The Risky Legal Waters of RMT in Social Media Games: A Zynga Case Study

Pixels and Policy previously reported on the potential risks of building an online gaming platform around the concept of real money transactions, or RMT's. Customers have proven willing to shell out large sums of money for virtual goods in the form of microtransactions, the $1 – $5 purchases common to games on Facebook and MySpace. So what's the problem?

There's an emerging legal question regarding RMT, and it centers on the growing partnership between online game developers and marketing agencies. What happens when a developer offers "free credits" for filling out "trial" offers? As social gaming titan Zynga found out, offering another venue for RMT is proving far more complicated than planned.

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Zynga’s Virtual Currency System Comes Under Heavy Fire

Farmville Thanks to some extensive reporting by a few gaming-industry websites, prominent social media game companies like Zynga have a battle on their hands.

The big issue is whether Zynga – which recently announced a huge profit – is basing most of its impressive financial growth on scams.

Investigative blog Techdirt and Mike Arrington of TechCrunch took Zynga to task for drawing a huge revenue stream from what they argued are questionable contracts, intensive marketing to children, and developer-created scarcity.

Pixels and Policy takes a look at the allegations and finds out there's quite a bit to be said for the quality of games-industry journalism.

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