You sweat blood and tears building palaces, slaying warlords and tending crops, only to discover none of the rewards are yours. The virtual world turns out to be not so very different from feudal systems of yore, except this time the barons are gaming companies.
A legal case under way in China could change that. Tencent, one of the biggest gaming companies, is suing DD373.com, which operates a virtual item trading platform, over the thorny issue of just who owns in-game currency and merchandise.
China, as befits the world’s biggest gaming market, is home to many platforms such as DD373.com which enable trading of in-game items. But so too are Europe and the US. Indeed, US publisher Blizzard even sought to get in on the act itself, hosting real-money auctions in its Diablo III game. These lasted a couple of years before being pulled amid fans’ gripes that monetising gaming so explicitly killed the fun.
The existence of these platforms, and the court case, suggest that ownership is a grey area. That is not quite the case. Publishers nearly always make clear in end-user licence agreements that they are the sole owner or, as UK-based interactive entertainment and intellectual property law academic Gaetano Dimita puts it, “governor and supreme god of this digital empire”. Publishers can, and do, change exchange rates within their virtual worlds, or close them down entirely.
Yet, there are exceptions — Second Life’s lindens, for example, can convert to real currency — and plenty of wriggle room. One reason for that is the sheer size of these “virtual economies”. Gamers are spending increasing amounts of fiat currency acquiring virtual currencies to buy weapons, skins and other items: to the tune of $129bn this year, estimates SuperData.
More than a few have turned this into real-life paydays. Look at Jon Jacobs, who struck real-life gold after selling a virtual asteroid in Entropy Universe for $635,000 in 2010. At the opposite end of the spectrum sit the outsourcing gold farms, which began cropping up in China around the turn of the century. These gamers, cooped up in dormitories, harvested treasure in return for a few bucks — and became an industry themselves, with investors including Steve Bannon (long before he served as adviser to then president Donald Trump).
Regulators, struggling to make sense of cryptocurrencies, have so far given in-game money a wide berth. But ownership confers responsibilities, and potentially even a tax liability. The bigger the sector grows, the harder it will become for regulators to remain hands-off.