Hello Everyone,

We just announced that EverQuest II’s existing Station Exchange service will be transitioned over to Live Gamer. If you haven’t seen that announcement, you can find it here.

I wanted to give you all more background on why we have made this decision. When we decided to begin our groundbreaking Station Exchange service, it was because we felt it was important to take a step in the direction of turning what had always been an illicit side of the MMO gaming market into something that would give people desiring to participate in that kind of activity a safe and secure way to do so. It was also our belief that by providing a legitimate alternative, we could cut down on the farming activity our players loathe and the large impact illicit virtual item trading has had on our customer service group.

In general, we’ve been pleased with the way things have gone on Station Exchange. It did indeed cut down on the CS issues we saw , but we can’t even begin to say it made a dent in farming activity. Farming has unfortunately become a big business, largely driven by companies on foreign soil that are virtually untouchable due to their location in places where the legal system just doesn’t give us the tools we need to fight this. The dirty little secret of the farming business is that many of these companies use stolen credit cards as well as charging back their purchases months after they conduct transactions. This fraudulent activity has risen sharply in the last 6 months both in the digital download business and in Station Exchange and this is an expensive fight.

We’ve been fighting this battle with these criminals for a long time. It’s clear to us that the systematic way in which these farmers conduct themselves has made this a top issue for us, both from a customer satisfaction standpoint and in the economic impact that this kind of activity has caused. We have also seen a sharp rise in the fraudulent activity within Station Exchange. This caused us to begin to use fraud screening services that were difficult to explain to our customers. Simply put – there were times that customers who had perfectly valid credit cards and had been long-time customers of SOE’s were denied transactions through no fault of their own due to being flagged by these services. We have evaluated new methods of fighting fraud, but they will take time to implement and, at the end of the day, we needed to implement additional solutions to this problem.

We were recently approached by the folks from Live Gamer. They had the desire to start a secondary market that would be sanctioned by publishers. They would only be operating in games where they had received a license to do so and in accordance with a strict set of guidelines including not purchasing from farmers, reporting suspected farmers to us and agreeing not to purchase from anyone we flagged as a farmer. We believe that over time, we can significantly cut down on farming activity industry-wide by having a legitimate secondary marketplace across multiple publishers. Live Gamer is run by very reputable people who have a vested interest in building a company that has the support of publishers. They will be concentrating on nothing but building this service and will be fighting the fight against fraud with a lot of resources dedicated to that effort, and we sincerely hope their efforts help our industry’s serious farming problem while offering a legitimate service for those players who want it.

We believe strongly that secondary markets such as virtual item trading are here to stay in online gaming. The growing number of players participating in this market tells us this. Games designed from the start to incorporate such activities could be a lot of fun, and while I don’t think this is ever going to be something the majority of people participate in, it will continue to be part of a lot of people’s gaming experience. If we can get rid of farming, or at least substantially reduce it over time, I think a lot of other people’s objections will disappear. There will always be those who believe that the game play should be pure. We respect that point of view and there are many here at SOE who play by that philosophy. But we also want to keep an open mind to the trends we see developing, so we can create the best gaming experience for all types of players.

This transition to Live Gamer should be a pretty seamless one. It will only be occuring on the existing EQ II Station Exchange servers. We will not be converting other EQ II servers. You can find more information about the transition at: www.stationexchange.com/livegamer and about Live Gamer at: www.livegamer.com

Smed

Hello Everyone,

Ordinarily I stick to Online Gaming stuff.. but this week I’d like to share something a little more personal.

This week has been a tough one for San Diego. These fires have just devastated our City. I know this is going to sound cliché, but the outpouring of help that people here have given each other has been nothing short of amazing to watch. The evacuation was one of the most organized and efficient things I have ever seen. We got the reverse 911 call at 4:30am on Monday morning to get out of my house (I live in a suburb of San Diego that is right on the border of Rancho Bernardo and Poway). That call literally saved our lives.

We got my 4 kids up and into my wife’s car very quickly, but I was terrified when I saw the flames coming our way while we were loading the kids into the car.

One thing you never, ever want to see while you are with your kids is fire coming towards your house.

