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Oct 03, 2003

Comments

101.

Bob K> "Phin - regardless of what endeavor you look into - there are going to be "bad" people who exploit any situation for a buck."

Where do the people who don't live up to a contractual agreement fit into your picture of bad, good, etc.?

Bob K> "I have to disagree that the creators of MMORPGs see their creations as "play spaces" - they set out to create functional worlds - something beyond ordinary games."

Perhaps, but what seems certain to me is that they see their creations as a place they don't want contaminated by having gamers sell in-game items in real markets. It is hard to imagine how they would make this any clearer in their license agreement. Again, shouldn't they have the right to purpose their games in this manner?

Bob K> "I would suggest that if a person is really just looking for playtime, or for some entertainment - there are plenty of single-player games out there that do qualify as 'play space'."

OK. And the game developers might suggest that if a person is really just looking to make a buck - there are plenty of jobs out there in which to pursue this ambition. Their suggestion, however, carries a bit more weight than yours, since they created the virtual world and have an inherent right to determine its purpose and use.

--Phin

102.

Bob Kiblinger>If a rare item is worth $1,000 in the real world and is obtained by a lucky adventurer, and the gaming company then has a server re-vert which causes the lucky person to lose their item - is the gaming company then responsible for the $1,000?

In general, no. The value of the object in the real world is bound up with its environmental factors. Part of the nature of the virtual object is that it is potentially transient; the price of an object should therefore reflect this.

Example: let's say a gifted flower-arranger creates a beautiful arrangement of cut flowers. They could sell it to someone, but the asking price will not be great because the flowers will be shriveled up in 3 weeks. The same applies for ice sculptures, pavement chalk works, live music... If there were some way to preserve it (eg. record the music) then its value would be higher. However, it's in its nature that the object itself is transient.

The nature of objects in virtual worlds is determined exactly by the virtual world's code and operating conditions. You know that an object in a virtual world has some persistence, but you also know that the object won't exist indefinitely. You know that virtual worlds revert their object databases occasionally, and you factor that into the value of those objects. In worlds with low persistence (eg. MUD2, which reverts automatically every couple of hours or so) there is no real-world trade in objects. In worlds with high persistence there is, but "high" isn't "eternal".

Virtual objects only have real-world value when someone pays for them. They don't have real-world value up until that point. The fact that someone paid $1,000 for something 20 minutes ago doesn't mean they'd pay $1,000 for it now. There is a Recommended Retailer's Price of $0 on the object, and that's how much compensation you're due if you lose it.

If you can persuade someone to pay $1,000 for an object, well, that's a private transaction between you and the buyer. Should the buyer pay you $1,000 for it and then the virtual world reverts, the buyer perhaps has a claim against you, but neither the buyer nor you has a claim against the virtual world. What happened to the object is part and parcel of what the object is. You've as much right to protest about its loss as people who buy beach property have to protest about the loss of their homes to a hurricane. You knew it was possible when you signed up, so you can't complain if it happens.

Richard

103.

To reanswer some earlier questions. Any income is considered taxable unless for some reason prescribed by law that it is not. While it is true that you cannot support a contract based on illegality, this is not the case with illegally derived income. This is the reason Al Capone was incarcerated for tax evasion of income stemming from racketeering.
There are some exchanges in a virtual world that may be taxable depending on how the object identified as being sold is viewed as, especially if one is in the business of transacting virtual goods. For instance if the seller, is selling his "time" (as many EQ and SWG types claim) ,and he recieves for it a good with a value, he has just earned income in that amount. I prefer to look at as if we were brokering data bits. As such If I trade 20 million gold pieces for a castle I am exchanging what is known as "like kind" property according to the Internal Revenue Code sec. 1031, which is a non taxable exchange. The sellers basis in the sold property is carried over as the basis for the purchased property. So if I had paid $300 for the 20 million gold, in my inventory the Castle would be valued at $300. Then, if I sold the Castle at a later date I would have earned income equal to the sales price minus my basis, which in this case is $300.
...the rest is just joking....now if i decided to keep the castle for a period of time longer then a year when I sold it would I be accounting for it as earned income or capitol gains. and if i lived in that house for the better part of the last two years, digital it may be, when i sell can I claim my $250,000 exemption for sale of a primary residence? Or can the Dev Team at EA keep the economy alive that long. ? ...........

104.

Richard - yes - I agree with you. I am saying that the game companies attempt to stop real life sales of virtual items so they are not confronted with this type of liabilty.

Phin - not all game companies are against real life sales of their items. In fact, some of the most famous game developers support it (Raph for one). As far as contractual agreement - I have already responded to that in earlier posts.

105.

Greg: "I agree that you have to do a lot of work to find an IP issue in the sale of the average lightsaber. But 'vanilla personalty law' is hardly vanilla here -- there is no spoon, y' know..."

That's exactly my point: how objectively important is it that there is no physical spoon? I realize that it is subjectively important because it requires re-conceptualizing from the brick and mortar to the bits and memory.

The application may not yet be "vanilla," but the law applied certainly is. Sure, we will have to make some adjustments but I think it'll end up more "french vanilla" than "butter pecan crunch."

Technology presents to the law an interesting problem: previously, the law acted to *reduce* transaction costs; technology has effectively reduced some transaction costs to zero and the law is now forced to address the issue.

