of them [are] very rich. And it’s quite a broad spectrum.

“The people at the top of the spectrum, the rich people, generally have to work pretty hard in the game to make sure they keep their in-game assets. Let’s say for the sake of argument” – he admits he’s simplifying and it doesn’t quite work like this, but it works for an example – “you put $10,000 worth of sesterces on your character and you went around in the world. Well, you wouldn’t keep it very long. 10,000 much poorer individuals are much stronger than 1 rich person with 10,000 sesterces. Unless he’s willing to give them one each, he’s not going to keep it for very long.”

So, Roma Victor is a world of Republicans on the run from angry mobs, regulated by violence? He laughs again. “Not exclusively. Not just violence. Primarily, in fact, politics and diplomacy. It sounds trite, but it’s nature. It’s so natural for the rich people and poor people to find some method of getting along. It may be through violence. It may be through politics.” It’s a remarkably realistic way of looking at his world, not quite the rose-tinted blinders so common in the genre. “It happens,” he says. “It’s a fairly natural process. The rich people realize there’s no point in buying a $10,000 castle if you can’t pay the people to keep that castle safe. If you’ve got $10,000 to spend, it’s best to spend it a dollar at a time, unless you’re a complete lunatic.” Enthusiastically, he adds, “In which case, welcome to our game!”

To the many detractors of his virtual property model, he’d like to say, “Take a look at it. I’d say this is the first few years. Yeah, there’s a lot of people in a panic. It’s a new technology. It’s inevitable. When there’s a new technology, there’s power. And at the moment, there’s a bit of a power vacuum in some places, a bit too much power in other places. And it happens. The Asian sweatshops and all that. I don’t think it’s the way it has to be. The virtual economics industry got loads of bad press before it even got out the door. I don’t think it really deserved to be labeled as a sweatshop/farming thing, when that’s one thing that happened at the beginning of the industry.”

Roma Victor, as he told me earlier, is one of the first games built from the ground up with virtual property and real money transactions taken into account in the design. I ask him how the players are reacting to the world. “Quite well,” he says cheerfully, before adding, “It makes the politics very interesting, because there are some very successful houses that compete against each other, and it’s interesting to see the economic ramifications when they start ramping up in different sorts of trade wars and all the rest.” The conversation winds back around to the “Republicans” from before, as he gives me a real, in-game example. “We’ve got one guy who is much wealthier, personally, in real life, and who’s spent quite a lot of money in game. [He] controls what you might call a ‘legion’ – well, they’re auxiliaries – of soldiers. And these two major houses try to vie for the attention and power of the ‘legion.’ It’s like real life. They love it. They’re having a great time. It makes the politics and intrigue that much more interesting.

“It’s strange, though,” he muses. “They don’t look at the currency as real. They don’t mind losing it. But if you translated that and said that’s five cents, well, they wouldn’t feel it. But we’ve got a one-way system, unlike Project Entropia,” where players can “cash out” of the game and get real money back. “We consider it, like, you know how you have arcade games? We’re a lot like that. You pay your money into the machine and take your tokens, and use your tokens to play the game. Now, if you put 10 cents into Space Invaders and died on the first level, that’s kind of your problem. If you put 10 cents into Space Invaders and tied up the machine for 12 hours, that’s kind of … our problem, the arcade provider’s problem. And so the trick is making sure the value relationship is right. And, actually, that answers your original question!”

Indeed, we’d circled back around to my original question about where he got his inspiration. “You asked me how we came up with the idea,” he continued. “I grew up playing MUDs and stuff and, in the U.K., local phone calls aren’t free. Consequently, I had some run-ins very early in life, when my dad came into the bedroom holding one 3,000 pound phone bill in one hand,” which he guesses was about $5,000 at the time, “and another in the other hand for the other phone line. And that’s what happens when you play online games.”

I empathize, remembering a similar conversation from the days when Prodigy, AOL and CompuServe all charged hourly, and we come together discussing how very, very angry multi-thousand dollar bills make parents. “There’s a genie that can be unleashed from a bottle, and we wanted to get away from it,” he says, getting back into the source of his inspiration. “The problem is, with a monthly fee, you’ve got people paying $15 a month for their game. As you well know, you’ve got your leet Level 60 ‘I own everything’ who knows everything that plays hanging off the edge of his bed, 22 hours a day, seven days a week. Now, he’s paying $15 a month for that. And this other guy who works and comes home and hasn’t got any time, but on the weekend, he’d really like to crank out some Star Wars Galaxies or EverQuest or whatever, and he pays $15 a month, too.”

