Free-Trade & Real-Money Trading

Clockwork Labs
14 min readApr 17, 2023

Game Design Blog — April 17, 2023

I’d like to talk about a game design topic which has long been a point of frequent, deep discussion and differing opinions within Clockwork Labs: free trade and its many implications.

The point of this article is to present four key points which I believe are crucial to the design of BitCraft.

  1. All games with free-trade (particularly MMOs) cannot escape real-money trading (aka RMT)
  2. Real-money trading necessarily makes part of the game in some sense pay-to-win
  3. Free trade is inherent to the vision of BitCraft and will constitute a big part of the game
  4. Therefore irrespective of what we, the game designers, want it’s inescapable that players in BitCraft will trade items for real-money. Rather than fight this, ignore this, or live in denial of this, BitCraft is designed and balanced with this in mind. We also carve out areas of the game which involve non-transferrable things and are thus protected from being pay-to-win as best as we are able.

Free-trade = Real-money trading

What is free-trade?

Free-trade is the ability for people to exchange goods and services with each other without hindrance or restriction. It is (or used to be) a very common feature for massively-multiplayer online role-playing games to have. Free trade requires that you are able to sell any item in a game to anyone for whatever price. It requires, in general, that items are not restricted from trade, “soul-bound”, or otherwise tied specifically to your character. While free-trade enables fun gameplay around setting prices, bartering, moving goods, and trading items, it also comes with game design challenges, namely real-money trading (RMT).

It’s a basic human tendency for people to try to acquire the things they want, with whatever means they have available to them. If a game designer enables transfers of in-game items between players, the game designer will inevitably find players attempting to use actual money (a valuable currency outside of the game) to buy the items they want from other players. For example, I send another player cash in real life, and then they initiate a trade in-game where they give me the items I want. (1)

This behavior is not a mere possibility, it is a direct and necessary consequence of allowing players to transfer things between each other. The point of this post is to discuss how to grapple with this inevitable phenomenon.

There are really only three strategies that game designers have to fight this:

  1. Aggressively police RMT
  2. Restrict trade between players
  3. Sell tradeable items directly to players for real-money to undercut RMTers

Policing RMT

The typical pattern you see with game developers is that they initially design the game with quite an open free-trade system along with a policy stating that RMT is forbidden and that accounts will be banned for RMT.

What all game developers find is that as their game becomes more popular, RMT becomes rampant in the game and almost impossible to ban away. Much like Prohibition in the United States, you end up trying to thimble out the Titanic. Not only that, but you place an enormous moderation burden on the company and enable the creation of entire industries focused around gold-farming to meet the demand of players. Developers can of course try to outlaw real-money trading and ban players who do it, but the fact of the matter is that there is not a single MMORPG with any amount of free trade that has escaped this absolute inevitability, even ones with limited free trade.

Restricting Trade

Once game developers realize the futility of policing RMT, they begin to restrict trade within their games. This of course not only restricts the behavior of RMTers but also the behavior of all players who enjoyed the free-trade aspect of the game and all of the liveliness that it brings to the world.

One example of such an attempt to restrict free-trade was when asymmetrically valued trades were disallowed in Runescape 2. This eliminated a whole class of gameplay for players who liked to do arbitrage and prevented players from gifting their friends items. In more extreme cases, the developers will simply remove all transferability for the items by making them “soul-bound” or otherwise not tradable.

Of course, the problem with this strategy is that you are only able to solve real-money trading by exactly the amount that you are removing the fun and interesting aspects of trading. If all of the important items are non-transferable or “soul-bound”, then all that remains to trade is stuff that people aren’t that interested in, and all the fun of trading is removed.

Selling items to players

The third option is to sell the items that are being RMT’d directly to the players so that they don’t feel that they need to buy the items from other players. This doesn’t really remove RMT at all, it just makes it so that you buy the items from the game developer rather than normal players or gold farmers. This is true whether you’re talking about a cash-shop or a more indirect subscription token system. Real-money trading is still happening, the only difference is that the game developer is cut in on the action. After all, if any real-money is changing hands then logically either players or the game developer have to be the ones to receive it.

Notably this strategy doesn’t even eradicate player-to-player RMT, it just makes it so that the seller just has to sell their items for less than what it would cost to purchase them from the company.

Pay-to-win

The main motivation to fight RMT in the first place is that RMT effectively enables a form of pay-to-win, and pay-to-win is unfair. So what does pay-to-win mean exactly? I define pay-to-win as a player paying real-money for an advantage over other players who are trying to achieve the same goals.

So for example, by this definition, purchasing XP boosts or a subscription that allows you to collect 2x XP per hour would be pay-to-win. This also means that buying things that can only be acquired by buying them is not pay-to-win, that is instead pay-to-play. For example, if a subscription allows you to join a PvP arena that is off-limits to non-subscribers that is not pay-to-win. Why? Because the goals don’t overlap. Non-subscribers aren’t even allowed to compete in the arena. You have to be very careful though, because in this example, if the PvP allowed players to gain more XP per hour than you could otherwise, it again becomes pay-to-win.

