For a long time, even before the old There closed in fact, we have wanted to find a way for people who developed virtual goods for There to be compensated with some sort of real currency, rather than the “virtual currency” they get today.
Due to advances in payment systems, we think we can now finally do just that.
In the near future buyers and sellers will have the option to transact business for virtual goods (actually, digital goods) using real money, and have the money flow directly from the buyer to the seller, with a small portion of the sale redirected to There (as it is today). It will be just “real life” where artists produce works, people buy them, and the gallery (that’s us) get a cut.
This is all possible today due to two advances by PayPal (and, we hope, other payment systems):
- Micro-Transactions for digital goods. This is key. It allows people to conduct transactions for small amounts of money for digital goods, and be charged a much lower transaction fee than they would for a “normal” transaction. The cool thing about this is that it was designed for “Digital Goods”, which is exactly what There transactions are about.
- Chained Transactions. These allow There to set up a transaction between a buyer, a seller, in such a way that There’s fees are automatically taken out and sent to There without the transaction passing “through” There as it does today. In this way, this is even better than the “gallery” model because the artist always gets their money right away, without waiting for a middleman to “process it”.
As of today, the only payment service which offers both of these features is PayPal. Others offer the second part – chained transactions – but only PayPal offers “digital transactions” at this time. To make this work, we need both pieces, otherwise it’s just not economical for anyone.
We’re sure many of you have questions, but I’m sure that the #1 question is “Why don’t you just do a Therebucks BuyBack like you did before?”. Here’s why:
- With a buyback, we actually have no idea where the Therebucks came from, not without crafting some sort of tracking system within the economy to make sure the Therebucks you were exchanging were Therebucks made from selling virtual goods. Without that, we’d be wide open for all kinds of shenanigans, many of which people tried to pull when we did hold a buyback. As it was, we had a full time person hand checking transaction histories to keep people honest. The “real money” system avoids all that since it only works for legitimate transactions.
- Doing a Buyback would mean we would have to increase expenses because someone would have process the requests, check them, issue the checks, and then send them to be to be signed and mailed (we’re in different locations). The “real money” system avoids all that as it all happens automatically.
- A Buyback would require that we set an “exchange rate”. Some places “float” the exchange rate according to demand. This means that you won’t really know what you’re going to get for your Therebucks. Some people may find this Ok, and others may not. The “real money” system avoids this since this is no exchange rate: It’s all in real currency.
- Setting an exchange rate to Therebucks implies, from an accounting standpoint, that every Therebuck in circulation is an overhang on the balance sheet. Even if this was applied only in part (only, say, 10% of the Therebucks are counted), this is still frightening. The “real money” system avoids this because there’s no “exchange rate”, and no intimation that Therebucks have any “real” value.
- We’d probably have to set up some sort of reserve to make sure we had cash on hand for Therebucks redemptions, which would mean taking significant amounts of revenue off the table “just in case” it got redeemed at a later date. The “real money” system avoids this, for the same reasons as #4.
- To keep a “run” on Therebucks redemptions from “breaking the bank”, we’d have to impose some sort of system to throttle or limit redemptions. Past experience has shown that whatever system we were to choose, anyone who couldn’t make a redemption when they wanted would regard it as “unfair”, and much unhappiness and drama would result (as a reminder, remember the uproar, cries of “unfair”, and rending of garments which occurred when we gave everyone an equal chance to claim PAZ drops in the world). The “real money” system avoids this, for the same reasons as #4.
Of course there “Real Money” system has it’s own risks. For example, if all of a sudden all transactions are conducted with real money, we’d see a precipitous drop in Therebuck sales. Or, people, accustomed to the idea of virtual currency, won’t want to use “Real Money”. But the risks of a “Buyback” far, far, outweigh these.
In my mind, the best part of this is that it gives the developer ultimate control over how their items are priced and sold. We’re no longer in the “middle” of the transaction, which means there’s one less entity involved – always a good thing.
We’re sure that there will be a thousand questions, such as Will items be “Real Money Only”, “Therebucks Only”, or both, or Can I change them on the fly? How will these items appear on my transaction history, and Do both parties have to have PayPal accounts? All of which we’ll be finding the answers and getting to you.
