Thursday, May 3, 2012

The End of RMT?

Marcus 'MarkeeDragon' Eikenberry recently talked about the downfall of RMT. According to Marcus, there are two major players in the market that are now looking for a buyer for their business. Revenues are reported to have dropped by as much as 90%. This seems like quite a change from the RMT heydays two years ago. He mostly attributes this to very efficient measures being implemented by Blizzard against account and currency trading.

At lewterlounge we haven't really seen a drop in traffic to our own site. However, we did witness a significant decline in traffic for several of the big names. One example being IGE, who probably lost close to 95% of their traffic and stopped serving a lot of games on their website (Aion and Everquest 2 to mention two), instead referring customers to partner sites like EpicToon.
Other shops who used to be big a few years back - like THSale - have also split up their online presence into numerous smaller outlets, all using custom branding and payment processing while still being tied to the same backend.

There are two major reasons we've seen for this decentralization so far:
  • Game companies targeting PayPal: Several game companies have taken to filing DMCAs against sellers with PayPal. Instead of fighting the DMCA complaints (which would require the sellers to agree to a US jurisdiction), many just close down their PayPal account and instead start a new one on a new site. This leads to sellers operating multiple smaller shops instead of a single big one. This way they cut their losses if one gets targeted by a game company.
  • Search engine optimization: In recent years, Google has not only improved their anti-spam measures (making it riskier trying to push a single shop for many game terms), but also added a significant bonus to URLs that have the search terms in the domain name. This resulted in tons of new mini, single-game shops getting started on domains taking advantage of that. Of course a majority of them belong to major players, but it gets increasingly difficult to keep track of who is part of whom.

One notable exception in this trend is Offgamers. The company has early on shifted its focus away from pure RMT activities, instead building up a major business with game time cards (GTC) and game registration keys. Targeting players in Malaysia (where, according to Alexa, they're among the top 200 websites in the country), China and other South East Asian countries, they've diversified not only their product portfolio but also their geographic targeting.

All in all I don't think we're seeing the death of RMT. However, it will become an increasingly difficult environment for buyers, who will battle with transparency issues, and sellers, who aside from Google and PayPal troubles will also have to worry about game companies taking over the business themselves - Diablo 3 being the latest example on that front.

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