Players, or the publisher, swap in-game items and currency for real money.
Putting a cash price on in-game items and time makes play feel like work and draws in farming and fraud, even when the publisher runs the market itself.
Items or in-game money from other players, or from the publisher's official exchange, for real cash. In the official versions you buy a token or currency that converts between cash and gold or game time. The unofficial versions break most games' rules and put your account at risk.
Players decided items and gold were worth real cash before any publisher did. Publishers first banned it, then sued sellers, then, when they could not beat it, absorbed it. Behind the grey market was a workforce of gold farmers (people paid to grind for in-game currency to sell), working shifts and selling through brokers. The official versions turned your time into something with a price: EVE Online's PLEX (cash for game time), the WoW Token, and Diablo III's real money auction house, which killed the game's loot loop by teaching players to refresh listings instead of hunting treasure.
Official, clearly priced exchanges (such as a token that buys game time) are the mild end. Unofficial gold, account and item sales break the rules of most games and risk the account.
Players sold Ultima Online swords and EverQuest platinum for real cash on eBay from the late 1990s. Economist Edward Castronova's 2001 study found EverQuest's platinum piece traded for more than the Japanese yen. Sony banned the trade, then in July 2005 opened its own official marketplace, Station Exchange. By December 2005 an estimated 100,000 people, over 80% of them in China, worked full time as gold farmers, selling through brokers such as IGE. Blizzard sued gold sellers in 2007, a case that ended in a consent order and permanent injunction in January 2008, then in June 2012 launched a real money auction house inside Diablo III, which it shut on 18 March 2014 after admitting it 'ultimately undermines Diablo's core game play: kill monsters to get cool loot'. EVE Online added PLEX in November 2008, and Blizzard launched the WoW Token on 7 April 2015, selling gold for cash officially. Publishers did not beat the grey market so much as absorb it, and once your time in a game had an official price, play-to-earn was the next step.
Blizzard v. In Game Dollar, LLC (filed 22 May 2007) ended in a permanent injunction by consent order on 28 January 2008.
Historical prices and revenues are in US dollars at the time unless marked A$.
Economist Edward Castronova's 2001 study found EverQuest's platinum piece traded for more than the Japanese yen or Italian lira.
Sony Online Entertainment banned real-money trading of EverQuest items, then opened its own official player auction, Station Exchange, on 20 July 2005.
By December 2005 an estimated 100,000 people, more than 80% of them in China, worked full time as gold farmers, with industry revenue estimated at roughly $100 million to $1 billion a year.
Diablo III's Real Money Auction House launched on 12 June 2012 and was shut down on 18 March 2014; Blizzard said it 'ultimately undermines Diablo's core game play: kill monsters to get cool loot'.
Covered in Video Games & Money: Ep 37 · Grey market, Ep 16 · Sub mmo.