Virtual Worlds, Real Profits

Virtual trading startup Live Gamer has raised $24 million in venture capital funding from Charles River Ventures, Kodiak Venture Partners, and Pequot Ventures, the company announced today. The company’s model differs from most existing marketplaces in that it is partnering with top MMO publishers (including Funcom GMBH, Sony Online Entertainment, 10TACLE STUDIOS, Acclaim, GoPets LTD, and Ping0 Interactive Limited) in an effort to “legitimize the existing virtual economy.” The funding and launch was covered today in the Wall Street Journal.

“Virtual item trading is already transforming the way people experience MMOGs and virtual worlds, but in its traditional underground context, the impact could be as easily negative as positive for a given player or world,” said Live Gamer co-founder and president Andrew Schneider. “An economy this large clearly needs a legitimate trading infrastructure that serves the needs of each of its millions of participants. Live Gamer has developed a platform with all the integrity, security, and professionalism of any real-world marketplace, and we’re working hand-in-hand with publishers to ensure a positive experience for every player.”

Live Gamer is positioning itself as an alternative to virtual goods “grey markets” where assets are bought and sold without the consent of game publishers, and often in technical violation of the games’ terms of service. Most publishers have not sanctioned real money trading (RMT) in gamer accounts and assets. But the explosion of gold farming and the continued growth of virtual trading markets like IGE, PlayerAuctions and GamePal may be shifting the landscape, and prompt more publishers to follow the lead of Sony’s StationExchange in creating a regulated marketplace for players who wish to trade game gold and accounts.

That tension was reflected in comments by Funcom CEO Trond Aas. “Virtual trading has the potential to open an entirely new dimension for our players’ in-world experience, but it has also caused endless grief through the actions of gold farmers and fraud artists, as well as the generally poor quality of service to participants,” said Aas. “Live Gamer makes it possible for us to satisfy players’ growing demand for this type of activity by providing a legitimate outlet that protects their experiences.”

“Even in illicit form, the virtual trading economy has proven that vast demand exists; now Live Gamer will allow this thriving marketplace to reach its full potential,” said Mitch Davis, the other co-founder of Live Gamer and a pioneer in in-game advertising at Massive Incorporated. “We’re confident in the Live Gamer team and its ability to execute successfully, together with the industry’s leading publishers, to create a safe and easy option for real money trading.”

See Virtual Worlds News for additional coverage.