Tuesday, August 9, 2011

MMO Arbitrage

So today I'm going to talk about an idea I had back in the day, possibly even while still in high school. As the title says, it's MMO arbitrage. I'll assume here that anyone reading this blog knows what an MMO (or MMORPG if you want the full acronym) is, but arbitrage may not be, so if you're too lazy to click that link, it's the process of making profits by trading something (usually currencies) at different rates. How does this work? Let's say I can buy euros with dollars at a 1:1 ratio in Lisbon. I can then sell the euros for $2 in Prague, then return to Lisbon and purchase twice as many euros, and repeat the cycle. The really good arbitrage is going to go through three or four currencies along the way and won't make near as much money per unit. (Ideally you'd also cash out with dollars and head to the States to spend them up, or find another arbitrage cycle to play with)

Anyway, how does this relate to games you may ask? Again, I'm assuming you did, because that's the question that's about to get answered. My plan was to create a stable of characters in several different MMOs, each of which had a certain amount of ingame cash. (The amount? Large) This would allow players who'd accumulated a large amount of cash in one game to trade it for cash in another game, so they could enjoy the wealth they had accumulated. Of course, most people could see several problems with this, such as:

1. Wouldn't it take a lot of time to accumulate that much wealth on that many games? Yes, it would. Unless of course I were able to recruit already rich players or buy them off. I suppose buying resources would be reasonable, given that most businesses expect to start off with a certain amount of investment.

2. How would you determine the cash value of the ingame currencies? The only one I can give a good accounting for is Kingdom of Loathing. As has been previously discussed, the game's currency is Meat, and there's no subscription fee. You can however donate $10 and receive a Mr. Accessory, which in addition to being pretty useful its own dang self can be traded in for monthly Items which do even more nifty things, and more importantly be sold to other players, making for a decent currency conversion. Currently they're selling for 8 million meat, making the conversion roughly 800,000 meat/dollar. So there's one.

3. How would you make money? Besides taking a commission on trading currency from one game to another, there would presumably be personal arbitrage trading and other deals going on the side, assuming the time and wherewithal to do so.

4. What would cause people to trust you? If my word of honor isn't enough, I shall demand satisfaction! Really, though, there's not much of a way, although I'm not familiar enough with PayPal to be sure that there's not a way to enforce a deal if it goes south.

5. How would you know what games to work with to actually get profits? Again, I've no real idea. My guess would be it would require one character in pretty much all MMOs that had a decent fanbase.

6. What about games that don't allow reselling of currency or items via third-party vendors? What about them? This is probably the biggest hurdle, but not the one that actually stopped me. (It was laziness more than anything) If I thought I could actually make a decent profit off this thing, I'd be willing to see if I could work around this. Unfortunately, I think it's just a decent idea. Still worth blathering about though.

1 comment:

  1. In EVE online you can buy a month's subscription item and trade it in game; real value of $15, not sure how many credits they go for at any given time. Second Life actively exchanges it's currency with real life dollars.