If you’ve been following along with SamSyn’s most excellent updates, we’re getting close to testing the “Real Money for Developers” project.
In short, what this project does is take the “Virtual Currency” out of Digital Goods sales in There. Note I said “digital Goods”, since that’s what developer sales are – sales of things you created which just happen to be in digital form – as opposed to “virtual goods”.
For things that you sell this way there are no more issues about T$ exchange rates, T$ buybacks, etc. You (the developer) put your things up for sale for Real Money, people pay Real Money, and you get Real Money for them.
I’m not quite sure this has ever been done before in a Social Virtual World before (if so, I’d love to hear about it).
For There, this is both very exciting, and very scary.
It’s exciting because:
- Developers can now get real money for their work. Hard cash. In your pocket (well, ok, your PayPal account).
- Developers now own even more of the transaction between them and their customer. In fact, in PayPal parlance, There is now a “Secondary Receiver” since we just get a portion of the sale.
- Developers have more incentive to bring themselves customers in There (because they’re being paid in Real Money, perhaps using other channels like their Facebook and Twitter feeds.
And, frankly, it’s exciting because it sweeps aside the whole “T$ BuyBack”/”3rd Party Resellers” issue. If you, as a developer, want to make real US $ for your goods, then you’re free to offer them that way.
(On top of all the other issues with “T$ BuyBack”/”3rd party resellers” we’ve discussed before, there’s the issue that since There was previously wildly unprofitable, every T$ was, in essence, subsidized by it’s investors, and, when you sold that T$ on the 3rd party market, a small part of that was subsidized also. Ugh).
It’s scary because:
- Depending on how many people opt to buy and sell this way, it could cause a significant drop in There’s revenue (because people aren’t purchasing Therebucks to purchase the items). Of course, we will still get a cut of the sale, but it’s not the same as us getting the whole Therebuck purchase revenue.
- This is a whole new level of responsibility for Developers, and people purchasing items from them. Since There’s not in the middle any more, Developers will have to take more responsibility for disputes, and keeping their customers happy. Fortunately, it will never be a matter of “I want to return this because it didn’t fit”, “I want to return this because I’m allergic to the fabric”, or “I just bought this to wear to the Oscars, and even though Lindsay spilled cocktail sauce all over it at an after-party, I want to return it”, but there could be issues which are new and unexpected. That being said, I’m sure they will step up to the plate, and have fun with it.
Let me go ahead and try to answer some questions ahead of time:
Q. Why are you making us (the Developer and Buyer) use PayPal?
A. That’s easy. Because PayPal is the only payment provider that provides a reduced transaction rate for digital goods (micropayments). You can read about it here (click on the “Pricing” tab).
Q. Why are you making us (the Developer) pay the PayPal Fees?
A. The biggest reason (apart from the usual litany of us being “Evil”, “Money Grubbing”, “Capitalist Pigs”, “Greedy”, and “Not caring about anyone”) is that it cost us (There) significant money to develop this feature, and the end result will we will make less off each sale than we did before. Bearing all that in mind, it doesn’t seem unfair that we’re asking the developer to foot the PayPal fees. I’m sure 99% of the people paying those fees will disagree, and maybe that will change some day if the program is wildly successful.
Q. When will you allow be to sell T$ to third party resellers?
A. For all the reasons we’ve discussed before, we’re sorry, but you can’t do that. It’s against the Terms of Service, and can result in you never having to worry about T$ again.
Q. What fees will you charge?
A. Our fees don’t change. The only difference (to There) is that we get the money when the sale is made, rather than “in advance” when the buyer purchases the Therebucks to eventually buy the item. Weird, huh?
Q. Will Developers have to pay income tax on money they earn?
A. We don’t know, and, even if we did, we wouldn’t tell you. It’s up to you to work with your financial or tax consultant to figure that out.
Q. Will you send developers a 1099?
A. No. The developer is the Primary recipient in this transaction, it’s up to them to tend their own finances. After all they’e a merchant now :-).
