Rekindling the virtual property debate

The Ancient Gaming Noob Wilhelm2451 has the best summary of the latest EVE story: In EVE game time cards exist as in-game item, called PLEX. They used to be safe, but recently they were changed to be transportable, and thus destroyable. And now somebody had his ship shot down with $1,300 worth of game time cards destroyed and lost.

While you might laugh or cringe at that story, I think it is important to look at the wider implications of this. The current legal situation in the USA and Europe, although never confirmed in a court of law, is that virtual property does not exist. Your space ship in EVE, your epic armor and gold in WoW, your EQ platinum pieces are all just parts of the code, of the intellectual property of the game companies, to which you have limited usage rights as defined in the End User License Agreements and Terms of Service. They don't have value, because they are considered to be something like a highscore in Tetris, which while being dear to your heart has no commercial value. While you *can* buy virtual currency, the game companies argue that they forbid that in their EULA, and thus the virtual currency has no real value. With virtual items and virtual currency *not* belonging to the players, the game companies can't be held responsible for any losses. And the players aren't liable for taxes on their virtual earnings.

For a PLEX, paid for in cash by the player to the game company, that legal argument might not hold up. If the player in question goes to a court of law and says "I paid for 74 months of game time in EVE and through an in-game event lost $1,300 and did not receive what I paid for", that court of law is probably going to consider that those PLEX *did* have value. And that opens a can of worms, because suddenly the game developer needs to argue how players can lose large amounts of money in their game. A court might think of an online game in which you can lose $1,300 as "online gambling", which is illegal in the USA and several European countries. Or they might consider the destruction of that value to be something the game company is liable for. And once we decide that a PLEX has value, then what about the players who "work" in-game to make ISK to buy that PLEX, do they have to declare an income to the tax authorities?

In China, where buying virtual stuff is more wide-spread, courts already consider game companies to be liable for some losses. If that becomes the law over here as well, that could have significant consequences for game development. Game companies would either need to deal with the liabilities of players owning virtual property, or they would need to design their games in different ways to make exchange of virtual goods for real money impossible, and thus get back to the "players are just renting pixels" legal situation.
- posted by Tobold @ 8:39 AM Permanent Link