This is especially evident in copyright. Where the law once worked to reduce transaction costs associated with licensing (ASCAP/BMI), it is now faced with having to impose transaction costs.

This is exacerbated by an inflated sense of entitlement in America.

Not to dig at Bob, but he can claim, with a straight face, "the game companies have every right to police me in-game - but what I do outside of the game is my own business - and they have no rights at all outside of the game world." And that, *after* he has repeatedly *agreed* (in the real-world, before entering his virtual minting-machine) not to engage in the very activity in which he then engages. His entire argument is premised on his "entitlement" to financially exploit trumping his agreement to not.

Though he has repeatedly acted in bad faith, *he* feels he has been wronged. And Sony has simply closed his accounts-- they haven't sued for damages (though I don't think Sony could prove any, see my post above), they merely closed his accounts. Still, he feels entitled to access to the world ... not to play, but to profit. Unreal.

The source of that sense of entitlement is more interesting to me than the source of any "property right."

Greg: "And you must have gone to a law & econ school like me, what with this focus on efficient contracting. :-)"

Yep. A Posner pragmatist, for the most part, though my faith in markets is not blind, heh.

Phin: It's the developers, as much as the players, that turn the spaces into job-spaces. I think the developer response roots in soil fertalized with other than ideals: a jealous response to somebody capturing value that the developer leaves on the table, an irrational fear of liability resulting from acknowledging value, a *very* rational fear of the cost of legally establishing their lack of liability, etc ...

Jeff Cole

106.

"I guess the question, which I asked above, is how (if?) we expect the law to deal with that fact... because I think the law will have to react to these "sales" in some way."
Actually, I don't think the _will_ have to react.
I think worlds like There and Entropia that have an exchange rate and build the game knowing there will be RW transactions for VW "things" will change the face of the issue.

I just had an odd thought - what if the reason that the Sonys and the Mythics have stuck to their guns on this issue is nothing more than a way to avoid having to figure out how this falls into the IRS code? Would they need to receive extra permits to operate? Would they have to report "earnings" of gamers to the IRS? How much of a stink would this create when the gamers suddenly got a 1099 form from SOE on February 1 informing them that they owed taxes on the money they "earned" in the game last year?

How many of those that _do_ eBay in-game content actually report their "earnings" on their tax return?
And how is that calculated? That must be pretty complex.


At any rate, if the service providers stick to their EULAs, there's not really anything "new" that the courts have to decide, IMO. They might rule in contradiction to existing precedents, but it's not really "reacting" to these sales as I see it.

If the SPs follow There, Inc. and Project Entropia's publisher by building an exchange rate, I don't really see handling those sales as anything new to react to either. Income is income as far as the government is concerned. I think it would probably fall under the same category as a garage sale - if you made less than $X, you don't bother to report it, if you made more than $X, you owe taxes.

It might go the way of "new" if game companies decide to report earnings to the government in the way of a 1099 income report(think of the forms you get from your bank about earned interest, or if you are an independent contractor somewhere, you probably file 1099 income), but the law doesn't need to react there, either.


I think the service providers are in the driver's seat on this one.
Isn't there a There, Inc. guy here? Do you guys deal with "income"? Is money made in there seen similarly to gambling proceeds or as some other sort of income? Has There's legal dept. set a corporate stance on this? Are you even at liberty to discuss it?

Anyway, I ramble horribly. The law needs not react, the framework is in place. The courts might change their stance, but I doubt it. It's the Service Providers that are in control here, at least as I see it.


P.S. Sorry about the forgetting "Dr." thing, Richard. I knew that, I just forgot. Richard it is. :)


DS - "If eBay wanted to state in their usage license that Bob *is allowed* to post data auctions but *NOT* allowed to play any MMORPG, that last activity would fall outside of what eBay can use as a condition of their license. Did I miss something? Am I crazy here?"
Bob has a license to consume Intellectual Property and share it(the consumption experience) with other licensed consumers within the venue. He does not have a license to profit by transferring that IP to another consumer. Bob has not created any saleable IP short of the story he has woven in his head of the life story of his character, and the saleability of that is arguable, as he doesn't have the license to the world. Items he's gathered are artwork created by someone else and they've given him a license to use it within certain (fair use?) parameters.

BSmith - "does the game company have any legal standing to regulate out-of-game behavior?..."
I believe yes because your contract with the game company and the license they issue you is out-of-game - you are licensed to consume the content as long as you don't create a taxable event...
"Unless you can absolutely ensure, beyond any doubt, that every item exchange that takes place inside he game was neither arranged, paid for, discussed, negotiated, nor brokered by anyone outside the game....then you can't reasonalby object to any item exchange that takes place. "
I'm pretty sure the law doesn't work this way.
If 100 people break the speed limit law per day, does that mean that the police are unable to cite the 15 people they were able to catch? Of course not.
Law enforcement is not all or nothing. You do the best you can.
Copyright infringement is similar. Just because 100 people copied the latest hit movie on DVD and there's only proof on 15, that doesn't mean that those 15 get off scott free because the other 85 were sneakier/smarter/under-the-radar.
If 15 our of 100 folks breach a contract with company X in a way that leaves the company with proof of the breach, whereas the other 85 leave no proof or there's no way to determine they breached, don't you think Company X still has a case on the 15 that they can prove breached?
You enforce where you have proof, you discourage(and write-off losses) where you don't.