Q. Shouldn’t There pay my income taxes for me on any Developer sales I happen to make?
A. Ummm. No.
Those are all the questions I can think of.
I really, really, really hope people will focus on how to make this work best for Developers and Customers, and how we can drive more sales to Developers so they’ll make more stuff, and in turn make more money, so they’ll make more stuff…
In many ways, this feature is 110% for them, and although it’s been a long time coming, we’re really happy to offer it and see it go to work.
So let’s put it to work!
I am so There 
#1 by maxsmoke777 on 2013.11.28 - 9:04 am
Let me outline 3 reasons why USD transactions are a bad idea:
#1. PayPal is taking a nice big cut out of of all There product sales. That’s money that’s not going to the There.com nor the developers, but a completely unrelated 3rd party for the privilege of handling our transactions.
#2. There developers used to often spend a good chunk of their Tbux earnings in-game, for showrooms and their own entertainment. By separating the USD transactions from Tbuxs, then *OF COURSE* every developer is going to list for USD. Why wouldn’t they? They can just buy Tbuxs as they need. Only now they’ll have second thoughts about spending their hard earned Tbuxs… The less they put back in, the less your company gets to keep. It’s also discourging developers from participating in the game like they used to.
#3. By forcing end users out of the Tbux system and back into the real-world dollars, you’ll only force them to reexamine whether or not that large purchase of items is really worth it. By buying Tbuxs, you give them a mental buffer between the item and it’s real-world value. Even a really savvy buyer is still more likely to spend a TBux then a real-like dollar, especially if they bought a large amount for one transaction and had some left over to to blow through. You can’t say the same thing about USD. Anything that forces a reexamination of a purchase is going to slow down sales. There’s a reason items in a convenience store are much more expensive then a big warehouse store that’s right near by. It’s all about that impulse purchase.
I do have an alternative suggestion: How about Developer Bucks?
Instead of paying developers in Tbuxs, pay us in “D-Buxs”. Each D-Buck would be worth 1 Tbux. We can exchanging them for Tbuxs, spend them for developer fees, or (most importantly) real-world dollars. Nobody will be buying up Tbuxs and trying to liquidate them into your financial ruin, as you always seem to fear. Developers just choose how much of their earnings they want back in real-world money, and how much they want in Tbuxs for the game. PayPal handles the sell off of Dbuxs, and because it’ll be larger sums, they won’t get the same RIDICULOUSLY large cut they get now. For small item sales, PayPal is getting up to %40 of each transaction. You can’t tell me you’re any more happy about then that I am or the end users. It’s a big fat PayPal tax on all USD’s right now!
You keep more money, developers get more money, and most importantly, more money REMAINS in There.
#2 by GreenAngel on 2013.10.15 - 7:35 pm
Hi Michael, I have an item on auction, #5317987, animated lightening for $13000 t-buxs, but for some reason three people had purchased my auction item for 240 t-bux. can you please check into this. Thank you GreenAngel
#3 by Leo Pond on 2013.10.08 - 5:50 pm
Energies should be focused on “populating” the world, and perhaps bringing in more consumers, because they are scarce as is, leading to discouraged developers who see no output for their inputs. Not against this, but it would be more of a theory than a practice if rolled out in this current state of the world.
#4 by Michael Wilson on 2013.10.09 - 4:36 am
That might be true, but we have gotten more feedback from Developers who feel that they should be able to get real money for their work, mostly in the forms of traditional third party T$ resellers.
Since we know that’s not acceptable to There as a business, this is the next best (actually, better) solution.
And, in reality I think it should help enlist the Developers to help us bring people to the World. After all, we (There) have now provided that software, the infrastructure, the utilities, etc for the “Town” that is There, and now we need the merchant’s help to make it grow. It’s not just rhetorical now – Merchants can make real money, so the end result is good for everyone.
