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How big is the RMT market anyway?

Monopoly money -- photo by goat_girl_photosQuite a few very different estimates of the volume of real-money trade of virtual items (RMT) are available. Part of the reason for the different estimates is the very rapid growth of the user base, and the number of potential real-money traders, in virtual worlds. New service types also spring up, and there are difficulties in defining what RMT should actually include. Regardless of what we decide to include in it, measuring it directly is practically impossible. In this post I review the existing estimates, speculate on what exactly might be included in them, and try to sum up some of the latest regional figures to produce an estimate of the grand total size of the RMT market.

In what follows, I conclude that what I consider as an important part of RMT is often excluded when RMT is discussed. In many cases it is also very hard to say exactly what the RMT market estimates include. Summing up the current RMT estimates from Asia and extrapolating from the recent Station Exchange statistics, I estimate the total worldwide RMT volume to reach USD 1,820M 2,090M (see comment below). The main contribution to the figure comes from the Asian market.

Perhaps a disclaimer is in place here. This article includes very rough estimates and heavy generalizations, all of which are not explicitly stated but should be apparent. I also rely exclusively on secondary sources of information.

What exactly is real-money trade of virtual property?

Even though many are used to thinking of virtual property as something that exists in full-fledged virtual worlds and MMOGs only, it is hard to find qualitative differences between buying a three-dimensional object in Second Life and a two-dimensional object in Tencent QQ or IRC-Galleria. According to Fairfield’s definition, both are virtual property. While virtual worlds get more attention in the press, other community services may have significant RMT as well.

In addition to including only the virtual world RMT, it seems that RMT is often restricted to the so-called secondary markets. These include the user-to-user trade in e.g. eBay or in dedicated marketplaces and, more recently, also the IGE-type trade through a middleman.

Apart from the secondary market of MMOG items, there is also a kind of primary market for virtual property, in which the operators of certain services sell virtual items to users for real money. Such services are usually free to use. Typically players buy the service’s own internal currency with real money, and use that currency for microtransactions inside the service. Examples of virtual property sold at such primary markets include the virtual furni, basically tradable personalization of the users’ accounts, in the Habbo Hotel; the cars, car paintings, weapons, and other items sold in Kart Rider (played mainly in Korea); the land sale in the hyped Second Life; and the virtual personalization items of accounts in Tencent QQ, the Chinese instant messenger service.

In addition to the typical MMO game avatars, there are other types of “avatars” as well, e.g. desirable Tencent QQ and ICQ numbers, which can be sold. The Q-coins, the internal money of Tencent QQ, are also an interesting issue. If virtual items sold by the operators are to be included, what part of the trade that happens with Q-coins should be counted in? The purchases of personalization items at the least, because they are clearly virtual property. However, the Q-coins are used also as e-payment for purchases of “real” goods and services, so all of the Q-coin trading cannot be included.

The list of controversial examples could be easily continued. Even if the trade from the operator to user is not counted in, there are quite a few open questions concerning the RMT concept. Drawing the line between the primary and secondary markets is artificial, since the motivations to purchase items in either market are likely overlapping, and in both cases real money changes hands for virtual property. Why should the real-money trade of virtual property as a term include only certain kind of real-money trade of virtual property?

The scope of some popular estimates

Some of the current estimates are collected in the following table.

RMT estimates

Edward Castronova published the first estimate of the volume of RMT in 2001. The figure was based on measuring the daily volume of Everquest-related RMT transactions, and estimating the yearly volume based on the daily volume. On one day at one web site, the total volume of RMT auctions was USD 12,900. The site in question was presumably eBay. On a yearly basis, assuming constant trade volume, this adds up to about USD 5M. As for an estimate of the total RMT of Everquest in 2001, doubling the figure to about USD 10M has been proposed.

This first well-known estimate of the RMT market is, to my knowledge, the only one for which the source of the data and the exact method of aggregating the data are known. Assessing the scope and the reliability of the following estimates is harder.

Castronova gave a slightly more recent and more complete estimate in a New Scientist interview in 2004. He estimated the total volume of eBay and Korean ItemBay RMT transactions of MMOG virtual items and currency to add up to USD 100M. The rest of Asia, all other types of virtual property, and all other marketplaces are not included in this figure.

Slightly later in 2004, Steven Salyer, the president of IGE, announced that the volume of the secondary RMT market reaches USD 880M. In a Guild Wars interview, (available only via ) Salyer said that the figure is an estimate of the annual worldwide secondary market size. It would seem safe to assume that the figure includes only the kind of virtual property IGE is providing, i.e. MMOG currency, items and avatars/accounts.

