How to Make Money Playing Everquest

Imagine you are a furniture dealer with a nice steady business, buying and selling, when one day you sell a rare antique chair and find that it magically replicates itself. The customer gets his chair, you get the cash and you still have the chair to sell again. You discover that it wasn't a one-off. You can make it happen again and again. What would you do?

Endlessly reproducing the chair would be conning the customer in a way: to some degree at least, the chair's value is linked to its rarity. Would your conscience get the upper hand? Or would you start duplicating and selling like mad to get as much money as you could before you were found out and/or the market collapsed?

It sounds an unlikely dilemma. Chairs don't magically replicate themselves. But this seems to be exactly what happened in the world of Everquest II, an online computer game. However, before you jump to the conclusion that this was a virtual-world scam involving just virtual-world money, stop. This is real money we're talking about. For this is a story about two types of money: game gold and US dollars. And the point is that you can sell one for the other.

Our furniture salesman is the self-dubbed "Methical", who according to the account he has posted on the internet, stumbled across a software glitch that allowed him to reproduce, almost without effort, virtual items in Everquest II, one of the massive multiplayer online role-playing games (MMORPGs) played by an estimated 20m people around the world.

A decade or so ago, this might have been of some importance to a handful of geeks but probably not to most readers of the Financial Times. But breakneck advances in online gaming and its popularity mean that virtual items, and the virtual money to buy those items, are now traded for significant sums of real-world currency.

"I started laughing like a silly little girl," writes Methical of the moment when he realised what he had discovered. "It was the kind of laugh you have when you're a kid and just hit a house with an egg. I couldn't contain myself."Before explaining exactly what Methical did, and its startling implications, it is worth explaining how far MMORPGs have come from their ­humble text-based origins.Before broadband, most games were single-player challenges - you against the machine, albeit an increasingly intelligent machine. But as connectivity grows, multiplayer games are fast taking over. Here the challenge is social, rather than technical.

For me, these games hold the same attractions as books, movies, theatre and art. The best are towering feats of imagination, offering new worlds to explore, with beautifully rendered landscapes, compelling plotlines and a constant need for split-second and sometimes morally laden decisions. The most creative minds and best engineers have partnered with mass consum­erism in a fertile marriage, whose eventual destination social scientists have only begun to imagine

When I started playing World of Warcraft, then the most popular MMORPG, it was a revelation. First there was the sheer size: an entire Tolkienesque universe, depicted through a kind of cartoonish impress­ionism, replete with jungles, ice-scapes, deserts and forests, inhabited by dozens of races and fantastic beasts, all fighting, exploring or making money across two continents of towns, cities and wildernesses.

When my fledgling elf, with his humble forest origins, first reached the dwarven city of Ironforge I felt a genuine sense of wonder: not unlike my feeling on arriving in New York after my previous job in Nairobi. As my character, Eghed, surveyed hundreds of players talking, crafting, duelling and chatting, I realised that I had arrived in the kind of online metaverse first imagined by the science fiction writer Neal Stephenson in the early 1990s. But now it was real.

Even more than the graphics, the game mechanics were what amazed: the plotlines, in-game postal service and messaging systems, even an auction house where players traded for game gold the items they had crafted using hard-earned skills and whose prices rose and fell according to supply and demand.And as players advance, they increasingly meet challenges that can only be accomplished in groups, and eventually by entire guilds of like-minded players.

To succeed in the challenges requires long-term relationships, organisation, bonds of trust. These online relationships endure and become an increasingly important part of the game experience.In time the aim of the game becomes the acquisition of interesting new items and powers. As the MMORPG player base grows older (many are now in their mid-30s), with more disposable income but less disposable time, many would prefer to buy those items with real money than work for them in the game. Fortunes are there for the taking.

Which brings us back to Methical. His tale starts when our anti-hero, who says he sold upscale modern furniture in the real world, "figured it would be fun to sell furniture in Everquest II as well". (Characters in many of these games like to buy clothes and furnishings as well as more obvious things like weapons to build up their individual identity). Unfortunately he found the process of making furniture online rather dull, so instead he started buying cheap furniture from hard-to-find "non-player" computer characters and selling it at a profit.