All you _have_ to do is show that you are doing your best to protect your rights/enforce your laws(due diligence? I forget the term).

On the baseball card analogy - you left out an important word, Bob.
Trading. I've always known them to be called "Trading Cards". They were _meant_ to be traded. It's an intrinsic part of what they are. VW items and accounts and licenses are explicitly meant to NOT be traded out of context.

At least, that's how I see things.

107.

I have to say, it's been great watching the discussion so far because I keep seeing issues and concerns being raised that bear striking similarity to issues and discussions in various classes I've taken to date. I'm just going to start commenting away at this point.

Quick response to Brian Green's comment above that "the legal issues be damned." Law is what gives rise to claims of ownership and rights thereunder. To construct arguments outside considerations of the law is to make them without sufficient basis for them to be actually possible. Ignoring the law, there is no recourse for substantive change to gaming company practices outside of quitting the genre.

This is not an Intellectual Property issue. Trademark deals with likelihood of confusion, Copyright with protecting works of art and expression, and Patent with innovative ideas be they designs, methods, objects or improvements. (This ignores specific other IP realms such as Trade Secret and Rights of Publicity which, at least in my opinion, have absolutely no bearing here.) As a side note, if the material could not be copyrighted, then it is not subject to the DMCA. Software code can be (and often is) copyrighted and, as such, actions attempting to get around security measures of that code/program are in violation of the DMCA. However, players selling in-game items or characters has nothing to do with that and is not comparable.

'Who Owns My Light Saber' is concerned with Contract and Property theory. It is not settled that, as a matter of law, EULAs or TOS are enforecable in court against a subscriber. That being said, Contract law may or may not support EULAs. Factors and anologies work both for and against them. These include references to licensing, real-world analogies, other software licenses and shrinkwrap (i.e. Microsoft Windows), players' rights, potential restriction of players' property rights (not a property concern yet, though), what players are actually paying for (access? property? entertainment?), how players' money is tied to their ownership if any (i.e. the value of time), reserving VWs as play spaces (not specifically a contract concern but goes toward a potential purpose of the contract), the extent to which game companies may regulate external transactions of internal content and the potential harm to participants or society at large.

As an above poster (apologies for not citing you correctly, I briefly scrolled up but this thread is too long) correctly pointed out, in general, contract theory is concerned with efficient and equitable business transactions but is also tied to moral values relating to efficiency and fairness. The EULA is a devious but intelligent tool to this end since it arguably places the participant on notice and reduces any liability attributable to the game companies. Those are usually the reasons for disclaimers and licenses, to reduce potential liability via established mechanisms for doing so. The EULA acts as the doorway to access to the VW. A strong but unrelated court case might be a consumer who purchases the game, views the EULA, clicks "No" or "I Disagree" and then tries to get the money back which he or she paid for the game. (Just a tangential scenario.)

EULAs are unlike most software licenses or shrinkwrap because they do not seek to merely protect the company's work and users potential misuse thereof. EULAs also seek to control external actions that affect or carry in-game components. This necessarily implicates property law in similar ways as the license mandated by Apple for downloading iTunes. (Unfortunately, I can't download the iTunes software atm to see their license agreement right now. Thus, the following is based on bits gleaned from news stories, etc.) One new clause prohibits, to some degree, the transfer or reselling of the mp3 downloaded. This regulates an external action concerning a licensed property. Additionally, the ownership of the mp3 thus comes into question since the user has paid 99 cents for an mp3 but does not carry an absolute right in and to the mp3 if the license is upheld. This is very similar to the questions and issues concerning gamers' light sabers and is slightly more transparent since it involves an accredited or approved transaction. (It is equally murky, however, since the user could copy the mp3 and then resell the copy while retaining the original.)

Property Law. The first question is whether there is property in fact present. Does the game content have a value or worth that can be ascribed to it so as to endow it with the legal recognition of property? While there is no clear answer, I would tend to either say yes, since players value the items to some degree, or skip over the question to move on to the ownership issue. Secondly, who owns the property? Game companies store the information and actually possess the code that constitutes the property. Players, however, are the ones who give it value and actually obtain the property at the expense of not only their time but also the money they pay to participate in the game. While the players do not actually 'create' the content, they do 'earn' it so as to generate a subjective, if not legal, sense of ownership. Undoubtedly, within the confines of the game itself, the companies have absolute control and may do as they wish (more or less without bounds). However, once the company starts to regulate external transactions, it starts to take on responsibilities similar to those of a governmental entity and the legal basis for that regulation rapidly fades. I would love to see a case brought to court regarding ownership in a VW. I fear that the case would not lead to a favorable decision though, partly because it would be a big change and have potentially undesirable side effects. Judges are generally loathe to bring about such possibly momentous changes unless there is a substantial public interest or constitutional right involved.

One of the reasons this has yet to be addressed by a court is probably because the companies are smart about who they punish. The largest "infringers" are also the ones who are most likely to have sufficient money, power and interest in protecting their "business" by taking the game company to court.