The same types of virtual property were included in the USD 100M estimate by Castronova earlier. We could form an estimate of 2004 total MMOG secondary market RMT excluding eBay and Itembay: this amount would be USD 780M. The share of RMT done in eBay was small, maybe surprisingly so.

The huge Asian RMT market

The volume of the Asian RMT market is very high in some recent estimates. An estimate of the Korean RMT market only, given by Korean Game Development and Promotion Institute (KGDI) (see the English source by Jun Sok Huhh at Gamestudy), is as high as USD 830M. The Gamestudy article also mentions poker and traditional Korean card games, but it is not clear whether these are included in the KGDI estimate or only in the separate survey that was made on RMT composition. If online gambling is actually included, it’s not surprising the estimate is very high. Steven Davis assumes that the estimate contains only the secondary market, though the original English source does not include this information.

There is also a way to estimate the Korean primary virtual property market. In Korea, free-to-use services are very popular. The operator of the service collects revenues from selling virtual property inside the service. Summing the revenues of some of the largest players in the Korean primary virtual property market gives an estimate of the total primary market in the country.

The popular Kart Rider by Nexon is free to play, but better cars, decorations and such can be bought using real money. The revenue model in other Nexon’s games (e.g. the 50-million-user Maplestory) is basically the same. The total revenue of Nexon includes virtual item sales, advertisement sales and licensing etc. It has been reported that “most” of Nexon’s revenues (USD 230M in 2005) come from virtual property microtransactions. I assume three quarters of the revenues can be accounted for virtual property sales. Nexon’s share of primary virtual property market is USD 170M. Cyworld, a Korean social network -type service, provides free accounts, or users’ 3D rooms. However, personalizing one’s account with virtual items is not free. The estimate of Cyworld’s total virtual item sales in 2006 is about USD 100M. The estimate for the total Korean primary RMT market is thus USD 270M.

According to Chinese government statistics (via PlayNoEvil), the total value of “virtual item trading” in China was about USD 901M in 2006. The figure reportedly includes the domestic consumption in online gaming (i.e. excluding gold farming), which takes about USD 514M of the total. The rest probably come from e.g. the Q-coin purchases in Tencent QQ. However, it might be very hard to actually separate the different uses of Q coins, so the figure may include also non-RMT transactions.

Extrapolating the EU/US secondary market

The recent white paper on Station Exchange (SE) also sheds some light into the secondary market MMOG RMT volume. The sanctioned RMT of Everquest II virtual property in Station Exchange reached USD 1.87M during one year. A total of about 40,000 users were registered on the two servers in which RMT was sanctioned. The introduction of Station Exchange had very little or no effect on unsanctioned RMT on other servers. It might be fair to say that RMT is not very much more likely to occur on the sanctioned server. I assume that on the average one Everquest II user uses about as much money on RMT as any other MMOG user. If the reported USD 1.87M is as large a part of the total RMT as the 40,000 users are of the total MMOG user base, we can form an estimate for the grand total worldwide secondary market. According to Bruce Woodcock, MMOGs had about 12.5M users in June 2006, so the estimate of the secondary market total RMT is about USD 585M. The 12.5M users include only paying users of MMOGs, i.e. users with a monthly subscription or similar.

Though the monthly subscription is in dominant use in EU/US games, the 12.5M users include also subscribers of popular Asian games. To produce a EU/US estimate, only EU/US users should be included, but is impossible to find exact numbers of the regional distribution of MMOG users. As an estimate, I exclude the users of both Lineages I and II, and the users of Chinese servers of WoW from the 12.5M total users, and end up in 6.1M users (all user statistics come from the above-mentioned source). My extrapolated estimate of the size of MMOG secondary RMT market in the EU and US is therefore about USD 285M.

The virtual property in the sanctioned RMT servers of Everquest II is traded also at other marketplaces, which is not taken into account here. This figure is only a lower limit for the total RMT volume. There are obviously many other sources of errors in this number, including any differences between an average MMOG user and an average SE-server Everquest II user.

An Asia-centric aggregate estimate of the worldwide RMT market

Let’s make some assumptions and try to come up with an estimate of the total worldwide RMT volume.

