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IGE: Inside The MMO Trading Machine
Firstly, a little background from an IGE spokesperson revealed the size of the company, something not previously clear in many public statements. IGE employs a total of approximately 420 employees in Los Angeles, Hong Kong and Shanghai, with a few more individuals scattered across North America and Europe. This figure is roughly evenly divided between those who work on the real money transaction (RMT) side of the business (though it's important to note that no gold or item collectors work directly for IGE), and employees who are part of the company's "growing content and community development division." Indeed, IGE's primary RMT operations are comprised of employees that handle "delivery, supply, and sourcing" of the virtual items. While the company maintains operations worldwide, Clarke, a career COO who previously gained some video game-related experience as COO and CFO of Michael Milken-backed advergaming company YaYa Media, commented of IGE that "our primary employee base is in Asia." So, basically, this is how IGE's business works - the company deals with external suppliers, who provide them specific in-game gold or items for a massive variety of games, from World Of Warcraft through Final Fantasy XI, EverQuest 1 and 2, and even Lineage II. Once they have procured the supply by paying the supplier, IGE will sell the item/gold to a user, and employ people to log on into the game/server in question and deliver the goods, after they are paid for by credit card on IGE's website. Interestingly, Clarke noted that the Hong Kong base for IGE's customer support actually deals in English and multiple other languages, including Asian and regional European ones, ending up with "a pretty cosmopolitan feel" for its Asian center of operations.
IGE's Core RMT Businesses? As for what IGE buys and sells, Clarke commented of IGE's business that: "Currency is the easiest thing to deal with - it's the reason we have currency in the first place". The company also deals in particularly popular in-game items, but is also moving into the 'power leveling' market, which allows players to hand their characters over to third parties in order to have their in-game stats and level rankings rapidly increased. He indicated that IGE "will act as the distributor" on this business, for which the largest opportunity (though not specifically stated as such by Clarke) is likely to be in Blizzard's torrentially popular World Of Warcraft - the company will contract with third parties who will take care of the leveling for the player. Clarke also noted that, in pure economic terms, paying people to level your character is "a market which tends toward commoditization." Of course, those handing over their character have "a high degree of sensitivity" to what's happening to their virtual avatar - the COO quipped: "It's almost like day care... you'd be amazed how much they check in." Looking to the company's long-term goals, Clarke noted that IGE planned to "extend our market footprint" through further expansion, particular with regard to developing a more "scientifically managed" organization. Market fluctuations with regard to theoretical currency values are great, even between individual World Of Warcraft servers, so this is obviously something that IGE employees are paid to analyze and capitalize on, though Clarke was understandably reluctant to go into further details on the matter. |
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