All of this is to say that RMT is clearly a form of pay-to-win because a player can pay money for items in a game and if those items afford any advantage over other players for a certain goal, it’s at least a little pay-to-win.

Not all pay-to-win is treated equally however and some are more egregious than others. We typically see pay-to-win come in 3 forms.

1. Pay the developer to win

2. Pay other players to win

3. Pay the developer via other players to win

#1 is the most egregious form, because it’s akin to paying for a cheat in the game. Essentially, you give the developer money and the developer uses god powers to give you the advantage that you want even if it means unbalancing the economy. Typically the more money you give the developer, the greater the advantage, although in practice this advantage is usually capped or limited in some way (e.g. diminishing returns).

#2 is RMT. You pay another player to give you an advantage. This is a less egregious form of pay-to-win because it is not the same as a cheat. Unlike the developer, the player you’re buying the advantage from does not have god powers and can only transfer to you the advantage they already possess. Total advantage in the game is preserved, just transferred. (2)

#3 is one I’ve actually already referenced above as a “subscription token” system. This is a very clever system whereby you pay the game developer for an item which is redeemable for a game subscription or other cash shop goods sold by the developer. In this system, the developer gets the money, the pay-to-win player gets the advantage they want, and the selling player gets what they want from the developer (either subscription or cash shop goods).

Note that #3 is actually just an indirect combination of #1 and #2. In the case that the token is eventually redeemed for cash-shop goods, it’s effectively equivalent to #1, just indirectly through another player. In the case that the token is eventually redeemed for subscription, it’s essentially just #2 since one player is paying for the subscription of another player. (3)

Game developers have almost universally adopted #3 because as with #1 all of the revenue goes to the developer while still allowing other players to benefit from the exchange as in #2. Developers are highly incentivized to have this system because it generates significant revenue while reducing the ability of gold-farmers to operate (i.e. people are going to buy in-game items anyway for real money, might as well have it go to the developer rather than funding gold-farmers).

The important point is that all three of these systems are pay-to-win. Free-trade, no matter how you slice it will end up creating an element of pay-to-win in your game.

In my opinion, it is the job of the developer to acknowledge that freely traded items are inherently a pay-to-win system in your game, and to treat, design, and balance those items accordingly. Developers should strive to make items limited in the advantage that they provide to players, provide no advantage at all, or be used to access parts of the game that players reasonably expect to pay for.

As a developer the worst case scenario is where you restrict trade and have the above system so you end up in an unhappy medium where you have pay-to-win, but you also don’t have free trade.

Free-trade and BitCraft

So what does this all mean for BitCraft? Let’s review the vision for the game we’re trying to make.

In nearly all existing MMORPGs the main way that a player progresses through the game is through having their character fight and gain combat power. Essentially, you play through the main content of the game by fighting monsters. Once you reach max level you either fight more monsters in raids or fight other players. Often “max level” is not the end of the progression because you continue to increase the power of your character through (often untradeable) gear upgrades.

These games are great for what they are, but our vision for BitCraft is fundamentally different. Our dream is to make a game in which the progression is instead centered around rebuilding civilization from scratch. Players progress in BitCraft by building and creating things in the world and by improving their character’s ability to build and create. It is a game that focuses on the aspects of MMORPGs which are often left to the periphery, but which a huge number of players love. Things like fishing, farming, crafting, socializing, trading, building and creating. Combat can be a part of BitCraft without being a central part of the progression.

The key part of this is “civilization”. A civilization is not a collection of buildings, it is a collection of people working, competing, and collaborating together. Our job as game designers, therefore, is to make players feel like they are building a real civilization. As real as any that exists IRL. There are many important ingredients to a thriving civilization, but this article is about one in particular: free-trade. We believe that a crucial component of a free and thriving civilization is the free trade and free enterprise of its people.

Why is free-trade important?

In my view, it is absolutely central to what makes an MMORPGs feel like an MMORPG, and I would even argue is perhaps the primary defining characteristic of MMOs..

Why is this a defining characteristic of MMOs? Because free-trade is the reason that you even care that there are hundreds of thousands or even millions of players in a single world. A dedicated player can only interact with a few dozen people every day, but trade connects you to the world. It allows you to interact with huge numbers of people indirectly through the markets that they create without having to meet or speak to any of them. Trade, particularly localized trade, can also be one of the main reasons in an MMORPG to meet and interact with new people. Centralized auction houses may be convenient but they fundamentally destroy the part of the game that forces you to explore, travel, and meet new people through trade.

Simply put, free trade is a central aspect of the vision of BitCraft and therefore a non-negotiable pillar of our game. In my opinion, it is manifestly obvious that all items and resources in BitCraft must be tradeable.

