Economies, Virtual and Real

[robotech_master]

Found the most interesting and fascinating article via a link on Slashdot about the intersection of the economies of virtual worlds with real life. Funny how timely it is, given that I just got into a virtual world.

The article itself is truly remarkable. It's a great example of how actions can have unintended consequences—you set up an alternate virtual world within the real world that's played on by zillons of people, and before you know it, you've created an entire new economy with monetary systems and everything.

I think the most fascinating part was this bit, though:

This debate may appear rather abstract right now. But, sooner or later, one of these game companies will start losing money and decide it can't afford to keep its virtual world. (Many observers expect at least one major world to go bankrupt this year.) If a game shut down, it would instantly destroy hundreds of thousands — perhaps even millions — of dollars. The homeless woman with the virtual mansion, for instance, could probably sell her goods for several hundred dollars; she would lose her single most valuable possession.

For now, there is no clear precedent on how to deal with virtual property. Owning a virtual castle is not like owning other virtual things, such as stock in a company, because the value is not in an external, tangible object such as a corporation, but in the work and money invested in acquiring it.

With stakes like that, said Jack Balkin, a Yale law professor and a host of the legal conference, players will probably fight back with lawsuits, or by going right to politicians, demanding legislation to prevent worlds from closing down. Julian Dibbell, a journalist who began trading virtual goods himself last summer — he aims to report "revenue from the sale of virtual goods" as the single biggest line-item on his 2004 tax return — later suggested an even stranger scenario. He said that players could well band together and try to buy back the world at the company's bankruptcy hearing — and then run it themselves as a breakaway republic. "Some renegade players have done things like that before, actually," he noted. "They've gotten access to the code of the game and then illicitly created their own duplicate world."

Up to this point, computer games have always had a life of a few years and gradually slipped into being abandonware. What would happen if a mass-MOG was legally required to stay in operation? I can't wait to see how this all shakes out.

Comments

EDWARD CASTRONOVA

[(Anonymous)]

Here's a really great paper from the same fellow:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=294828

-Alex