In addition, eBay is the perfect vehicle for this punsihment. It is one of the most visible and accessible of online auction sites. Furthermore, eBay has previously expressed an interest in avoiding litigation by reasonable means, i.e. pulling controversial auctions. Thus, eBay would be receptive to potential regulation. Furthermore, by not excluding all auctions (asking eBay to forbid them) and going after users individually, the game company can determine who the users are who are infringing and individually punish or regulate those users. This will not only dissuade some users from posting auctions on eBay (and other auction sites) but will also attempt to lend credence and strengthen the potential power of the EULA.

(I know this is lengthy but bear with me, I'm almost done.)

Briefly touching on a few other aspects mentioned above...

There is no constitutional right to entertainment (at least no aspect that I can currently think of). There is no constitutional right to game-playing. Any arguments for such a right would likely be shot down in a heartbeat. Since there are no such rights, any inalienable rights or possible existence thereof do not come into play (at all). Any and all rights at issue relate to contract and/or property law.

There are some antitrust implications here regarding market regulation. At the moment, I don't think the government would step in to regulate this aspect of the industry. There are not enough significant problems or monopoly issues to so warrant such action.

The minor issue of jurisdiction and choice of law, where a suit could be brought and which state's laws would apply, is interesting in this context, primarily due to the widespread dissemination of the games and large user-base. My guess is that the state laws so prescribed would govern and that a suit could be brought in any state, literally.

The breach of contract issue (whether there was a breach and any ramifications) only comes about if there is a binding contract. Hence my discussion of the EULAs legality rather than any breach. If the EULA is enforceable then there is no question that there is/was a breach of that contract.

That's all I can think of for now. Cheers!

108.

Lots of impressive comments here. This has to be the most rational ebay discussion I have been witness to.

My meagre points:
1) I confess I am guilty of the sense of entitlement. For example, I have written short stories in the books inside of Ultima Online. If EA were to prohibit me reposting these on my website on the grounds that they own the copyright, the fact this was listed in the EULA wouldn't stop me from being very upset.

2) What SWG *should* do, IMHO, is incorpreate real world dollars into their bazar system. Allow players to deposit extra money into their account. Add a Bazaar which works with real world currency. Take a x% slice of every transaction.

3) The software world has gotten away with utterly ridiculous contracts for so long that I don't blame Bob at all for ignoring them. I personally interpret every click-through EULA as:
"Do not sue us if this program burns down your house"
That is what I consider myself bound to. If they want to add a paragraph about my first born having to be named after the company's CEO, I am not going to read it. I am also not going to feel the least bit morally culpable for breaking it. IMHO, I'm doing them a big enough favour by granting them immunity to liability for their shoddily made software. (See what I mean about having a sense of entitlement?)

Thus, all the talk about "Knowingly violating the contract" falls on deaf ears. While there may, or may not, be a legal contract in place by the "I accept" button, most people I have talked to do not think there is a moral contract in place.

My concern is that the game companies are just becoming more and more greedy with the rights they grab from the EULA. Eventually, this will blow up, get regulated, and they will lose the immunity for burning down my house, which was all they really wanted in the first place.

- Brask Mumei

109.

Consider the following scenario:

A guild decides to host a newbie giveaway party some evening. A sizeable portion of the guild shows up with the extra junk they have cleaned out of their bank account with the intention of passing them out to any newbie that wants some. The members get together to drink, talk, and have fun acting generously superior to the newcomers.

100 newbies receive higher level items that they would not otherwise be able too obtain. This is all done inside the game, and under the knowing and approving eyes of the GMs. At the end of the evening, everyone logs off happy.

Except....

75 of those 100 newbies just happened to wander past and got a surprise gift. 15 of them got a specific item by privately offering to pay the high level player for it later. 10 of them were given the item as the final culmination of a negotiation that was begun on an auction site.

Remember, all 100 of the newbies received those gifts inside the game, under the watchful monitoring of the GM. Which one of them violated their contractual obligations? 25? 15? 10? None? Or all of them?

The game companies need to come to grips with another, potential lethal issue that is going to bite them in the ass if they don't learn to control themselves.

Having ultimate authority over the game world that you designed does not necesarily imply having any authority whatsoever over the real world. None. Nada.

Unless you can persuade real world legislators to grant you specific authority, or you can get a real world judge to issue an imperial decree, then you have no authority to interfere with anyone else's activity that does not take place on your server or web site.

The classic case, which still ticks me off every time I think of it, is the time EQ found that a piece of fan fiction, which had previsouly been posted on an independent site, was discovered after the fact to be objectionable to them. They immediately took steps to not only ban the player in question, which was within their rights, but they also took the further (and possibly actionable) step of coercing the independent site into taking the story down.

The literary merits are irrelevant. The game company had no right, and no authority, to regulate someone else's behavior outside the game. And the copyright excuse be damned. There aren't any uniquely original games out there. They ALL borrow from previously published material themselves.

The EULA may be written so as to grant the game company exclusive authority to prevent you from naming your child after one of their game characters, it might grant the game company exclusive authority to prevent you from drawing and using a game-related wallpaper, it might grant exclusive authority to tell anyone they want that they cannot do anything at all without express permission of the gaming company. It might give you the inherent right to come into my bedrom and inspect my pillow case.

