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| 5/25 |
| 2004/5/20 [Recreation/Computer/Games] UID:30316 Activity:very high |
5/20 Everquest fraud:
http://www.pbs.org/cringely/pulpit/pulpit20040506.html
http://www.pbs.org/cringely/pulpit/pulpit20040513.html
\_ EQ? Who cares? It's a stupid and _boring_ game.
\_ Someone didn't get their Prozac this morning.
\- are you are such a loser apparently you dont realize EQ is about
5th in terms of what this situation is about. --psb
5th in terms of what these articles are about. --psb
\_ Hmm... Something is kinda telling me these people are only getting
what they deserve for letting their fantasy life take over so much
of their real life.
\_ There's a real easy solution to this, just make it illegal to
buy and sell "virtual" goods. We shut down sites that buy and sell
this kind of crap, and people who get scammed can just
duke it out in small claims court.
\_ Er, but what about virtual goods like digital music? |
| www.pbs.org/cringely/pulpit/pulpit20040506.html i, cringely search cringely go I, Cringely mascot The fussy old toad pictured here was the original "I, Cringely" mascot, circa 1997. MAY 6, 2004 PayAcquaintance When It Comes to Selling Virtual Property, PayPal Isn't Always Your Pal By Robert X Cringely Games are make believe, their rules have to be only internally consistent, not consistent with any laws of man or nature. And that is probably the reason we like them, because in the game, whether played in my garden or in your computer, we can be warriors or wizards, men or mice, we can carry on our belts the scalps of our enemies and nobody is really hurt, no laws are broken. But games are also big business, which means they inevitably intersect with the real world. And when that point of intersection is through PayPal, some game players believe they are being robbed. This story was brought to my attention by players of EverQuest, Sony's incredibly successful and incredibly complex fantasy role-playing game, but I am sure it applies to similar games. Understand, I am not a gamer, and have not a chromosome of gamer DNA in me, so if you are a gamer and feel that I am mischaracterizing an activity that occupies, say, a third of your waking hours, just pity me and hold the complaints, okay? EverQuest and most other multiplayer online games like it are subscription-based. You pay Sony a monthly fee to be allowed to be a character in the game. Some of your character attributes are personal choices made when you set up the account, but many are earned, given, or even just discovered as you make your way through the many levels of the game, gaining powers and weapons and even money. The currency in EverQuest is platinum, and it can be used to buy many things, including sometimes buying your way out of trouble. Sony's view of its game is that everything takes place in the server and nothing in the real world. Avid gamers, however, came to see a real market in these things, selling them primarily to players who wanted to buy their way higher in the game. So there developed a secondary market in virtual goods, first on eBay, then on specialized game auction sites, and there are online stores where you can buy this stuff outright. Sony doesn't specifically allow it, but Sony also doesn't do much to prevent it, so the practice is widespread. The arbitrage opportunity here is based on skill and knowledge of the game. If I am some kind of EverQuest god having made it the old fashion way to the top of the game, it is much easier for me to acquire these goodies than it might be for a beginner. Or maybe I have found a bug in the program that allows me to exploit over and over again some action that yields platinum, for example. Once I have enough valuable stuff worth selling, I would typically give it to a second character (not my most powerful performer -- I need to keep him/her/it apparently untainted by commercialism). Then I find a buyer through an auction site, or I just sell the stuff to a wholesaler like Internet Gaming Entertainment, the Big Kahuna in the buying and selling of this stuff. How the actual transfer of goods takes place is very interesting. Once a deal is struck, the characters of the buyer and seller have to meet at an agreed place in the game where the hand over (no hands are actually involved of course) takes place. Either one character just gives this big load of platinum to the other or they give it in exchange for some game item of much less value. This latter technique is the pure play because it complies best with Sony rules that allow bad bargaining and character stupidity. Meanwhile, back in the real world, real money is changing hands, typically through PayPal transfers. The transfer is done first, then the property is exchanged. Sometimes the buyer retracts the payment saying that a transfer never took place at all. PayPal yanks the money back out of the seller's account EVEN IF IT HAS ALREADY BEEN TRANSFERRED TO A BANK ACCOUNT. One minute the money is there, the next minute it isn't, and the seller has almost no recourse at all. The specific event that led to this column was the failed sale of $2,300 in platinum by a group of EverQuest fanatics who wanted to use the money to pay their way to a big EverQuest convention. It is their contention (not mine, I'm just the reporter here, remember) that the bad guy in this deal is either Jonathan Yantis or an associate of his. Jonathan Yantis runs Yantis Enterprises, which was until recently the big competitor to IGE for the buying and selling of this stuff that isn't real. Yantis is in San Diego, IGE is in Florida, and earlier this year they merged with IGE buying Yantis, though the web sites (they are both in this week's links) remain separate. The players who came to me sold their platinum through