Within 10 minutes the fire was at the house. I stuck around and was able to put the fires that started on my property out with a hose. I’ve attached a couple of pictures of what that looked like. At one point I realized I might not have made the best decision.. but for whatever reason we got very lucky. Our trees and bushes burned and our house smells like an ashtray, but we’re ok. Of course the power is going to be out for the next 2 weeks, but hey.. that’s a small price to pay. In my neighborhood 11 homes burned down, including the home of some very close friends of mine. You don’t think it’s going to happen to you, but when it comes that close it puts a lot of things in perspective.

 
The view from my backyard

We had a lot of people that were evacuated at SOE, and at this point it looks like we did have one person that lost their home. We shut our offices down for the week with the exception of a skeleton crew in CS and Operations. The problem is that even though a lot of people were able to return to their houses, the schools in San Diego were closed which caused a cascade of issues. There are still parts of San Diego that are still under mandatory evacuation.. and many parts that are without power.

I’d like to say thanks to all of you for understanding the situation and for the kind emails. We should be back to full strength by Monday.

Thanks,

Smed

I had pre-ordered the book, “Legend of the Syndicate: A History of Online Gaming’s Premier Guild,” by Sean Stalzer, and it arrived last night. I have to say this is by far the best book about online gaming I’ve ever read. Once I got it, I couldn’t put it down and just read it straight through.

It gives a detailed history of one of online gaming’s premier guilds, “The Syndicate ™”. In the book, Sean Stalzer offers a very insightful look into the bonds of friendship that were forged in various online games (UO, EverQuest and WoW). He talked about what makes The Syndicate ™ work, and went into great detail about the mechanics of the various games and what works and what doesn’t from a Guild’s perspective. I found the critique of the early days of EverQuest very humbling. I think it did a really good job of illustrating the power that online games have and showing where we can improve.

The overall sense I got from reading the book was something that I’ve personally felt for a very long time – online gaming can lead to making lifelong friends. You spend a lot of time playing with people, and over that time these bonds can be just as powerful as friends you met back in school. I strongly believe that’s the biggest reason people like to play online games in the first place. It may not be what brings them in, but it is certainly one of the biggest drivers of what keeps them playing.

Nice work Sean!

Smed

We just got done having our 2007 Block Party over the weekend. It was a great event and I was really happy to see how many fans ended up coming up from Comic Con. We got to show off videos for The Agency to a lot of the people that showed up. I was really pleased with the reaction we got from the people that checked it out.

Later this week we have SOE’s Fan Faire 2007 in Las Vegas. I’m really excited because we’re going to be doing something very different at this year’s Fan Faire. For the first time we’re going to be using Fan Faire to introduce a new game we’ve had in the works for a long while now.

I can’t wait for people to get their first look at it and actually be able to play the game at Fan Faire.  We’ll be revealing it in the Community Address at 5:30pm on Friday, August 3rd.

And don’t worry, if you can’t attend Fan Faire, you can watch the Community Address live … just click here for more info.

Smed

To Penny Arcade:

Hopefully the welts from the ping pong balls won’t hurt you too much. I suggest wearing a cup.

p.s. I’ll bring the donuts.

- Smed

(click to enlarge)

(click to enlarge)

Today we released a white paper that features a lot of very detailed information about our Station Exchange service for EverQuest II. It contains details like the amount of revenue we generated for a fixed period between 2005 and 2006. It can be found here.

Many people may wonder why we put out all of this very confidential information. The simple truth is that we wanted to shine the light of day on the real world economics at work here. I believe very strongly that RMT is an absolutely massive part of the MMO business. By our estimates, it’s over $1 billion worldwide in the past 12 months. A lot of this is coming from Korea and China, but probably 30% of it is coming from the US. Those are numbers that no one can ignore. It’s very easy to sit back and take the “no RMT” stance, and many companies have. I understand and respect that position. We all know farming is rampant in MMOs (yes, ours included), but there is a very concerted effort in most of the major MMOs to stop it. It absolutely negatively affects people’s gameplay. I’ve had that happen to me in my own gaming, and I get every bit as frustrated as many of you. We’ve all seen the spamming of some of these guys in our games, and yes… it sucks.

