Money changes everything; it’s as true in video games as it was during the California Gold Rush. And when you’re talking Real Money Trading (RMT), not for the better.
Whether it’s spam bots, account theft, money laundering or just plain old cheating, RMT is either associated with or responsible for many of the complaints you'll find in any MMO’s player Reddit.
We were warned. In his 2005 book, ‘Synthetic Worlds’ Edward Castronova advised us that:
'...if we determine that all synthetic worlds are really nothing more than shopping malls, something very important will have been lost’
After all, isn’t the point of gaming to have fun and get away from the real world for a few hours?
So what is RMT?
For something so contentious, it’s quite easy to define; RMT is the exchange of real-world currency for in-game items, currency, or services, and vice versa, usually involving secondary markets. This can take several forms:
Item Trading: buying and selling in-game items like weapons or skins.
Currency Trading: exchanging real money for in-game currency and vice versa.
Account Trading: the sale of game accounts, often with high-level characters or rare items.
Boosting Services: players paying others to improve their in-game rankings or complete difficult tasks.
Virtual Real Estate: Players buying and selling virtual property in games like Second Life.
It’s not a new phenomenon. In fact RMT is as old as online gaming itself and truth be told, it’s an essential part of its history. That said, its existence often confounds non-gamers - a fact nicely captured in the Netflix series Ozark, when Jonah explained to his parents how he’s just made $6,000 mining gold, and selling it to players who are ‘impatient’ and want to get to the next level.
Of course - spoiler alert - Jonah ends up in the family business - money laundering - and being rather good at it. What a coincidence!
However, it’s always been contentious.
Way back in 2002, Blacksnow Interactive, perhaps the first business to make money from trading items, actually tried to sue Mythic, the makers of ‘Dark Age of Camelot’. Why? Because Mythic had tried to kick them out for trading. The case was eventually thrown out but it set the tone.
So does that mean RMT is illegal? Well, kind of. We’ll look at this in more detail later.
As online gaming became the phenomena it is today, RMT was there every step of the way. From Everquest to WOW and Eve Online, Second Life to Runescape and Ragnarok; wherever there was a large player base spending a long time playing, people and businesses would pop up to facilitate trading in-game items and currency, for real world cash.
Unfortunately they’d be followed by other individuals and businesses, who were less interested in enabling the trading, than in exploiting it for their own profit.
Many game publishers also don’t like RMT because it risks converting their game into a game of chance under the laws of many jurisdictions, which are looking for a mix of value-in, value-out, and chance. If you permit RMT then you’re left relying on a regulator understanding that your game is a game of skill and not a game of chance. But even outside of this somewhat academic risk, there is a whole world of bad conduct that is facilitated by RMT.
Like single player cheating, RMT doesn’t really cause too many gameplay problems when it’s just individual players trading in-game items they no longer want; it’s worth remembering quite a few games used to allow it and some still do. But it’s generally agreed it becomes an issue when things get organized, and the motives of those involved become 100% financial.
It’s this industrialisation of RMT that damages game experience, drives honest players away, and makes headlines. Which is why we’re paying attention to it with this briefing.
So back to that question of legality. Is it?
Well…yes and no. It depends on who you ask and what country you’re in.
What is agreed is that in most games it is prohibited in the End User License Agreement (EULA), which means you can get banned for taking part if not actually sued, or (in some circumstances) sent to prison. For example the user agreement for Warportal’s 'Ragnarok' states:
(YOU MAY NOT USE THE SERVICES TO) Engage in purchasing, selling, or exchanging in-game services, in-game virtual items such as zeny... through unofficial third party sources for or with real-world money as well as communicating or facilitating any commercial advertisement, solicitation or offer through or within our games pertaining to transactions of this kind except when purchased from Warpportal or otherwise expressly permitted by Warpportal in its sole and absolute discretion.
Similarly, for 'Black Desert Online', the terms and conditions clearly prohibit the acts of 'trading items, accounts, characters, etc. with money, real goods/services, or items from other games...trading paid contents, in-game currency with money, real goods/services, or items (including from other games)...making another person raise a character (boosting) in exchange for money or real goods/services...manipulating market prices by repeatedly trading certain items to transfer in-game goods in exchange for money or real goods/services '.
As well as ensuring publishers can take action against actors involved in RMT, these conditions perform another critical role. They allow publishers to ensure a game maintains its legal status as a closed rather than open loop payment system; thus avoiding the extra regulations, including those focused on Anti Money Laundering (AML) that open loop systems, like the pre-paid credit card and gambling industries contend with. Of course, this saves publishers quite a lot of money, but as we shall see, it doesn’t seem to scare the traders much.
Ok, but how worried should we be? If RMT has been going on for so long, what damage can it really be doing?
As we mentioned earlier, it’s hardly the end of days when an individual player, needing a bit of cash to pay the rent, sells the MMO character they've spent years grinding away with on Ebay. Surely no-one gets too excited about that?
