Fieldnotes from the Metaverse — A history of Real Money Trade in Virtual Worlds

This is a bonus chapter to Fieldnotes from the Metaverse — Market and Society on the Cyberian Frontier.

The term “Real Money Trade” has been used in the online games industry for decades. Developers quickly realized that any game with an online component will have in-game items, artefacts and characters traded for real money. This is because all virtual worlds hold real world value, but also because play time is always a central resource in a game, especially in persistent online games. That also means that Real Money Trade has a direct effect on game resources and thus balance. If left unchecked, RMT will lean any persistent online game towards pay-to-win.

On the other hand, RMT can represent a significant revenue stream for developers and publishers, if they control the trading platform. However, this is a tight balancing act between providing a service and being perceived as greedy.

As a result, the interplay of virtual economies with real ones has been closely monitored, analyzed, and documented in the games industry. Listing all insights and milestones would take forever, but here are some that I find noteworthy.

A history of Real Money Trade in Virtual Worlds

1978 — Multi-User Dungeons (MUDs) are invented. As the first virtual worlds with small and intimate communities, the first bartering / trades of virtual items and services appear on a local player-to-player basis.

1989 — A game character is sold for $2.000 for GemStone ][, a text-based MUD running on the GEnie online service.

1995 — Ebay launches. Virtual items and services for virtual worlds are listed on the platform within weeks.

1997 — Ultima Online launches. The first items from the game are offered on Ebay within days. Electronic Arts accepts & communicates the real money trade as a measure of success and popularity of the game.

1997— Also within the first week, the first brothels start operating in Ultima Online, trading virtual sexual favors for real money or high value virtual items, which are sold for real money on Ebay.

1999 — EverQuest launches. Items are again offered on Ebay, however Sony Online Entertainment actively opposes RMT, banning game accounts that bought or sold items and asking Ebay to remove all auctions based on IP violations.

1999 — PlayerAuctions launches, specializing in player-to-player trade of virtual assets and services through the platform as a trusted intermediary.

2001 — Internet Gaming Entertainment (IGE) launches, allowing players to buy and sell virtual currency, items, and accounts.

2002 — BlackSnow Interactive is founded in Southern California, providing commercial character levelling as well as gold and item farming services for Ultima Online and Dark Age of Camelot. The company claims to use “control programs and macros designed to combine clusters and implants at a quick enough pace to accumulate an entire level’s worth of experience in a very short time.” In reality, they run sweat shops, renting offices in Tijuana, equipping them with PCs and a T1 line, and hiring three shifts of unskilled Mexican laborers to follow a defined play-script to maximize gold-per-hour rates and character levelling.

2002 — Mythic Entertainment, producer of Dark Age of Camelot, suspends all game accounts owned and operated by BlackSnow Interactive and asks Ebay to remove all their listings. As a result, BlackSnow sues Mythic, however the suit is never heard as BlackSnow Interactive disbands shortly after.

2002 — Edward Castronova publishes “Virtual Worlds: A First-Hand Account of Market and Society on the Cyberian Frontier”, an academic paper analyzing the economy of EverQuest, creating the new field of virtual economies in economics.

2003 — Julian Dibbell, game journalist and author, earns $24.000 in one year through buying and selling virtual items, documenting the entire process and later turning it into a book.

2003 — A player called Evangeline is running a brothel in Sims Online, taking the equivalent of $50 US per “service”. Allegedly Maxis employees are also customers.

2003 — Second Life launches. By the end of 2003, players created over 12,000 individual virtual objects for sale with a total of 100,000 user-to-user transactions for goods and services.

2003 — Planet Entropia launches. Players can exchange the in-game currency (Project Entropia Dollars, PED) with real money at a fixed exchange rate of 10PED to 1$. Thus, all items within the virtual world have real cash value, and players can at any time initiate a withdrawal of their accumulated PED back into USD.

2004 — A Jedi character for Star Wars Galaxies is sold on Ebay for $14.000. Players wanting to play a Jedi character need to first fulfil an unknown list of criteria, followed by a long and monotonous grind to unlock the Jedi profession, making the class unobtainable through gameplay for most players.

2004 — The Island, a digital property in Project Entropia, is bought in auction for 265,000 Project Entropia Dollars, or $26,500. The sale includes the “complete mining and hunting taxation rights” as well as the rights to allocate parcels of land to sell to other players.

