Real Money for Online items

Fifty · Post by **Fifty** » Thu Apr 15, 2004 7:18 pm

http://www.guardian.co.uk/online/story/ ... 78,00.html

In a leap for post-modern mankind, Julian Dibbell, a sane family man, reports today to the United States Inland Revenue Service that he's earned more in 2003-2004 by selling imaginary goods than he's earned as a professional writer. He has profited from the trade of - literally - castles in the sky, purchased for virtual cash and sold for hard currency. Dibbell is engaged in a potentially far-reaching philosophical digital exercise: the perpetuation of the economies of online games.
Dibbell is a tradesman in Ultima Online, an internet-based game where people play together to propagate a virtual society. His progress, documented in the weblog Play Money, has followed his path from market obscurity to the number two seller on eBay Category 1654 - Internet Games - where people buy and sell items for everyday virtual life.

The phenomenon of the online economies is symptomatic of the increasing age and maturity of players of interactive entertainment. According to calculations reported by Edward Castronova, an economics professor at California State University, people are taking internet games so seriously that since the beginning of the year, Category 1654 has racked up $6,404,668 in sales - real money spent on things that do not exist.

The articles for sale are utterly removed from the physical realm. Dibbell has sold in-game currency, imaginary suits of armour and virtual real estate, for weekly profits of up to $1,086. Still, that's small potatoes compared to those who make six-figure sums a year trading virtual castles at $700 a pop, or specialist character accounts for more than $2,000.

At their most rudimentary, the games are a simulation of the basic elements of capitalism: trade, barter and asset accumulation. Although it's not possible to "win" in the traditional sense, many strive to have the biggest pile of stuff. This takes time, a commodity scarce in modern life.

Thus, the key to Dibbell's success is the time he spends in the game. The average player spends 22 hours a week in online games, but a professional trader such as Dibbell spends between 10 and 17 hours in the game per day. Thus, he accumulates more virtual wealth than "ordinary" players - virtual wealth he can trade for real money. "It's almost a cultural divide between people who have a lot of time and those who are able to buy their way into the game," he explains of his marketplace. "[Success] is not a matter of skill versus lack of skill, it's a matter of time invested or money invested." Through supply of and demand for virtual time, a fluid real-world economy has grown up.

"I suspect that only a handful of players per game have this as a sole source of income," explains Castronova. "There are many hundreds more who supplement their incomes this way, though. A typical story is the college student who pays for books by selling items."

This practice is not without controversy. "eBayers", or people who purchase fully created accounts or other items are accused of aiding schisms that reflect real-world concepts of haves and have-nots. Others are gaining from globalisation: virtual sweatshops have been uncovered in third-world countries with underpaid employees "grinding" accounts until they are fit for sale, for $200 each.

Castronova runs a weekly analysis of virtual world markets where he calculates hourly wages, totals spent and US dollar values of in-game currencies. This week's priciest item was a rare Jedi character account sold for $2,025. Castronova's 2002 examination of genre leader EverQuest's virtual economy placed the fictional setting of Norrath as the 77th richest nation in the (real) world. By investigating the flow of currency and the cost of key items, he was able to determine that it had a higher GDP than Bulgaria.

The city of Alphaville in Electronic Arts' The Sims Online has become a hot spot for the study of the seediness that results from such transparent free enterprise. The city suffers from user-created intimidation, muggings, theft and red-light activities, including citizens engaging in sex chats for in-game currency. Most games have at least one Mafia who oversees the creation of new products, gets cuts for protection and financially benefits from real-life sales. There are also rumours that the Japanese Yakuza is involved in the buying and selling of virtual goods.

Virtual trade also comes with complications of ownership. Throw in a global purchasing population and there arise questions of international trade and taxation regulations. Jamie Hale, co-founder of the Gaming Open Market facility, which provides an alternative system of inter-player exchange to eBay, believes their services don't step on the toes of any international treaty. "If we were brokering real-life currency trades, we would no doubt be subject to a whole boat-load of laws and regulations. Instead, we deal in "play money" - not legal tender - and hence are not regulated in the same sense that real foreign exchange markets are."

