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It can takes hours or days or even weeks of dedicated play to reach milestones in the virtual worlds of online gaming.  A player addicted to World of Warcraft might search aimlessly to find a tool or special weapon.  To help, there are online forums: tips and suggestions, even auctions within the game itself.   There’s also a less savory choice. A black-market of sorts has arisen where players and fans can sell and trade already established accounts, or in some games, the in-game components that move a character. It’s real money paying for virtual, cash in exchange for time saved.

Live Gamer, a New York based startup is aiming to add legitimacy and security to these kinds of trades.  They estimate the market represents $1.8b in real money exchanged.  Their solution, which was announced today, is to offer a publisher supported platform for “real money trading of virtual property.” 

Live Gamer’s plan is to work with game publishers to provide an accepted and secure environment.  Security is the obvious part of their motivation.  A sanctioned environment will help protect against fraud and predatory transactions.   In addition, working with publishers will help ensure the trades fall within a game’s terms of use and thereby don’t detrimentally impact the game play for others (e.g.  a scenario where inappropriate trades are the equivalent of cheating). The hope is the combination of the goals will draw customers to the site.

The presumption is, like eBay or other platform based online shopping environments, Live Gamer will charge a small transaction fee for providing the infrastructure. At this point, however, no information has been provided regarding how Live Gamer will make money. Likewise, no information has been disclosed on any revenue sharing plans with the game publishers who sign on as partners.

So far, Live Gamer has established partnerships with Funcom, Sony Online Entertainment, 10Tacle Studios, Acclaim, GoPets and others.  Blizzard (which recently announced plans to merge with Activision) the maker of the leading World of Warcraft franchise is not on board, at least for now.

Linden Lab, the maker of Second Life, is also not a participant. Second Life maintains its own in-game virtual marketplace. Participants, so-called Residents, can exchange their virtual currency for real cash at both affiliated and third-party exchanges. There’s no word whether or not Live Gamer will maintain one of those third-party exchanges in the future.

Supporting development, Live Gamer has raised a substantial $24m in venture financing.  Charles River Ventures, Pequot Ventures and Kodiak Ventures led the first round.

Live Gamer was co-founded by Mitch Davis who serves as Chairman.  Davis was previously behind Massive Incorporated, one of the early pioneers of in-game advertising.  (Massive was acquired by Microsoft).

Live Gamer will not be without competition.  Silicon Valley based Playspan is also aiming to offer a platform for in-game trading. They raised $6.5m from Menlo Ventures, Easton Capital and others in September.   Playspan also got some news attention for its founding team.  CEO Karl Mehta co-founded the company. His partner, to the amusement of many, is his sixth grade son whom he credits with the idea and initial development. 

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