That’s normal for the industry and fairly obvious, right up until what he says next. “That really sucks,” he says, pausing for a moment to let it sink in. “Anybody who knows anything about economics looks at that and goes, ‘Well, value broken.’ Doesn’t work. They should be getting value for what they’re paying. We wanted to address that and make sure that people are getting the value of these games that they’re paying for.” The idea that people should pay based on what they use is so commonsense, yet utterly foreign to most of the MMOG industry. It seems ludicrous, from an outsider’s point of view – and from an economist’s – that people who play once a month pay just as much as people who never log out of the game.

He continues. “And we’ve got people running around, doing the errands, gathering the firewood, who aren’t really spending much on the game, but they’re playing the game for free or very, very cheaply. And you’ve got other people who are playing the game very intensively, very hardcore, who are paying into it, who are putting money into the economy, kind of paying for the freeloaders who are helping them out.”

While we’re talking money, I ask him about some of their potential other revenue streams, or maybe if they’d consider letting people take money out. “We might do additional features, like pay for web hosting for guilds and that kind of stuff, but to be honest, there’d be additional merchandise first, like selling t-shirts.” He hearkens back to the arcade model from before, saying, “We’d like to keep the virtual economics side of the game separate, make sure we don’t have inflation or deflation or anything that might affect the game world. That’s why we don’t have transactions back out. No, we’d like to keep it sort of clean and simple. You can just buy sesterces. It’s that simple.”

With any game design, no matter how robust, there’s always an unexpected element to how things will turn out. The potential monkey wrench in any game system is the players. I ask Kerry if they’ve surprised him at all. “They have and they haven’t,” he says. “They literally surprise me every day. They’ve invented something new, or they’re doing something I simply haven’t accounted for. You know, Richard Bartle and I go back a bit, too. I was talking to him about this very subject and he shared the story of when he used to run MUDs, the original MUD.” He admits he’s probably going to get the story wrong, but continues. “There was this one chap who collected roses. And the rose wasn’t a viable item. I mean, you couldn’t do anything with them. They didn’t get you any points or anything. But he had like 10,000 roses in his inventory, and he collected them, and Richard was saying you can’t account for that in design. You can’t account for someone who wants to store 10,000 useless objects. Why would they do that? But they do.”

That leads to a moment of reflection. “And that’s the fun bit about designing about a virtual world, to be honest. Whatever LEGO bricks you put down there, people are going to build the most amazing things out of them, and you’re not going to be able to predict it.” Giving control freaks a bit of a heart attack, he adds, “And if you can predict it, your game is far too narrow. You need to give them that freedom. That’s what they’re playing for. There is activity that you as a developer will not understand, and that is a good thing. If there isn’t activity you can’t understand, you’ve made the game too narrow.”

One dark cloud I saw on the horizon was, of course, the lawyers. Where money changes hands, someone is eventually going to get mad and sue. Has the RedBedlam team run into any legal issues? “When you get kicked out of the arcade center for misbehaving, no one’s going to listen to your complaints about the tokens you bought that morning,” he responds. When you’re spending money – and this is the way virtual economics should work, I think – when you’re spending money, you’re spending it then.

“Nobody’s trying to set up a new World Bank here, and I think it’s wrong for people to try and do that. A character in a database isn’t something people [should] eat and drink and live and die off of,” he says. “We’d like to keep that delineation between the two. You’re spending [the money] then, well, if the guy who bought $10,000 worth of sesterces went down a dark alley and lost it all,” He’s quick to point out this is impossible, but continues with the example. “That would be entirely his own fault. I’d have no sympathy for him whatsoever.”

As to the legal side of it, “I don’t think he’d have any legal recourse, either, he’s exchanged his money for tokens. It’s a silly argument really. […]I think the MUD developer people are much more comfortable with [these sorts of communities]. There’s all sorts of people out there that understand that. And the game developers are coming at it, very much sort of the new kids on the block, encountering the new sorts of scary things. And since they’re the new kids on the block, and they’re sort of pop stars, celebrities, they bring mainstream media with them, which is a good thing and a bad thing, because they mess it up.”

So, in closing, I ask if VP is going to continue tiptoeing toward legitimacy. Are we watching the dying throes of the last generation? “I think the resistance to it comes from, well, people just don’t understand it. Often, when something new and powerful comes along, there’s a lot of distrust. And immediately, stories pop up on why you should distrust it, and everyone says, ‘See? Told you so, told you so.’ And then, we look back a few years later and go, ‘Well, that was a flash in the pan, it was part of a much bigger story.’ I think that’s what’s happening. It’s a fairly seismic change. People have acknowledged that virtual stuff can have value to real people. That ain’t goin’ away ever.”

Millionaire playboy Shannon Drake lives a life on the run surrounded by Japanese schoolgirls and videogames. He also writes about anime and games for WarCry.

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