One of the issues regarding Cloud Party is the inability to cash out. This is understandable as content creators are more likely to be tempted to engage if they can find financial reward. Cloud Party do allow you to pay for services such as island rentals using Cloud Party coins, so there is a degree of economic movement but it stays firmly within Cloud Party.
Kitely on the other hand allow people to list items on their marketplace with the option of a Paypal payment as well as Kitely credits. There’s no cashing out from Kitely but paypal payments are a way of a merchant getting cold hard cash. Again, like Cloud Party, the inworld currency can be used to pay for services.
However what people would really like to be able to do is to sell Cloud Party coins or Kitely credits in the same manner as Linden Dollars can be bought and sold. The beauty of this solution is that it adds an added level of consumer confidence, because when they make a purchase, they are doing so with an inworld currency, they aren’t handing over details to a stranger in a virtual land. That’s the beauty of the virtual currency.
Recent legislation in the USA has given platform providers the heebie jeebies about users selling virtual currencies, hence why they aren’t that widely available. However you would think that someone would seize the opportunity to tap into this market, be that Paypal, Amazon or even Linden Lab.
Now I’m sure plenty of companies would like the idea of selling virtual currencies to consumers, the part they aren’t so keen on is allowing users to sell that virtual currency. Linden Lab of course do this with the Lindex, so why can’t they expand this to offering a service to other companies?
Let’s say someone develops a game on Desura, Linden Lab could offer a version of the Lindex for users of that game who could then buy and sell a virtual currency. This would therefore provide the stability of people being happy with using a virtual currency coupled with content creators and devs being able to monetise said project. Linden Lab would collect a fee from the devs for providing the service and a fee on transactions.
Amazon and Paypal should also be looking for a piece of this sort of pie. Amazon are already part of the way there with Game connect, which informs end users who link their account to a game:
“Note: Amazon will not collect your game account password or share any information with the game company, including your username, password, payment information, address, or telephone number.”
Paypal have been part of the way there with DiabloIII. On Diablo III there was the real money auction house, I’m not sure if it has gone yet, they are closing it down. However amongst sales of digital items, you could also sell gold for use in the game. Now when you sold an item on the real money auction house you had the option to have your income from the sale deposited to Paypal.
So it’s not as if the concepts of buying and selling virtual currencies are alien concepts or there are no examples of them in action.
Amazon and Paypal are trusted brands, ok some people have had bad experiences with them, but they are trusted brands. Linden Lab are not as well known as Amazon and Paypal but are certainly well beyond the point of being considered a fligh by night company.
There’s a gaping opportunity in the market here for companies to take over the responsibility of providing virtual currency exchanges, companies who know all about their legal obligations and have the means and know how on how to deliver them.
Virtual worlds, virtual currencies, user generated content, these markets are going to continue to grow, someone should be look to establish the means to allow users, publishers and content creators to safely and seamlessly enrich their vision.
Hi Ciaran,
Thank you for the coverage 🙂
Just one clarification, all transactions between users in Kitely Market using real money are done using avatar identities. The buyer gets the avatar identity of the merchant and the merchant gets the avatar identity of the buyer. Those two parties never need to exchange their real world identifying information, their billing information or even their email addresses.
The buyer buys using PayPal and that money is transfered to Kitely’s PayPal account. We then hold on to the money for a vesting period that serves to limit both credit card fraud and provide time in which people can report merchants trying to sell content which they don’t own before they can get away with the money. Once the money has cleared the withholding period we transfer it, minus our sales commission, to the merchant’s PayPal account.
By acting as a middleman we also shield the merchant from having to deal with PayPal disputes and credit card chargebacks themselves. Our withholding period is a day longer than PayPal transaction dispute window and, unless there is obvious attempt at fraud by the merchant, credit card chargebacks are deducted from merchant’s future payouts and not clawed back from their PayPal account.
In effect, Kitely Market enables people to buy and sell virtual goods using real money without losing the anonymity benefits that you mentioned which are gained from using a virtual currency.
Thanks very much for the update Ilan. Much appreciated that you took the time out to provide such detailed information regarding this.