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Real trouble in virtual worlds

Posted on 11 Mar 2008 at 16:43

You might think, considering the hundreds of pounds and countless hours spent developing property within a virtual world, that this investment would be protected under the law. Think again. Your hard-earned and fully paid-for property can be deleted without either warning or compensation from the Game Gods, or anyone else for that matter. Online casinos in Second Life discovered this last year when, following an FBI investigation into whether strict gaming laws were being broken (online gambling is illegal in the US), Second Life decided to ban gambling in its virtual world, even when operators and players are both based outside of America. The owners of highly profitable virtual casinos found their property had been literally wiped off the map overnight.

Linden Lab, which operates Second Life, stated quite clearly at the time that "there will be no reimbursement if Linden Lab removes objects or activities that violate this policy". For the people who had invested heavily in building these virtual businesses with a real-world profit margin, the loss was instant and not subject to appeal, online or off. Second Life, in the eyes of the law, is just a game and its players are subject to the terms and conditions they agreed to before playing. To all intents and purposes, Linden Lab is judge, jury and virtual executioner. The worrying thing for Second Lifers is that it makes the law as well.

So where does this leave the likes of Ailin Graef, the Chinese-born German citizen who, as the Anshe Chung avatar, became the first person to make a real million-dollar profit out of a purely virtual business within Second Life? Yes, you did read that right, $1 million of real money. She did this in two years by buying "land" on the Second Life map and building a huge property portfolio of houses, flats, shops and even entire shopping malls, which are rented out to other in-world citizens. Her initial investment was just $10.

The Second Life economy operates using an in-house currency known as Linden Dollars, which you buy with real money. There's also a currency exchange mechanism to turn your virtual cash into real money. On an average day, $1 to $2 million of real cash is spent within Second Life. Graef could lose everything in the virtual world at the whim of the Game Gods - a big risk for an entrepreneur with real offices in China and a staff of more than 60 developers.

Gold farming, copyright and taxation

Graef isn't the only entrepreneur to cross over from the virtual into the real business world, but some of the others are shady to say the least. According to documentary footage online, an estimated half a million Chinese citizens are now earning around £50 per month by playing WoW and similar games for up to 12 hours a day in sweat-shop conditions. The phenomena, known as gold farming, uses this cheap labour to earn the in-game "gold" currency by completing tasks, fighting others and playing the game more intensively than most of us have the time to do. The owners of the gold farms then sell this to the money-rich and time-poor US and European players who are looking for the rapid route to gaming glory. Although such enterprises are scorned by honest gamers and those who despise the exploitation of cheap labour, no laws are being broken. At worst, those involved at either end of the transaction are in breach of the game terms and conditions, which is hardly a hanging offence.

Nor is stealing a sword from another player within WoW - indeed, some might well argue it's all part of the game. It certainly isn't theft, which requires the physical removal of an object, although hacking offences could be on the table if an account were manipulated to acquire the weapon. Scheurer argues that in certain circumstances, a quasi-theft offence, such as obtaining a pecuniary advantage by deception, might apply where an item has a real-world value and has been obtained dishonestly.