#5 by FredT on 2013.10.13 - 10:47 am
Does that mean you think that with this new incentive, developers are now going to be pulling in new users and convincing them to front $10 a month for a membership just so they will then be able to pay more money for in-game items?
That’s the upshot of this that you foresee?
I’m not trying to be funny, but it genuinely seems like you WANT there to be a ghost town. You seem to always lean toward banning “griefers”, preventing entire classes of users (young people, people who once got in an argument with a moderator in the old There, people without access to paypal, etc.) from ever joining in no matter what. I’m not talking about cases where you’re forced to make a decision that excludes people–maybe each of the examples I just gave can’t be avoided–I’m talking about what you seem to want. It’s not just that you can’t find a way to bring (for example) non-paypal users in. You don’t seem to think that’s an important goal in the first place. You don’t want them in. A world full of people teeming around just does not seem to be the there you envision.
Clearly, what you want is for there to be a first and foremost NOT a virtual world for socializing and exploring, but a marketplace where people come to spend money on virtual real estate and in-game items. But then you also charge them just for the ability to sign in. Think of that– a market where you have to pay to enter. Like amazon.com charging $10 a month just to browse the catalog. Maybe it’s not a logical impossibility that such a thing could work, but it certainly is prohibitive–it certainly does DISCOURAGE people from flocking to the marketplace en masse. You will get some sellers and a few (very few) highly dedicated “buyers” who account for 99% or more of the money changing hands, and that will be it. You won’t have a population, or a broad userbase. You’ll have a ghost town with–yes–a tiny, ever-dwindling trickle of money flowing in.
I am sincerely asking, what fun is that? Why would anyone want a ghost town?
Let’s bring in the masses. The griefers, the freeloaders and cheapskates, the newbs, the explorers and casual card players, the old people, the young people, the single people and the married people, the sane people and the crazy people, all of them.
If you want people to spend real money on a new in-game outfit, then give them a mob of other people they can show off their new outfit to. If you want folks to be buying boats and cars, give them a crowd of strangers they can take for rides– or mow down as they please. Give us PEOPLE–give us life! Make the world fun, and the money will come. It’s self defeating to try and do it the other way around.
#6 by Michael Wilson on 2013.10.13 - 10:58 am
We tried to run the world for Free. For over 10 years. And, every year, There lost more money than it took in.
The net affect of “griefers, the freeloaders” was increased support costs (because those people thought it was fun to antagonize other players, and those players turned to the There to control them), increased risk because some minor could meet up with some miscreant, and that child’s parents would hold the company responsible.
“It’s not just that you can’t find a way to bring (for example) non-paypal users in. You don’t seem to think that’s an important goal in the first place. ” In the old There, we actually handled credit cards, which caused us to have to “vault” the credit card numbers, and forced us to be “PCI Compliant”, which was an expensive process to prove to the credit card companies we were secure enough to vault the cards (we were).
To save costs, and risks, we don’t do that any more. We use PayPal because, as much as some people dislike it, millions of people don’t. Aside from that, Paypal is the only platform which allows for microtransactions for digital goods. I suppose we could add support for other platforms, like Stripe, or the smaller providers, but it’s not clear that they will allow more people in (I think Stripe JUST got working in Canada, for example), AND you’ll still have to use PayPal to buy developer goods who want real money.
When we started charging for it, and limiting it to members who were 18+, for the first time in it’s history, There actually broken even.
We’d ALL like there to be more people in There. But not by repeating the same failed strategies we used before.
#7 by dx on 2013.10.22 - 12:39 am
Excellent work and solution for a promising and fruitful next generation of There. To a bright and positive There-tomorrow! Let’s make it happen! ‘cheers
#8 by Thumdar on 2013.10.07 - 2:08 pm
I’m have to say bravo! It makes so much sense to offer this feature to developers and for many reasons. Perhaps the combination of There’s new ‘Real Money for Developers’ and the recent upheaval with SL’s new TOS will bring an influx of designers into There. More designs, more Auction options, more exciting There. Bravo.