He started doing quite well, so he set up a showroom in his in-game house. So far, so normal. But one day, during the act of selling a "gnomish thinking chair", he came across a glitch where, by performing a certain series of actions, he sold the chair to another player but somehow still retained the original item.He tried it a second time and the same thing happened. "I must have turned bright red. I was waiting for some alarm to go off. There, in front of me, was the most beautiful gnomish thinking chair I have ever seen," he writes. "I now knew a working dupe. God bless those gnomes and their thinking chairs."

After a brief struggle with his conscience, Methical teamed up with a partner, who helped him replicate the glitch time and time again. They were soon duplicating hundreds of items and selling them for ever-increasing quantities of game gold."We duped and duped until our eyes bled. We were laughing the whole time," Methical writes. And then he started selling his ill-gotten gains for real money.One of the most intriguing phenomena of MMORPGs over recent years has been the emergence of secondary markets, over the internet. They allow players with more dollars than free time to spend their real-world money on virtual currency to buy attractive in-game items.

Pay $100 in the real world and your online character gets several hundred units of game gold. With that you can buy the in-game items you desire - a fancy bow, for example, or a funky piece of clothing to help develop your identity.Some of this game gold is sold on generic auction sites but specialist companies have also sprung up, both offering a forum for exchange and trading on their own account. One such company, IGE (www.ige.com), claims on its website that "the 2005 marketplace for virtual assets . . . is approaching $900m."

In Asia and other developing parts of the world, "gold farmers" - players who spend time earning virtual gold by performing online game tasks - can earn more selling virtual currency to players in the developed world than they might by, say, making T-shirts.Game gold and real dollars have effectively become convertible: one website (www.gameusd.com) even posts the latest average exchange rates, just like the FT does with real-world currencies."Some experts believe that the market for virtual assets will overcome the primary market [in game sales and subscriptions] - projected to reach $7bn by 2009 - within the next few years," says IGE.

By discovering how to make game currency for almost no effort, Methical could effectively print his own money: "I checked the prices: they were ridiculous. $300 for a platinum [a piece of Everquest II currency]. We were pulling platinum out of thin air. We set up some player auctions and started selling," he wrote. "The first day of sales we made $500."

Methical moved on to the specialist game currency distributors. "You name them, I sold to them. Our money was spreading like syphilis at a nymphomaniac recovery summer camp."The money started pouring in. Money that made me so scared I went and consulted with a lawyer and an accountant. Needless to say, neither of them had a clue as to what the hell we were talking about," he writes. "Try telling your accountant you're making money by selling pieces of gold in a video game."Unfortunately for Methical, however, his greed ran away with him and he started doing things that allowed him to be caught. He duplicated a vast number of rare "Halasian Maulers", a kind of pet dog, which caused questions to be asked.

His characters were also showing up on the game's statistics sites as making much more money than appeared feasible for their level. In the end, he says, Sony Online Entertainment (the game's maker) found out and informed him that his account was banned. But he had already made a killing."The exact total of what I profited is not important," Methical says. "Just know it's more than some people make in a year and it was enough to take my girlfriend and entire family on a vacation to Paris.

"PS. Sorry for ruining the economy and all that."

Fascinated by his tale, I tried to hunt Methical down to talk to him but he proved elusive. However, Chris Kramer from Sony Online Entertainment, confirmed that the company knew of him, that he'd been "problematical" and that he had been banned from the game. But Kramer also said there were "a number of inconsistencies within his story" and "some serious doubt about the veracity of his claims".

IGE similarly had heard of the tale and raised doubts about its accuracy but did not shoot it down entirely.It is not surprising that the game-makers and currency exchange sites are wary of raising the profile of someone who claims to have cheated the system. I, like other players, am inclined to believe there is significant truth to Methical's story, which provoked a storm of debate and comment in the gaming community when it was posted on the internet.Whatever the precise truth, there have been other confirmed cases of duping and people are clearly ­making a lot of money from trading game gold.

This raises important questions. As game currency takes on real-world value, what are the rules governing it? Does ownership of game gold entail property rights, or intellectual property rights? If something alters the value of the gold (such as duping or changes to the game design), is there room for redress?According to Kramer, the situation is clear. "We own the gold. Everything within the world is the property of Sony Online Entertainment." That said, SOE recently launched its own "station exchange" service (http://stationexchange.station.sony.com) where players can buy and sell game items and characters. The implication is that Sony also recognises that the stuff being traded has value. However, Kramer asserts that, rather than the property itself "people are buying and selling the rights to use" it.

