I personally do not see a great future for micro transactions in a game, I think they can exist around the edge of a game and WoW has been successful here in adding them in without anyone pointing at them and identifying them as such, in WoW the transactions are purely for server transfers, and character name/sex/major appearance swaps, none of which effect the game or could not be done for free in the game.

Only in the server transfers does it get slightly sticky ground since not balancing servers or ensuring they have good population levels could be said to force people to move, hence Blizzard profit (they made £250 just out of one small guild move some friends did - it must be a good revenue stream). Its the same moral hazard for SOE now with EQ2, if they speed up XP gain they could reduce the income from XP potions...

And fact that the biggest MMO around right now lacks any signification game changing real money trading and I think real money games are going to be a small niche for the foreseeable future since the people who are prepared to lash out unlimited money on a game will follow the one where the largest population is.

I think it will be just too hard a sell to convince people to pay the equivalent of a normal monthly subscription for a MMO in real money trades, they also have a bit of a stigma to them in some people eyes since for a lot of people gold sellers / power levellers are reviled.

The question I have is how many people will end up paying more in real money trades then on the monthly subscription? I know if my gym for example charged me
per a visit I would start getting more selective how often I went, if I thought I'd be spending money to play WoW or EQ2 tonight I would be more tempted to do something else too, while I'm a cautious type of person I am prepared to pay subscription rates, some people won't go that far it seems.

So overall I think they'll have a market, but not one that can kill the subscription market.

Still not convinced, the problem with the saving money argument is that someone somewhere has to pay more for it to be more profitable, I think that there will be some people paying more but overall if the average take from someone playing say EQ3 was less then the monthly subscription they'd get from someone playing EQ2 then the microtransaction would fail as a business model unless it allowed for much bigger player numbers (and bigger numbers = more resources needed to host it which needs more revenue still to cover it, capital like this will also need escalating higher revenues as reward to cover the risk).

The solution then would be to make everyone pay more, being a free market (as in people are free to look for the cheapest way to get their fix) I'd expect a ongoing struggling between the people setting the prices and the players trying to find the cheapest price. The end result would be the game design would be made so there were no exploits that allowed someone to play for a really low price, although I would expect someone to be able to pay a little less to get a bit less in the game.

So if you take away really cheap ways to play the same game you then have the other problem I see, a lot of people want to know exactly what they are paying for upfront (I'm one of them, I would describe myself as cautious), I know a lot of the people I play with would also take that same view and the cynical (older) population will see any game that has microtransactions built in as a much have to play as being an open ended expense.

The younger population though seem more ready to pay out unlimited cash for games since they tend to be the people who pay to power level, buy gold or run their
own bots, on the last one I know when I was younger my sense of competition meant that cheating wasn't a taboo, but as I grew older I picked up a moral code, its hard to say, but I wouldn't be able to say 100% if I was 10-12 that I'd see running bots/cheats as a bad thing.

On the first two I think that does reflect how good/cautious people are with money, younger players don't have money worries so will not care too much about micro transactions, but I'd expect it to be a lot less popular with older players.

So overall I see it as a limit on game design, its got a market, a big one, but not one that will kill the subscription market which I expect to be where the big money is earned still, or the free to play markets that already exist (Guildwars and Day of defeat source seem somehow to be doing fine, the latter having servers run by members without any real company running things short of a little steam time).

The only big question I have is how much you can add micro transactions to a subscription based model before it all falls apart? WoW has limited it to character changes and server transfers (along with novelty items from online card trading) without any real complaints, EQ2 has gone a step further, maybe too far though getting XP involved since it risks complaints then on game design.

But then you risk alienating all those who get those items through those hours spent in game.

If I ever stop jumping alts long enough to get up to 80 with a toon, and then put in all the effort of getting my Epic (which is a long term ambition, for sure) - I'd be pretty pissed off to then meet someone who couldn't be arsed with all that and just paid $20 for HIS epic.

It's a tricky sum; by going down that path SOE risks losing long term subscribers. The question for them, I suppose, is whether the money they make is worth the loss - plus, of course, the potential damage to their community. I do think, however, that Station Cash is just the thin end of the wedge - SOE are using it to judge how bad an impact it makes on their subscriber numbers, and if they don't dip significantly I'd expect to see more and more items being offered for sale.

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The epeen bit of the argument I agree should not be a factor, although it does cheese people off when someone is able to get something easy mode while other people had to put time+effort into it, it does only really seem to be a problem when this is still current content though. E.g. someone gaining a mythical for level 60 in EQ2 would not bother the player base, I know that since in WoW its easy to get a few high levels to stroll through an old raid instance to plunder it. Late in an expansion high level items are often obtained easily too to allow more people to experience the content (usually a new item), no one cares though short of a few epeen dominated raiders, and they don't care enough to quit.

But my problem with the above would be that its short cutting the game, if someone was able to buy armour + weapons for real money that were needed at the end game you could gear up quicker for the harder stuff. At that point people who don't pay the money then could end up left behind while the large amount of the player base are all doing the harder stuff, it also encourages the game designers to bend the game to make this the better/only practical way to do things. I really don't want to play a game where I feel I am forced to pay extra money to progress.

In the end getting a mythical weapon would be cool for my characters, but if its just brought for real money its worthless, its the quests, story lines, groups and people I joined to get that weapon that really make it mythical for me, the weapon at the end allows me to get into higher level content, but the memories are the best parts. I find in a MMO the destination rarely ever means as much as the journey, and in MMO game design giving people easily exactly what they want with little effort does seem a bad idea often for this reason (something I think WoW WotLK is getting a real increasing problem with).

A definite no go though for any real money trade has to be any game with PvP, if a person can outspend someone else to gain advantage the game will fail pretty quick (I hope!), sure some people have time, but if the game is designed right most people should have a chance to perform fairly well with the time they get, if all you have is 30 minutes a week then I think you'll struggle whatever and a MMO really won't suit or be good value.

The last thing I think is the moral problem, I know MMO's are an addiction for me and a lot of people, sure I can step away when better things on but sometimes I enjoy myself so much I'm itching to do XYZ in Norrath or Azeroth, but while the cost is a measly £10 a month who cares, its probably the best value addiction you can get :)
But as soon as you make the cost open ended people will get encouraged to pay ever more, this one really should not be a problem with personal responsibility, but its something I don't want to see. I certainly would not recommend a friend to get involved with a real money game since I would feel if they got addicted badly I could be partly responsible.

I agree. But that is a decision you make. For me, buying similar items might free up time to do some questing rather than grinding for shards.