Welcome to Jester's Trek.
I'm your host, Jester. I've been an EVE Online player for about six years. One of my four mains is Ripard Teg, pictured at left. Sadly, I've succumbed to "bittervet" disease, but I'm wandering the New Eden landscape (and from time to time, the MMO landscape) in search of a cure.
You can follow along, if you want...

Wednesday, November 27, 2013

Slippery slope

How about a quick mental exercise? Got your thinking caps on? Here we go.

In the "Sell Orders" section of the EVE forums, you can sell all sorts of EVE-related products and services for ISK. At one time, this only included in-game products and services. However of course, as the concept of being "in game" has expanded(1) so has the concept of an "in-game" product and service. For example, lots of alliances use chat services or kill-board services provided by central providers of those services. While it's not an in-game service like Red Frog Freight, it's certainly a service you wouldn't need without the game.

As a result of all this, CCP expanded their definition of in-game services (it's at the bottom of this post from CCP Spitfire):
This has been extended to include Characters, EVE Time Cards (ETCs), website hosting and voice chat services. Please use the sticky thread in OOPE to advertise signature services there. Please note that scamming for out of game services is not allowed; for more information see this post by GM Lelouch.
As implied, the post from GM Lelouch mostly has to do with scamming but does include this tidbit:
Finally, for maximum accountability, transactions involving out-of-game services such as killboard/voice chat server hosting should be negotiated through the sell orders section of these forums.
OK, so these sorts of services can be sold as long as the sale of them is documented in the forums, sort of like a character sale.

Players have certainly been taking advantage of this expansion of the definition. It's a rare day that TS, Mumble, or kill-board services aren't right there on the front page of the Sell Orders section. But Spitfire's post also mentions "website hosting." I myself have a domain that I use for hosting pictures that I put on this blog (among other things). Theoretically, someone out there who runs a website hosting company could sell me hosting services for ISK, too. And as long as we negotiated our agreement in the Sell Orders section of the forum, this would apparently be legal.

Let's suppose you run a massive EVE gambling site that recently lost its main source of RL income. You have website hosting charges to pay. You don't have a RL income any more but what you do have is billions of ISK flowing through your hands on a weekly basis. Suppose that you were willing to pay 50 billion ISK per year for website hosting...

Hey, you in the back! Don't start talking yet. I'm not finished. Stay with me.

Ahem. Suppose that you were willing to pay 50 billion ISK per year for website hosting. On paper, that's about 85 PLEXes with a nominal cash value of about $1500 U.S. It's a sizable amount of in-game currency but ironically the actual amount doesn't matter. Let's just use 50 billion per year as an example amount for our discussion. Let's say your actual RL hosting charges for your website are around $500 U.S. per year, again just as an example amount and again the actual amount doesn't matter. It's just a number we're using for our discussion.

Per the Spitfire post, if you advertise that you're willing to pay 50 billion ISK per year to host a website, and someone accepts that (or vice versa), then this is a perfectly legal transaction, an exchange of ISK for EVE-related services.

Let's take it a step further. I don't own a hosting company. But I do have $500. Let's suppose that I'm willing to pay the hosting charges for this massive EVE gambling site. I go to the operators of this gambling website and they're amenable to giving me 50 billion ISK per year for website hosting. I go to a hosting company I know, and I buy a dedicated hosting server. I then advertise it in Sell Orders with a somewhat misleading post title. The operator of this gambling site then replies to my post saying that he wants to buy my services with ISK. We then let the post fall far down into the invisible pit of thousands of other Sell Order posts.

The gambling site gets their hosting. I get 50 billion ISK -- $1500 worth of ISK -- for $500. Is this legal? Or is it RMT?

Not so fast.

When you buy a kill-board from EVSCO (which hundreds, if not thousands of EVE players, corps, and alliances have done), you pay ISK for the in-game service, which is legal. The owners of EVSCO then pay for the website hosting of your kill-board. As their in-game business has expanded, I'm quite sure they've had to pay more RL money to their hosting company to host all those kill-boards and deal with the demand. EVSCO pays RL money and in return receives large amounts of ISK from hundreds of EVE players, corps, and alliances. Same question: is that legal? Or is it RMT?