  1. Take the total value of gaming-related virtual item trading given by the Chinese government statistics as-is. The figure is USD 514M.
  2. Take half of the remaining USD 387M reported by the Chinese government, because e.g. some of the Q-coins are used for purchases of “real” goods and services, and some are used to purchase virtual assets. This figure is USD 193M.
  3. Take the RMT volume reported by the Koreans as-is. Assume it does not overlap with the Chinese government estimate. Assume it does not include gambling, but includes both the primary and the secondary markets. The figure is USD 830M.
  4. Take the extrapolation from SE numbers as the EU/US MMOG secondary RMT market value. This figure is USD 285M.
  5. Update: Take the estimate of the Korean primary RMT market that was derived from the revenues of Nexon and Cyworld. This estimate is USD 270M.

Summing up the estimates 1-4 1-5, the worldwide grand total is about USD 1,820M 2,090M. (see comment on the updates below)

As commented in the beginning, this figure lies on heavy assumptions, but then again, is transparent in the sense that its sources are traceable. Especially, it should be noted that the EU/US estimate includes only the MMOG secondary market, whereas the Asian market includes also other types of RMT.

Vili Lehdonvirta also contributed to this article.

Didn’t Viti also assess that the Korean market was worth….

close to a billion dollars yearly on its own (in “Virtual Assets, Real Value”) ?

Considering he contributed to this article, does that mean that the billion dollar figure was overstated?

Also, does the RMT value estimated by KGDI include the purchase/sale of acorns on Cyworld (rumored to be about US$350k/day) ? If that’s the case, Cyworld ALONE would represent about 16% of the market. Considering this data, does that mean that Asian markets are actually concentrated in the hands of a few players?

Finally, shouldn’t you take markets like Second Life and Project Entropia into accounts as part of your EU/US analysis as they do represents hubs of authorized RMT?

Interpreting the numbers

Hi Tristan, thanks for your comments. I assume you refer to one of my earlier talks, which I sometimes titled “Virtual Assets, Real Value”, e.g. this one. In it I refer to and present the figures 0.7-1 Bn USD. The figures were based on “>this comment by author SugY, a Korean game scholar. Since we now have a more recent figure from KGDI, in this article that one was used. However, as you point out and as Tuukka discusses in the article, we are yet to find out whether or not the figure includes the “primary market”, e.g. Cyworld acorn sales. Tuukka made the educated guess that it does. If it doesn’t, the total would obviously be higher. These are rough estimates.

Considering this data, does that mean that Asian markets are actually concentrated in the hands of a few players?

It is true that based on these figures, Cyworld and Nexon would seem to command a large proportion of Korean/Asian RMT, as understood in the wide sense. However, the business significance of this is a different question. Rice commands a large proportion of the Asian diet, but meat producers do not feel threatened. Cyworld acorns and WoW gold are not very good substitutes to each other. They also appeal to different customer segments, of which Cyworld’s is the larger. There is room for both.

The all-inclusive grand total figure of RMT volume can be thought of as an indicator of how much people spend money on virtual assets as opposed to spending it in other categories of consumption. For example, the global market for children’s clothes has been estimated to be USD 28 Bn in 2005, so you could go and say that people spend around fifteen times more money on children’s clothes than they do on virtual assets (there are various problems with this comparison/approach, but I leave those for another time).

Finally, shouldn’t you take markets like Second Life and Project Entropia into accounts as part of your EU/US analysis as they do represents hubs of authorized RMT?

Definitely, but they are both somewhat conceptually difficult cases and would require a lengthier discussion. And since they are relatively small in terms of number of users, their contribution to the total is probably not remarkable. I suppose their contribution is meant to be included in the extrapolated ballpark estimate of the Western market.

Korean numbers are just for secondary

I think there is a kind of ambiguity in the very concept of RMT. Anyway, generally in Korea, trading outside official game system is looked as RMT. So to speak, the revenue from micro-payment is not classified as that from RMT. KGDI’s estimation is only for secondary in this article.

So, how big is the size for the primary? When MMORPGs with fixed fee consisted of most of the market, the primary is so small to be ignored. But, lately, as MMOGs with micro-payment is growing rapidly, the size seems to be considerable. The revenue profiles of companies such as Nexon would be a good proxy for this work. But, it’s just a wild guess.

Updated the article

Thanks for the info on the scope of the KGDI estimate. I updated the total estimate to USD 2,090M accordingly. The updated parts are marked in the article.

Congratulations, you’re authoritative!