But, these days RMT is not like this. In 2024 it’s usually facilitated by organized bad actors. As CCP puts it in their EULA for 'Eve Online':
‘There are no legitimate methods of RMT. All of the ISK and items that are purchased on third-party websites are gained through illicit means. They come from credit card frauds, hacked accounts and bot farms. No exception…Botters create hundreds of accounts and generate ISK by using all sorts of automation. This is how RMT is funded.’
Similarly, ArenaNet, the publishers of 'Guild Wars 2' state clearly:
‘While real money traders will occasionally purchase brand new accounts to farm and distribute gold, most of their in-game wealth is acquired using hacked or stolen accounts, or by using stolen credit card information to purchase and convert large quantities of gems to gold. They usually target the most vulnerable accounts……When they obtain an account, RMT will strip the characters of their wealth and gear, funnel wealth to other accounts, or use them as shell accounts to transfer items to players who purchase from their sites’.
Subsequently the impact on player experience, too often downplayed, should not be underestimated.
The majority of assets or currency found in digital marketplaces is generated by traders using bots to farm or mine gold. In fact the use of bots to farm or mine gold isn’t just common, it's essential to there being such volumes to be traded in the first place, and as we shall see, attracts other criminal activity.
This can damage the game experience as bots start making it very hard for legitimate players to level up their characters - as anyone who’s come across a bot train will tell you, seeing resources you need disappear before your eyes when bots turn up, is frustrating to put it mildly.
As a result honest players can’t generate their own virtual currency or materials for crafting, which means they can’t trade (legitimately) in the game, which in the long run disrupts the game balance, particularly as many will themselves feel pressured to go down the secondary market trading route. Furthermore, as the bots generate tons of illegitimate currency for RMT throughout a game, inflation can follow, which makes it harder for new players to compete.
Like cheating, it’s often those that are taking part who are at most risk of harm. As ArenaNet goes on to say in its terms:
‘Credit card information is acquired by RMT hackers through multiple channels, though the most common method is to use information provided directly to them by users who purchase gold or items on their sites. That same information is later used to purchase and convert gems in the game’.
As well as having access to the bots and cheats to mine, farm and craft on such a large scale 24/7, the traders also require access to thousands of accounts at the same time. That’s right, they need lots of accounts to run the cheats on. And where would those come from? Right again - hacking and account fraud. Which means infostealers, malware, social engineering and all sorts of other delightful tricks. You see, it’s all connected!
Those are some of the ways RMT damages the in-game experience, but that’s only part of the problem. It also has a real impact in the real world.
Most serious is how it provides an easy, and mostly unregulated way for criminals to launder money. Several instances of money laundering related to RMT have been uncovered and widely publicized.
One of the most notorious, featured in publications such as The Economist and Vice, was on CS:GO, where in 2019 Valve uncovered fraudsters using stolen credit cards to buy loot box keys which they would then trade to wash their funds. As Valve stated at the time:
'... worldwide fraud networks have recently shifted to using CS:GO keys to liquidate their gains. At this point, nearly all key purchases that end up being traded or sold on the marketplace are believed to be fraud-sourced.'
Valve patched the game to make such trades impossible. Job done? Not really.
The bad actors simply moved to using secondary markets for trading, and the problem persists. A recent report from ‘theScore esports’ about CS2 farms, highlighted how they use multiple machines and accounts to obtain cases during weekly drops, for selling to players who either open or flip them.
But why is it so easy?
Much of the problem is how the various organizations responsible for AML regulation, such as the Financial Action Task Force (FATF) and various law enforcement agencies, define in-game virtual currencies and the resulting lack of focus on gaming as a risk area.
As Shane Kelly points out in his paper, ‘Money laundering through virtual worlds of video games: recommendations for a new approach to AML regulation’ in the Syracuse Law Review”:
‘The FATF (Financial Action Task Force) and other agencies classify the in-world currency of virtual worlds as a “non-convertible virtual currency.” However, current AML practices only cover “convertible virtual currency,” i.e. virtual currency that is designed to be converted into real currency (e.g. crypto). These agencies do not consider virtual worlds and the currency used therein as having a high enough risk for money laundering to warrant AML regulation and guidance.’
As a result,
‘... the lack of regulation, and the ease of conducting transactions across borders make virtual worlds an ideal medium for cleaning illicit funds for evading taxes or funding crime.’
So, because in-game currencies like Fortnite's V-Bucks and EVE Online's ISK are used in closed loop systems, and the official in-game marketplaces do not permit transferring them back into Fiat, they are deemed non-convertible, and largely ignored by the authorities.
Of course, this is (very) bonkers. The idea that criminals won’t find a way to convert their in-game currency to real money because the EULA forbids it, is laughable.
