Interview with CCP: EVE currency traders "going to lose big"?

EVE Online, the space-MMOG produced by the Icelandic company CCP, is known to have an advanced in-game economy with player-driven enterprises. The economy recently gained a bit of notoriety when the biggest-yet in-game banking scam was revealed, reported to be worth around 700 Bn interstellar kredits (ISK) or more than 100 000 USD at current eBay and IGE prices. I had the opportunity to interview CCP’s CEO Hilmar Pétursson and CMO Magnús Bergsson about EVE’s virtual economy and secondary markets at the Nordic Game conference last month. Below is a transcript of selected parts.

To start off, how big is the EVE Online playerbase today?

Hilmar: We have about 150 000 subscribers and recently growing fast. The average number of users online is 18 000, recently peaking at over 30 000. So even though EVE Online still only has a fraction of the subscribers of World of Warcraft, EVE players share the same universe with more than ten times as many people as the inhabitants of your average WoW realm.

What are the user demographics like? Based on what I see in the chat channels, my impression is that the users are a bit older than in your normal fantasy MMORPG?

Magnús: That’s probably right, the average age is about 27 years old. 95% of the users are male and 5% women. Most of them have an education and some kind of a degree. Their average EVE playtime per week is 17 hours.

Let’s start with the in-game economy. Is EVE a closed system where a fixed set of assets circulates, or is it more like an open “faucet/drain” system where inputs and outputs are regulated to maintain balance?

Hilmar: Originally, we tried to develop the game under a closed economy concept: each time you manufacture something, you use up minerals, and when the thing is destroyed, the minerals return to the pool again. We operated under this concept for quite a long time, but it is very difficult to balance this with the influx of newcomers and the rat-packing of the old hammers. At the end of the day we saw now added value in having a closed economy as opposed to controlling the material inputs in a more loosely defined manner.

So you control it just enough to maintain some kind of price stability, or?

Yes, we have defined systems that almost auto-balance it. Resources push out to places where people are not harvesting them, and they usually are not harvesting them because they are hard to get to. And simply the fact that there are so many people compared to the resources tends to create an auto-balancing situation.

So you could say that while the closed economy model is theoretically interesting, in practice it doesn’t deliver added value?

Hilmar: We have all the benefits of a closed economy model, without the hassle of trying to make it work. You probably know how much trouble Ultima Online had with their closed economy, there’s so many downsides to that. [See Simpson, 1999]

Then why is it that you wish to create a realistic economic experience in the first place? Wouldn’t it be easier to have a more limited “trading sub-game” like many other MMOGs?

Hilmar: We are making a virtual world where the players are creating something which is real – to them. For this reason, we definitely want to make the point that the EVE economy is a real economy in the sense that it operates according to real-life economic concepts. This is a very complex marketing message to make: “EVE Online – where everything is real”, when at the same time it obviously isn’t.

My own research focuses on the value of virtual property, questions like what drives teenagers to spend real euros on virtual furniture in Habbo Hotel. What makes EVE’s imaginary battleships so desirable?

Hilmar: The key difference between Habbo Hotel and EVE Online is that Habbo Hotel is not competitive, at least not to the degree that EVE Online is. In Habbo Hotel, you are basically buying stuff to look cool and socialise, whereas in EVE it is the intense competition that creates purchase pressure. People are engaged in war, worry about logistics, margins and time-to-market, and these very realistic considerations drive their purchase patterns in EVE.

One way to conceptualise this would be to talk about use-value and symbolic value. I think that even in EVE, symbolic value accounts for a large part of the purchase behaviour. For example, the other day someone was showing off with his shining new Navy Comet, a ship he said he is probably never going to use in battle.

Magnús: There’s definitely that element too, but I would say it’s very uncommon. It’s not common for people to buy these ships just to show off. Most people are buying them to actually use them.

Hilmar: It’s different in different playgroups, but the core of the market is the competitive players. EVE is a PvP game. But I want to note that this doesn’t simply mean people running around shooting each other like in Counter Strike. People are competing against each other on many levels. For example, huge infrastructures competing in manufacturing efficiency and market actions.

Magnús: Actually, when you talk about symbolic value, I just realised I actually bought a Navy Raven just to show off. I never used it for anything, ever.

