> 1) "having everything trading for essentially real money doesn't change that underlying level of engagement." It has been long established that this is absolutely the case. A classic example of this would be Diablo 3's RMAH effectively destroying the game by having the entire economy be driven by real-world profit-seeking grind

It doesn't need to be "real" money, just something people value (even if its in-game assets). But having something at stake definitely does alter the gameplay

Try playing poker for "fun" (without real money), and then agin with money at stake. People play a lot more seriously, the psychology of the game changes.