If you approach free-trade from the mindset that it is only a small feature in a larger game, then you’ve set yourself up to begin restricting trade when issues do arise, and before you know it, you’ve got a single player game with other players in the background, rather than a true civilization with a thriving economy. This might not be a bad outcome if you set out to make a combat focused multiplayer game, but if you want to create a social MMORPG like BitCraft, I think it’s an awful outcome.

Rather than approach trade in BitCraft from a restrictive mindset, I would like to approach trade with an open mind to the kinds of things that players will create in their own civilization. If eliminating real-money trading required restricting trade completely or relegating it to a meaningless corner of the game, then I would sooner wholly accept real-money trading than remove free-trade.

I believe our mantra should be: Let the people trade!

Another Way Forward

If free-trade is an inherent part of BitCraft and free-trade always leads to real-money trading despite the best efforts of the developers who try to prevent it, it follows that real-money trading is going to occur in BitCraft.

We should be clear-eyed about this reality so that we can design and balance BitCraft to match this reality instead of burying our heads in the sand and pretending that this won’t happen, or that we’ll be able to prevent it from happening like so many developers before us.

So how do we address the issues created by real-money trading?

Issue #1 — Scams and Fraud

Scams and fraud are always a part of any system where people have an incentive to cheat or steal. When real-money is involved those incentives become much more serious.

MMORPGs have been dealing with scams since the very first games of this type because of the potential for RMT in those games. With this in mind, we have designed the back-end game engine on which BitCraft is built with full-auditing capabilities and extremely powerful analytics, so that we can record and track every single transaction that happens in the game.

We will be able to replay in-game events and track the movement of items and goods throughout the game world. We will also be able to analyze chat messages and other related player behavior in connection with transactions in the game to identify fraud or scams between players.

Instead of wasting our time and resources trying to police all RMT, we will provide safe and well-designed UI and mechanisms to reduce scams and fraud while limiting our policing to the fraud and scams that deliberately harm our players.

Issue #2 — Pay-to-Win

As we have seen, free-trade leads to RMT, and RMT introduces pay-to-win into the gameplay, even if other players are receiving the real-money rather than the developer.

It is clear then that while important parts of the gameplay should be transferable between players, there should also be important parts of the gameplay which are not transferable, and thereby not subject to RMT. By clearly delineating which aspects of gameplay will *not* involve free-trade we can be sure to avoid having free-trade, RMT, or pay-to-win accidentally leaking into these aspects.

The most notable of these is the skills and experience system. Unlike buying items in the game, gaining experience will always and everywhere require putting in time and effort into the game. There will be no way to directly buy skill experience either from us or from any other player. No skill scrolls, no passive conversion of items into experience. This will require that players actually play the game in order to be able to do high level activities. Just as in the real world, skills in BitCraft are non-transferable. They are inherent to your character and what you’ve spent your time doing. Characters in BitCraft are non-transferable.

Similarly to scams, instead of trying to police all RMT, we will more aggressively police players attempting to share accounts which is generally a more manageable task. Hopefully we will be able to create stronger defensive lines around this smaller set of things.

Issue #3 — Fun becomes work

Personally, the biggest issue that I have with RMT if I were able to sell my items, is that I would always feel like I would constantly need to decide if I wanted my items or the real-money I could get by selling them. This is awful for the game experience. Nobody wants to be thinking about money constantly while playing a game. We never want a casual player of the game to feel they have to make this decision.

The best way to avoid this predicament is for the game to be balanced appropriately so that the prices of items that players need in the course of the game are sufficiently low that it always makes more sense to just use the item in the game (or that they player would clearly rather have the item in the game than the money), than to try to sell it to another player. I also think that subjectively, making it more difficult to sell your items or putting many layers of indirection between you and the real-money helps distance the items from real-money for all but the most dedicated RMTers.

Achieving this is a question of MMORPG economy design and supply and demand. That’s a topic that’s too long for this post and one that we’ll have to explore in a future post.

The Mission

We believe that if we are resolute in our dedication to free trade and equally resolute in our defense of those aspects of the game which should not be related to trade, we can create an ecosystem that mirrors much of the complexity of real-world economies and is just as fun and interesting.

— Tyler (3Blave, Cofounder of Clockwork Labs)

Footnotes

(1) Note that these kinds of trust-based trades create the potential for scams and fraud as the buyer has no assurance that the seller will actually trade the items in-game.

(2) In practice, what happens is that total advantage does actually increase because RMT incentivises people who would not normally play the game to farm the advantage they otherwise wouldn’t. (e.g. gold farming).

(3) The nice thing about #3 is that gold-farmers aren’t interested in subscriptions so they’re forced to sell their items at a lower price than what the tokens are worth, potentially pricing gold-farmers out of the market if they’re not able to farm gold profitably.

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