Hilmar: And remember the guy who bought the unique silver frigate that was a prize in the Amarr Championships. He paid like four billion ISK for it and never uses it. It just sits in his hangar.

Hehe, I see. And if you think about why people engage in the competitive play, those motivations are also related to status, recognition and so on. I like to think that it all boils down to symbolic value in the end. Moving along, what’s your take on the recent Eve Intergalactic Bank (EIB) heist?

Magnús: In my opinion, taking money from other players like that is really not cool. But it is part of the game – the people that gave EIB their money have nobody to blame but themselves. The good thing is that this has made people more careful, so that future scams are less likely to succeed. Trust is a very scarce commodity in EVE, and extremely valuable.

Have you thought about some mechanisms for increasing trust?

Magnús: In the next release of EVE Online, we are actually introducing a very sophisticated contract system. We are introducing a tool that allows players to create many kinds of contracts, including job contracts.

Will this new contract system make it possible for some enterprising player to create EIB 2, this time with legal safeguards for the investors?

Magnús: Yes, it will be possible, though perhaps not in the exact same form as EIB was organised. I am sure we are going to see the users put their imaginations to work and come up with some very cool new things to use the contract system for.

As I understand, the contracts will be enforced by the game system, so it will be impossible to break them. This is similar to how the NPC police force Concorde maintains unbroken order in the central regions of the EVE universe. But most of the EVE universe is lawless, controlled by player alliances that impose their own rules and enforce them by force when necessary. Is there any room for player enforcement in the new contract system?

Magnús: It really depends on the way you set up the contract, there will be a lot of options for doing that. For example, you might require someone to put money in escrow as a security payment.

But the escrow itself is controlled by the game code?

Magnús: Yes. But I imagine that for example big enough alliances, say three to four thousand people, could have their own insurance companies, complete with insurance inspectors to detect attempted frauds.

Let’s move on to the secondary markets. Dozens of highly skilled characters and billions of ISK are constantly being traded for real money on eBay and other marketplaces. CPP is strongly against this, right?

Hilmar: Right. It’s interesting to note though that very few ships or items are being traded on EVE secondary markets. I think this is a measure of how efficient the in-game commerce is. In some games, players are tempted to use secondary markets just because in-game transacting is so bothersome.

Do you have any estimate on the size of the secondary market around EVE Online?

Magnús: We have absolutely no idea. The real-money transactions are actually very difficult to identify.

IGE has made a big business out of buying and selling in-game currencies, including EVE Online’s ISK. Some have speculated that game operators are colluding with IGE since the trading company seems to be able to do its business without interference. What’s CPP’s relationship with IGE?

Magnús: They actually came to our office once, it was a really odd meeting. They basically wanted us to give their business a stamp of approval. We almost threw them out of the office. There’s just so many things wrong with that.

Can’t you close their accounts then?

Magnús: If we knew which accounts belong to IGE, we could close them as they break the end-user license agreement. But we absolutely don’t know this. In a big economy like EVE, identifying transactions of a few billion ISK is just impossible.

So is it going to be a perpetual war between secondary markets and game operators like CCP? Can you ever beat them?

Magnús: They are going to lose big soon. We are implementing something that we have been thinking about for a year and a half now. We need the players’ support before we can do it, but we know that we’ll get it. It’s a very different approach from what you have seen before.

Some game companies have embraced the real-money trading phenomenon and created new revenue models around it. Are you ever tempted by this?

Magnús: We are of course fully aware of all the different revenue models that people are contemplating. We would never implement any of those for EVE Online, they just don’t fit. On the other hand, CCP is not going to be a one-game company.


21 thoughts on “Interview with CCP: EVE currency traders "going to lose big"?

  1. Magnus, you are a liar.

    Please explain about the EVE Gametime Code for ISK RMT model that you currently allow and enforce in EVE online.

    For those who dont know, heres what it is…

    You can buy EVE online subscription timecodes from CCP or any CCP seller, you pay real money for a code which will add 30 days/50 days/90 days of play time to your EVE online account.

    CCP actually allow players to sell these timecodes (which they purchased with real money) to other players in exchange for isk, the going rate currently is you can buy a 90 day gametime card for a little less than $40, you then make a thread on EVE onlines very own sell order forums stating that you are selling timecodes, the going price is about 330 million isk for a 90 day timecode.