The major issue for games developers and publishers is potential copyright infringement and theft of intellectual property. Dibbell and others maintain he's not breaching any rights. Most games companies disagree. The most extreme case is an agreement made between Sony Online and eBay: items from EverQuest, the most popular game of the genre, are absent from category 1654.

Others are more tolerant, but have the right to pursue recompense. "If you are selling in-game items in violation of a contract you have entered into with a game company, you should be liable in a civil suit to the game company," explains Greg Lastowka, a legal scholar who studies intellectual property and virtual worlds. Only one has attempted. The publishers of Anarchy Online sued Black Snow Interactive for grinding too many accounts. They lost.

Dibbell doesn't envisage any issues with the tax office when he files his claim today. "The one ambiguity that I've come across is that the IRS wants to tax any economic transaction that involves gain for somebody." At deadline, all profits could easily be spent and the IRS told that the money, now invested in imaginary goods, doesn't exist. "At what point in the growth of these games does the IRS wake up and say everyone who trades in these games has to file?"

Since the first game was released in 1983, the genre has evolved from global versions of Dungeons and Dragons into something more worthy of investment. Several million people now gather online in more than 350 worlds, perpetuating systems that run 24 hours a day, 365 days a year. In Korea, the world Lineage has a population of more than 4m, making it more popular than TV.

"If human society migrates into cyberspace, as many seem to think it will, the coin of the realm will be these shadow currencies. Rather, pounds, yen and dollars may become shadow currencies to the gold piece," explains Castronova. "It's a shocking vision, but eminently conceivable within the lifetime of a person born today."

So, what would real money someone pay for Laen's Logistical Ledger? A truly one of a kind item that allows you to cast expeditious retreat once per day and improved invisbility for 5 charges of a total of 50?

Krez · Post by **Krez** » Thu Apr 15, 2004 7:46 pm

This brings me back to the Asheron's Call days. I just cant believe anyone would spend real money to aquire a digital item to play a game. I remember back when you could go to ebay and see all the characters for sale on multiple online games. Why don't people just spend the time to build there character and have fun playing the game? As for all the money being made by people selling the stuff Hats off to them. They could most likely sell ice to eskimo's also, but look out the farkin IRS could be round the corner. Look Out

*throws down a few coppers*

Themicles · Post by **Themicles** » Thu Apr 15, 2004 7:56 pm

Castles and Keeps went for literally a thousand dollars or more at one point. No idea what they go for now. I sure as hell wouldn't buy a virtual item... but you're damn right I'll try to sell them.

EDIT:
Not here of course... I don't have anything worth a damn.

-Themicles

4x4_Ender · Post by **4x4_Ender** » Thu Apr 15, 2004 7:57 pm

Yeah, i used to play AC too, and i would see some accounts go for thousands of dollars on ebay. Rediculous.

Speaking of AC, their going to do an expansion pack for it, which will double the polygon count (making the graphics ALOT better), and add new areas, items, quests, etc. Might be pretty cool, since AC is the only MMORGP that i even remotly resepct. Everything else ive tried just blows.

Melakin Skywieder · Post by **Melakin Skywieder** » Thu Apr 15, 2004 8:00 pm

Damn either those people have too much money or they're stupid...or both.

If any of you are in either class 1 or 3 please contact me. I have much better ideas for your money

Dralix · Post by **Dralix** » Thu Apr 15, 2004 8:03 pm

Krez wrote:Why don't people just spend the time to build there character and have fun playing the game?

I would never purchase game items for real money, but it's easy to see why some would.

First of all, not everyone has fun in the same way. Some find it fun to build a character and acquire items, others just want to have the good stuff to be able to do some stomping.

Second, is the value of their time. Some people decide that instead of investing 100 hours of their time to get to the point where they can have fun, they'll just spend $100 (numbers pulled out of my ass). To them, an hour of their time is worth more than a buck.