Don't be alarmed. That sensation you're experiencing is just the slippery slope.

I don't know the answer to this question myself and hell, I'm not sure there is a definitive answer. I've been asking the question of a lot of different people lately (it usually escalates into an argument pretty rapidly).(2) Nobody seems to know the answer and those that do know the answer -- if there is one -- aren't saying. What do you think? Discuss.


(1) For instance, how often is The Mittani "in game"? How often am I? Am I "in game" right now as I type this? Am I "in game" when I'm debating some concept of future EVE development in my role as a CSM member? The whole idea of being "in game" probably deserves its own blog post at some point.
(2) My thanks to everyone who's argued this with me over the last few days!

35 comments:

  1. The ingenuity of EVE players is astounding.

    While the focus of this article is about grey area RMT, I can't help but think that much of EVE's quasi-game-world enterprises exist because CCP has never gotten around to adding these things to the game. For example, I can't think of any logical reason for why killboards, evemon, price checking tools, fitting tools, and mapping tools aren't already part of the game. I'd love to hear an explanation if you can squeeze one out of them.

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    1. Because it takes a significant amount of time to plan, develop, test, deploy, market, maintain.

      As it takes a lot of time, it costs a lot of money.

      If you're a developer, why would you go out of your way, spend hundreds of thousands of dollars, to implement features that are already in existence?

      The only one I think you have a point about are the price checking tools... Don't get me wrong, I don't think that they should provide that per se. But I see no reason why market details of each station can't be provided through the standard API, as it must already exist in some referable and query-able form.

      But yeah, that's why.

      Delete
  2. The one significant loophole being created by this rule change is a fairly large one. While the transfer of ISK in return for services is verifiable with documentation on the forums and I assume documentation of an ISK transfer in game there is no documentation or ability to confirm that the services were received or even legitimate.

    You posit a theoretical where by a player pays $500 worth of services for hosting and is paid $1500 worth of PLEX/ISK. I agree to provide a service worth $1500 of hosting in return for your $1500 dollars of PLEX but instead I provide $200 to you and we both know I'm buying ISK and you are selling it but the records show everything above board.

    Since the service (if they are real) and/or cash is being paid through 3rd parties that can't be audited or monitored by CCP then the transfers serve as a direct means to RMT on the forums themselves with no accountability or verifiable trail on the service/money side. In the SomerBlink issue CCP was able to actually monitor how many GTCs they were providing to Marquee Dragon and had a business contract (I assume) that stipulated CCP rights with regard to sale. This meant CCP could directly influence whether or not money was changing hands to SomerBlink from Marquee. In the scheme as currently articulated anyone can claim to be providing a service and instead pay someone cash for ISK with no consequences as long as they make a forum post first.

    Again we have the issue of RMT taking money out of the official buy Plex/GTC system and being siphoned off by whoever can create the most clever work around to the system. The entire system makes you wonder who is actually legit, What does EVSCO do with the ISK they earn if they can't actually use it as currency for RL business expenses? There's a limit to the amount of ISK any one organization providing services to the community can spend in-game. In the SomerBlink business we had a fairly clear understanding that a lot of the excess ISK was being sold (in the form of bonuses) for the big kickback $$$s from Marquee.

    I'd be suspicious that anyone providing services in game for ISK on a large scale isn't using some method for turning the ISK into cash. CCP's rule change is going to give a lot of cover to anyone looking to do so.

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    1. This is exactly how RMT is legitimized.

      IRL, wealthy Chinese get around capital controls by conducting such bogus transactions; buy $100 worth of goods from a western corporation by paying $100,000, and voila, you just got $100,000 worth of currency out of China, all totally legitimate and above board.

      Forget about buying $500 worth of "services" for $1500 worth of ISK. You can totally get away with selling $0 worth of services for $1500 of ISK, and not a single person would be the wiser. And the best part is, if you don't get your ISK, you can even sic CCP GMs after them for scamming you.

