The Alphaville Herald

Gaming Open Market to the Rescue!

by Alphaville Herald on 17/12/03 at 1:22 am

Urizenus has gone to a better place, but I’m sure readers want to know what happened to all the simoleans he racked up playing trivia in those money houses! Put to sea on a burning ship like a Viking king’s gold hoard? Er, not exactly. Turns out Uri had @ 1 million simoleans on deposit with Gaming Open Market. (Had half a mil in the First Sims Bank too, but that’s another story and another interview). Even better, since Maxis finally cracked down on mazing, the value of the Simolean has stabilized and Uri’s wealth has tripled in value while he has been dis-sim-bodied! But how to reclaim the booty? Gaming Open Market, run by Jamie Hale and his partner Tom Merrall, offers several options: selling the simoleans for dollars, converting it to another currency (hmm Linden Dollars), or turning it over to a friend or loved one (or some studly new avatar) in the game. In this interview, Urizenus talks to GOM President Jamie Hale about the options, mechanics, and aspirations for the Gaming Open Market project.

Urizenus: As you probably heard, the avatar urizenus, resident of alphaville has met an untimely termination. As you know, he had approximately 1 million simoleans on deposit with GOM. Is it still there?
Jamie: Absolutely! Ready whenever you are.
Urizenus: Well, now what can I do with all that moolah?
Jamie: You have four choices:
Jamie: First, you can withdraw it whenever (if ever) you get access to Alphaville again.
Jamie: Second, you can sell it and take the cash.
Jamie: Third, you can sell it and buy simoleans in another TSO server…
Jamie: And fourth, you can sell it and buy currency in an entirely different game. Up to you.
Urizenus: What are the games that I can move my money to?
Jamie: At present, your choices are Second Life, Ultima Online and There. My partner is familiarizing himself with Star Wars: Galaxies and Dark Age of Camelot, and I’m just getting started with Horizons.
Urizenus: Ooooh, 2nd life. Tempted.
Jamie: It’s a terrific world. Very progressive.
Jamie: Plus, before us, they never had (to my knowledge) an external market for L$.
Urizenus: Linden Dollars? You are the first traders?
Urizenus: Still, I have a cousin who has a friend that wants to play in alpha. I think we’ll let him have the money.
Jamie: *grin* Not a problem.
Urizenus: How is the exchange rate fixed for these money trades?
Jamie: Not fixed at all. The price is entirely determined by the buyers and sellers.
Urizenus: oh I see, so if I want to buy Linden Dollars, I have to bargain with someone on 2nd life that wants simoleans? (doesn’t sound promising for me)
Jamie: Not at all. You break the trade up into two discreet steps. First, you list your simoleans at whatever price you think the market can bear – alternatively, you can sell to anyone who has placed a “Want Ad” at a price that’s appealing to you.
Jamie: Once you’ve sold your simoleans, you reverse the process in the SL market, buying at the price you choose.
Urizenus: ic, but just how liquid is the market right now?
Jamie: It depends on the price, I suppose, and who’s watching. Just tonight, someone listed simoleans at a terrific price and they sold almost immediately.
Jamie: The simoleans market is a little bit wacky these days after the auto-mazers have been shut down.
Urizenus: Is that helping stabilize the currency?
Jamie: It’s certainly bringing it back in line. I’m no economist, but basic supply and demand applies. Without the mazers dumping billions on the markets, the prices have jumped from $6-10 per million to $17-25 per million in the past week alone.
Urizenus: woot! so I’ve tripled my money since I died!
Jamie: Yes you have. So have several of my clients.
Jamie: Mind you, I expect the price to settle for a bit before the next cheat arrives.
Urizenus: yup, won’t be far off (the next cheat). Do you think it will be a CODE bot, by the way?
Jamie: Based on the Aphaville Herald article by The Phantom, I suppose RSO might be pushing it that way. It’s only a matter of time. If Maxis were smart, they’d admit defeat and replace the simple menial money games with something that requires a little more human input.
Urizenus: That might be more fun too, but why program fun into the game?
Jamie: Why indeed.
Urizenus: But back to the issue at hand…
Urizenus: About how many customers do you have now?
Jamie: We have about 160.
Urizenus: and do you have any projections (or hopes) about how many you will have, say, a year from now?
Jamie: You mean beyond total global domination?
Urizenus: yes, apart from that
Jamie: Well, when I started work on the project, the dream was to provide a real slick (and cheap) way for people to trade their currencies. eBaying currency is painful. By making it easier, we wanted to drag in everyone who was trading. And by dragging a lot of traders, the market becomes more liquid.
Jamie: I would be very happy if I knew people were actually speculating using our site.
Jamie: Not just buying and selling for the game needs.
Urizenus: so how many traders do you hope you can bring in to the site, say by next year at this time?
Jamie: Numbers are tough. If we could convert two or three of the major eBay dealers for each game, and hopefully bring along their regular clients, we could be talking about 1000 give or take. Depends on our marketing and how well we respond to the new games.
Urizenus: sweet, any idea about how much money would be moving through your market on a monthly basis (in US dollars) at that point?
Urizenus: right
Jamie: Again, numbers are tough. Based on Ted Castronova‘s numbers, there are approximately 40000 completed eBay auctions per month. We could take a guess at maybe 30% being currency trades. If we could take half the market, we could be talking about a few hundred thousand dollars. Give or take.
Urizenus: You think you can get half the Ebay market in currency trades?
Jamie: That would be ideal, of course. We’re just aiming at setting up a nice liquid market. Once we establish that, the dollars just depend on peoples’ interest.
Jamie: Half is a round number.
Jamie: We’re hoping to take a fair chunk of their business simply because we’re substantially cheaper, and a heck of lot easier for buyer and seller.
Urizenus: Maybe this is a question for Castronova, but are there projections for the growth of this market?
Jamie: Definitely a question for Ted, but were I to guess, I’d say that we’re definitely going to see more of the external markets as the developers realize the potential. Of course there’s always the possibility that the publishers saturate the game markets and the players split themselves between the games – diluting the external markets like us. Hard to say.
