China stops trade in virtual currency

This Monday the Ministry of Commerce of the People's Republic of China announced a prohibition of use of virtual money for trading in real goods. Note the order of the words! Of course this also prohibits the use of real money for trading in virtual currency, because real money is a real good. But the order of the words tells you that this isn't done because China is worried that their gold farmers might ruin World of Warcraft. The intention is a very different one, which they clearly state:

China has unveiled the first official rule on the use of virtual currency in the trade of real goods and services to limit its possible impact on the real financial system.

The intention is to prevent activities like money laundering via a transfer and back into virtual currency. But whatever the intentions are, it remains to be seen how this will actually be formulated into law, and what activities it affects. Will Chinese gold farmers playing on US servers of WoW become extinct, or at least driven underground?

One tricky part is the sales of virtual goods that aren't currency for real money. In the wording of the press release that appears not to be affected. But of course one could launder money not only buy buying virtual gold with it, but also by buying and reselling virtual epics or trade goods. But if you prohibit that, then the microtransaction business model also becomes illegal in China, and it is far more widespread there than in the US or Europe.

Even more interesting is the potential effect of this on future game design. It is possible that the Chinese government will hold game companies responsible to completely stop RMT. That is easier than you might think. You just need to completely eliminate the player economy and all forms of trade. For example in World of Warcraft you would need to eliminate the auction house, mailboxes, and direct trades. Then you'd better remove the current limit of 2 tradeskills, because everybody will need to be able to do everything, when there is no trade possible. You would also have to remove the shared guild banks, but could add shared banks limited to the characters on the same account, so people could still pass trade goods and heirloom items between alts. Of course that would be a rather significant change to World of Warcraft, but it would still be very playable like that. And as the goal here is to prevent harm to the greater financial system, I doubt that the Chinese government is too worried about the effect of that on game balance. We might even see games without player economy here in Europe and the US, if the game company wants to sell the same game everywhere.
- posted by Tobold @ 6:30 AM Permanent Link