Tuesday, January 17, 2012
Is Diablo 3 gambling?
If you happen to live in South Korea, the Diablo 3 you will be able to play will differ in one major aspect from that available for other countries: The South Korean version will have the real-money auction house function removed, because the authorities considered that to be gambling. Basically finding a very valuable item in Diablo 3 is very much a question of luck, and thus you paying Blizzard to be able to play in the hope of getting your money back and more from selling random loot drops could well be considered a form of online gambling.
In the United States and Europe online role-playing games have up to now largely avoided too close a scrutiny of legal questions regarding virtual property. Up to now the argument of the game companies, that players did not own anything in a game, and that everything in a game was just intellectual property belonging to the game company, held up well enough. While people *could* sell their accounts, characters, or virtual items on EBay or other platforms, the practice wasn't all that wide-spread, and in most games it was against the rules.
Diablo III represents a huge step forward in the virtual property debate, as now selling virtual items for real money is not just possible, or permitted, but even encouraged with the game company providing the platform to do so. Thus the day approaches where some judge is going to say to Blizzard that if there are thousands of official transactions in the game where the Sword of Uberness is sold for around $10, and the player can cash out that money, there is no more legal reason to consider the Sword of Uberness (or at least the right to use it) not to be a property of the player. And thus the question whether the randomized way in which the player acquired the Sword of Uberness is a form of gambling is valid. And that is just the tip of the iceberg: If virtual property is recognized as a form of property lots of other laws start to bite as well, from tax laws to concerns about money laundering.
I wonder if Blizzard has thought all that through, or whether they are just starting to discover the implications. If Diablo 3 is gambling in South Korea, then why not in other jurisdictions? As long as the flow of money is strictly from the customer to the company, we can always say that the customer is buying a service, not property. Diablo 3 opens up a potential stream of money in the other direction, towards the customer, and it is unlikely that this won't have legal consequences.