    CCP enforce this, if you get ripped off by another player, they will return your isk and ban the offender. Many players sell up to hundreds of timecodes, literally thousands of dollars worth of their spent money transfered into isk using this timecode for isk exchange system, ccp profit the real money from the bought timecode and the player gets to buy isk with his real money.

    Magnus, you said CCP would never allow any kind of real money exchange revenue model into EVE online, and that was a lie. The gametime code for isk situation is a CCP valiated method to buy isk with your real life cash.

    People are also abusing this heavily, what some people are doing is using their isk to buy timecodes and they then sell the timecodes for real money at a slightly reduced price, this is working both ways, in EVE online you can spend 330 million isk on a 90 day timecode and then you can sell that timecode to someone for almost $40.

    Next time you do an interview, you should ask CCP some questions about the gametime card for isk situation, it would be an interesting read indeed.

  2. The net effect of the isk-timecard trading is that a larger base of players pay further out in their subscription cycle, just as if people switched from month-to-month to annual subscriptions. They are not directly trading isk for real money in that it is inherently limited by the demand to subscribe in advance.
    They are not making any additional money on the transactions, just getting the money they would earn anyway that much sooner. You can’t do anything with a timecode other than use it to buy game time.

  3. I actually did ask Hilmar and Magnús about the gametime cards for ISK system, apologies for not including that in the transcript. They simply admitted that it is indeed a way of obtaining ISK for real money, so we didn’t discuss it any further. Hilmar and Magnús were actually very open about all the issues. Perhaps I’ll ask more about this later.

  4. I personally don’t buy ISK with real cash, but i have the time to sit back and play, what about the person that only has five or six hours a week. I know one such individual and he was simply getting frustrated with the fact that his character was getting stronger but could not afford bigger & better ships and equipment, and does not want to spend the little time he has mining or doing missions, he simply wants to play the game. CCP could never condone it but for those people to remain interested they need to purchase elsewhere. It’s just those who can’t afford it that screem fowl but take your game time away and see how long you remain interested flying around in a little frigate staying out of trouble because you can’t afford the insurance and fittings, not much fun there i’m afraid. I think its great you only have so much that you can spend your ISK on so the people that buy it actualy need it. A person with 1bn ISK is at no disadvantage to another with 100bn ISK. Just a thought.

  5. To the poster above, if you dont have the time to play, dont play.

    Buying your way into a game defeats the purpose of the game, or at least this game.

    Saying that those who can’t afford it scream fowl is the biggest bull, I could easely pump 300 Euro per month in the game. I just don’t do it, cause it is cheating pure and simple.


  6. I think real money for isk is understandable, for individuals with a Job and maybe Family it is near impossible to compete on the level they really want to without spending some of the money they earn for a little isk.

    Verdict: Official stance of CCP should remain on it being illegal. They are right, lealizing it would ruin the game or make it far less desirable in my eyes. But leave the system as it is and don’t spend too many resources fighting it. It is a necessary evil.

  7. Heres the thing about the whole GTC deal. CCP does not want anyone (Other than themselves) to profit off of ISK, because CCP alone owns all isk and the copyrights behind it. They dont mind you buying ISK, as long as they are getting the money for it, not some macromining ebay schmuck.

  8. You can’t be serious…

    I personally retain multiple accounts. All of which generate more than enough ISK to purchase GTCs with my ISK. I use this ISK to trade for GTCs to pay for my game time.

    So, I personnaly play for free. And those who purchase the GTC to trade In Game for ISK are paying what would be my game time costs.

    Essentially it is nothing different than trading me a rare commodity or other item In Game for some of my ISK.

    So to try and claim EVE is an RMT is totally baseless.

  9. Doesn’t matter how many accounts you have or how long you play, you can’t compete on the same terms as someone who pays other people to play the game for him.

  10. i think ccp should have a loans system so if a player wants to get some isk they can take out a loan buy some expensive stuff and do some high level missions.i am in that problem right now i have lvl 4 missions but dont have the funds to buy the needed equipment to do the job like a bs.100 mill isk is a lot for a newbie to get so a loan would be perfect for me and the game can take a bit of my isk every so often.

