EPT1. It directly supports pay to win. This issue can be divided between PvE and PvP.
PvE - Athene is the most striking example of what can be accomplished by abusing the market. In a player vs environment game buying gear with real money doesn't affect anyone else's experience. The one exception is when going for world-first records, but at the time those records are created there its unlikely there's a large enough secondary market to influence it. In games like Diablo, where the time invested:skill rests along the lines of 70:30, players whose time is more valuable than money can bypass the gear part and move on directly to the skill. Doctors, CEOs, and lawyers fall in this category. In player vs environment games where there are time investment elements beyond learning game mechanics, such as grinding for gear, I support such an entity. This is also similar to using cheats in GTA to get access to the rocket launcher right off the bat as opposed to investing in a ton of criminal enterprises to earn the money to buy it at Ammu-nation.
PvP - In player vs player games, this becomes a more broad ethical issue. Games are about fun, and for many the most fun comes at the expense of others by virtue of their skill. Being able to buy an item that negates the skill deficit between two players trivializes the efforts of the more skilled player, unless that skilled player also purchases the item. When this situation exists, there is a strong incentive to continue to create even slightly overpowered items to sell for small amounts of money as long as the playerbase continues buying. If a developer opts out of this practice, like Blizzard has, and forces players to spend time instead of money, the player whose time is more valuable than money turns to the grey market to keep up in the arms race. They then face possible fraud or theft of their money and even identity when purchasing from a third party, and also put their account and all the money invested in it at risk. The developer is presented with the decision to invest their time and money policing parties who participate in this practice, or to create, regulate, and maintain a secondary market on their own. Because of their ability to tax the market, there is a similar monetary incentive for developers as for the grey market brokers. There is also probably less opportunity cost in powering a server and paying a few employees to oversee the market relative to the retainer fees of the legal team needed to shut down third parties. Because of these factors, developer-maintained secondary markets are almost inevitable.
Where it becomes fascinating is that as long as a player can purchase the same advantage with both currencies, that is time or money, skilled players who otherwise wouldn't be able to compete because of lack of time to invest now can, and players who couldn't compete because of lack of money now can, effectively elevating the level of competition by encouraging a larger playerbase. Everyone along the spectrum, between no life basement dweller with infinite time, and super rich 120 hour workweek CEO with infinite money, can invest a suitable ratio of time to money in order to purchase equivalency, leaving their skill as the deciding factor. Lack of gross amounts of dispensable income leads to developers making the grind interesting for the majority of players who must invest time, and at the same time encourages depth and replayability in the skill based portion so that players with excess money will keep coming back and the grinders consider their investment worthwhile. This all leads to more bang for your buck when it comes to the initial purchase price of a game.
2. It gives intelligent players a chance to make money through legitimate arbitrage.
In Diablo 3, players are able to sell their time for money. This is done by killing the same groups of enemies over and over, who drop items of diverse rarity and power. Those who play the odds by killing an enemy many times are more likely to earn higher quality items, which are in higher demand. These items are then sold either for real money, or for in-game gold, which can also be sold for real money. Either way, a player who is able to effectively maximize their ability to earn high demand items through time investment and clever use of game mechanics can actually earn thousands of dollars doing so. You may have notice that nothing I've described so far is actual arbitrage, and is closer to a typical job. Here's where the fun comes in: players who understand the auction house mechanics, user base, and trends are able to effectively speculate for profit. That is, thousands of dollars in profit can be made in a very short time in exactly the same way Wall St. day traders do. This makes the game even more exciting because just like day traders, they can also lose just as much just as quickly. It gives a greater amount of depth to a system that is already encouraging even more depth. If I had to guess, I'd say this is going to create quite an awesome feedback loop of game design, leaving open new channels of innovation for developers to compete with one another and making the consumer experience even more badass.
There is a dark side to all of this however. Those who can organize a group of laborers to operate at the lowest possible opportunity cost makes the most profit. Countries like China in which human rights may as well be nonexistent offer the cheapest labor, and thus the lowest opportunity cost. For these people, a bed to sleep in and a bowl of rice twice a day is a suitable wage. Exportation and exploitation of Chinese labor is an old tale in this day and age, and something we tend to accept as a fact of life. But when companies engage in the act of creating digital secondary markets in which such labor efforts are encouraged, the company is profiting as well via transaction costs. There is no regulating legal body I'm aware of that is capable of oversight in this situation, and if there indeed is none, then the ethics of the situation just fade into the ether that Douglas Adams named the "Somebody Else's Problem field." Now we've gone from companies such as Blizzard stomping out such activities with the cooperation of policing entities in China to Blizzard turning a blind eye to the matter as long as their pockets get fatter.
Such a situation is inevitable to some degree as long as the cost of doing so is worth the risk, and it'll be interesting to see how the world handles it as we move into further into our digitized global era.
