The truth about IGE and the gold industry
To players like me, nothing is more corrupting than selling. In a virtual world where you are suppoused to earn your your status, some people like to take shortcuts, ruining the game for others (farming anyone?) After my recent post about what IGE owned, I got a lot of positive emails, thanking me for the info. With that feedback in mind, I decided to delve a bit deeper into IGE.
PLEASE NOTE: This has involved a lot of research. Archive.org, whois.sc WHOIS history, talking to people, investigating relationships. It has been an intensive process, and I have documented all that I could (and relied on reliable sources when I couldn't).
In the Beginning
IGE.com was originally used by an imagine processing company. Sometime in the middle of 2003, the company sprung up. While their original history is a bit muddled, the creation of the company is a bit quizzical. The company was founded by Brock Pierce, who was a child actor (his most famous movie being First Kid, with Sinbad). Originally based in Spain, the commpany moved to Hong Kong (I have verified by sources that is where they started). There was an internet rumor/article that later went on claiming that Brock's former partners (from a company called DEN) were infact child molestors. This culminated in the following vulgar flash video (NSFW). Some quotable news pieces:
DEN Founder Marc Collins-Rector Arrested in Spain After Two-Year Manhunt
- VentureReporter.net Monday, May 20, 2002, 4:15 PM ET
SIX-MINUTE SHOWS. Although they weren't named in the suit, DEN co-founders Chad M. Shackley, 24, and Brock Pierce, 18, also resigned. Company officials say they left with Collins-Rector because the trio is closely aligned and plans to start a new data-storage business.
As a (related) aside, DEN was one of the most spectacular flameouts on the web. An interesting read is the FuckedCompany board.
So Brock was management in a company that fleeced millions, happened to be in Spain where Collins-Rector was also, and then moved the company to HK right after he got arrested? Interesting bit of coincidences.
With that vulgar picture in mind, we take a break, and look at the original pioneer.
Gold Industry begins with Yantis
Selling virtual currency was nothing new when Brock came rolling in. eBay had tons of auctions for UO Gold (and still has quite a few). Yet what really got the market going was a Mr. Jonathan Yantis, of MySuperSales fame.
Originally starting with EverQuest, Yantis (as he was referred to) quickly became a villian in the game. Looking to broaden his appeal, Yantis bought out Monkly-Business, which was the favorite hangout for EQ Monks. Gaining more traffic from this, he then expanded and bought out Luclin.com and Prexus.com
What ensued was a firestorm. While M-B had been left alone, Yantis directly moderated the newly bought boards. Removing all bad press about himself, and seeding in threads about how great his service was, the two sites were completely dead within weeks, all links changing from the original sites to newly ones created by users. Yantis had tried using his money to buy part of the market, and he had failed.
This all happened before IGE even existed on the radar.
At this time, Yantis had successfully become the biggest player in the market. Dominating the marketplace at PlayerAuctions.com (Sony had successfully gotten eBay to remove all EQ auctions, and thus people used this site instead), he had also begun to aggressively advertise on other sites. With a 10% comission and a rumored 40% profit margin, Yantis was sitting pretty.
Then came IGE. Well-financed, the company started making inroads into the market. A professional service equal to Yantis, they started to gain market share.
Yantis was not sitting idly. For all the money he (and IGE) were making, their exposure was still very little. He owned a few sites, advertised on a few (but none of the big ones), and was paying quite a bit to advertise through Google and and Goto/Overture. It was with the introduction of IGE that in late 2002 Yantis started playing the SEO game.
A lot of SEO (search engine optimization) can be cast as spam. Stuffing their page with keywords, buying links from pages with high PageRank, these specialists game the system so that their sites show up on top of search engine results. (Please note: A lot of SEOers are great people, who don't spam or whore sites. But an equally large portion is a shady underbelly of the internet).
Suddenly Yantis was getting tons of traffic from search engines. He even broke top 10 on google for the word 'everquest', displacing quality sites with his platinum-selling storefront.
So while Yantis was rapidly getting new customers, whats a competitor to do?
And so begun a movement engineered by IGE to discredit Yantis. While Yantis was marked as being an individual using exploits and dupes to create gold, IGE set themselves up as the 'conscientous' choice, a good and moral company that didn't employ and farmers and just paid wholesalers.
Yes, I'm serious. The sentiment actually shifted with Yantis being blamed for all of EQ's ills and IGE looked up as a 'good' alternative.
But that didn't stop Yantis. Far from it. He kept growing and growing. IGE was also growing (and building contacts with game providers), but was still second to Yantis.
And so this continued until end of 2003. Suddenly MySuperSales went offline. Was all that money making just a mirage?
Not even close. While I cannot trace it specifically to IGE, the attack worked. Whois history shows Yantis suddenly moving to Rackspace after the worm was identified. You can see that Symantec marked its distribution high, so whoever put this out did a good job. Almost sounds like online rackateering.
But this worm was just a preview of the upcoming fierce battle.
Yantis begins acquiring MMO websites
Around New Year's of 2004, while everyone at SOE was busy eating and sleeping, Yantis announced the acquisition of a few sites. Starting with EQBeastlord and EQDruids, the sites had suddenly sold out to Yantis. But this time, instead of moderating the forums, Yantis opted to just stick his banner on the site, and leave it alone. A smart move - most newbies would end up just viewing the content anyway, missing all the bitching happening in the forums. And since he wasn't moderating the sites, a lot of the links never got removed.
And so began a movement that finally broke down the barrier and made currency selling common.