a game-specific auction site. The deal went forward exactly as described above, and they suddenly had no platinum and no money. Wily hackers that they are, they tracked the mail records of the only trail that did exist, the e-mails arranging the exchange, and claim to have found that the buyer's IP address was from the same range used by Yantis Enterprises. Further, they explored the qualifications of the "PayPal Verified" buyer and claim that most of the positive feedback came from Jonathan Yantis. Finally, they claim that the day after the transaction, the Yantis price to sell platinum on their EverQuest server suddenly dropped as though there was suddenly a larger supply acquired at little or no cost. These players are fervent and angry and they have some real data so what happens now? Not much, and that is probably the real topic of this column. Yantis Enterprises has no telephone number and doesn't respond to e-mail from me. IGE also has no telephone number but they do have a PR firm that doesn't call me back. These are companies apparently doing millions per year in business, yet they effectively don't have a physical existence. PayPal certainly has a physical existence and they DO return my calls and tried hard to be helpful, but the story there isn't very encouraging, either. For one thing, PayPal can't figure out how to handle payments for such virtual goods, so they rely on the good will of the buyers and sellers involved. If a buyer backs out, PayPal has no recourse but to reverse the charge (called a chargeback) or take the loss itself, which it is unwilling to do. This applies to game goods, but it also applies to ANY virtual goods, so if you are planning to sell software or music or video this way, you might have to think a bit harder. PayPal is not built to reliably support a peer-to-peer economy. Isn't the great enforcement mechanism of eBay and PayPal supposed to be feedback from other users? The essence of feedback is that you can run, but you can't hide, and PayPal enforces that by limiting each user to a single account. PayPal asked ME to help them find Jonathan Yantis, for example. Here is a guy who has participated in more than 10,000 PayPal transfers and they don't know how to reach him. That 10,000 plus PayPal number is a big part of his marketing. But PayPal also told me that part of their difficulty finding him is that they have DOZENS of accounts under the name Jonathan Yantis. Their assumption is that these are all different people. So I went to the People Search section of Yahoo and looked for everyone in America named J, Jonathan, John, or Jack Yantis and found 35 people. Say there are another 35 with unlisted numbers, that's 70 people, tops. If there are 300 million Americans and PayPal has 40 million users then no more than 14 of those users ought to be named J, Jonathan, John, or Jack Yantis. So it is easy to have multiple PayPal accounts and if you have multiple accounts you can give yourself lots of positive feedback, so the system can be played. I am not saying that Jonathan Yantis or IGE did any of this. I'm just reporting what I was told and what I discovered. I can't understand why someone would threaten a 10,000 plus PayPal score by trying to corner the EverQuest platinum market. I'm also quite concerned over the lack of safety measures PayPal has in place to protect buyers and sellers. I ... |
| www.pbs.org/cringely/pulpit/pulpit20040513.html i, cringely search cringely go I, Cringely mascot The fussy old toad pictured here was the original "I, Cringely" mascot, circa 1997. MAY 13, 2004 The Wild Ones The Best Way to Protect Sales of Virtual Goods Can Be Found Inside the Game, Itself By Robert X Cringely Nobody mentioned in last week's column on the buying and selling of virtual property liked what they read. Jonathan Yantis and Internet Gaming Entertainment felt attacked. Even the victims of the chargeback scam were unhappy, primarily because the FBI offered to help. The victims wanted my readers to know that such scams exist and to be wary, but they didn't want me to actually help them DO anything. Fortunately, there is lots to be learned from this experience, and I still get to present some good ideas for how to turn this problem into a business. First there's Yantis, who called me soon after the column appeared. com, one of the two big web sites for buying and selling virtual goods from online games like EverQuest. Mysupersales is now owned by Internet Gaming Entertainment, the other big buyer and seller of virtual stuff, and I also heard from the CEO of that company as well as its chief counsel. Yantis, with the support of his partners at IGE, claimed to be a victim too. His version of the scam is that he buys and sells so much EverQuest paraphenalia that it is easy for some third-party scam artist to buy and sell a few lower-priced artifacts with Yantis to gain a good PayPal rating, then go out and perpetrate a much larger crime like the $2,300 one I described last week. That the Yantis price for EverQuest platinum dropped on the server where the scam took place didn't surprise him because the perp probably turned around and resold the stuff to Yantis. But since there is no way outside Sony to trace platinum, Yantis says there is no way he can tell whether any of the stuff he buys is earned or stolen. But the bit about e-mail records coming from the Yantis IP address range -- "I can't explain that," said Yantis, who also said he uses an outside e-mail provider. The folks at IGE say simply that they are in a volume business, and scamming customers will just lose them business and slow them down. To their credit, both Yantis and IGE offered to "work something out" and "investigate the problem." The lesson here is that the market in this stuff may not be limited, but