One only needs to look at some of these secondary markets to see how foolish this is. G2G and PlayerAuctions are two examples where the sheer volume of items being traded and professionalism stand out. They even have affiliate programs!
With a problem as entrenched as this, a combination of actions is required to take the fight to those responsible - there’s no silver bullet.
Account bans for players who take part is part of the solution but monitoring the transactions across an entire player base is time consuming and costly. Machine learning and AI can certainly help security teams identify suspicious behavior and trading quicker, but the task will remain huge.
The key is focusing on the key actors involved on the supply side, rather than their customers.
Consistent and effective moderation of in-game chat is a must-have as this can help address the issue of the spam bots constantly offering currency and levelling up services (and then ripping off the suckers who sign up)
Talking of bots, they’re next on the list. As already mentioned, their use for farming, mining and crafting is essential for the big sellers of in-game currency, items and accounts.
The only alternative to bots, is mass forced labor of the sort reported on in China back in 2011 where guards were caught making prisoners mine virtual gold all night for their own benefit, punishing them if they didn’t meet targets.
So, targeting the developers and sellers of bots is going to impact the availability and hence supply of tradable assets, eventually leading to price rises, and slowing demand. This can be done through a combination of intel gathering, engineering fixes, and takedowns. It won’t put them out of business overnight, but it will disrupt their business model. This is a similar approach to the one we espouse for targeting cheat developers, and have covered in previous briefings.
This takes us to the big players - the secondary markets. The likes of G2G, iGGM and PlayerAuctions who we introduced earlier, against whom, a two pronged strategy is required.
Firstly, it would help if the authorities and organizations responsible for AML regulation took a closer look at these secondary markets. If they did, they would surely realize they should be subject to the same regulations as any crypto exchange because they are in effect financial institutions.
As Shane Kelly stated in his Syracuse Law Review paper:
‘As money transmitters, convertible virtual currency exchangers are therefore MSBs (Money Services Business), and as MSBs they are therefore financial institutions, and as financial institutions they are therefore subject to the Bank Secrecy Act (BSA), AML regulation, and reporting requirements.’
OK, but aren’t in-game currencies non-convertible?
Well, the existence and success of the secondary markets suggest otherwise. What are they doing if not converting currency? If there’s any doubt, PlayerAuctions has a helpful ‘how to’ diagram on its website:
So, PlayerAuctions and G2G should be subject to all the processes and requirements that this brings such as having a compliance team, regular auditing, and the reporting of suspiciously large trades to the Financial Crimes Enforcement Network (FinCEN). They may complain, but isn't that the point?
Secondly, game publishers need to start enforcing their EULA’s much more forcefully, and not just against individual players, but against the unofficial marketplaces, who are clearly in breach of the terms. Issuing more Cease and Desists is long overdue and taking a few to court wouldn’t do any harm.
Don McGowan, ex-General Counsel of Bungie and ex-Chief Legal Officer of Pokémon, has this to say about legal proceedings against RMT buyers and sellers:
'It’s important for game developers and publishers to remember this isn’t a victimless act. Account boosting is very strongly correlated with cheating and other antisocial player behaviors, and selling accounts to facilitate RMT is one way these bad actors conceal their true actions.'
It’s critical that publishers take action to give their EULA’s real teeth. If they don’t, and the authorities start treating in-game currency as convertible virtual currency, then the likes of FinCEN could well start asking if the only way to stop RMT is to treat the publishers themselves, as financial institutions subject to the AML Guidance and the oversight that entails.
This means publishers need to pay as much attention to RMT as they do to other disruptive behavior, like toxicity, cheating and fraud. Not just being on the lookout for suspicious behavior, but actively searching for it 24/7.
Tracked purchases can be an important part of this. Buying currency or items enables you to network the accounts that are used by these communities, work out the wider framework of avatars they use, and crucially where they store their supplies of in-game currency to close down. Analyzing the telemetry of these accounts can also uncover patterns that allow the widespread closure of these syndicates when they try to start up again, stopping any momentum early.
Also key is Investing in the resources and technology to ensure they are always aware of the latest exploits, bots and scams. For example tracking currency prices across the different markets so they can see when there’s an increase of their in-game currency on the market as soon as the price goes down. Also, keeping up to date with the relevant terminology for exploits being used around the globe - have you heard of 'brick transport'? No? We need to speak.
Improved reporting processes to help empower honest players will also help. As Don McGowan says:
'The first thing your players want to see is a level playing field. The last thing they want is to be in an environment where shenanigans are afoot. So you can look to them to help you to learn which players and which accounts are the bad actors. When I was at Bungie, we regularly had people in the community telling us about this kind of activity, because the players don’t like it either.'
But above all the publishers need to be not just looking at the small sellers (the mom and pop shops) but looking behind the curtain, to go further up the food chain. Looking for connections between actors, so they can identify a common source across different vendors, and know who they should be targeting if they want to stop the major actors. Above all, gathering evidence to stop the major actors.