The Decline and Fall of an MMOG Gold Farming Empire

[Mr. Hrm]

The business on which IGE was built was sold off, and the company shed its name, becoming Affinity Media and redefining itself as a marketer of the MMO community sites it once bought just to boost its own traffic. IGE US persisted, but only as a holding company with no holdings other than a minority stake in Affinity. It was empty now, a husk.

IGE.com persisted as well and remained, as it remains today, among the top virtual-currency sites. But it belonged to Yantis now, who owned it through a web of companies registered in places like Vanuatu and Australia and more resistant to lawsuits like Hernandez's. It took Yantis a while to sort out the mess Pierce had left behind. Many suppliers had gone unpaid and were still harassing the former IGE Shanghai for payment. In May, according to a rumor that made the rounds of MMO blogs, a desperate gold-farm operator stormed the IGE Shanghai offices demanding 2 million yuan and using a "toy pistol" to hold employees hostage.

But accounts were settled in the end, and new practices stabilized the supply chain. "Basically," says James Clarke, a veteran turnaround executive who replaced Debonneville as IGE's COO (and left the company last January), "what happens now is that the risk has been pushed further up the supply chain. Retailers often don't even touch the gold; they don't even have accounts anymore. It's the farmer that holds the gold and risks the banning."

This was not a great way for Pierce to start the year—and the year never got much better. In June, he was forced out as CEO of Affinity and replaced by Stephen Bannon, the investment banker who had joined the board when the Goldman Sachs deal went through. That same month, Debonneville sued Pierce in Los Angeles federal court, seeking millions of dollars in damages for "breaches of fiduciary duty, breaches of contract, and fraud" related to Debonneville's exclusion from the Goldman buyout—and dredging up questions of character that reached all the way back to the DEN days. A few months later, as if on cue, Collins-Rector made British tabloid news when he reportedly turned up in London consorting with teenage boys ("Tycoon Paedo on Prowl in UK" blared one headline). Debonneville's court filings, meanwhile, revealed that the year before, Pierce had told him that Collins-Rector was blackmailing him, threatening to snarl IGE in litigation that would make it unattractive to investors. Debonneville's suit was settled before it got to court. By the year's end, it looked like Pierce might never really escape the shadows of his past.



Pierce Brock in The Mighty Ducks, 1996.


But by then it was clear that Pierce's undoing had also been the result of uncertainties about the nature of virtual goods in general. Who really owns them? Who determines their value? These are the kinds of questions that a case like Hernandez's should have helped resolve. And as long as they remain unsettled, no game company will ever let any single independent entity control the amounts of virtual wealth that Pierce and IGE once did.

Not that Steve Salyer was wrong to suggest that one day "millions" would be earning a living in the markets IGE pioneered (already the number doing so in China has reached the hundreds of thousands). Or that Pierce was wrong to think that MMO publishers would one day accept the inevitability of RMT in some form or another. In the past year, there's been accelerated movement toward publisher-sanctioned item sales: Funcom, makers of the new MMO Age of Conan, and Sony Online Entertainment have both announced partnerships with a startup called Live Gamer to provide player-to-player RMT exchange sites. At the same time, the so-called free-to-play model—no subscription fees, revenue derived entirely from direct sales of in-game items—has made inroads in the Asian MMO market and is being embraced by no less a gaming giant than Electronic Arts in the upcoming Battlefield Heroes. But both these models, in their blunt rejection of IGE's third-party retail model, only underline what Pierce himself implicitly conceded when he sold out to Yantis: There is no future for his once-bright dream except in the dimness of what is plainly now a permanent gray market.

The Decline and Fall of an Ultra Rich Online Gaming Empire