That assumes that the only way to compete is to buy things yourself with real money, which isn't actually the case in any game I'm aware of. Our top players are rarely the ones that have spent the most money, for instance.
That's also not true. It's a simple matter to allow non-paying members to trade the products of their time investment for the products of the money investment of paying players.
For instance, you buy credits in our games, and can put them up for sale on the credit/gold market, where non-buyers can purchase those credits with gold that they got by investing time.
--matt
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