2004 — World of Warcraft launches and quickly becomes the most popular MMORPG to date. As the game offers free trial gameplay accounts, gold farmers immediately open sweat shops where cheap laborers are following defined play-scripts to maximize impact, playing on multiple machines (“multi-boxing”). A New York Times article estimates that there are over 100,000 full-time gold farmers for the game in China alone.

2005 — Selling in-game currencies, items and services like character levelling evolves from a cottage industry into a hype industry, backed by multi-million Dollar investments. Ads for virtual goods and services in various virtual worlds are run on all major gaming sites.

2005 — A Second Life player called Anshe Chung (Ailin Graef in real life) earns $150,000 per year buying and selling virtual property within the platform.

2005 — Ultima Online launches Advanced Character Tokens, offering players the option to either configure a new mid-level character from scratch or to immediately advance an existing, low-level character for money.

2005 — Sony Online Entertainment launches Sony Station Exchange, allowing EverQuest II subscribers to securely buy and sell the rights to use virtual characters, items, and in-game currency for real money.

2005 — Shanghai gamer Qiu Chengwei kills another player in real-life over a dispute around a virtual item, worth 7.200 yuan ($1.000).

2005 — A Project Entropia player called Neverdie (Jon Jacobs in real life) mortgages his home to buy a virtual asteroid for $100,000. Neverdie develops the asteroid by building and operating a nightclub called “Club Neverdie”, as well as a stadium, shopping center, and bio-domes, earning him $200,000 per year from other players buying virtual goods and services.

2005 — Blizzard includes a scratch card in their Blizzcon 2005 gift bag that unlocks a unique pet in World of Warcraft. The scratch cards are found on Ebay after the event for thousands of Dollars.

2006 — Anshe Chung becomes the first (reported) Second Life millionaire by managing a team of artists and designers that develop virtual property with custom models and experiences. She represents the Second Life business community in BusinessWeek and other traditional news media.

2006 — MindArk, the developers of Planet Entropia, announce an ATM card bound to the in-game PED funds of the player. As a result, players can withdraw the real-world currency equivalent of their PED funds directly from participating ATMs.

2006 — Roblox launches, allowing players to create their own games and experiences using Roblox Studio, which can then be played by other users. This also includes tradable game assets like characters, skins, gear, and objects.

2006 — PC Gamer refuses to run ads for gold farming services. Other publications follow. This is part of an industry-wide backlash against gold farming sweat shops and worker exploitation.

2007 — Under pressure from SOE, Blizzard, and other publishers, Ebay creates a general policy to ban all sales of virtual game items. This does not include Second Life, which Ebay “doesn’t consider a game”, also stating that “Linden Lab, the company that owns Second Life, maintains that all virtual items created by the players are the property of the players, not Linden Lab.

2007 — A World of Warcraft character is sold for £5,000 ($6,200). Blizzard bans the account associated with the character 5 days later, citing the End User Agreements prohibiting real money trade. The character possessed many rare items, including the exceptionally rare twin Warglaives of Azzinoth, now lost forever.

2007 — Blizzard starts suing gold farming and trading companies like IGE, peons4hire and others for “interfering with the intended use of the game” and “substantially impairing the enjoyment of subscribers.”

2008 — EVE Online introduces Pilot’s License EXtensions (PLEX) as a secondary in-game currency. Players can buy PLEX tokens in-game, which can be redeemed to extend a player’s game subscription for 30 days (worth $18). Since PLEX tokens can be traded in-game, this creates an exchange rate between ISK (the primary currency in EVE) and real-world currencies. However, selling in-game currency or items for real-world money is still prohibited by CCP Games.

2009 — FarmVille is launched and becomes the most popular game on Facebook. Within weeks, companies start offering commercial “virtual crop tending services” in case users can’t invest enough time themselves or are on vacation.

2010 — Scientific American estimates that there are over 400,000 full-time gold farmers in China.

2010 — Neverdie sells the Asteroid Space Resort to various other Entropia Universe players & investors for a total of $635,000.

2010 — Gacha games become popular in Asia, combining grind-based gameplay of eastern MMOs with gamification aspects of social and mobile games. The games revolve around a main in-game currency, which can be gained by game play or by purchasing it from the game publisher directly, where the gameplay mechanics actively incentivize players to spend real-world money. Since there is a direct conversion rate between the central game currency, items and real money, game accounts are traded for their real-world value.

2011 — SEE Virtual Worlds acquires Planet Calypso, the initial planet in the Entropia Universe for $6 million. This includes all assets and responsibilities, meaning that SEE Digital Studios is now responsible for development and operations of this region of the virtual world.

