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Op/Ed: PlayNoEvil on John Smedley's Brilliant Con

Posted Fri, Feb 08, 2008 by Aelryn

You sly devil, you.

The well-known PlayNoEvil blog has an article explaining how John Smedley's Live Gamer deal was a brilliant move for SOE, shifting all of the risk of RMT to another company while raking in the rewards.

Now... and here's the brilliant bit, Mr. Smedley taps Live Gamer for its partner (it really wouldn't matter which of these guys he chooses). He probably sold the Station Exchange software for cash and equity in the company (on the odd chances that it succeeds).

Depending on the details of the deal (of which I have no knowledge), SOE gets all of the benefits of legitimate RMT without any of the costs and, perhaps, cash back to recover its own costs in developing Station Exchange. Live Gamer and its VC investors get to pick up all of the customer support and transaction risks associated with the transactions... for the privilege of a modest percentage of revenues.

No doubt, SOE was smart and retains the right to get a copy of the software and operating configuration if Live Gamer goes belly up via a software escrow procedure.

Total Slam Dunk for SOE:

All of the operational advantages of legitimate RMT by dumping / handing off customer support to Live Gamer
Recovery of development costs in exchange for equity and cash of Station Exchange
All of the financial risks associated with fraudulent transactions transfered to Live Gamer

Home run. Bravo, Mr. Smedley.

Read the whole post at PlayNoEvil and then come and tell us what you think about this.

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