Online gaming and the Real Money Trade

I play Final Fantasy XI online from time to time. One of the biggest challenges facing the game is keeping up with the “Real Money Trade” (or RMT), where in-game currency is exchanged for real-world money. It took me a while to understand why this was a problem in game, but as it turns out it may have an even more important impact in the real world.

The impact the RMT has on an in-game economy is fairly profound. They can contribute heavily to inflation within the game, making it more difficult to acquire things in-game for those who choose not to use their services. Since they generally work in large networks of players they can dominate areas and prevent other players from obtaining high value items from some monsters, decreasing the value of play

This article outlines some even more serious effects that the RMT can have. In this case QQ, the Chinese online community has managed to spawn a whole underworld economy based on the in-community currency that they sell to allow people access to various games and activities within their service. Use of the QQ Coin as an actual currency has become widespread for the sales of pornographic services and gambling, both of which are heavily restricted by the Chinese government. Things have gotten so out of hand that the government has stepped in with legislation targeted directly at QQ and their online service.

Final Fantasy’s issues aren’t nearly so widespread. This is largely because Square Enix and PlayOnline, the companies involved with maintaining the service for the game, have gone to great lengths to limit the RMT as much as they can. They go to lengths such as the mass removal of accounts, placing monsters in areas frequented by automated “bot” programs used for obtaining items in game, and in-game managers to prevent the monopolizing of areas that might otherwise be lucrative. They do not under any circumstances want their virtual currency to be linked with an actual cash value.

Other governments than the Chinese have started to notice the value of in-game currencies. Even the US government has taken an interest in taxing MMORPG revenue before. They have a strong interest in being able to track and tax financial activity across borders, and if in-game currency has real-world value they’ll want to keep track of it.

What interests me about the whole thing is the future of online currency in general. Non-governmental monetary systems already exist online. Gold-backed digital currencies such as eGold and Liberty Reserve can be used for online exchanges of wealth already. If in game items have any real value then an in-game currency such as FFXI’s Gil or Second Life’s Linden Dollars could be considered to be backed by the property you can purchase with it. It’s not a big jump from there to have an in-game currency then become a truly international currency outside the direct control of a government.