2011 — Steam introduces Steam Trading to allow player-to-player trade of in-game items. It also announces Steam Workshop where users can sell their own creations like character skins or game assets like maps.

2013 — The recently released Counter Strike: Global Offensive adds loot boxes containing cosmetics that can be unlocked using virtual keys, purchased through in-game microtransactions. Players start trading accounts with rare cosmetics immediately.

2015 — Valve pays out $57 million to more than 1,500 creators on Steam Workshop for their sales of digital items.

2015 — For a brief period, Minecraft allows the creation of “illegal usernames” by accident, for example with only 2 characters or special characters. Many of these accounts are lost or deleted over time, but a few remain that now sell for thousands of Dollars.

2015 — Countries investigate gatcha game mechanics for their similarity to gambling, and some countries require drop rates to be made public, regulate, or ban certain practices.

2016 — CS:GO introduces Prime Matchmaking, requiring an account with a verified phone number to prevent cheaters or high-skilled players playing on alternative, lower ranked accounts. Services like MCA launch to offer account boosting services, items, and Prime accounts for money.

2017 — Roblox reaches 56 million monthly active players, with 1.7 million active creators. Creators earn up to $100,000 a month, with the top two poised to make more than $2 million per year. Overall, Roblox is paying out $30 million to the creator community in 2017.

2018 — Decentraland (aka Genesis City) is announced. Although no virtual world exists yet, users spend up to $200,000 for property deeds in the planned game.

2018 — Axie Infinity launches. Players breed and train digital pets called “Axies”, which they use to fight against other player’s pets. All Axies are NFTs on a blockchain, which makes them tradable in- and outside the game.

2020 — Decentraland launches. The central currency is a fixed-supply cryptocurrency while all virtual items and property are handled as NFTs.

2020 — Minecraft accounts with all Minecon capes are selling for up to $15,000.

2021 — After a decline, Roblox reaches 50 million active users again in 2021. Players created over 25 million virtual items with 5.8 billion item transactions (paid and free) in 2020. Every fifth player updates their avatar with new skins or models daily.

2021 — The Sandbox (re-)launches as blockchain-based virtual world. The central currency is a fixed-supply cryptocurrency while all virtual items and property are handled as NFTs. The initial plots of land are sold for a total of $1.4 million.

2021 — acquires 116 parcels of land in Decentraland for the cryptocurrency equivalent of around $2,4 million, to be used to organize digital fashion events and sell virtual clothes for avatars.

2021 — “Pay to Earn” becomes a new trend term, fueled by cryptocurrency and Web3 investors making claims around creating value and jobs, but ignoring the history around RMT and the negative externalities.

2021 — Axie Infinity tuns into a meta game as most active players are from the Philipines, acting as low-wage workers for “bosses” who use them to level up their game characters (Axies) and earn rewards, which they trade for real-world currency. The “gameplay” is now which bosses can recruit labor the cheapest. The cynical take is that this is “good, actually” while others see it as “digital colonialism”.

2022 — Diablo Immortal launches, evolving gacha games by turning loot boxes into small game play sections. The game didn’t launch in Belgium and the Netherlands due to local gambling laws and was banned in China shortly after launch. As with every other Diablo game, characters with rare items as well as gold and levelling services show up on Ebay within days.


To get a good overview of the day-to-day and people in the Real Money Trade business, I highly recommend Julian Dibbell’s book “Play Money: How I Quit My Day Job and Made Millions Trading Virtual Loot”, published in 2006. It documents his experiences as a trader of virtual gold and artifacts in Ultima Online between 2003 and 2004. The first half of the book covers the concepts of play, work, and money, while the second half covers his trading activities, during which he also describes his relationships with other traders, entrepreneurs and “Chinese gaming factories”. He also kept a diary on his blog, which is still public.

More recently, Ed Zitron’s “On The Value Of Time” is an excellent article looking into the value and monetization of joy, hustle culture and externalities in an always-on digital-physical / virtual-real world.

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About the series

The term “Metaverse” is currently claimed by many groups, driven by different incentives. Some groups attach the term to specific technologies (for example VR, AR, XR, Digital Twins or Blockchains), others see it as a future vision or narrative (sometimes dystopian, sometimes utopian). Some groups talk about the coming Metaverse, others argue that it already exists.

Fieldnotes from the Metaverse” is a series that discusses the history, visions, perspectives, and narratives of the Metaverse: Specific milestones, their immediate impact and how they shaped the discussion going forward. The goal is a holistic and inclusive view of the Metaverse space, separating visions, signals, trends, and hype.



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