  11. above all the other games, and i feel proud to say that lol.
    seriously though, it stands at 8.4 in with WoW not even being on the top 5. i want them to do what ever they can to make it better, eventhough i dont play it lol

  12. honestly come on guyse its very easy, if you are a newbie and cant afford the cost of gear for your ship you can do two things. 1) fly lower lvl missions till you have the money needed for buying the expensive gear. OR 2) join an ingame corp, which usually have ALOT of money and take a loan from them…. How hard can it be??

  13. I think it defeats the idea of a level playing field, and gaming competition. CCP outlined that they don’t accept real currency in exchange for ingame isk, however this is exactly what the time card system does. Cash for isk was a cardinal sin until CCP was getting the revenue, now it’s sanctioned, and even enforced by CCP.

    I think this is a decision that should be reconsidered carefully. I hope that continued endorsement of cash for isk ceases.

  14. oh come on like with any game there are those who are going to purchase virtual currency with RL currency. I personally wouldn’t do it. But it is an inevitable fact. And the Truth be told CCP trying to track and stop it is a waiste of time and effort as it is impossible to stop. Not only in eve but in any macro farming online game. So yeah they said ok whatever. I personally am glad that CCP aren’t waisting time on a senseless effort. And can utilize that extra upfront cash and effort into game improvements.

    Basically it boils down to this. Eve is set just right. IF you play all day and have billions of isk. Or if you work all day and have millions of isk. doesn’t make one difference. isk doesn’t win the battle in EVE Strategy, Teamwork, and experience wins in eve. cause of the large player base there is no i win button. Woot for the best game ever.

  15. Secondary trading presents many issues for game operators.

    The reason game companies are usually opposed to it is the exploitation of their copyrighted IP by third parties, which are becoming increasingly more corporate & organised in nature (i.e. they’re missing out on profit from trading activity of their IP). Whether or not you sympathise with that position, it’s a legal fact of life in the west.

    Under western property law, a gold farming company selling isk is the same as an unauthorised publisher selling your books without paying royalties. Once caught, a western isk seller could (now we’ve had successful prosecutions for illegal downloads) be sued pretty easily for IP theft.

    Other countries do not, however, have the same legal precedents, if indeed they legally recognise IP rights at all.

    This makes it impossible for an MMO operator to prevent secondary trading, and therefore somewhat counterproductive to actively prosecute.

    At this point, he has a choice. He can take the extreme approach (like Second Life) and compete directly with the secondary market, or he can take CCP’s approach.

    With GTCs, CCP create an IG audit trail for a greater amount of isk trading (making detection of EULA violations easier), “reclaim” some of the profit from the exploitation of their IP and (most importantly to the end user) fix a baseline value to IG assets. This has the net effect of stabilising the secondary market by stopping the wild see-sawing of secondary market pricing. This makes the inevitable secondary market safer for and at the same time less attractive (as they have a sanctioned mechanic to buy isk) to players. It also has the bonus of throttling the profitability of the secondary sellers, as it becomes far harder for them to manipulate the value of “their” offerings.

    The big downside of GTCs, of course, is the fact that it lets RL intrude on the game. But then, the spammers & goldfarmers do that already and have done since shortly after release.

    GTCs or equivalents are the only way for a subscription-based MMO to enforce any kind of control over a secondary market.

  16. Let’s say the game is called PHD, and the goal is to become a Doctor and have a more successful practice than the next guy.

    So a player creates his character we’ll call Dr. EarnedIt.

    Dr. EarnedIt spent 7 years in school and 2 in residency to become a Doctor. Now he is paying off his student loans while also supporting his family. At this point his car and home are nice but not brand new. He cannot afford to make any investments yet.

    Then the Game Dev allows for InGame Money to be bought with OutOfGame Money.

    In comes Player #2. He buys InGame Money.

    Dr. BoughtIt buys his Diplomma from InGame Market.

    Dr. BoughtIt has no student loans to pay back so he has an expensive car and a mansion and buys a hospital and then makes tons of money.

    Why would anyone now create a character and work through the game? The game has made itself pointless.

  17. Can someone please explain to me why people think businesses are literally selling ISK to players?

    Last I checked, CCP owned all the isk, all the characters, and all the assets in EVE Online. So whether you THINK you are buying/selling isk or not is 100% irrelevant. How can anyone “sell” isk to anyone else? Even if they think they are, they’re not.