Strangg · Post by **Strangg** » Thu Apr 15, 2004 8:03 pm

4x4_Ender wrote:Yeah, i used to play AC too, and i would see some accounts go for thousands of dollars on ebay. Rediculous.

Speaking of AC, their going to do an expansion pack for it, which will double the polygon count (making the graphics ALOT better), and add new areas, items, quests, etc. Might be pretty cool, since AC is the only MMORGP that i even remotly resepct. Everything else ive tried just blows.

BAH! They ALL blow, not one can lay claim to the title of MMORPG, they are all just MOG's!

~S

Krez · Post by **Krez** » Thu Apr 15, 2004 8:05 pm

Lets just call them the money roll players

Bear · Post by **Bear** » Thu Apr 15, 2004 8:07 pm

I can't believe that anyone would buy virtual equipment. I mean really... go out and play the damn game yourself....

Wanted -- Boots of Haste -- $100 USD

Bear

FunkOdyssey · Post by **FunkOdyssey** » Thu Apr 15, 2004 8:10 pm

Some of those numbers sound pretty ridiculous to me, so the reactions are understandable. But I have a feeling that many of you who claim to be opposed to the concept, would be willing to spend $5 to purchase a haste item for your character if such a deal was available.

If you concede that you would trade $5 for some boots of speed, then you've given a green light to the whole practice.

Uvatha · Post by **Uvatha** » Thu Apr 15, 2004 8:14 pm

Once in the netcafe I work a guy payed another one 120 euro (around 130 US $) for 4 rings in Diablo 2...

Quiz001 · Post by **Quiz001** » Thu Apr 15, 2004 8:29 pm

Sadly I used to play Diablo II, and I was one of those who found an original windforce bow - probably the most sought-after item in the game (this was before duping and hacking became prevalent). When I found it, I could have sold it on e-bay for a lot of money: the week before, one had set a new 'imaginary item' record of $1700. Why didn't I sell it? I'm not sure, but I didn't need the cash at the time, and didn't like the idea of selling game items for real money anyway. Still don't - I think it's a nail in the coffin of a game when this starts happening; people become too 'item obsessed' and stop playing for the right reasons.

Aloro · Post by **Aloro** » Thu Apr 15, 2004 8:42 pm

Bear wrote:I can't believe that anyone would buy virtual equipment. I mean really... go out and play the damn game yourself....

Wanted -- Boots of Haste -- $100 USD

Bear

Yeah, that's ridiculous.

PM me.

- Aloro

Post by **Urizen** » Thu Apr 15, 2004 10:45 pm

For SALE! Beautiful land in Shaah Sulehagh. Be one of the first from southern Avlis to acquire property in this beautiful new land to the north! The climate and productiveness of this region is not surpassed in Avlis! Water in the quiescent glades is always pure and drinkable. Shaahesk provide pleasant and amenable neighbors for a low cost. Lots in this land are available for $100.

Send a personal message (PM) with your VISA number by private courier to DoomSlayer to secure your place in these new lands.

We reserve the right to advance the prices of our lands at any time and without notice

Midknight · Post by **Midknight** » Fri Apr 16, 2004 4:53 am

So, what would real money someone pay for Laen's Logistical Ledger? A truly one of a kind item that allows you to cast expeditious retreat once per day and improved invisbility for 5 charges of a total of 50?

Not while you have a Builder client that allows you to make one.

It's the rare occurence of powerful items that make them valuable, not so much the power of the item. Of course, most rare items also happen to be powerful...

In reality it's not so much different than collectible cards like Magic or even plain old hockey cards. Heck, it's no different than any intellectual property nowadays - a game is 70$ Canadian, whereas a blank CD costs 50 cents. Why do we pay so much? Because we don't have the time or the talent to make our own. Same could even go for food...

Fifty · Post by **Fifty** » Fri Apr 16, 2004 5:24 pm

Midknight wrote:
So, what would real money someone pay for Laen's Logistical Ledger? A truly one of a kind item that allows you to cast expeditious retreat once per day and improved invisbility for 5 charges of a total of 50?

