J. Mark Hood is that rare thing in the game industry -- an executive who came up through the ranks. Beginning as a programmer at Sierra back when the company produced its own adventure games in-house, he rose up and up until eventually becoming a senior vice president during the Vivendi days.

Now, Hood is the co-founder of Reality Gap, which -- like many companies these days -- publishes free-to-play PC MMO games. In addition, Reality Gap has also launched a payment method known as MetaTIX which, like other virtual currency solutions, allows players to convert from free to paying.

However, there are claimed  philosophical differences behind the MetaTIX model and differences in execution, as well -- partially influenced by Reality Gap director and Atari founder Nolan Bushnell's experiences in the arcade market during its heyday. 

In this interview, Gamasutra talks to Hood about his background in the industry, the founding of Reality Gap, the concept of running a virtual economy in an MMO with no item stores, but only players purchasing from each other, and more.

How was Reality Gap founded?

J. Mark Hood: Basically, what happened was I was at a meeting at a bistro with Nolan Bushnell and Mike Williams, and we were chatting about a bunch of different stuff, and what would be cool things to do in the industry, and what the industry needed.

We started talking about tokens, and the way it came up was... Nolan was saying in the old days, he only released arcade games in an arcade when it was a new IP. He wouldn't release out just at 7-Elevens and that kind of stuff. It would go first into a big arcade.

I asked him, "Really? Why is that?" He said, "Well, it's real simple. For new IPs, having the lower barrier for entry by having people walking around with a big pocket full of tokens is really cool. They just go by and they see a new game, they're like, "Oh, I'll try that," because they don't really associate with money anymore. It's just a token. They'll put it in, and they'll try it. Whereas if you're at a 7-Eleven, and you have to go buy some quarters, you may not want to do it.

So, a lower barrier for entry for new IPs was something that really interested me a lot because I've been trying to do that forever between Capital Entertainment Group and helping the guys at Garage Games.

I think getting the barriers for entry for innovative product has been something I've been really interested in for 10 to 15 years. So, we decided that this is a really good thing to do and try.

So, we started by just trying to prototype it. We're really strong believers in "by developers, for developers," doing it in a game. Not just coming out from some ivory tower place of making a microtransaction system, but really trying to figure out what was needed in games, what was a nice, small, and tight API that would be easily used in any type of game no matter what the language was, and implement it that way, and then actually try and code it in a game.

Monato Esprit

So, that's really what we did. And in doing so, we knew we wanted to get a game first to start. It was sort of our demo place and really our laboratory for trying out microtransactions and how they work. We had a relationship with a company already in Korea called Gamasoft. They've done a game for Michael, our CEO, with a previous company called Risk Your Life. They had a game that we started doing some work on, and we basically redesigned the game from scratch to have a userbase economy in it.

So, we started with that game, just to try it out as sort of a test then. We ended up releasing that commercially a couple months ago. It's a real, virtual economy. There are no item stores in there. It's very different from most MMOs.

We took out their item store and replaced it only by consignment stores. So, the things that you pay for in the game are things like dungeons, where you can go get rare items. You can pay for repairs. You can pay for alchemy in order to craft new items and make them. But in order to buy items, you actually have to buy them from other people.

So, it's been pretty fun because we're seeing a lot of people that are just going in there. So, free players now become a part of the economy. Instead of becoming a drag on the economy as sort of a deadbeat kind of thing where they're just taking up space, they actually become an integral part of it. They have become the supply side of the economy.

So, they go in there. They may want their MetaTIX in order to visit a dungeon and get some rare ingredient. So, in order to get the MetaTIX, they go out and they mine, they get what they need, and they build it.

And then they put up this nice item they spent hours and hours building, and they put it up for sale in the consignment store, they get MetaTIX, and they now have virtual money to go in and buy whatever they want in the game. And the other people who are actually spending money in the game, they see it as a game because they don't want to spend three of four hours building this item. They'd rather just go buy it.

Do you only have cash-based currency, or is there in-game currency as well? Many games now have dual currency systems.

JMH: Monato Esprit is only MetaTIX. There is no gold in-game. You can buy [MetaTIX]. The only way you can earn it -- we never give it to you for doing anything -- is from some other player actually buying something. So, somebody always bought the money that's in the game. It's never made or created in any other way other than someone putting down a credit card.

So, in fact, the amount of money that can exist in the world is dependent on people purchasing money in real life.

JMH: That is correct. I don't want to confuse things. That's really our laboratory game. That's not necessarily something that we're saying is a model for MetaTIX. That's just what we did for our first game.