"We have the right to take it away if necessary," he says. "We allow people to come in and play in the world but they don't own the world. Our games are entertainment; we provide an entertainment service to our subscribers."But legal experts are questioning how sustainable that position might be. According to Joshua Fairfield, associate professor of law at Indiana University: "The fight is whether or not there is any property interest for people who legitimately obtain these things."Asian countries, he says, have begun to tackle theft and abuse in online game economies with traditional property rules. "Korea, Japan and China have all cracked down very heavily on people who steal [or] abuse the economy," he says.

A recent New York Law Journal article reports how, in December 2003, "the Chaoyang District People's Court in Beijing ruled that the game company Arctic Ice Technology Development should restore to gamer Li Hongchen a virtual arsenal stolen from him when the game Red Moon was hacked.""The court determined that AITD should restore the weapons at a cost of RMB1,140 (about $138) and pay most of Li's court costs." It also cited a Korean law that instructs that "online virtual property holds value independent of the game's parent company/creator. The lawmakers reached the conclusion that there is no fundamental difference between virtual property and money deposited in the bank."

In the west, however, the approach has been to let businesses work out their own standards. The question is whether their solutions will stand the tests of time and litigation. Prof Fairfield believes Sony might be "trying to craft a new property right that is not defensible".

Steve Salyer, the president of IGE, which allows players to buy game gold online, takes a more pragmatic approach: "I don't personally have an opinion about whether they are leasing a right or whether it is a virtual item to which virtual property laws apply." he says."I've made it a point to speak to [the game companies] and say, 'Look, we are on the same side of the table. You don't want to litigate against your customers; I don't want to litigate against my customers'."He said it was not necessarily in either party's interests to get clarity through litigation but insisted that IGE did not support duping or "botting", where characters set up subroutines to perform tasks on auto.

Edward Castronova, another Indiana University professor who has led the way in charting the new phenomenon, calls it the dawning of a new era. "It's happening so fast," he said. "The phase we're in right now is that everyone is ­trying to apply the proper metaphor. This is terra nova; a lot of these phenomena are frontier phenomena."But as legal scholars debate what the rules are, so do the gamers. Their approach is not so much what property law applies or not but whether it is morally right to buy online gold in the first place.

Two camps have emerged. On the one hand there are those who are convinced that advancing through the game by buying items, rather than earning them, is cheating and should be stopped. Even worse, in their view, are those players who use game glitches or create "bots" to perform tasks automatically.

Others insist there is nothing wrong with using money to bypass dull tasks. "Why do people have such an issue with buying gold?" asks a player called Sortilege, a troll mage, on a World of Warcraft forum. "I have limited playtime. I'm in my 30s, I work, I make good real-life money. Time is much more valuable to me in real life than money because it is a finite resource. I don't want to spend that time farming . . . but playing and having fun instead. God, I love capitalism!"Another player, Euthyphro, a human priest, responds: "The problem is mass buying of gold only truly benefits the gold sellers and everyone else ends up being screwed over. It drives up prices . . . "

"Actually, it only screws over the poor folk and little kids still on an allowance" shoots back a Tauren shaman called Cleaner. "I don't buy it now but I may consider doing it in the future and I won't give a damn what anyone thinks about it."

I recently had my own ethical dilemma to struggle with. After one complaint too many from my girlfriend, I finally decided it was time to hang up Eghed's spurs.I concluded that the only way to avoid myself going back in a weak moment was to delete the character altogether. It was a heart­rending decision: all those hours building up powers and reputation for nothing. But it had to be done.Then a thought struck me. I could probably sell Eghed for several hundred dollars - real dollars. He had many desirable items and was a member of a powerful guild.

I guess the game company behind World of Warcraft, Blizzard, a division of Vivendi, would, like Sony, probably argue that he wasn't really mine to sell. Yet he was something I had created. He represented my time, my skills, my experience.Finally, though, my decision had as much to do with personal ethics as the finer points of intellectual property. It is hard to explain but handing over Eghed to another player just seemed wrong. He might abuse the trust others had in my Eghed, the one that did not steal nice items and knew what to do. What if someone else wrecked Eghed's colleagues' game experience? Colleagues who had assisted Eghed out of altruistic good will.

On balance, I decided he had to die. But I still wonder whether I made the right decision. After all, like Methical, I could have treated my girlfriend with those dollars - a nice dinner and flowers, perhaps, rather than a trip to Paris - to make up for all that time spent in another world