Virtual Economy - Controversy

Controversy

A game's synthetic economy often results in interaction with a "real" economy; characters, spells, and items may be sold on online auction websites like eBay for real money. While many game developers, such as Blizzard (creator of World of Warcraft), prohibit the practice, it is common that goods and services within virtual economies will be sold on online auction sites and traded for real currencies.

According to standard conceptions of economic value (see the subjective theory of value), the goods and services of virtual economies do have a demonstrable value. Since players of these games are willing to substitute real economic resources of time and money (monthly fees) in exchange for these resources, by definition they have demonstrated utility to the user.

In January 2010, Blizzard stepped up its offensive on account security scams with the launch of a new website. The new Battle.Net account security website hopes to highlight the importance of keeping it safe when it comes to subscribers' accounts.

These pages are part of a larger effort to provide you with the knowledge and tools necessary to identify and report threats to your account’s safety, to spotlight ways in which we work to fulfill our security commitment, and to act as a helpful resource in case someone manages to steal account information from you.

Ongoing campaign by WoW fan sites to boycott gold ads on their sites is just one of several community efforts to raise awareness against crackers.

Gold sellers and leveling services are responsible for the vast majority of all account thefts, and they are the number-one source of World of Warcraft-related phishing attempts, spyware, and even credit card theft. Players who buy gold actively support spam, hacks, and keyloggers, and by doing so diminish the gameplay experience for everyone else.

On August 1, 2011, Blizzard Entertainment announced that their forthcoming MMORPG, Diablo III, will include a currency-based auction house, wherein players will be able to buy and sell in-game items for real money. Robert Bridenbecker, Vice President of Online Technologies at Blizzard, explained that the intent behind the effort is largely to reduce account thefts resulting from player interaction with third-party sites. An undisclosed fee structure including listing fees, sale fees, and cash-out fees will accompany the Auction House at launch, and all transactions will exist within the protected context of Blizzard's MMORPG. The "Real Money Auction House" (RMAH), as it is called by the Diablo III fanbase, will exist in the presence of a parallel auction house wherein items are exchanged for gold, the in-game currency. Accordingly, gold can be posted on the RMAH such that the two currencies may be exchanged for one another at the market rate less applicable fees.

Other virtual world developers officially sell virtual items and currency for real-world money. For example, the MMOG There has therebucks that sell for US dollars. If the currency in Second Life, the Linden Dollars, can be easily acquired with real money, the reverse is done through a market place owned by Linden Lab, but is not guaranteed, as the TOS of linden Lab explicitly says that Linden dollars are not redeemable. Rates would fluctuate based on supply and demand, but over the last few years they have remained fairly stable at around 265 Linden Dollars (L$) to the US Dollar, due to "money creation" by Linden Lab. The currency in Entropia Universe, Project Entropia Dollars (PED), could be bought and redeemed for real-world money at a rate of 10 PED for U.S.$ 1. On December 14, 2004, an island in Project Entropia sold for U.S. $26,500 (£13,700). One gamer also purchased a virtual space station for U.S. $100,000 (£56,200) and plans to use it as a virtual nightclub.

Many Korean virtual worlds (such as Flyff) and other worlds outside that country (such as Archlord and Achaea, Dreams of Divine Lands) operate entirely by selling items to players for real money. Such items generally cannot be transferred and are often used only as a means to represent a Premium subscription via a method which is easily integrated into the game engine.

These intersections with real economies remain controversial. Markets that capitalize in gaming are not widely accepted by the gaming industry. Reasons for this controversy are varied. Firstly, the developers of the games often consider themselves as trying to present a fantasy experience, so the involvement of real world transactions takes away from it. Further, in most games, it would be unacceptable to offer another player real currency in order to have them play a certain way (e.g., in a game of Monopoly between friends, offering another player a real dollar in exchange for a property on the board); and for this to be necessary or valuable may indicate a Kingmaker scenario within the game. However, such rules of etiquette need not apply, and in practice they often don't, to massive game worlds with thousands of players who know one another only through the game system.

Further and more involved issues revolve around the issue of how (or if) real-money trading subjects the virtual economy to laws relating to the real economy. Some argue that to allow in-game items to have monetary values makes these games, essentially, gambling venues, which would be subject to legal regulation as such. Another issue is the impact of taxation that may apply if in-game items are seen as having real value. If (for example) a magic sword is considered to have real-world value, a player who kills a powerful monster to earn such a sword could find himself being charged tax on the value of the sword, as would be normal for a "prize winning". This would make it impossible for any player of the game not to participate in real-money trading.

A third issue is the involvement of the world's developer or maintenance staff in such transactions. Since a developer may change the virtual world any time, ban a player, delete items, or even simply take the world down never to return, the issue of their responsibility in the case where real money investments are lost through items being lost or becoming inaccessible is significant. Richard Bartle argued that this aspect negates the whole idea of ownership in virtual worlds, and thus in the absence of real ownership no real trade may occur. Some developers have acted deliberately to delete items that have been traded for money, as in Final Fantasy XI, where a task force was set up to delete characters involved in selling in-game currency for real-world money.

However, Second Life has shown a legal example which may indicate that the developer can be in part held responsible for such losses. Second Life at one stage, offered and advertised the ability to "own virtual land", which was purchased for real money. In 2007, Marc Bragg, an attorney, was banned from Second Life; in response he sued the developers for thereby depriving him of his land, which he – based on the developers' own statements – "owned". The lawsuit ended with a settlement in which Bragg was re-admitted to Second Life. The details of the final settlement were not released, but the word "own" was removed from all advertising as a result. (It should be noted that Bragg purchased his land directly from the developers, and thus they were not an uninvolved third party in his transactions.)