But that does NOT give the EULA the force of law. Grasp the concept. Your right to tell me what I can do stops when I step outside of your game world. What I do out here is my business, not yours.

FYI, I have never traded a character nor an in-game item of any kind outside of a game world. I have have had any interest in it. Never actually gotten deeply enough into a particular game to investigate that activity. But that does not mean that I would feel the slightest twinge of conscience for doing so, if the mood struck me.

Inside the game world, your are lawgivers and gods. Out here, you are a bunch of geeks trying to tell other people what to do. Grasp the difference.

110.

Hi Brask,

Sony could actually accomplish #2 by simply authorizing/establishing a way to convert SWG Credits <> US$.

I am guessing that the main problems with doing so are 1) Once players start paying RL$ for In-world goods their is some implied ownership involved. 2) Exploits now become a huge financial problem. What happens when the currency crashes? 3) Few enjoy entertainment where the richest guy wins.

I also like the point that you bring up in #3. If a paragraph has lost its meaning, what good is it for?

I see the same problems in RL with the speed limit on some highways. In the case of the RL speed limit, the public opinion effect of writing an unpopular law is often balanced out by infrequent enforcement. This tends to work short-term to fulfill the public's desire to write one thing and enforce another, but it does little good for sustaining the system of communicating what actions are and aren't in the public's interest. More likely a dual policy communicates that neither, or worse both, actions are in the public's self-interest.

I can see this also happening with the function of the EULA. Instead of outright authorizing a few places where members can conduct RL<>VW trading, its easier to simply pass out speeding tickets here and there to keep the flow of traffic regulated.

-Bruce

111.

B Smith> "Unless you can persuade real world legislators to grant you specific authority, or you can get a real world judge to issue an imperial decree, then you have no authority to interfere with anyone else's activity that does not take place on your server or web site."

Except that perhaps you can persuade another business that it would be in their best interests to use the authority they have over their own service in a manner that was agreeable to both parties.

So, Sony and Microsoft might decide that when an EQ character reaches level 60 the account owner gets a free AC account. Or McDonalds might get together with Sony and agree that if someone peels a Boardwalk Monopoly game piece off their Super Sized fries, they get a free castle they can place anywhere in EQ.

Furthermore, I see no reason that whoever is offering the service cannot place even rather arbitrary restrictions on what happens on a server that is not their own, so long as the respective service provider agrees. So, McDonalds might insist that only a character named "Ronald" who had big, red hair could own the castle. If Sony agrees to this, it makes no difference that McDonalds doesn't own the EQ servers. If you peel off the Boardwalk sticker and you want the EQ castle, you'd better create a character with red hair and name it "Ronald."

Or, if Sony and eBay agree that...

B Smith> "The classic case, which still ticks me off every time I think of it, is the time EQ found that a piece of fan fiction, which had previsouly been posted on an independent site, was discovered after the fact to be objectionable to them. They immediately took steps to not only ban the player in question, which was within their rights, but they also took the further (and possibly actionable) step of coercing the independent site into taking the story down."

I'm not sure what the legal definition of coercion would include, but I'm pretty sure this wouldn't qualify. Evidently, both parties decided that it would be in the best interests of the services they were providing to take the objectionable material down. I don't see how it is not within Sony's rights to do this. I certainly think you'd be well within your own rights if you did everything you could to persuade the independent site to leave the content up. If you had mounted a grass-roots effort to do this, would we be justified in claiming that you "have no authority to interfere with anyone else's activity," etc. etc.?

--Phin

112.

Bruce: "Sony could actually accomplish #2 by simply authorizing/establishing a way to convert SWG Credits <> US"

This is where I agree with the anti-ebayers of the world.

If Sony sells SWG currency, they are devaluing it to at least their sell price. If the price is too high, people will buy from third party currency sellers and the whole exercise was a waste. If the price is too low, people won't bother playing the game to earn SWG currency - you have effectively just added an extra subscription fee.

If Sony buys SWG currency, they are insane, as SWG credits are, by design, easy to come by. They will have a huge liability for the first exploit or currency crash. (One may argue that this would provide a strong encouragment to avoid dupe bugs. However, I think there already is a pretty strong desire to avoid them).

Please note that both these comments are specific to SWG (and similar games, such as UO), where there are in-game generators of currency. SWG could certainly add a second currency with a fixed USD conversion rate. They likely wouldn't want to give that out as a monster drop, however :> Indeed, that is sort of my suggestion - you'd have two bank accounts - the SWG Credits, and the USD.

My fear with MMORPG is that some developers look at the $5 million in ebay sales and ask: "Why don't we sell Swords of Uberness for $500 and get that for ourselves?" This annoys me as a player as it is artifically injecting items into the economy. I have no objection if Player X crafts a Sword of Uberness, and sells it to Player Y for $500. I do have a problem if Player Y pays $500 and a Sword of Uberness magically appears in the air.

Thus, IMHO, the real market is to take the role of ebay. Ebay cannot compete with an in-game auction system. The ingame system can guarantee delivery, descriptions, etc.

Ebay currently has a Final Value Fee of 5.25% of the first $25, 2.75% up to $1000, and 1.50% for the rest. This suggests that Sony could likely charge 3% and the Ebay category for SWG would disappear.