Heads up, guys — I used the RMT figures you calculate here in my recent New York Times Magazine article on Chinese gold farms:

And also at Terra Nova, for an update of my total-virtual-GDP calculations:

One thing, though:

In my Times article, I actually went with your original figure of $1.82 billion — not because I think the $2.09 billion is flawed, but because I wanted a figure with as little *primary market* RMT in it as possible, since it’s only the secondary market that the gold farms participate in. I wonder if it’s possible to filter out the primary-market contribution more precisely, for future reference?

In any case, nice work, and thanks for doing it.

Cool, thanks Julian. I

Cool, thanks Julian. I understand why it would be interesting to filter out the primary market from the figure, but given the sources we’re relying on, it’s rather difficult to do with meaningful accuracy for now. Let’s keep our eyes open for more data.

New updates of RMT market size

Online gaming industry is continually growing all over the world. According to Strategy Analytics referenced in the “Online Games: Global Market Forecast” report, the Internet gaming market will reach $11.5 billion by 2011, a 25.2 percent annual growth rate. And an analyst referenced in the Wall Street Journal article predicts that “non-subscription revenue” from volume of real-money trade of virtual items (RMT) market will reach $5 billion by the same year.
5 years ago, the profit margin of RMT business used to be unbelievable high (nearly 80 percent) when some pioneers put their virtual items on eBay for trading the real money. Many people just left after making a fortune from selling virtual items and some stayed. Those who stayed created several virtual item exchange services, allowing gamers to buy and sell in-game currencies, items, and even accounts.
When more and more gamers got tired of tedious monster-killing type of power leveling work and were willing to buy virtual item in real money in order to better enjoy gaming experiences, many new companies (such as, and the RMT business. Like any other businesses, since then, the profit margin dropped down immediately because of the competition and the battles between those middlemen were never ending. and IGE

IGE, a leading services provider to the MMOG community, best known for its virtual item exchange services and its interesting M&A stories, used to be the dominated player in the RMT market. Like IBM in the computer hardware and service industries back to early 90’s, IGE had almost 60 percent RMT market share and its monthly revenue ever reached $9 Million in 2006, more than the combination of the latter comers such as, and

However, things have changed since 2007. For the managing problem and its historical debt issues, IGE started to quickly lose its market share in RMT market. There have been many lawsuits against IGE and its management team. Somehow they stopped to pay millions of dollars virtual items payment to their suppliers after receiving the virtual goods since February, 2007. As a result, many suppliers had to wait at IGE’s Shanghai office everyday asking for the money they deserved. In April 2007, Brock Pierce, the founder of IGE left the company and the company was sold out to Atlas, a company founded by several previous share holders of Affinity Media, the parent company of IGE. The first thing Atlas needed to deal with was to pay back the debt IGE left over.

Since then, the new IGE could never gain the trusts back from their suppliers and customers. Its Shanghai office was shut down in a few months and its Chinese website (the major channel to get suppliers and their virtual currency and items) was removed thereafter.
At the meanwhile, and have taken over the market shares IGE left. After acquiring, now becomes the largest provider in the RMT business. With 300+ employees all over the world, seems to be the most trustful and reliable service provider in the North America and Europe.

However, Thsale has not reached the level IGE ever achieved yet although it seems they do have the potentials. They need to make sure they won’t repeat IGE’s failure. After several years’ competition, only a few companies survived. Besides the tight market competition, MMORPG developing companies will be continually working against the RMT market. Only those who can provide better, faster and more reliable services to both buyers and sellers can finally stay.
It is survival of the fittest in the RMT market and you never know what’s going on. Maybe at the end of the day, the game developing companies and RMT providers will work together to explore this multi-billion dollars business. Until now, the battle is continuing.

THsale and the other China companies

How could you say David that Thsale is the most trustful and reliable service provider?! Just google “” there are pages of complaints on bizrate as well as official internet complaint boards. Just like all other Chinese sites THsale fails miserably at service and is managed by a completely inept team that follow Eastern values not Western. I myself being a consumer in the RMT market have tried many sites and have found my permanent supplier and it is not one of the guys found in China but a site found here in the USA. They are based in Ohio and do a great job. I would suggest David before making such claims as most trusted you look at the easily found data that is out there.. Thsale is not a company I would trust or give my business to ever again.

I can not agree any more

I can not agree any more about your opinion about THsale, and it is more ulgy than you saw on the internet complaint pages, this company just wanna gain more and more from the pool Chinese farmers with an ugly purchase price.