      Delete
  3. This is interesting. Your post prompted me to visit the Sell Order section of the forums for the first time since I started playing EVE. I'd been looking for an example of a game company sanctioning RMT on the secondary market and now I found it. I wish you'd written this post last week :)

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  4. Jester tbh im shocked ccp shut down the affiliate program. U see RMT is a term mmo company's were using to describe illegal currency for real money. The reason the company's are against it is they don't get a cut. Once a company is the main one making money off it its suddenly not rmt (cough cough plex). Tbh I have no problem with the sale of ingame assets its just funny to me that do many ppl scream omg RMT and dont get that if the main place profiting from it is the game dev that it's not really rmt in the way it was invented in UO.

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    1. CCP did not shut down the affiliate programs that the GTC companies have with sites like SOMERblink. They just put out a ruling that the player affiliates had to abide by the terms of the EULA. If you look, SOMERblink is still an affiliate of Markee Dragon.

      And if you really want to help the community, you can buy a GTC through Dotlan. He is an affiliate of 3 GTC companies. I also think he's due for another server upgrade in 2014 :)

      Delete
  5. You are right to highlight this grey area. Indeed, when I asked Nosy Gamer about the ISK he recieves for TMdC posts aiding ad revenue RMT, he was strangely silent on the matter. To be honest the grey area covers any form of RL monetization, be it YouTube channels, news sites, betting sites or any other in game services which also involves the transfer of ISK or in game items.

    How many degrees of separation are required from the RMT - ISK tranfer, for a given service, before the transaction is regarded as legitimate activity? Well, I guess that is something for CCP to decide

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    1. There's a substantial difference between monetization of in-game video a la YouTube and transfer of isk for real money. If you don't have to pay for the service in the start or if you do and transfer no isk in relation to whatever work is done, there is by definition no RMT. Real world monetization is not indicative of RMT.

      Delete
    2. You asked me about ISK I receive for TMC posts? I must have missed that :) Then again, it's been months since I've written for TMC and I don't expect to get paid for the last article that appeared since it appeared on my blog and wasn't written specifically for TMC.

      I haven't figured out whether accepting payment for articles about EVE, whether from TMC or EN24 (and I've written for both) violates the EULA. I do know that the practice goes back to the old EVE Tribune, which started at the very end of 2006. So up until now I assumed it was okay with CCP. Then again, I assumed that what SOMERblink was doing didn't violate the EULA either until people started selling ISK on the forums and CCP let them.

      I should add that there is so much sanctioned RMT occurring in EVE that I'm waiting on the revamp of the EULA and ToS that was talked about at Fanfest. I think CCP needs to figure out exactly what they want to allow.

      Delete
  6. Arghhhh you're melting my mind!

    So those are big numbers being bandied about, but not high volume repeatable transactions.

    So if I ran a site that got a $ affiliate rate for click through GTC purchases from individual players, could those individual players legitimately provide a 'service' on the WTS forum, for say 200Mill?

    the mind boggles....

    ReplyDelete
  7. Interesting question - and I don't have a definitive answer. If there even is one.

    One difficulty in your example is that the RL money does not go to the person providing the ISK. But it's not going to CCP either.

    I am also wondering if "Legal or RMT?" is still the right question to ask, or if the question should be "Not RMT, sanctioned RMT, or unsanctioned RMT?".

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  8. SO who and where do taxes get paid ??

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  9. To throw another cat amongst the pigeons,
    Who pays the associated taxes with these transactions ?

    Tax would certainly apply in the country I live...

    ReplyDelete
  10. The fundamental problem is that any kind of service (in-game or real) needs someone's work. You buy his worktime and expertise with your money (real or ISK).

    Since worktime has opportunity cost in real life (you could work instead of playing), every in-game service has a $ value and this value can be realized if the money is laundered enough to hide it from CCP.

    Your example of "guy buys web service for $ and sells it as his own for ISK" is such example.

    Actually, if I do extra housework at home and in turn my girlfriend logs in and plays with me, can be considered RMT.