It may seem foolish to go after $150,000 rather than the whole $5 million, but I think:
1) Sales will go up with increased security & increased ease of transaction.
2) There is no need to try and find the proper price to sell stuff at.
3) There is no risk of being accused of making for-sale only items, catering to the rich, etc.

There are some serious legal issues, but I don't think they are that new. You'd basically be providing a debit account, much like the ITunes wallet, or micropayment systems. Ideally you draw your subscription from this account so EVERYONE has one (even if they aren't planning on trading) so everyone can be tempted into buying.

There are some serious technical issues. You definitely don't want items disappearing during the transaction. (Afterwards is less of a concern) You definitely don't want someone to be able to dupe their USD. (Again, duping credits is less of a concern). You don't want a server rollback to undo the item transaction but not the USD transaction. It is, unfortunately, likely too late to try to put this sort of thing into SWGs design.

- Brask Mumei

113.

Paul, your examples above are illustrative of licensing (companies working together for a limited purpose) and intellectual property issues (trademark).

Companies seemingly "work together," even though their respective individual goals are different, under two circumstances that I can think of. First, with regards to licensing, especially as in a promotion, contest or use of the other party's intellectual property. Second, with regards to limiting liability. Therein lies the coercion.

Under the current laws, anyone can send out a cease & desist letter. Anyone can complain. I can complain that someone else's grammar is bad and offends me to the point where I demand his post be taken down. However, results are usually nonexistent until a large corporation or organization gets behind one of the parties. The instant Sony sends me a c&d letter saying I must stop offering 3 dozen Star Wars Galaxies items on my private auction site (or even sends the same to eBay), you better believe I'll take that site down immediately. It's coercion. I'm bigger than you, I have more resources, I can take this needlessly to court and make you spend money, I can squash you like a bug. aka I am (Sony, Microsoft, other game company), hear me roar.

Yay for grass-roots campaigns but especially with something relatively low-key (i.e. not on the radar to the majority of the population), your efforts will probably be to no avail. (But good luck!)

114.

DivineShadow wrote, "Furthermore, you cannot decide it on race/creed/sex/nationality and a bunch of other things."

I most certainly can! I can choose to not let people under 18 into my pornography-themed game; in fact, I'm probably legally required to! I could say that no males can participate in my virtual world for the recovery of female victims of rape. I might be required to only allow people of certain nationalities play my game if I licensed it from someone else that has licenses in other territories. (My ability to enforce these restrictions is a whole other issue, of course.) There are plenty of viable reasons for restricting access based on any number of external criteria.

Alan Stern wrote, "Quick response to Brian Green's comment above that "the legal issues be damned." Law is what gives rise to claims of ownership and rights thereunder. To construct arguments outside considerations of the law is to make them without sufficient basis for them to be actually possible. Ignoring the law, there is no recourse for substantive change to gaming company practices outside of quitting the genre."

You mistunderstood me. I wasn't saying, "Haha! Law can't catch me, I'm the gingerbread man!", rather that this isn't an issue of enforcability of EULAs. If I, as a game maintainer, can't choose who can and cannot patronize my game, I have lost significant control over the world to the point that, frankly, it will be impossible to run.

To use a bad analogy: If I go into McDonalds and yell a book reading at people, it doesn't matter if I have a legal right to read that book out loud or not. I'm disrupting their customers, and the owners have the option to have me removed from the premises. That's why lots of establishments have the sign "We reserve the right to refuse service to anyone." There are times when you need to remove someone that is disrupting the enjoyment of other people.

The simple fact is that eBay sales do disrupt some people's enjoyment of the game; the simplest case would be where the eBayer is camping an item and excluding others from having the opportunity to get that item in-game. The developer/administrator needs the ability to refuse service to anyone who is disrupting their game for any reason. (Note that my game, M59, does not have specific regulations against eBaying items. Yet, I recognize the value of being able to restrict access to people that are disrupting the game.)

This is completely ouside the enforcability aspects of EULAs or about 90% of the other legal issues brought up previous to my post. This is a question of being able to control access to my service for what I think is the benefit of my business. Again, if I can't eject a disruptive element from my place of business (the online game/virtual world), I effectively can't run my business.

Some clarification,

115.

Brian,

"I most certainly can! I can choose to not let people under 18 into my pornography-themed game; in fact, I'm probably legally required to! I could say that no males can participate in my virtual world for the recovery of female victims of rape."

Sorry to disappoint, but you will need legal backing to exclude any one group of people out, no matter how much sense it makes. You can kick people out for breaking rules, but you can't deny service at the door without legal backing.

Keep in mind this is different from people you did provide service to and had a bad experience. This is not a pre-defined group of people, but bases itself on your company's experience. ... Having said that, sharing your "black list" among companies is a *very* tightly regulated activity.

116.

DuckiLama,

"All you _have_ to do is show that you are doing your best to protect your rights/enforce your laws(due diligence? I forget the term)."

Yet this might backfire in a disastrous way. Should a court judgement rule against the game companies for actioning directly against Bob's (or anyone's) accounts they would open themselves up for class-action lawsuits. It would be just a matter of time after that before similar suits are brought to the desks of other unrelated game companies.