More details on IGE

Some of the events are actually true, IGE is having a hard time regaining the trust from their suppliers and some of the business transactions are odd. The new company registered in Vanuatu, Atlas Technology is probably owned by Yantis. More of the story here.

FYI, this thread is

FYI, this thread is receiving a lot of comments containing advertisements for virtual asset dealers. I’ve kept a policy of deleting thinly veiled advertisements that provide no additional value to the discussion. I left the THsale plug since it has some interesting bits about IGE.

Second Life, Habbo Hotel…

According to the statistics published by Linden Labs, the trade volume on Second Life’s LindeX platform was about 66 mio USD from January to October. There has been a constant growth throughout the year and the trade volume was about 7 mio USD in October. If we assume the same amount for November in December, we have a total of about 80 mio USD for the year 2007. No idea how much of the trade is Linden Labs acting as seller of currency, so it’s not clear how large the share of primary market RMT is.

Habbo Hotel reportedly earned about 50 mio USD from selling furniture or whatever to children in 2006. That’s primary market RMT but there might also be secondary market RMT going on, which is obviously not included in that number.

That would be another 130 mio USD.

Station Exchange data extrapolation problems

The data from Station Exchange is very interesting but might there be a couple of problems with extrapolating the size of the RMT market from it? First, this is “legitimate” RMT whereas most RMT is quasi-illegitimate, and that status may well supress consumer expenditure. This is also trustworthy RMT whereas most RMT is hard to trust, again suppressing expenditure compared to the SE data.

Second, the overall SE figure could include some arbitrage (i.e. buying currency at a low price and reselling at a higher price), which would artificially inflate SE spending compared to the amount a typical player spends in other types of RMT (assuming the latter does not see arbitrage). As an example, compare the US$46 per player annual spend from the SE figures with US$10 from Yee/Castronova.

Thanks for the comments.

Thanks for the comments. You’re right, there probably are a number of biases in the estimate. Any differences between an “average” MMO user and an average SE-server EverQuest II user introduce an error. The second problem you mention may also apply to other statistics I used. Regarding Station Exchange: according to the SOE white paper, at least the top sellers in SE are not the top buyers and, based on this, it’s deducted there that active sellers are not gaming SE. So arbitraging may not be a problem in that data.

I hope it’s possible to form an updated estimate of the RMT market volume at some point and, hopefully, get more data to avoid the extrapolation problems.

very little if any arbitrage in Station Exchange

Station exchange really isn’t used for arbitrage. The sony white paper on Station exchange showed the top buyers are not the same group as the top sellers, showing that money is not made through arbitrage by the top sellers. Another RMT guy with a blog pointed this out too at Ralf Kosters Site.

I heavily use Station Exchange and I’d have to say I couldn’t imagine using arbitrage to try to make a penny with it. The whole system is like ebay, and although you may occasionally see ebay sellers buying low and selling high … there really isn’t much room for that in Station Exchange, for 2 reasons. #1, in ebay, you’re allowed to find something that wasn’t posted properly, the description not that good … no image, with less interest in it, buy it and list it properly and it will do better. However in Station Exchange, you have no ability to explain anything about an item, Sony auto-describes it all. #2, there is always a sense of what something is worth, everyone knows it. There’s not a million different things for sale, there’s a million similar things for sale. My chances of buying something as unique as a high level char and reselling it for a profit is slim, especially seeing that Sony puts a 10% commission and $1 listing fee on top of everything, there’s just no way. I talk about this more on my blog about RMT playpenny make money online with RMT.

the overall SE figure could

the overall SE figure could include some arbitrage (i.e. buying currency at a low price and reselling at a higher price), which would artificially inflate SE spending compared


I am sick of real-world-trading if i’m being honest. if anything, i find it more than annoying when i attempt to login and my password as been changed. I have witnessed the affect this has taken on the virtual world. the MMRPG Runescape (owned by jagex, not myself) had it’s fun-factor sucked away due to real world trading. It was no longer possible to give your friends money, or to lend them items then to later include half of the game to be torn away, once known as pking (player-killing).
It’s sad to see that companies have been created with knowledge of destroying games, also threatening the well-being of the companines running the game to take ‘a joy ride’for the simple reason of making some extra money in their back pocket. well, if you ask me, i think its ridiculous. If you can’t play a game properly without getting around the problem using get-out-of-jail keys, then im afraid you shouldn’t bother playing at all.

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