”We’re excited to be MMO Guildsites’ solution of choice,” said George Karidis, Chief Strategy Officer for SoftLayer. “They have an exceptional offering, and we’re proud of our role in the online gaming industry. We are an established leader in the segment, with a strong and growing customer base. Clearly, our level of performance and connectivity, as well as our interconnected facilities from coast to coast, have made us an ideal resource for the industry.”

MMO Guildsites said it struggled finding a provider that could support its growth with the right combination of network reliability, hardware and services. They chose SoftLayer’s quad processor multi-core platform and secure, out-of-band management through VPN for full control of their environment. Additionally, SoftLayer’s proprietary customer portal lets the company easily track its customers’ traffic and usage.

“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.

But Affinity president John Maffei said that was no longer the case. “At one point, the company owned IGE but it was sold this spring,” Maffei said on the Wowhead announcement FAQ page. “It was a private transaction so we can’t reveal details.” It turns out that a number of forums reported the sale back in April, including F13 and an April 30 thread at the Allakhazam forums, in which site operator Allakhazam says that IGE had been sold a month earlier to John Yantis, an RMT veteran who built up MySuperSales and then sold the company to IGE in 2004.

But others are alleging that ties remain between Affinity and IGE. And if IGE was sold months ago, why was Affinity CEO Brock Media at the Virtual Goods Summit doing an interview with CNet about the eroding profitability of the RMT market?

“Affinity is finding it harder and harder to make the big profits it used to,” CNet’s Daniel Terdiman writes of his dicusssion with Brock. “And that’s because, he said, virtual assets are increasingly a commodity and, therefore, the margins on sales of WoW gold and other virtual goods are rapidly shrinking. In fact, he said, as Chinese competitors get more and more sophisticated, they are also willing to accept less and less profit margin. And that means, ‘they’re perfectly happy to accept $20,000 in profit on $2 million of revenue.’ ”

It’s interesting to see all this intrigue about the ownership status of a major RMT exchange emerge even as the Virtual Goods Summit is demonstrating the growing interest in virtual currency among investors and venture capitalists. Is a corporate-friendly discussion of “virtual goods” superseding the debate and controversy about “real money trading”? Is the entire undertaking being rebranded to appeal to the money crowd? Stay tuned.

I don’t think it’s clear at all. Congress hasn’t been quick to act on complex tax issues regarding the Internet. And taxing virtual goods is complicated. If your only interest is in taxing income from the sale of virtual goods, no action is necessary, as that is income which is already subject to tax laws (see Julian Dibbell’s wonderful book Play Money and his dialogue with the IRS). If you want to tax virtual goods in WoW because they have cash market value at IGE, who do you tax? Under the ToS, Blizzard believes it owns all the in-game assets created by WoW players.

There are many unresolved issues regarding the ownership and taxability of virtual goods, as practices and scenarios vary widely across the virtual frontier. Can Congress sort this out? It would take a lot of time to do so, and I just don’t think the cost/benefit analysis on taking action makes sense for Congress.

If only they could tax all that mad-crazy income from those Chinese gold farmers …

The court filing is plain: “The TOS are a contract of adhesion,” it reads. A lawyer should certainly weigh in here on just what that means, but as far as I know — and I’ve looked into this somewhat while Peter Ludlow and I were writing our forthcoming book about virtual worlds — it at least means that LL can’t just point to the Terms of Service and claim that all SL users are unequivocally subject to its whims. The court decision essentially holds LL to a higher standard than any virtual world company has been held before, as far as I know. In part, the decision grows out of the fact that real money is at play in Second Life, and out of LL’s and Rosedale’s relentless promotion of SL as a place where money can be earned.

Really interesting stuff. If the lawsuit advances and creates any precedents (still a long way off, but now a legitimate possibility) it would appear to have implications for games that allow real money trading (RMT). Would that include Sony’s Everquest II, which allows players to buy and sell assets in the Sony-sanctioned Station Exchange? This is a case to watch going forward. See additional discussion at ValleyWag, Raph Koster and The Forge.

“As many of you know, the latest content patch, along with many great new content additions, contains technical counter-measures designed to combat in-game gold spamming. Our efforts to reduce in-game abuse and create a fun, safe environment for everyone are never-ending. With that said, we felt that it was important to share with the community just how serious we are in our efforts to combat this type of abuse. Blizzard has filed a federal lawsuit against the operators of Peons4hire, a popular gold-selling organization which many of you have no doubt seen advertised. As part of the lawsuit, the operators of Peons4hire have been asked to immediately cease all in-game spamming efforts by all entities and websites under their control. If this organization refuses to act accordingly, further legal action will be taken. We’ll be sure to keep you posted on the progress of this topic.”

The new patch includes a “report spam” button. Posters in a Slashdot discussion thread says Blizzard has also blocked trial accounts from being able to send whispers (individual messages), limited the amount of text that can be included in a whisper message, and throttled the rate at which players can send whisper messages. One commenter noted that gold spammers have simply changed their tactics, and would continue to find ways to try and sell inside the game. An excerpt:

The real crux of the issue though is that spammers, and more generally, gold selling, wouldn’t even exist if people didn’t buy the services! Because demand is so high it is not reasonable to expect in-game ads to disappear completely. But what Blizzard has done is definitely a giant step in the right direction — IF you aren’t one of the large minority of people who have actually purchased gold. If you are, you probably liked the spam sometimes, because usually it provides up-to-the-minute price info and increases competition between the sellers.