    Therefore how can you say that ISK farming companies are stealing CCPs intellectual property? Did any isk leave the game? No. It was transfered from one in-game character that CCP owns and to another in-game character that CCP owns.

  18. With Eve, like most games it doesn’t matter. The ability to win
    in any chosen environment is not determined soley by what you fly.

    You can go out and buy the best ship you want, with the best faction or tech 2 items and lose it in a heartbeat.

    The same applies with WoW, buying gold doesn’t really do that much. WoW market is controlled, the gold was earned in that server so the person selling it is not flooding the market. The best equipment in WoW comes from instances or time spent.

    In these games, whatever way you look at it, the ingame money is being made and distributed.

    If some nice person gave you 1 billion isk as a gift, should you and he be banned for giving a supposed advantage.

    What about Corps who give out free stuff? Or websites that give out information on how to ‘beat’ the game.

    Stupid, I don’t understand how people get so worked up about something that really deosn’t affect them. Think perhaps they need to have some real life issues to give them some perspective. 🙂

  19. I’ve been playing EVE off and on since the week it came out and there are affects from rule changes that have brought people to seek other ways of making ISK. Every time CCP makes a rule change it affects mass numbers of players. Rule changes that have caused me and others to lose ships and have to re-tool work character design plans. Plans that has taken real time YEARS to accomplish. I know this is an economy website but they seem to be interested in both sides of the coin so let me give some examples. Missile rule changes and Drone rule changes. In one case these rule changes caused me to lose a 120 Million ISK battleship and thats not counting the modules and weapons added. I got exactly 0.0 ISK from CCP when I lost it. It took me months to come back from that and MONTHS OF TRAINING to get my combat skills back to a pre patch state. I didn’t ebay ISK but I looked into it and had corp members not helped I would have.
    CCP’s latest updates (latest patch posted 11/28/2006) are no acceptation to reality affecting fantisy. Friday(11/30/2006) a game server node crash caused two players in our corp to lose battleships. Approx loss value 240 million ISK. After insurance payout that is. That is real life interfering with our game. CCP has not replied to petitions for compensation yet but I believe they will, but it’s been two days. Weekends are about the only time we can play.
    There are other examples:
    What about rule changes that allow users to to catch up with me? I remember when they added implants. Now new users are getting second and third generation implants and they are able to compete with my character and I’ve been playing for years. I didn’t get to vote on it and I’m suffering because of the changes. CCP has given zero noticable compensation for these rule changes. I believe one of the reason CCP’s system works so well is because it has built in rewards for seniority, but certain skill changes can greatly alter the balance. It’s getting to where I’m scared to shoot newbies because I don’t know what kind of skills they have. 🙂
    If you choose not to trade for ISK that’s your decision. But if you play for any lenght of time one day FOR SURE there WILL be game changes that directly affect you and push you back weeks or perhaps months. I would like to see what you have to say then. Dosen’t matter if you do it or not, would you blame somebody that did go outside to get ISK. And I want you on a polygraph because if you play EVE I don’t trust you. : )
    I have no problem with people buying ISK in any fashion they choose. If you don’t spend it wisely as the poster of “With Eve, like most games it” points out it will be wasted in weeks if not days… and you really spend it wrong and it’s gone in seconds.

  20. Ok buying isk for rl cash imo is cool if you want to.
    I Work a normal 9 hr day, i get plenty of gametime i make ingame isk in that time but my rl wage is avarage.

    If i worked 12 hour days and earned a lot of money, my 1 maybe 2 hours i get to play eve i would want to do fun things, so i would buy isk.

    People should leave people alone to have fun, theres no problem here dont you see? people want to enjoy their time, their money and if there hobby needs both but they can only afford 1 then they buy/work for the other.

    Gaming companies should make safe trading for ingame items and rl cash so people can enjoy the game to the fullest in the way they want, this would also give the game companies oportunity to make a little more cash from the auction security they offer the players as they could monitor the transactions.

    People that have problems with it are usually just jealouse/stupid.

  21. “People that have problems with it are usually just jealouse/stupid.”

    When you’re accusing others of stupidity, make sure you can spell.

    Would you play in a poker game who was making deals with someone else in-game to buy aces? If not, why not?

    Isk sales are called metagame collusion cheating. In Vegas, collusion cheating will get you worked over with tire irons.

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