In September 2009, Second Life was sued for allowing individuals to sell fake virtual goods. The case has recently moved forward with the filing of a case management statement. While this lawsuit deals explicitly with intellectual property, these issues are also significant for virtual economies in terms of who makes money and which residents are willing to keep their businesses in Second Life.

Update: the authoritative version of the article is now up on Routledge's site, here. For those who don't have access to that repository, the pre-print version is still available here .

Early this year, I posted a pre-print version of an article (see Why do people buy virtual goods?) and promised to post more later, as the scholarly publication process can be as slow as the proverbial snail. Here you go: a pre-print version of Virtual Consumerism: Case Habbo Hotel, a sociological study of the motivations and practices of virtual consumers in a popular teenage online hangout. The publication venue is a reasonably prestigious journal called Information, Communication & Society, to whose reviewers I and my co-authors are much indebted.

The bulk of this work was actually completed two years ago. While virtual goods have continued to spread like crazy since then, I believe the motivations for purchasing them remain the same. In contrast to the previously posted article, the main audience of this paper is sociologists. People who are in the business of selling virtual goods to other people might also find some "actionable insights" there.

The following Guest Article by Steven Davis is an extract from his recently published book, Protecting Games: A Security Handbook for Game Developers and Publishers. The extract is from Chapter 22: Game Commerce: Virtual Items, Real Money Transactions, Gold Farming, Escorting, and Power-Leveling

Money makes the (real and virtual) world go around. In some sense, money itself is the oldest, most widely used virtual item. Because money is so universally understood, virtual currencies are widely used as incentives in online games. Whatever one's views are about “consumer culture,” we all seem to have a Pavlovian response to accumulating more things.

Mira Burri-Nenova has just posted a working paper on SSRN: "User Created Content in Virtual Worlds and Cultural Diversity"

User created content (UCC) has often been celebrated as a grassroots cultural revolution that as a genuine expression of creativity, localism and non-commercialism can arguably also cater for a sustainable culturally diverse environment.

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Dear VERN readers,

I am pleased to announce that I have accepted a position with
Pillsbury, a global law firm with San Francisco roots and a high-tech history dating all the way back to cutting-edge 1880s telegraph cases. I'll be helping establish and build Pillsbury’s new virtual worlds and video games practice. Returning to practice with a large law firm means that I’ll be somewhat less free to comment on virtual law issues than I was while self-employed. As such, this is my final post at VERN.

Virtually Blind periodically runs “quicklinks” — items that are not long enough for a full story, but are worth a click. Here’s the current batch.

We reported earlier about the 20% tax rate legislation on virtual currency transactions in China. Shanghai Daily has now published an article concerning this legislation and about the fall-out that followed.

According to Korea Times, MMO publisher Nexon "is preparing to repay users who own paid items" in ZerA, an unsuccessful Korean MMO that is due to be closed in January. The game was launched in 2006 and peaked at 40 000 concurrent users. According to Korea Times, ZerA took three years and 10 billion won (approx. 7.5 M USD) to develop. Plans to launch in Japan were dropped after lukewarm reception in Korea.

Our friends at MindBlizzard report that a Netherlands court has found criminal liability for the real-world theft of virtual goods from the hybrid free/paid MMO roleplaying game Runescape.

From the post at MindBlizzard:

[T]he court has reached a verdict and has sentenced two boys to conditional detention and civil services because of the virtual theft from the game Runescape. [T]he boys from Leeuwarden, at the time both 14 years old, forced a thirteen-year-old victim to hand over virtual goods, a mask and an amulet, and to transfer the items to their account. The thirteen year old had collected a large amount of credits with which artifacts could be purchased. The boys forced him to a house and there he was kicked and threatened with a knife, until he transferred the goods and credits.