Are secondary markets profitable to developers?

The Virtual Economy Research Network takes an academic look at the profitability of secondary markets for publishers that already support official RMT:

"While the analysis I have presented is very straightforward and lacks depth, one reason for establishing an operator-controlled secondary market in terms of maximizing service provider profit appears to be fairly compelling: secondary markets seem to exist in virtual world environments regardless of whether the service provider endorses them or not. Therefore, by not establishing a controlled secondary market the service provider forfeits a part of the available welfare – consumer surplus in form of transaction taxes – to an outside party such as an online auction house. Attempting to curtain secondary markets seems pointless in the given framework, as even outside, well-functioning secondary markets increase profitability of the primary market according to Shulman and Coughlan compared to the situation where no secondary market exists. Furthermore, trying to prohibit secondary market transactions would result in monitoring costs, making it even more disputable in terms of service provider gains."

The paper was written to see if games that have an official RMT market should also promote/allow the resale of those goods. However, the conclusions the paper reaches is that a secondary market exisits reguardless of the developers "official" stance, monitoring/controlling the secondary market is too costly or impossible, and the publisher loses out on potential "RMT tax" profits if it doesn't provide a secure channal for RMT and impose a tax on it.

Posted by Andrew on Apr 05, 2009 | 1 comments | Tags: Economics, Academic, VERN
Comment by www.obaoma.com on Apr 21, 2009
Most of the WoW gold in US market is provided by China, Obaoma.com is one of these suppliers. We don't think that all the reason of virtual gold sale is benefit-driving; while customers' need is the motive power.

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