Former Massive in-game-ad firm founder Mitch Davis, currently at Brash Entertainment, has teamed up with Sony Pictures Digital vet Andy Schneider to launch a new company, Live Gamer, whose technology is geared to create a publisher-supported, secure platform for real-money purchase and sale of virtual goods.
They kick off with a slate of MMO and virtual world operators including Funcom GMBH, Sony Online Entertainment, 10Tacle Studios, Acclaim, GoPets and Ping0 Interactive, all of whom will work with Live Gamer to provide the transaction platform to their users.
Live Gamer, backed by a $24 million investment by Charles River Ventures, Kodiak Venture Partners and Pequot Ventures, aims to protect virtual worlds and MMOs from the impact of illegal item sales, hoping to thwart fraud and maintain game balance by working with publishers who support the platform.
When Gamasutra sister site Worlds in Motion spoke to Live Gamer CEO Andy Schneider, he explained that it was his and chairman Davis' experience in the digital entertainment industry -- Davis is also founder, chairman and CEO of game publisher Brash Entertainment -- that helped them realize the need for such a service.
"After Mitch sold [Massive] to Microsoft, he was looking around the landscape and wondering, 'what else is going on in the game industry? What else can we do here?'"
He continues, "That's when we both took a look at what [item sale platform] IGE was doing, and all of the bad things happening in the industry. There was a lot of black market activity, publishers were getting upset at IGE -- and this kind of virtual item trading has been going on since Ultima
. There's obviously been a big uproar," says Schneider.
But, as he points out, this is a market that can be valued at as much as 2 billion dollars. "There's clearly demand, but it's going to the wrong place," he says. And in addition to issues like fraud and deception, publishers were swamped with customer support calls from users confounded by bad trades. Andy's solution? "We decided to create a company that would live or die based on publisher relations."
Live Gamer provides a toolset on the back end for its partner publishers that lets them maintain control over the in-game economy and resulting game balance, while offering a front-end component for user-to-user sales as a legitimized alternative to gold farming and black market virtual property sales and auctions.
Publishers can either elect to be totally hands-off, or to set their own trading indices. Schneider says that, faced with overwhelming demand, plenty of publishers were on board from the start.
"We approached a number of publishers, and to our surprise everyone was very much in favor about being proactive about directing that consumer demand and not having it go out to the black market," Schneider says.
Live Gamer has a dedicated team to work with the publishers in support of the technical integration, and the company also leverages that publisher integration to ensure that the items users buy are actually delivered. But as to maintaining item value and adjusting game balance, Schneider says that control stays in the publisher's hands.
He continues, "I think that it’s going to be up to each and every publisher as to how they decide to embrace and implement our solution. There are three categories of games- MMOGs, virtual worlds and casual games. And there are different types of players, but they can all benefit from a secure commerce platform."
We asked Andy about the meteoric rise of virtual goods as a component of online play, and he pointed out the generational aspect -- we've now a generation of users who've grown up playing games online, and that commerce is part of the social experience, he notes.
Adds Schneider, "Both the gaming and the virtual worlds space are maturing. People are used to having a persona online that they accrue value to. Their character is their representation online, and has real value to them. The objects or items their characters have have real value to them."
So will Live Gamer work with all publishers? "The only real requirement we have for a neighboring capability is in someone’s level of persistence," Schneider explains. "We’re certainly open and willing to work with everybody – there are age considerations. We don’t want to deal with kids in this type of a market. I think there are some nuances, some compliance issues when we're talking about various age groups [conducting transactions] online. But we have solutions that we can implement. We have to be sensitive to regulatory issues."
He concluded, "But at the end of the day, we really want to talk to any and everybody that has interest in providing this kind of service to their users. The main point is that there’s also a network effect. The more people we get on board, the more we provide a better service globally and have a better idea of targeting people trying to commit fraud." More information on the roll-out of Live Gamer to major games and publishers should be available in the near future.
[The preceding article originally ran at Gamasutra sister site Worlds in Motion.]