Urizenus: On the other hand, if the US market follows the lead of Korea or Thailand…
Jamie: True. Of course that would be ideal.
Urizenus: How do the mechanics of this work. Are my simoleans still in the game in someone’s hands?
Jamie: Yes. Depending on which server you deposited them on, either myself, or one of my agents is holding them.
Urizenus: so you don’t sell them and rebuy later? why not? — what if you or one of your agents gets deleted (that happens, I hear).
Jamie: Unfortunately, as you’ve discovered, being deleted is a reality. We can only hope that we don’t displease the ones that hold power. At present, if we get deleted, we will have to replace the goods on deposit. It’s only right. That being said, we do our best not to displease anyone – especially by being so despicable as to have a URL in our profile.
Urizenus: Right, wouldn’t want that.
Jamie:
Urizenus: so people who haven’t traded with you will want to know how this works. What do I do? I go to your GOM web site and then?
Jamie: You create an account with us, and it works a lot like a bank account. Your account can hold cash (USD) or goods (game currency). If you want to sell your goods, you schedule a deposit and a GOM agent will meet you in the game to receive it. Once the goods are in your account, you visit the market page for that particular good, and try to find the price that you want. If someone has already listed a “Want Ad” at a price that you like, simply click “sell” and you’re done. Otherwise, you place your own “For Sale” ad at the price you want.
Jamie: And wait for someone to buy it.
Urizenus: when you say an agent meets me in game, is there a secret handshake or something?
Jamie: If you’re coming from the other side, you can deposit cash through your PayPal account (or cash or money order), and then visit the market page for the currency for which you’re shopping, find someone who’s listed a “For Sale” ad at a price you like, click “buy” and you’re done. Again, if you don’t see the price you like, place a “Want Ad” to let people know you’re willing to buy.
Jamie: In games that don’t have unique avatar names (and hence traceable transactions), we have a 3-way security check
Jamie: If you hadn’t arranged for the transaction previously, you would approach our agent in the game and explain that you would like to make your deposit. When you scheduled it through the site, you were given a transaction number. You give the agent that number and they look it up at the GOM site.
Jamie: When they look at the record, they can see the pre-arranged GOM agent secret word (known only to you and the agent). They speak it and if it matches what you were expecting, you can be certain that the agent is who they say they are.
Jamie: Once you have that confirmed, you speak your secret word so that the agent knows you are who you say you are. They cannot process the transaction until they have your secret word – it’s a blind test.
Jamie: Sounds complicated – hard to explain – but it goes quick in game.
Urizenus: What is to prevent maxis from making an appointment, going to the meeting and then deleting the agent’s account once identified?
Jamie: At present, nothing. Our lawyer is looking at our terms of service as I type trying to determine how to limit something like that.
Urizenus: Perhaps the exchange agent should be distinct from the holding agent. Then you could run the exchange agents on 30 day free trials.
Jamie: An interesting suggestion – although something like that is bound to attract attention. We’re not trying to scam Maxis or any of the game companies. I own valid licenses for all the games we cover.
Urizenus: One more question about the “goods” that I can (ahem, could have) deposited on TSO. As you may know there are certain valuable “fetish goods” like simmys, rare breed pets, maybe even mushy pumpkins that one might want to keep in a safe place and/or trade. Can you trade those too, or just currency?
Jamie: At present, currency is all we cover – it’s our first service. Once we feel the exchange is more or less done, we’re definitely looking into covering the remainder of the markets – namely accounts and items.
Urizenus: Are you in this for a) profit? b) fun? or c) to learn something?
Jamie: A little bit of all three! We’ve been running commission-free in an attempt to attract business, but eventually we’ll have to start showing a profit. At least enough to cover the costs. And to appease the shareholders. Fun, definitely. My wife is amazed that I’ve somehow found a way to spend *more* time playing video games. And with regards to learning things, I’m a sucker for all sorts of financial stuff. If I had my way, I’d be trading commodity futures for a living. The way I look at it, I’ve started my own little exchange so I can play like the big boys.
Urizenus: Do you have a formal background in business or economics?
Jamie: Nope. Software engineering. I have a library of books on economics and trading theory. Sometimes I actually read them too.
Urizenus: what are all those graphs and charts on the site about?
Jamie: Eye candy. There are two extreme types of traders – those who watch the fundamentals, and those who watch the charts. In our market, the fundamentals would include things like Maxis clamping down on blasphemers and removing the maze game. To me, that’s all black magic. When I trade in RL, I watch the charts. I just figured that somebody might appreciate seeing the historical behavior of the game currency prices. I know I do.
Urizenus: clarification: when you said ‘that’s all black magic’ did you mean the charts?
Jamie: Nope – the fundamentals. The charts show you exactly how the traders have reacted to various stimuli – the trader mindset as it were. To analyze the fundamentals, you need to know whether removing the maze games will drive the prices up because the supply will drop, or down because all the auto-mazers will just drop their accounts in favour of another game.
Urizenus: What does toading an alleged PITA do to the charts?
Jamie: Pardon?
Urizenus: PITA = pain in the ass, toading = deleting
Jamie: Missed the MUD reference. To be honest, your account deletion has come at the same time as the mazers, so it’s hard to say which one had the most effect. Not to be disrespectful or anything, but my guess is the recent rise in prices is not likely due to public outcry and mourning of Urizenus.
Urizenus: He’s gone to a better place, after all
Jamie: Second Life?