The issue of “Trial Accounts” is actually tied, indirectly to the “Real Money” issue.
The original plan was to implement “Real Money”, and then “Trial Accounts”, because we know developers have been clamoring for a “Real Money” solution since There re-opened.
After thinking about it, we think it would be better to do “Trial Accounts” first. Here’s why: When we introduce “Real Money”, we expect we’ll see a decline in Therebucks purchases, which will be bad for us, and, through inference, bad for you.
If we introduce a Trial Account system, we’ll be increasing the size of the population, and thus developer sales. We would expect this to at least partially offset the impact of reduced Therebuck sales.
So, we’ve decided to do Trial Accounts first, before Real Money.
Fortunately, we think we’ve come upon an easy way to implement Trial Accounts which will make it much faster than we had previously anticipated.
Let’s review the problems with “Trial Accounts” as they existed before:
- Abandoned accounts. The old There has literally hundreds of thousands of abandoned “Trial Accounts” in it, each one all the system’s data which represented an avatar and all it’s goods. These abandoned accounts caused all kinds of problems in the system, including poor performance, extended backup time (more data == more time for backups), and we’re sure other issues. (Believe it or not, the old There never had a way to deleting an Avatar and everything that goes with it, something we’re working on now).
- Pollution of the Avatar Namespace, a.k.a. “All the Good Avatar Names are Taken”. If it costs nothing to make an Avatar, then it costs nothing to take that Avatar name that you wanted, and lock it up forever.
- Providing an “open door” to under-age players. Despite evidence to the contrary sometimes, There is 18+, and the requirement to have a valid PayPal account is one deterrent to underage players (it’s by no means fool proof, but it’s a deterrent).
- Providing an “open door” to griefers and previously banned members. As we’ve seen, we have griefers, previously banned members, and previously banned underage members who are willing to pay $10 to get back into There, and Trial Accounts would just give them another way to do that.
To address of these issues, we’re going to first experiment with the idea of a “Trial Account Period”.
During this “Trial” period, the avatar will not, as many have suggested, have privileges like voice.
After the ‘Trial’ period expires, a subscription will be needed before the avatar can log in again, but now with full member privileges (voice included). Of course, if the Trial member decides that There is not for them, they need take no action and will not be charged a subscription.
The trial avatar will not be deleted immediately, should the member change their mind within TBD days and start a subscription (where “TBD” is a comfortably long period to allow a “Trial” member to change their mind and decide There is for them).
Of course, if the Trial member decided There’s not for them, they can do nothing, and nothing will be charged.
There are lots of ways we can tweak this – changing the length of the trial period, changing the types of privileges the Trial member gets, etc.
When the Trial Member signs up, we need to verify that they have a valid PayPal account. Unfortunately, there’s no way for us to determine that without making a charge, so we will make a small charge – less than a dollar – to validate the account. However, we will credit the account with Therebucks in exchange for the small charge, perhaps with some bonus included. This is in addition to any Therebucks gifted on the Welcome Walkway.
I understand that lots of people – especially those under 18, griefers, and banned members – who won’t like this system, because it makes it harder for you to get a trial account. On the other hand, it does allow the types of members There does want to get a “taste” of what There has to offer without making a monetary commitment.
We will probably also re-introduce the restrictions on who has access to the Welcome Walkway, and what they can wear, when when turn this back on.
To sum up:
- Members can sign up for a “Trial Account”, which will give them access to There for some period of time.
- The “Trial Account” won’t have certain privileges, such as voice, but will have privileges not granted to Trials in the past such as Music, and the “Explorer Pack” which allows use of the compass and favorite places.
- Once the “Trial” period is up, the member will need a monthly subscription, and will get all the cool privileges a regular There member does.
- A member who’s in a Trial can always convert immediately to a regular membership.
- A member who’s in a Trial can always do nothing, and be charged nothing (when their login privileges will be revoked is TBD).
We’re still deciding few other things, like how long will a Trial Avatar exist before we delete it (we’re building that functionality this time around).