We took a different approach to this. We decided that in EQ II we were going to open Station Exchange servers and allow this activity specifically on those servers. Since that time, we have seen a tangible reduction of RMT on our other servers and specifically we’ve seen it go from roughly 40% of our CS ticket volume to roughly 10%. Now I am NOT saying it doesn’t happen on the other servers (even though the companies that do this encourage people to break our EULA). It happens and it’s common. However the really serious problem cases are down by a significant amount because there is now a legitimate place to engage in this kind of practice.

This has provided us with a lot of information about the behavior involved with RMT and we think it best to share as much of this data as we can in an effort to get this all out in the open.

After having seen Station Exchange running for over a year now, I’ve come to see RMT in an entirely different light and I believe the real future of RMT is actually a really bright one if we can work on our game designs in such a way as to make it a cool part of the games. Imagine an MMO without a subscription fee that has Station Exchange built into it. However, the game is designed in such a way as to only allow the sale and transfer of non-game impacting items. What if an in-game tailor had the toolset to actually put cool designs on clothing and literally make them custom for different players, and then that person could open a virtual storefront on Station Exchange. That’s the kind of cool thing we see in the future and frankly it’s the direction we want to steer things. To create an ecosystem for players to make money from these games while they’re having fun.

Smed

As I began my post holiday catch up of various news sites, I stumbled across a NY Times piece on the Child’s Play Charity.   The piece talks about the roots of the charity and the money it has raised to date, definitely worth reading and like my blog entries, it is short.  Mike and John, alias Gabe and Tycho have done a great thing here, raising over 2 million dollars for Children’s Hospitals around the world.  Our own John Smedley is quoted in the story,

Mr. Smedley said, Child’s Play “really helps bring our industry together for the common purpose of helping kids.”

I agree.  With all of the criticism out there about video games, as well as all of the competition we have between various companies it is refreshing to see industry and fans alike come together and do something so worthwhile. 

Thanks Tycho and Gabe for starting the charity and for all the good it has done.

Just read this blog

http://www.gamesetwatch.com/2006/12/mmog_nation_how_they_are_going.php

I’m personally really excited about a Firefly MMO.

But then again I’m an optimist by nature. The first thought that ran through my mind was “that’s an awesome universe for an MMO”.

I am strongly of the opinion that cynics are in general pretty useless. That’s not the same thing as saying critics are useless. I absolutely believe criticism is an important part of the creative process.

But saying what other people are creating is GOING to suck may be a popular pastime in this day and age, but it doesn’t mean I have to like it.

- Smed

I’m very proud to announce that SOE has launched the online version of Pirates Constructible Strategy Game (based on the collectible card game from Wiz Kids). It’s our first foray into online collectible gaming which is something we see being a key part of SOE’s games in the near future.  In addition, all proceeds generated today from Pirates CSG are going to be donated to Child’s Play Charity. For more information, visit childsplaycharity.org.

I was reading a very interesting blog here:

http://ozymandias.com/default.aspx

Essentially Ozymandias is talking about how he thinks it’s confusing to be hooked into multiple online services. I have to respectfully disagree. One of the cool things about integrating both the PlayStation Network and Xfire into our PS3 title Untold Legends: Dark Kingdom is that my friends on Xfire running on the PC can send me messages while I’m playing the game on the PlayStation 3. I can also respond to them if I want.

I can do the same thing (also from within the game) with my friends that are playing other PlayStation 3 games using my PlayStation Network friends list. We’ve integrated both into the game because we realize how important it is to be able to tie into different groups of online friends. I personally think that’s one of the best things about the PS3’s open approach. I am a member of multiple online communities. The fact that the PlayStation 3 will allow publishers the option of hooking my favorite games into these communities is a big plus to me.

I do want to point out that you aren’t just able to see if your friends are online at the cross media bar interface level.. it can happen within games too.

As for his thoughts on how this somehow relates to that lawsuit…. well… that just sounds like a pretty out there theory IMO.

Smed