Happy with the results from the first days, Yantis started snapping up websites left and right. Before SOE even new what had happened, half a dozen class websites were under Yantis' ownership. And he wasn't done - not even close. Over the next few weeks, deals were made, only to be broken by IGE waving around money. The peak (with EQ) came with interealms.com - the largest forum community, it suppousedly went for over $50,000. What made this even more nuts was that Yantis had already bought and paid for the site. The owner actually returned the wire transfer and stated that Yantis, enraged with what had happened, actually threatened to sue him for breach of contract.
Along the way, in continuing to develop its relationship with game developers, IGE hired Themis Group, an MMO consulting company. After a fierce backlash, the company removed all signs of the deal ever having occured. Themis Group also owns the WarCry Network.
That never happened, as what happened next blew most people's minds.
IGE buys out Yantis
In the middle of this frenzy, where Yantis acquired 75% of the websites, IGE 25%, and SOE only moving to help out EQInterface (paying them over $10k/month!), a stunning announcement came: IGE had purchased MySuperSales.
Announced on January 22, 2004, the rumored value was that IGE had paid $10 million to Yantis. Of course, my sources confirmed this was not true. Instead what had happened was that Yantis (whose revenue was actually twice that of IGE) had not only realized that his image was tarnished, but also that with them competing with each other and the market growing, it was easier (and likely more profitable) to work together. The end result was that MySuperSales (a brand with a negative stigma) ceased to be actively promoted. In turn, Yantis became the biggest shareholder in IGE, and IGE started to use his backend (and suppliers). So much for the 'Yantis is an exploiter' idea. A funny aside is that IGE had used a lot of money to lure people from Yantis' side to IGE. These people were promptly fired.
At this time IGE had now become a juggernaut. With their management team (Brock as deal-making/schmoozing CEO, Alan as the president, Yantis for strategy/existing infrastructure, and Randy as their general counsel), IGE continued to grow while devouring its competition.
IGE's only visible competition at this time was Team-VIP. Suppousedly holding out for a million dollars, the company was suddenly engulfed by fraud and ceased to exist. The domain and site are now backup again, except this time owned by IGE.
At the same time, IGE had continued buying up marquee sites. While snapping up large sites like L2orphus.com for a reported $5000 (and generating that much in sales every day), the big payday came when IGE successfully purchased ThottBot. By far the most popular WoW website, it went for a reported $100,000, with Bill (Thott) hired at a $100,000/year salary. Not only did this give IGE the most trafficked MMO site on the internet, it also gave it a lot of leverage against Blizzard.
While all this was happening, IGE was still busy expanding. Hiring well-connected talent from other companies (such as Stephen Salyer, a Vice President at both Ubisoft and EA). This was a concentrated effort by them - connect and brand with users through MMO websites, and connect and establish relationships with developers through their hired executives.
And all around this time came the acquisition of OGaming. An upcoming network, IGE's latest purchase continued the trend of buying their way to prospective gold-buying customers. RPG Holdings was created as a new company that owns all MMO-fansite assets. IGE began to start advertising in magazines, and worked hard to hide the ogaming<-->IGE connection, and the Thottbot<-->ogaming connection. To their dismay, this relationship was exposed.
To further a positive image within the MMO community, a fake interview was put up on OGaming to push their agenda (this has since been deleted, but can still be viewed in the internet archive ).
Today IGE stands as a monsterous multimillion dollar operation with a stranglehold over the MMO gold industry. Some recent events of interest to gamers include:
- IGE made a fake bid of $60k a few months back for a vanguard site just to confuse/scare Sigil Games.
- IGE has acquired key domains, including ffxi.com, daoc.com, mxo.com, eq.com
- Yantis leaves the company, suppousedly 36 million dollar payday (but over 3 years).
- IGE acquires other companies, including Enotts and ezgaming
- Originally working on deals with SOE, Linden Labs, and WB, all three fall through as SOE launches its own system, Linden does its own thing, and WB sells MxO to SOE.
- IGE continues picking up executives from Yahoo! and Vivendi Universal (owners of Blizzard) (press page)
- IGE, suppousedly bleeding money and unable to afford Yantis payment (estimated 1 million/month) releases him from non-compete. Yantis creates GamerKing, with a wholesale deal with IGE, and immediately starts stealing away IGE affiliates and trying to buy out websites.
- Mogs and Lewt emerge as new competition, IGE talking to both Mogs and Lewt about a buyout.
If that isn't enough activity for you, here's the big news:
IGE acquires Allakhazam.
The deal happened in complete secrecy in about November 2005. Even many IGE employees were kept in the dark of the deal that was almost certainly worth millions.
IGE's OGaming had been bleeding money, and IGE was looking for a new website strategy. After adding gold currency ads to sites like thottbot and Ogaming, IGE shopped Ogaming around to investers but no one bought in. Thottbot and OGaming take up over 100 servers.
Working to integrate all of their web properties (Ogaming, Thottbot, and Allakhazam), IGE today announced plans to create a new super-network, Zam.com. This new MMO network is being spun to the community as if Allakhazam had purchased Ogaming when it was himself who was bought out. We thought the truth should be known.
Read Allakhazam's spin for yourself.
UPDATE : WoWHead.com is aquired by Affinity Media and joins the ZAM Network of IGE owned websites.
UPDATE November, 2008: Wired.com has posted a write up about the "The Decline and Fall of an Ultra Rich Online Gaming Empire" as it details more about the fate of IGE and a bit of an eye into the whole dark world of virtual gold and item selling.
UPDATE August, 2009: China bans gold farming and selling
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