There are a number of ways that this can evolve, including a central authority to handle “currency exchange.” I have heard some claims of software under development to support a digital currency. While most people working on this problem are dealing with the real world, such as buying a Coke with your cell phone so that the transaction debits your cell phone’s internal “bank account” and credits the Coke machine’s, it would also apply to the worlds of games.

If there is no market, then it is a closed economy and fundamentally at the whim and control of a “government”, in this case the game operator. As long as the player believes they are purchasing value with a transaction that can not be later challenged, then the purchaser will recognize the risk.

Without allowing market forces to work within the economy, then the purchaser is taking a high level of risk that they are going to get their expected value from the purchase. As long as they are happy, the market for other virtual objects in the specific marketplace of the game will florish. Otherwise it could create a collapse, similar to the bank collapses in the U.S. of the early 1800’s. The U.S. economy has evolved, and so will the general concept within games.

Meanwhile, an enchanted pig knuckle may be worth it to the buyer and lone consumer, but not as an item that carries intrisic value because the buyer can’t turn around and sell it. And that’s not kosher.

How exotic does that entertainment have to be before it’s worth $5, or $10 to you?

I can see a two-hour (newly-released, Hollywood blockbuster) movie at the theatre for $10. Of course I can only do that once or twice a month (or I end up seeing really bad movies and/or seeing the same movies more than once).

At $15 a month, I can potentially get 100 hours/month of entertainment out of an MMORPG (or maybe more). Total cost? $0.15 per hour.

Why would people pay $0.15 per minute to talk long-distance on the telephone? But they do. I’m getting considerably more value out of my MMORPG fix (I can talk to any of my friends who happens to be online, or several of them simultaneously — while doing some sort of skill-based virtual theme-park ride together with them!) for one-sixtieth of the cost of that long-distance call.

$500 for an item may seem pretty ridiculous. But what about $50 for a high-end item? Even if it only saves me 20 hours of dull, boring work–that might still be good value. In effect I’m paying someone else $2.50/hour to do that 20 hours of dull, boring work for me.

If you think of RMT as buying a one-time service (rather than buying virtual assets) then there are lots of examples to compare it to.

I hate cleaning my kitchen. I could pay someone else to come in every week and clean my kitchen—probably cost me $20 an hour, or something. If my time and/or comfort is worth more to me than my money… then its a good tradeoff. The same goes for RMT. Which is worth more to you–the $50 for the item, or the 20 hours you’d save if you paid someone else to get it for you, instead of doing the unpleasant and repetitive task of grinding it yourself?

Damien Neil, down below, points out that some people pay $500,000 to be allowed on a golf course, and sometimes, those memberships are not transferable. They also represent nothing physical.

Damijin wrote:

But, if this adoption is continued it will seemingly bring us back to the age of hourly charge. Back then, the most important thing was to keep the “high rollers” happy. Keep the power gamers in game and suck their bank account dry hour after hour.

You’re using some pretty loaded metaphors there! I used to play MUDs that charged by the hour, and I never felt ’sucked dry.’ I was more than happy to pay because I absolutely loved playing them.

Charging by the hour is -not- the future in any case, so I wouldn’t worry about it. There is a very high psychological barrier to entry in a pay-by-the-hour scheme, and the only real reason they existed in the first place was that network resources were very expensive back in the day.

People buy virtual items because they don’t have the time to farm endlessly to earn enough gold to buy that epic mount, for example, so they can better do the things that the game offers to them that is enjoyable.

Consumers will consume whatever it is that feeds the enjoyment bug inside them. Virtual items just have less fat content then tangible things.

However, I can’t help but to think how disenchanting this whole scenario becomes for those who grew up with games and real life separated. I know that it looks like a great business model right now, and Korea is the future, right? Well… by at least 12 hours anyway.

But, if this adoption is continued it will seemingly bring us back to the age of hourly charge. Back then, the most important thing was to keep the “high rollers” happy. Keep the power gamers in game and suck their bank account dry hour after hour. With this model we will see a return to the catering of the high spender. Make sure the people who spend money are happy. Over time, this will make the people who don’t spend money so unhappy that I guess we’ll see a return to them as a viable market.

So I guess it’s potentially cyclical. Maybe. I guess we’ll have to wait and see

I have to admit that I’ve always thought that anyone that would spend $500 on a virtual item for an MMO was a little off but then I also believe that anyone that would spend $500 for a new driver is just as demented. I guess if you feel you’re going to get $500 worth of fun out of either item then you got your moneys worth and who am I to judge.