I see deep social, economical and legislative inter-relations *between* these virtual worlds; Where the actions of world A impact world B (see the topic "Vulnerability II at http://terranova.blogs.com/terra_nova/2003/09/vulnerability_i.html ). The more legislative monoculture these worlds adopt (ie: everyone copies everyone elses's EULA), the greater the risk the industry as a whole runs of being severely disrupted. The last thing I want to see is the virtual worlds I enjoy so much to be sued into oblivion, yet a good chunk of them seem to be opening up their defenses by enforcing murky licenses.

Then again, perhaps this is a necessary evolutionary step for the industry, where only the worlds that can maintain their entertainment value without resorting to meta-game regulations survive and their seed ideas spawn a new and even better generation of games that immediately fill the void left by the mass extinction of the "dinosaurs of gaming".

117.

Brask Mumei>My fear with MMORPG is that some developers look at the $5 million in ebay sales and ask: "Why don't we sell Swords of Uberness for $500 and get that for ourselves?"

I too have a fear: I fear that people will reach a consensus on the legal and economic issues involved in this kind of activity without being aware that there are working examples of different yet successful approaches that have important things to say on the subject.

Example: Achaea (http://www.achaea.com/). This is a textual virtual world, but there's no reason its business model couldn't be extended to a graphical one. Here, the game is free to play but people pay for in-game objects. The developers sell over a million of these a year to their players, for real-world dollars. This year, they may get close to two million.

Their system involves buying "credits" from the developer that can be spent in the virtual world for objects that have tangible properties within that virtual world (ie. not purely cosmetic things like armour dye).

I don't know if there's much of a trade in Achaea objects outside of Achaea itself, but I suspect not (I didn't see anything on eBay when I looked just now).

Those among you interested in the legal/economic issues this raises may be interested in the following disclaimer from the bottom of
http://www.achaea.com/creditsalt.htm :

"Achaea is a functioning world, and while we guarantee you will not lose any of the credits you buy, no such guarantee can be provided for what you purchase with the credits themselves. We wouldn't be in business very long if this happened frequently, but as it is a world, your actions have consequences, and the actions of others can result in consequences for you. It's this dynamism in the nature of the world that people enjoy about Achaea. Thus, it is possible that the perceived or real value of the things you purchase with credits, or your ability to use those things, may both rise and decline during the course of play."

This is roughly the equivalent of the message we have in the UK accompanying all advertisements involving the stock exchange: "the value of may go down as well as up". In other words, you're buying "as is".

Achaea is a small game with a vibrant player base consisting of players happy to pay for virtual stuff they want. They're below the radar of most of the law/economy researching the field, but that doesn't mean that they and other virtual worlds like them are not important. In particular, they perhaps give a lie to the assumption that sales by developers of in-game objects are necessarily a bad thing. If the virtual world is properly designed around the concept, it can be a very good thing.

Richard

118.

In South Korea Aeonsoft (http://www.aeonsoft.co.kr) and Wizgate (http://corp.mgame.com/) are two companies with what I would call chat-portals using graphical avatars.

Both companies charge a monthly fee roughly double the usual US MMOG rate, but generate most of their revenue by selling avatar clothing directly to the players.

They explained to me that the chatting was so much a part of the social fabric, that people were extremely motivated to purchase the latest fashions, especially the rare, limited edition items.

I don't recall whether there were used or buy-back programs. But they are at least examples of sustainable businesses based on selling digital items directly to customers....

(Perhaps someone closer to the Korean market could comment on this. My information is about a year old...)

119.

Referring to eBay sales and such, I've personally heard the following phrase from a manager at a game company that runs one of the games in the "over 100K US" group: "Whenever I see someone making a profit based on our game I think to myself: Why can't we do *that*?" The source will go forever un-named, at least from my side.

Along the vein Richard cited, playable and currently nearing completion, is Project Entropia http://www.project-entropia.com/ a fully-3D world that sells their credits, and allows free exchanges of credits back/forth with real currency and has no suscription fee.

My personal take on these things: I'm torn.

*) How fun is a game where you KNOW the suscription fee is going to come from your online purchases and that motivates the game company to constantly obsolete my virtual gear.

*) What are other people's motivations for playing? Fun, relaxation, personal relationships? What are their values? Loyalty, honor? Or does the direct link to the almighty dollar boil it all down to greed? Do I want to play in a world full of people motivated primarily by greed?

*) The fact that in current popular games coming and going from credits to dollars is neither immediate nor direct (thanks to the inefficiencies of eBay) creates an insulating barrier that helps the suspension of disbelief and promotes immersiveness. Seeing "You're dead" has very different meaning if it is followed by "10,000 Credits have been debited from your account" than if it's followed by "$1.50 has been deducted from your account". Sure, on the eBay market they may be the same, but bringing it in-your-face to the gameworld has a nastier sting to it.

*) On the other hand I don't have forever and more to play these treadmills, so something like UO's "Advanced Character" service has quite a big appeal, just as buying a nice EQ account.

*) Not having oodles of time mean that I also value the service people like Bob bring. If it weren't for Bob's trade I would have to spend the few hours a week I have to play being broke or playing with substandard equipment that either gets me broke or prevents me from joining my playpals that have more time to play. Where's the fun in being broke? Where's the fun in driving yourself broke? Where's the fun in playing without your friends on a multiplayer game?