    However, there IS a definitive answer, one that is perfectly safe for CCP and avoids all kind of unsanctioned RMT element. And it will be my blogpost for Friday.

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  11. I bet CCP really really regret giving Somer all those ships. If they never gave those ships out this whole 'thing' wouldn't be happening.

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  12. scamming for out of game services is not allowed;

    The question to me is... Is selling a service for a profit (for more ISK than the US, EU, ISK RL monetary value) a scam or just... business?

    Is New Eden a REAL marketplace? Not just a virtual market simulation? If so... when does Iceland get to levy taxes? Sales tax... hell, INCOME tax?

    I mean we ALL know the RL$ (US, EU whatever) to ISK conversion ratio is real and in play in the RW market EVERYDAY... or RMT could not exist.

    The question isn't RMT... it's when will Red Frog do it's IP and go public? and for how much per share? =]

    ReplyDelete
  13. To me, RMT is Real Money Transaction. Where I give you ISK and you give me real cash, either directly or indirectly as per the Somerblink method.

    Some of the other incidents you are describing are to me not quite RMT, even though they are of the same flavour of transaction. Instead I'll call them RBT, real barter transactions. Where I sell you a service (no matter how I pay for or provide that service) in exchange for isk. At the end of the day, you may "save" RL money by bartering for a service in exchange for fake money (isk), but you are not making a RL income from that exchange.

    Its also the method TMC uses. They exchange isk for the writing or other services of staff members. Of course, in TMC's case, things get a bit murkier since the have ads on the site, and are therefore essentially making an income off of the backs of staff paid with isk. I'm quite tempted to say that this should not be allowed, just as the Somerblink method shouldn't.

    So, as I think about it, I believe the line should be drawn at making a RL cash income in exchange for isk and/or in game goods. Put another way, the person giving isk to another player should not be making a RL income as a result.

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  14. As long as you can sell out-of-game services for isk, and you can sell the same service for money, then sure, you can trade money for isk. That's not exactly rocket science.

    Consider the following:

    A. I make a nice PvP video
    B. I make a nice PvP video for an EVE buddy of mine
    C. I make a nice PvP video for an EVE buddy of mine and he gives me isk as reward
    D. I make a nice PvP video for an EVE buddy of mine, and he buys me a beer as a reward
    E. I make a nice PvP video for an EVE buddy of mine, and he gives me isk as reward, but he got the isk from another friend and he gives him money to buy a beer
    F. My brother makes a nice PvP video for an EVE buddy of mine, and my buddy gives me isk as reward
    G. I pay my brother to make a nice PvP video for an EVE buddy of mine, and my buddy gives me isk as reward

    As you can see, there is always a possibility to tack on services for money in exchange for isk on either side of the equation (buyer or seller). You can and always could convert isk to money.

    However, CCP is not trying to prevent people from buying isk, that would be foolish. They are merely trying to make it difficult enough so that many people won't bother.

    Think of it as a Diablo Auction house. Make a digital-goods-for-money-trade to easy and accessible, and the fun of acquiring the digital goods diminishes, which causes the fun of the game to diminish, and in turn diminishes the value of the digital goods themselves.

    As long as the isk-for-money trade is hampered enough to be sideshow restricted to the elite few, then the game itself won't suffer, which should be the ultimate goal of the ban on isk-for-money trade anyway.

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  15. It's not just vague where the line is, but it's also so easy to hide whether the line has been crossed, that it doesn't matter. CCP will have to set some arbitrary limit that is too strict for some, and will always be argued about.

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  16. There is only so much web hosting one company can possibly need. Web hosting tends to be sold in large periods of time such as per month or per year. I am sure if someone was to start offering large volumes of ISK per hour of web hosting services, it would be painfully obvious to all observing the transactions that they were engaging in RMT. Once you have bought a six month web hosting package, you won't want any more web hosting for that six month period.

