eBay has banned the sale of “virtual property” on their online auction site. What, pray tell, is “virtual property?” Those of you who participate in “Massively multiplayer” online (MMO) role playing games such as World of Warcraft or EverQuest maybe familiar with the concept. For years, a shadow economy has existed where MMO gamers buy and sell things or services that only exist within the confines their game’s virtual environments (such as avatars, weapons, armor and virtual currency) for real life cash.
Confusing? Here’s an example of how this works. Player A’s character in World of Warcraft needs cash. Rather than procuring the gold through the normal means within the game’s virtual world (working for it, selling something, stealing it, etc.), Player A decides to pay real world cash to Player B whose character has some spare virtual cash to auction off on eBay. The two players exchange the real-world cash and agree for their characters to meet at a designated location in the virtual world in order to pass the virtual gold from character to character.
This practice has evolved into more than an unusual cottage industry. There are several companies (most based in China) that employ scores of people to play the game for the sole purpose of accumulating virtual goods to sell for real-world cash. Companies like *www.ige.com* IGE directly sell virtual currency, items and other services to MMO gamers on their web sites.
The developer of most of these games, including World or Warcraft’s Blizzard Entertainment, have long opposed this “underground economy.” They assert that, “while the player is in the VIRTUAL POSSESSION of said items, ownership of the property of the property ultimately remains with the game developer.” Because eBay is such a significant marketplace for these virtual goods, several of the MMO developers have requested the auction site ban their sale. This week, eBay agreed.
Slash Dot reports that eBay’s “decision to pull those items was due to the ‘legal complexities’ surrounding virtual property. ‘For the overall health of the marketplace,’ the company felt that the proper course of action, after considerable contemplation, was to ban the sale of these items outright.”
“Legal complexities” indeed! Do we expect the courts to decide who owns something that does not, in reality, exist? Do intellectual property rights apply in this case? eBay usually shys away from regulating items exchanged within the confines of “The World’s Most Unusual MarketPlace” unless it is explicitly illegal or universally accepted as immoral or unethical. No legal precident here. No public clamor of this practice being unethical or immoral either. So why the policy change?
Chris Augustines comment on this post on a CNNMoney.com blog may provide the best insight into eBay’s new policy. He points out that it may have less to do with the transfer of virtual property via the auction marketplace and have more to do with the transfer of real-worl currency at eBay’s PayPal division. According to Chris, “Virtual items are not covered under any credit card agreements that eBay must live under to operate PayPal and thus eBay is ‘eating’ alot of the transactions [where the exchange of virtual goods fails to take place].”
An intersting development in the online auction industry. Question is… Is it relevant? Time will tell.
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