*) Although I play only four hours a week I still pay the full monthly suscription fee just like Joe Industry Average does. Joe Industry Average plays the industry average of 20+ hours a week. Can someone at an MMOG company fathom a better customer than the guy who pays the fees and doesn't use the service? Think of the bandwidth and CS saving, lower peak players, etc. Yet they go about banning those who make this (my) playing possible; Bob is an *enabler* for the game company to capture me, the sweetest spot of them all: 25-35 and six figures income (ready, willing and able to keep up multiple accounts, buy expansions, premium services, co-marketing, etc). Bob and his trade bring a brand name (his brand, "*Treasures") backed by a track record that confers stability to the trade that enables me to play while *also* maintaining the insulation I need for the gameworld to be fun when I do play it. And they ban him? Might just as well ban me too.

120.

DivineShadow wrote, "Sorry to disappoint, but you will need legal backing to exclude any one group of people out, no matter how much sense it makes. You can kick people out for breaking rules, but you can't deny service at the door without legal backing."

Ah, it is not I that will be disappointed, I think. Someone better tell your assertion to the Augusta National Golf Club. Seems they won't let women become members, which has upset some people late last year.

http://abcnews.go.com/sections/wnt/DailyNews/Masters_controversy020920.html

Sure, it's morally repugnant. But, I don't think it's illegal as you seem to imply. Otherwise, I think this controversy would have been MUCH shorter after a court case was brought.

The parallels between a private golf club and an online world shouldn't be too much of a stretch.

121.

Divine - I sure wish you worked for SOE - lol. Well said.

122.

Achea is very aggressive about their "No eBay" policies, they'll instantly ban any account involved in a cash transaction other than a purchase from them. And items purchased with cash cannot be transferred between characters, as I understand it.

The first part of that doesn't scale well.

--Dave

123.

Brian,

I suppose some Canadians are dodging some aspects of the CEDAW treaty they signed in 1980( http://www.un.org/womenwatch/daw/cedaw/ ). While 170+ countries have ratified it to date, the US has objected to Articles 2(e) and (f) (among others) that deal specifically with the private life of citizens and organizations. Evidently you have a green light to go discriminate against women on a club/game in the US for the time being. I'll stay tuned to the news meanwhile - it should prove interesting.

Bob,

" Divine - I sure wish you worked for SOE - lol. Well said."

Thank you, but that would mean something horrible happened somewhere along the way. :)

124.

Dave Rickey>items purchased with cash cannot be transferred between characters, as I understand it.

I wonder what the reasoning behind this second part is? On the one hand, it may be that a second-hand market might undermine primary-level market sales (although in the real world the existence of a sell-on market can help direct sales because people will more readily purchase something new if they think they can get rid of it easier when they want something newer); on the other hand, it may be that there are legal concerns about liability if people can lose objects they paid for (eg. by being tricked out of them).

I guess the smart thing to do here would be to ask the Achaea team, because they'll definitely have a thought-through explanation for why they have these rules.

Richard

125.

é por que eu tenho um buneco no mu mais eu botei qual quer mail (inventado) ele ja esta na level 58 e eun não quero perdelo por que foi um sacrificio chegar ate aqui como eu posso recuperalo saber sua nova senha

126.

é por que eu tenho um buneco no mu mais eu botei qual quer mail (inventado) ele ja esta na level 58 e eun não quero perdelo por que foi um sacrificio chegar ate aqui como eu posso recuperalo saber sua nova senha

127.

> pls sent the pass word of mu. bec. i cannt open my accnt there pls refly asap tnx

128.

pls sent the pass word of mu. bec. i cannt open my accnt there pls refly asap tnx.. i miz the game saw much...

129.

pls sent the pass word of mu. bec. i cannt open my accnt there pls refly asap tnx

130.

This is in fact, a practical issue.

The ongoing market for virtual items is stimulative to online gaming in 2 respects.

1 - it creates a number of players who create and sell items, and create a player revenue for companies.

2 - it creates the possibility for people who do not have hell of a time to create good chars or mountains of credits to get the full taste of the game. i am one of those, and i never want to spend 2 hours of grinding or working per night to only be able to achieve a character which can be satisfyingly effective and active in the game world. i have my own grinding and working to do in the real world, and i can not pay 5 to 20 dollar per month to again come and work in a virtual world this time instead of actually PLAYING the game.

There are 2 solutions to this for gaming companies' problems :

1 - do not offer any support or accept any responsibility from virtual item trades by 3rd parties. cite the intrackability of these as a reason. get it as an agreement in EULA. you put hell of articles there against the customer, just put another one. and that is that.

2 - allow gaming trade to an extent, but do not allow any 'big company' to be founded to do that job. a 'company' like this can hire 50-100 'workers' to create virtual items and sell them on many games, and by itself will reach the output of i guess 500-1000 individual players. this would cut player revenue for the gaming company to one tenth.

as a result, action on behalf of gaming companies should be to utilize this new aspect of online gaming to enlarge and tie their player base to their game.

we are seeing that some very small gaming companies are able to cope with biggest media corporation's games by utilizing these methods.

wake up. and dont waste our valuable resting time by getting us 'grind'.

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