it is contained. Most of the retail selling comes through the same outfit, IGE, which owns the top two virtual goods sites. com, and that, too, appears to either be a part of IGE or is about to become a part of IGE. The complaint that sellers have is that IGE simply doesn't pay enough so they go the auction route and reach different buyers but at greater risk. That's the way markets work and why there are junk bonds. PayPal points out correctly that their buyer protection plan specifically says it doesn't cover virtual goods. PayPal also says their limit on accounts isn't one per customer, but two (one personal account and one business account), and they claim never to have told me that Jonathan Yantis has dozens of PayPal accounts (except the words that came through my telephone from the nice PayPal PR lady sure sounded like "dozens of accounts"). In fact, PayPal says, there are only five US accounts for a Jonathan Yantis. But PayPal turns out to be the real victim in this particular crime, not the people who came to me originally or Yantis. That's because the nasty chargeback that this story is all about didn't actually happen. The seller's bank called him warning that the chargeback, was coming so he had enough time to empty the account and prevent the loss of funds. The chargeback still happened, but as the merchant of record, so far PayPal has had to eat the loss. There are just too many shades of gray here, so let's concentrate instead on how to make this problem not happen again. Dozens of readers contributed ideas, but most of them involved some action on the part of Sony, like serializing platinum. Clearly, EverQuest platinum already has some kind of identifier to keep it straight who has what in the game, but Sony isn't sharing that and it is for a good reason -- the same reason why Sony and any other company in Sony's position won't want to get in the business of sanctioning a secondary market in virtual goods. As things stand right now, the actual owner of everything in EverQuest is Sony, and Sony declares that all goods, characters, weapons, magic devices and currency have no value, nothing. At most, what's being bought and sold by IGE and others is simply the use of this stuff, not true ownership, but it is very important for Sony to keep the par value at zero. If all this stuff suddenly has value, then that value can be calculated and summed. Now say there are 50,000 accounts on a particular EverQuest server. Now say that something awful happens, and that server and its backup (if one exists) get toasted, taking with them those 50,000 accounts. Under the current system, Sony apologizes and attempts to restore what it can and the subscribers don't have much to say about it. But if Sony sanctions or participates in a secondary market that gives real-world value to virtual-world stuff, then Sony is suddenly on the hook for $200 x 50,000 -- $10 MILLION -- which is one expensive server crash. Sony's total liability under the current scenario is nothing, while it could easily rise into the billions if trading was sanctioned. No wonder Sony wants to keep its corporate nose out of this. So there is still a need for protecting these sales, but we know we can't count on any help from Sony. This is possible, but the average platinum sale is $50, and you just don't see escrow being used much on eBay for sales that small. Plus the escrow holder would actually have to be in the game, and the economics of that aren't good for the escrow company unless it can somehow script its escrow activities to make one EverQuest account do the work of 100. PayPal has considered having a paper receipt just for virtual goods. One reader, a gamer/lawyer, offered to perform a different kind of escrow, acting as a virtual intermediary. The seller hands the platinum to the virtual lawyer who hands it to the buyer. This is a bit simpler, and what gives it power is not a formal escrow, but knowing that cheating means you'll be taken to court by a guy who can do so almost for free. I imagine some paralegal rushing around the game might actually be able to break even -- MIGHT be able to break even, so this is still not a real business. A couple readers suggested that all you really need is a witness in the game to verify that the transaction took place. Not being an EverQuest gamer ,I have no idea if this is possible, but it sounds plausible. However, I think it would make the most sense if done informally rather than making it a business. Since gamers form guilds, why not go in groups to make the sale? But one solution stood out from the others as practical, elegant, simple, and even consistent with the spirit of game in a way that no other suggested solution was. Forget about escrow and fair witnesses, forget about Sony. One very smart reader suggested (I wish I had been the one to think this up) starting a simple protection racket. As a buyer or seller, I register my proposed virtual world transaction with a real world entity called The Wild Ones, and pay them in advance some percentage of the transaction price, say five percent. In exchange for this payment, The Wild Ones do not provide an escrow service nor do they witness the transaction. But if, after receiving payment for their services, The Wild Ones are informed that someone reneged on the deal, well, then all Hell breaks loose. You see, The Wild ones would be a guild of maybe 25 really, REALLY good gamers, folks who have lived so long in the game they dream as their character, folks who are so good at the game and so powerful with weapons and magic doodahs that nobody wants to mess with even one of them, much less all of them. It is a simple matter of announcing in advance that the transaction will be protected by The Wild Ones. That announcement alone would eliminate ... |