Not while you have a Builder client that allows you to make one.
It's the rare occurence of powerful items that make them valuable, not so much the power of the item. Of course, most rare items also happen to be powerful...

In reality it's not so much different than collectible cards like Magic or even plain old hockey cards. Heck, it's no different than any intellectual property nowadays - a game is 70$ Canadian, whereas a blank CD costs 50 cents. Why do we pay so much? Because we don't have the time or the talent to make our own. Same could even go for food...

Like to see you smuggle it into Avlis though.

storminj · Post by **storminj** » Fri Apr 16, 2004 5:42 pm

Who needs to smuggle when you could buy a DM? I am not implying that our DM's are doings such things but in theory you could offer a DM on the sly so much money and have them give you a item. The only problem is not being stupid enough to get caught. Thankfully most people of Avlis know that the fun is in the attaining and not the actual having. As long as there is someone with too much money and too little sense you will see things like this.

Post by **Orleron** » Fri Apr 16, 2004 7:13 pm

I can definitely understand why someone would pay real money for these things. Say you're a corporate exec making US$200k per year. You work 50 - 60 hours per week. When you come home, you only have an hour or two to play, and getting anything really cool in the game will probably take longer than the lifetime of the game itself. So what do you do? Buy it. If you make that much money, $50 isn't much more than a rounding error in your monthly finances. So who cares?

Those are the main group of people buying these things on Ebay, or at least I read that in another article.

NWN will not ever make this practical though. One word: Toolset. You can make anything you want in this game. Sure you can pay a DM to put it in for you, but once you're caught, both of you are dead. One more word: Database. We can see every little gold piece of money and inventory that you take in, and we can see every little item you store in your p-chests. So where would you hide something? It may take us a while to find it, but we do eventually. We really have a huge amount of info on your characters, including the ability to just pluck it out of the vault and open it in our own game and look at it. We've done that many times too.

I'm fascinated by this trade in the other games, and I don't see anything wrong with it there. Whenever you have a centralized server with high security (that's the key), and the players have no ability to create pieces of your world in a toolset, you'll always have an economy springing up around that. Just so happens that this is new to the scientists. Definitely fascinating that at one point the UO goldpiece was trading higher than the Italian Lira. But right now I think it's somewhere near 5000 gp/ US$1.

Drakuul · Post by **Drakuul** » Fri Apr 16, 2004 8:11 pm

I have a second hand weapon handle for sale if anyone wants it

Start the bidding now!

Titanium Dragon · Post by **Titanium Dragon** » Fri Apr 16, 2004 9:32 pm

Actually on CoPaP it'd be fairly easy. Go to another server, bribe a DM to run a quest for you and give you item x at its end, then come back to Avlis. It would be incredibly hard to trace.

Kaenon · Post by **Kaenon** » Sat Apr 17, 2004 7:38 am

I used to play UO Alot and sell items/gold/accts

that was one of my part time jobs in highschool.

So you see there are some of us who benifit from these people

sarek88 · Post by **sarek88** » Sun Apr 18, 2004 2:42 pm

yeah people who do that have no life. I mean I could do a lot of stuff for 1000 dollars. Buy a new computer instead of buying some virtual castle or whatever

VETT SCALES L7 · Post by **VETT SCALES L7** » Mon Apr 19, 2004 7:48 pm

I got offered $200 American for my EQ character on the TZ pvp server . He wasn't a completely tricked out toon but he had a DM handed out title as part of his name . $200 American for a name .

Dralix · Post by **Dralix** » Mon Apr 19, 2004 7:50 pm

The real money in selling names comes from domain names.

Strangg · Post by **Strangg** » Tue Apr 20, 2004 12:07 am

Selling my Strangg1 account! This includes my warrior Harthgrepa as well as my cleric Strangg. $2,000,000, USD only. Cashiers checks prefered, cash and checks accepted, 7-10 days to let a check clear the bank. 50% of the proceeds go to pimping out the Avlis servers and buying diapers for Orls twins.

~S