THE GBATEMP INTERVIEW WITH PLAYER AUCTIONS
What an interesting and rare turn of events! I had written an article a few days back about the real money trade problem that exists in MMOs and discussed the impact it had on the virtual economy. Earlier tonight, I was approached by a gentleman from PlayerAuctions, a site that actually deals in real money trading services, providing a means for players to purchase and sell currency and other intangible goods. We both agreed to do a cordial and impromptu interview about the real money trade, and the discussion that transpired between us is after the jump, so hit that "Continue reading" button!
I am pleased to announce that Jake (who goes by PlayerAuctions here), the contact I was in touch with, is also the Managing Director of Player Auctions, and he has agreed to host an interview of sorts with the GBAtemp community, and he has agreed to answer almost anything you ask! So fire away! If you have questions about the interview I conducted, and the answers provided, feel free to ask as well!
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After the formal introductions and the rolling out of the welcome mat for him as a member of the GBAtemp community, the interview began.
How do you guys protect your customers and in the case that a customer is banned for buying currency on your site, how is this dealt with?
Excellent question. PlayerAuctions is very different from your typical run of the mill "gold selling site", which you can easily classify as "black market". Those companies go into the game, spam in-game channels, camp spawns, bot, etc. etc. Because they go into the game and produce the assets themselves, they become a part to the game developer's contract. PlayerAuctions is considered a "grey market", in that there is no actual legislation on the legality of secondary markets. In fact, some game developers actively encourage secondary markets for their games (check out the eBay section for Magic the Gathering). PlayerAuctions is based on the c2c business model (consumer to consumer) or what we like to call, player to player trading. Each user is responsible for their own trading activity when it comes to any contractual agreements they may have with third parties. We do not enforce third party contracts since we are not a party to them. In the event that a user is banned from the game publisher, this becomes a legal matter between that individual user and the game publisher, who has essentially infringed on their right to trade goods which they either produced or had dominion over. This has already happened in one of the world's largest game markets S. Korea (reference:http://www.pixelsandpolicy.com/pixels_and_policy/2010/01/south-korean.html). In Summary, two gamers sued the makers of Lineage 2 who were banned for real world trading. The courts ultimately sided with the consumers citing customer rights. In this case, the consumers won against the developers, wherein Korean courts ruled that the Publisher's TOS and EULA were unenforceable and against public policy.
I see that you guys have a lot of sellers on board, but do transactions that take place get refunded to the buyer in the case of a banning?
This is something that rarely happens on our platform primarily because unlike black markets, most of our trades occur between actual gamers. We have a few "professional" service providers on the platform, but we enforce strict quality standards before allowing them to continue trading with our users. In the rare event a banning does occur, again it is between the user and the publisher. Alternatively, we have seen users communicate this issue with the seller directly, and many times the seller will re-deliver or offer some sort of recompense as a measure of retaining loyal customers.
PlayerAuctions however will refund users who have had bannings as a result of actions taken by the seller however.
Your site makes a lot of bold claims about having high tech security and bank vault level encryption, but how does that stop the seller from getting away with the funds? Can't they just not deliver?
No, this is not possible on our platform. While our business model is based on eBay, we take it a step further by deploying a proprietary escrow service which is specifically geared towards digital assets. We have been doing this since 1999, so anyone who claims they know how to do it better are either lying, or mad geniuses :-) As a result we are able to secure payment for the seller and protect against unauthorized payments & chargebacks, and we do not disburse payment to the seller until the buyers acknowledge delivery.
As it is, our platform has a 0.2% average monthly fraud loss rate. And at last closure, 97% of orders that have passed through our systems have gone on to successful completion with both parties leaving positive feedback for each other. A lot of our new users comment on our Trustlink page, we are also highly rated with the Business Consumer Alliance.
For me, I'm just curious at this point, but how do you guys justify RMT to a customer who plays a game? What reasons could be given to get people on board? Security? Ease of access? Reliability?
RMT has a negative connotation as it is so closely related to black markets. I peg PlayerAuctions closer in line with actual "gaming secondary markets" and "gaming services industry". This idea of "it ruins the spirit of the game" and "fairness" are all old ideologies that have been propagated by people who fail to realize that it was simply a method of control for game publishers to reduce competition to their own revenue generation. There were other issues of bad behavior from black markets which I recognize, but this is the beauty of secondary markets. On a player to player trading platform, sellers can make their own price points, rather than selling to black markets for 30% of the actual value of the commodity, and buyers therefore get on average 30% savings as well.
Not only this, but there are inherent benefits to secondary markets. The first is psychological, in that something innately powerful happens when you allow a user to ascribe value to their gameplay. You become vested in that game. Secondly, secondary markets exist due to the way games are designed. The dynamics of which create a demand for secondary markets. If you have something so unappealing as repetitive, grinding gameplay, can you not expect gamers to want to bypass that unpleasant element so their interest in the game world can be retained? Thirdly, this also boils down to resource capacity. People in general have two resources at their disposal: time, and money. Some gamers are rich in time, and therefore can spend hours upon hours getting the "true nature of the game by grinding their way to success". If they enjoy it, more power to them. However some of us actually want our college degrees, or have full time jobs, or families, and therefore may not be rich in time as a resource. The basic goal of gameplay is entertainment, and playing to "win" so to speak. If RMT were off the map, then players who are poor in time as a resource are arguable "playing to lose" because they ultimately cannot keep up with gamers who are rich in time. Game publishers also isolate and alienate a large portion of gamers for which they could actually retain, by allowing them to enhance their gameplay and to dictate what the experience is like with regards to how they can keep up in game.
