No Fun and Games in Cyberspace

By now you've almost certainly heard about "phishing," when online criminals send to unsuspecting individuals emails dressed up to look like those from legitimate businesses -- including, in many cases, businesses those individuals actually patronize. The emails often send those users to official-looking websites and request personal information, such as payment or login data, compromising the customer.

The latest case of phishing is an interesting one because the company whose customers are being targeted didn't have such liabilities just a few years ago. The company? Japanese video game software maker Square Enix, publisher of the online "massive multiplayer online role playing game" (or, only slightly less dauntingly, MMORPG) Final Fantasy XI. Now it and other companies traditionally in the "old-fashioned business" of writing, packaging, and marketing software that's sold in one-off form at the local Best Buy are facing big, new headaches.

MMORPGs such as FFXI, Electronic Arts' (Nasdaq: ERTS  ) The Sims Online and Ultima Online, NCSoft's City of Heroes, Sony's (NYSE: SNE  ) Star Wars Galaxies and Everquest, and Vivendi Universal's (NYSE: V  ) World of Warcraft allow players to immerse themselves in imaginary worlds and storylines while interacting with other players from around the real world in exchange for a monthly fee.

Lately, it seems, phishers have been targeting FFXI players and their login information. Their goal isn't to play the game for free or nab credit card numbers, but to steal into an account and pilfer valuable items and in-game money from their victims' characters. Those items can then be used or sold either in the game or even, it seems, in real life on eBay. (The FFXI market for money, characters, and gear isn't as developed as it is for some other games, such as EverQuest and Ultima.)

Some of the phishers apparently have mean streaks that run deep. User reports suggest that they even command their shanghaied avatars to irrevocably dump a certain kind of gear that, while very valuable to the owner, has no in-game or real-life market value because the game doesn't allow players to sell or trade it -- it can only be acquired through a series of time-consuming trials, and only after significant time has already been invested in the game.

Time is, in the end, what these games are all about. The company needs you to want to come back month after month, so it's vitally important that it measures out the game's difficulty and storyline in amounts that strike the proper balance. Some folks will live online, while others will quit in frustration after just a few weeks or months, their initial investment essentially sunk.

You can bet Square Enix and its competitors have carefully developed formulas for how long they want and expect players to stick around -- and what they have to do to get them to do so. If players don't invest substantial hours, they won't acquire the equipment and attributes needed to have a full game experience.

A made-up example: Brewing a magic drink might take only a matter of seconds, but acquiring the ingredients could involve a series of tasks that take far longer. Trying to bypass those tasks by purchasing the ingredients could be much quicker -- except the in-game money needed to buy them might take even longer to get. And then there's the matter of developing a high-enough skill in brewing that your ingredients aren't wasted.

Some players don't relish this process, which is precisely why you can buy characters, money, and equipment online -- and why phishers are keen to steal it. To maintain an equitable experience for all games, Square Enix has to shut them down.

There's an obvious trade-off for dealing with these new headaches: reliable, repeat business. FFXI will run you $100 for the PlayStation 2 (because you need a special hard drive to store the game) and $30 for PC players; after a free first month, you pay $13 for each month of play. If you play for a year, that can end up north of $200 in revenues for just one game. "Expansion packs" that add more bells, whistles, and plots can fatten the take. Companies like Square Enix are betting that the extra hassle is worth it in the long term.

Fool contributor Dave Marino-Nachison doesn't own any of the companies mentioned.


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