    A convenient measuring stick for determining whether a particular ISK reward for a real world transaction is "fair compensation" or "RMT" is the value of a GTC. If I'm paying about a GTC-worth of dollars per month for someone's web hosting, it's fair for me to receive about a GTC-worth of ISK per month as compensation. If I'm paying about a GTC-worth of dollars per month but getting about two GTC-worth of ISK per month, that's no longer compensation and more likely to be the motivation for the trade.

    There is a line, but the line is a little fuzzy. Can Somer Blink compensate people a little more heavily for GTCs bought through affiliates? If Somer was to offer a private contract at 10% above the current GTC value to people who bought GTC through their affiliate program, is that RMT or suitable reward? Does it make sense to ask people to buy one day's worth of web hosting for 1/30 of a GTC value in ISK? At 1/15 it would clearly be RMT because you are offering significantly more ISK for the dollars being provided.

    Personally, I'd prefer to see CCP set up their licensing system so killboards could be rented out for straight dollars with a license fee or royalty going to CCP.

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    1. Ah... that would work only if there was a standard "hosting cost". I pay 5$ a month for my crappy provider who goes down a lot. I also pay $15 a month for a tiny Azure VM to play with. Finally, if I were to move my site to Azure, my cost would jump to around 500$ a month.

      So... if you see someone paying the equivalent of $250 a month for hosting, how do you know which case they're in?

      Delete
  17. Is it true that all character sales must be memorialized in the Character Bazaar forum? I know of a guy who claimed to have "sold my entire account" once while he was "on the air" streaming. Searching the Char Bazaar forum turns up no hits on that character's name. Yet, in his streaming sessions you can see him chatting with that character and it's obvious he's not chatting with himself. It's a friend of his now controlling it. I filed a petition and nothing ever came of it. Now he's got a new character. He admits as much and gives the name of the new character on his stream page. No mention of this character ever being transferred either in the Character Bazaar forum. I will not petition this time. Why bother? Still, it's galling to see some people getting away with the same shit again and again and again.

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    1. > I will not petition this time. Why bother? Still, it's galling to see some people getting away with the same shit again and again and again.

      It's not so much "why bother" because one person is getting away with it while others must follow the rules. It's "why bother" because they can just post a "private sale" on the forums and that's all that needs to be done. (the sale price could easily be set at 1 isk... or even 0 isk for that matter)

      Delete
  18. Just ask the goons. They are really bright guys, and I am certain they have explored every loophole, every avenue, to maximize their RMT stream.

    They can tell you what is legit, what is not.
    They can tell you what RMT actions CCP looks the other way at (if you are not named Somer), what ones they don't.

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  19. Any time you exchange ISK for something that the seller paid RL cash for is RMT. Buying and selling PLEX through the ingame market is RMT. BUT, its a sanctioned form of RMT. When most people think RMT, they tend to think more of the practice of selling or buying ISK directly from third parties. Which is RMT as well, but its unsanctioned. I believe Noizygamer has been referring to the latter as illicit RMT. I think there is now becoming a need to separate the two types, as the term RMT is usually associated with illicit activities that only do harm to MMO's and I don't think it is fair to associate sanctioned activities such as PLEX with the illicit activities.

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  20. I don't see how this is in question. Of course it is RMT. You can always add an arbitrary number of steps in between the $->ISK conversion, but that doesn't change the actual conversion of real money to ISK in the whole transaction. I think the misunderstanding here is the assumption that RMT is always illegal. If there are ways CCP allows, it's legally okay, but that doesn't change the fact it's RMT.

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  21. It seems to me that CCP attempts to get to the substance of the transaction rather than look at the legal form. In your examp,e the legal form (the structure of the transactions involving the parties) seems ok but the substance of the transaction is RMT. At the end of the day you are getting ISK for US$.

    "Substance over Form" seems to be their motto - which ironically is how company reporting now works.

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  22. Three meta-questions that I haven't seen fully addressed:

    Why/when is RMT a problem?

    How free-form can the "legit" RMT market be before it becomes a problem, either by hiding illegitimate RMT or causing issues in and of itself?

    Could virtual world RMT be used for practical real-world money laundering or tax evasion?