As for our platform specifically, well... we have high aspirations of creating an environment where people feel safe and secure to trade their gaming assets, both digital and tangible. I can confidently say, that we are presently the largest c2c exchange for Western gaming markets. And with my taking things over in October, the focus of the business has been to move away from being a "tech platform" and more in line with being a "Customer centric business", hence... why I'm here engaging with communities. I love doing this. Digital asset exchange has been what has made China & Korea the largest gaming markets worldwide. Game publishers recognize that their audiences may not be so keen on restrictive subscription models, and instead allow gamers themselves to define their own gameplay experience. This is something that has been picking up momentum in the casual gaming space, and as you can see is migrating into more mainstream models (such as what we saw with Diablo 3... which is an example of the wrong way how to do secondary markets, but that is a different topic altogether). We are pretty rad, an international team, we run lean (only about 50 of us work on PA), and we really care about reaching critical mass for users worldwide who love to trade.
Are you by any chance aware if any of your professional service sellers a part of this "sit in game and spam chat" group or are they more along the lines of regular players that don't really interact in those activities?
We do not allow anyone on our platform to engage in activities which we would consider to be harmful to the virtual worlds we love. If it gets reported, then that seller gets suspended. Or has fines levied, or is banned.
What is the average turnaround time for a transaction to complete, usually?
That depends on a number of factors. If the buyer is new, or old. How fast the seller is to respond to inquiries and make deliveries, etc. etc. It can take as long as 3 days (for new users who have security flags raised, to verify their payment & identity) to as fast as 10 minutes (which is the experience I had this weekend).
This might be something that might not be able to give an answer for, but I'll plow through anyway. You mentioned in your reply about a proprietary escrow service between seller and middleman. Without revealing company secrets (if any) could you tell me more about how that works? Is it similar to a Paypal automated system or is each transaction manually verified by someone on the PA team?
Between buyer & sellerWe have a sophisticated risk management and fraud prevention system in place which essentially tracks through statistical algorithms, as well as consumer history, how trustworthy an individual buyer & seller are. Since we've been doing this since 1999, we have an extensive warm, negative, and black list to help our system weed out suspicious activity. Once a buyer players an order, we then verify their payment. This is done via a two way communication between our risk management system, and the risk management system of our payment processors. Once the payment is verified, we send notice to the seller telling them we have his payment, and it is okay for him to make delivery. Once he completes delivery, he will confirm delivery on our website, and then the buyer will confirm delivery as well. This closes the order as complete, and the seller's payment then enters our disbursement queue. That is it in a nutshell. But realistically, the system itself is far more complicated than that, to take in any number of variables, or extra ordinary circumstances.
Oh and I forgot to mention, each seller is obligated to select a delivery guarantee time. As such, if a seller fails to make delivery within that delivery time, the buyer can cancel the order easily.
I see. Thank you for your detailed answer. My next question is about buyer security. I know that you guys have a great sounding security system, but are there any measures that your site places that increase safety? (embargo on purchasing too much, verification of buyer to the PA team, etc). How about driver license verification?
Yes, our risk management system is both based on tech, as well as human review. Each member/order is assigned various flags for which each has their own value. If thresholds are reached, then the order must undergo a manual review by our Risk management team.
Order velocity, subject identification, email reputation, phone reputation, device reputation, payment source reputation, identity and even address verification are all employed as well as a great number of other items.
I'm assuming none of this info is stored, correct?
We have our PCI Compliance certification, and all data with personally identifiable information is two way encrypted.
Do you think this service is comparable to buying things in apps for mobile games?
Hmm... yes, it could be comparable. The difference is that when you purchase things in apps/mobile games, you are engaging in the primary market sales (i.e. purchasing directly from the publisher/developer). With us, we are a secondary market.
We also support in-game trades for certain mobile games as well however. Such as Blood Brothers, which is one of our top item sales games.
That sounds interesting, that you've been able to move to the mobile platform.
It just depends on the game design model. Most casual games do not have developed in-game economies and restrict users from trading. Whereas Blood Brothers has alienable assets. Rage of Bahamut also.
I was beginning the wrap up work, but he wanted to leave a comment about what PlayerAuctions stands to become in the future.
We're not in it to make a quick buck. Even despite our size, we operate on razor thin margins. The idea is to help people see, that RMT isn't inherently evil if it is DONE RIGHT.
This is the situation that we have right now:
1) Gamers get banned because they engage in trading because the game design encourages this type of demand
2) Our virtual worlds are destroyed by in-game spamming, spawn camping, hacking, etc. etc.
3) Game publishers control and profit from everything, including the activities of gamer's themselves
4) people trade in unsafe venues.
But it doesn't need to be like this.
Personally, I haven't really engaged in activities like this, but I really wish that developers were more open to that particular idea.
1) Gamers should have the unalienable right to trade property for which they labored for (John Locke's labor theory of property)
2) Gamers should recognize that by allowing for player to player trading, then you get more honest trading being done. There doesn't need to be the in-game spamming, or the hacking of accounts by mega black market companies, etc. etc. They can trade directly with other honest gamers
3) Game publishers can serve to PROFIT from this further by a) increasing their own retention rates of users, b) increasing the scope of user acquisition to include players that are limited on time as a resource and c) you increase customer longevity by allowing them to ascribe value to their gameplay
4) We have a proven track record of keeping people safe.
It certainly seems like you guys truly do value user safety in comparison to other sites.
We have seen gaming secondary markets legitimized in China and Korea, and how it has resulted in a revitalization and explosive growth for those markets. The west doesn't need to hold back any further, and iterations like Diablo3 don't need to have the poor results they yielded. (although for Blizzard's shareholders, diablo 3 made everyone happy, and they made a KILLING from that game due to it's RMAH, they just failed to consider the consumer in it's development, which we could have helped with).
At this point, we were able to wrap up and end things with some cordial banter that had nothing to do with the issue at hand.