#9 by Jimuari Therian on 2013.10.07 - 12:19 pm
I may be wrong but did not Kaneva do the same thing as they can sell for real money or K$(whatever they call it now). I believe they can only do that after having submitted in world for K$ so many times first. I have no knowledge as to how that worked out for them. I like the idea that we can try it here. Thank you.
#10 by Namron Therian on 2013.10.07 - 8:57 am
I have a question about Developer sales and purchases that might occur from outside the US.
In previous postings, you’ve mentioned that this new feature would be available only for purchases that occur from members that are in the US. but When I read the link above, the pricing indicates “There’s an additional 2.5% charge for any currency conversion and a 1% charge to receive payments from another country.” That would imply that micro transactions could occur as long as the extra fee is paid (by the developer, unless there is a way for them to pass this on to the customer).
Am I correct or mistaken?
#11 by Michael Wilson on 2013.10.07 - 9:03 am
I actually don’t know.
All we tell PayPal is “Fees to be paid by Primary (recipient)”, which would mean the fees would be passed onto you (the Developer), so, I think you’re correct.
#12 by Namron Therian on 2013.10.08 - 10:45 pm
So, assuming we’re both correct, the developers will also need to keep these two fees (currency conversion and foreign payment) in mind when setting (real) prices in order not to get “bit” when someone purchases in foreign currency or from out of country)
#13 by Michael Wilson on 2013.10.09 - 4:32 am
I imagine so. At this point I’m not sure it will happen a lot, as many people from foreign countries appear to be having problems using PayPal for There, as they claim that’s “the reason” they won’t/can’t pay.
#14 by coolnet on 2013.10.07 - 7:17 am
What I’m concern is privacy. If members purchase a item via PayPal, what information will the developers receive from us (consumers)? Will they have information will they have of us? Are they going to know our address and other personal information?
#15 by Michael Wilson on 2013.10.07 - 7:26 am
Since the money part of the transaction is handled between the Developer, the Buyer, and Paypal, it will be no more information
than PayPal requires to get the payment from you to seller (e.g., There isn’t involved any more). I don’t expect a shipping address will
be involved (“Where should we send those Bits, Mr. Smith?”), but there will obviously be some identifying information in the transaction.
Since PayPal’s been in business for a long time, I don’t suspect it will be more information than will be necessary to complete the transaction
and maintain a proper record of it.
#16 by coolnet on 2013.10.07 - 10:28 am
Oh I see. Okay. Thanks 🙂 One other thing came into mind, A member purchases a buggy for 16,000 therebucks, lets say the member has 10,000 therebucks and wants to pay the rest through paypal, will the system allow us to do it? Also, this goes with the same if you are gifting it to another person.
Thank you again for answering my questions. 🙂 I’m very excited to see another form of payment. 🙂 Hopefully, in future we could use ultimate game cards to purchase therebucks only (if possibility).
#17 by Andrew Almeida on 2013.10.07 - 3:55 pm
But it would include a person’s real name?
#18 by Ox64 on 2013.10.07 - 1:41 pm
That’s not a bad thing. In the small event some merchant tries to scam someone over, it will be harder for them to escape anonymously. Great thing about this going through Paypal is being able to dispute transactions (and maybe a bad thing too in some cases). Takes a lot of headache off There.com too! If privacy is a concern with anyone, they need to unplug their computer from the internet as there’s bigger things to worry about than Paypal…aka NSA 🙂
#19 by Michael Wilson on 2013.10.09 - 4:37 am
I agree. This is real money now folks, and it you want to play with the real thing, you have to follow the real-world rules.
#20 by MaxSMoke777 on 2013.11.17 - 4:35 pm
How could a developer (aka Merchant) rip off a There user? It will really just be used to get free items out of developers. Some people will use any excuse possible, point out any defect, eyeball any imperfection in the texture map, just to claim they have the right for a complete refund *AND* keep the supposively returned item as well.