Looks like you’re going to have to earn your phat lootz the hard way. Sparter, an online marketplace for virtual game currencies that launched last year, has effectively shut down. The company has issued a notification stating that no further purchases can be carried out, though transactions currently in progress will be fulfilled.

The site, which is backed by Bessemer Venture Partners, allowed gamers to sell gold to other players for real-world money in games including World of Warcraft, Eve, and Everquest. This kind of trading has been commonplace on the internet since the emergence of major massively multiplayer games, but it has always been controversial – eBay banned it in early 2007. Such transactions are against the Terms of Service for nearly every online game, and many players believe that they are dishonest and can ruin a game’s economy.

So what led to the shutdown? The site almost certainly folded to pressure from game developers, though it may have also had a hard time gaining traction in a space with countless vendors of virtual gold. The site does still leave some wiggle room for its rebirth in the future, explaining:

“Going forward, we believe the best course for our business is to focus solely on providing marketplaces with the full support of game developers and publishers. ”

For now we’ll be adding Sparter to the Deadpool. Gamers still looking to take the easy way out can head over to competitors like IGE.

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If our source is correct, a decision has been made as to the long term use of wow.com. It has been transferred to the AOL Games group and is currently being turned into a – you guessed it – World of Warcraft social network.

That makes a lot of sense, given that the first thing that comes to mind for millions of people when they hear “wow” is the ubiquitous online role playing game. Apart from selling the domain to Blizzard (which owns World of Warcraft), turning it into a World of Warcraft related site is the most obvious way to leverage the random traffic it must receive from people looking for the game. Just don’t think too hard about the fact that World of Warcraft is already a social network…

We don’t have any details yet on the functionality of the site or when it might launch, but we’re digging. In the meantime, there are plenty of social networks surrounding World of Warcraft and other MMOGs – see Rupture, Warcraft Social Network, mmoguildsites, and Guildcafe. For related news, see our coverage of Sparter, which runs a MMOG currency exchange.

As a semi-random aside, click on the image above to see a clip from the Southpark World of Warcraft episode.

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The company is a true person to person trading company. Users can sign up and either buy or sell virtual currencies at market prices. There are already a number of sites that sell these currencies directly to users (IGE is the largest), but they don’t take sellers, just buyers. And the prices are set by the company, not the market.

I spoke to Dan Kelly and Boris Putanec, the two executives Bessemer brought in to start the company, earlier this week. They say that a major supply of WOW gold today comes directly or indirectly from “farmers” in China and India. People are paid a very low wage to play the game and gather small amounts of gold, which are then sold directly to players or to services like IGE. Those models are fine, they say, for people who want to buy currency. But it gives no way for people who want to liquidate their virtual gold into real world money.

eBay is one place where gamers currently try to trade virtual currency for real money, but the company started restricting the sale of virtual goods on the site earlier this year, and proactively removing listings that include virtual money and other items. Sparter is simply filling the void that eBay has voluntarily created, the company says.

Others note that eBay left the market due to trademark and other concerns. In particular, it is a violation of the terms of service of many of these services to exchange currency in this way. Whether these virtual worlds will turn a blind eye to Sparter’s activities, or attempt to fight it, remains to be seen.

Sparter acts as the go-between for the parties, keeping payments in escrow until both sides say the virtual transfer went through properly. Users are also asked to rate each other after a transaction. Users with higher reputational ratings may be able to charge a premium.

The company only supports trading in currency for now. Other digital goods cannot be traded on the platform. They say they have no plans to deviate from that strategy, unless users show strong demand down the road.

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