    I wonder if the reason CCP wants all ISK for out-of-game resource transactions on their notice boards is to avoid the appearance of illegitimate RMT. e.g.: CCP notices that Jester's alt has deposited 2bil ISK into the account of my alt. Obvious question: is this legit? CCP checks the notice boards and the transaction is listed there.

    PS: if you want to try this out, just let me know ;)

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  23. “RMT” often gets thrown around unreflectively as an epithet leading to discussions about what actions are tainted by the sin of RMTing and what actions are untainted by the sin of RMTing. I suppose, at the heart of this “It’s a sin” approach is the observation that this is supposed to be a game we’re playing and if some person is turning their game time into real world cash it looks less like a game and more like a job. The sin, so to speak, occurs when Eve genuinely becomes real.

    Off the top of my head I’m inclined to say, “As long as your job isn’t detracting from my game I don’t really care what kind of real world cash you’re squeezing out of our space pixel universe.” Accordingly, when people jump straight to over the top histrionics about the obscene amount of sinful RMT afoot I’m tempted to ask, “How, specifically, are you being harmed by this sinful RMTing?” Until the hyperventilating player has a good answer to that question I have to wonder what all the damn fuss is about.

    I imagine CCP looks at things a little differently since the easier it is to convert ISK back and forth with real world cash the less ISK looks like a virtual currency and the more it looks like a real word currency. I suspect CCP wants to be a gaming company, not a foreign exchange broker.

    DireNecessity

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  24. The question isn't "is this RMT or is it legal?", clearly what is going on is legal RMT. When we hear "RMT" our brain processes it as "illegal gold selling", because we're so used to the illegality of RMT in online games.

    Clearly these transactions are specifically permitted, clearly they are legal RMT. The fact that this is perfectly legal and cache scraping for eve central is against the EULA is all the proof you need that EVE's EULA is absolutely insane. Probably it needs to be rewritten from the ground up, probably noone at CCP has time to do this, probably if they tried they would make things even worse.

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  25. This is all just splitting hairs over semantics.

    What do both ISK and USD have in common? They're both currencies. Money. They even have an exchange rate between them like any other currency in the world. This seems somewhat obvious, but for some reason people think of them as differently since one is used primarily in a game but one is used in real life.

    Next, here's where they begin to look exactly the same to me and why Jester's scenario doesn't rustle my jimmies in the least: what exactly is money? Yes yes, there's the whole "Money is debt" thing in modern fiat currencies, but I'd like to be even a little more basic than that. What is the simple concept of money? Money is an abstraction for time.

    In a barter economy I provide service A, you provide service B, and somebody else provides service C. I want to buy your service B, but you have no use for my service A. You DO have a use for service C, and the guy providing service C has a use for service A. How do we make everybody happy? Create an abstraction for the time spent rendering a service, then allow me to accept that abstraction as payment for my services, then hand you that abstraction to pay for your services.

    So, what exactly am I saying? Since all currency is an abstraction for time, RMT honestly doesn't fucking matter to me. Whether this is or is not "RMT" is irrelevant. Somewhere along the way you're trading hours for a currency. The only question in Jester's scenario is whether the rate is fair, but frankly if all parties are pleased with what they got for their hours of labor, I'd say that's fair.

    The moment a game allows something like PLEX to exist as a traded commodity in game, you've created an exchange rate for currencies and assigned a real world currency value to your in game labor. Normally in other games this is created by third parties in a black market; EVE only differs in that CCP establishes the exchange rate themselves since they handle that market.

    I don't think there's a slippery slope at all here.

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  26. My take is, it's only RMT if the product and or service which you have purchased with ISK can be re-sold to someone else for currency.

    The purpose of CCP's RMT restrictions is to prevent somebody from accruing personal wealth with ISK. That would be a game-breaking incentive to farm.

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  27. I wrote a thing in response: http://www.ninveah.com/2013/11/bottom-of-slippery-slope.html

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  28. wtf does this have to do with a slippery slope, you're talking about logical extensions

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