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Also posted at Terra Nova  Read more

The ethics of social games and virtual goods: a bigger picture

ADOPT THE BABY SEAL! You can rescue a scared Baby Seal when it got lost while playing hide-and-seek! The Baby Seal is too young to survive on its own. (Happy Aquarium by CrowdStar)ADOPT THE BABY SEAL! You can rescue a scared Baby Seal when it got lost while playing hide-and-seek! The Baby Seal is too young to survive on its own. (Happy Aquarium by CrowdStar) A big theme at the Game Developers Conference this year was the rise of so-called social games: relatively open-ended games typically played on social networking sites such as Facebook, light on story and complicated game mechanics, but full of highly optimised feedback loops and virtual goods accumulation. A paradigmatic example is Zynga’s FarmVille, which has attracted an incredible audience of 80 million players. The success of social games is forcing traditional developers to reconsider the way they approach game design and game business. But some game industry veterans are now raising concerns about the ethicality of the social game paradigm (Soren Johnson has a good summary, check out the comments, too). Much of the concern relates to the idea that social games “exploit psychological flaws in the human brain” to keep users engaged and paying for comparatively simple game content. Sour grapes or valid concerns? I’m withholding judgment, but the discussion prompted me to write a short essay that puts the current concerns in a bit of a historical context.  Read more

Second Life Sued: Intellectual Property and Virtual Economies

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.  Read more

Community dynamics that create demand for virtual goods: case Habbo

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.  Read more

Guest article: Game Commerce from virtual item sales to gold farming

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.   Read more

New Paper on UGC

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

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.

Benjamin Duranske’s final post at VERN: joining Pillsbury’s virtual law practice


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.  Read more

Quicklinks: Taxes, Blogs, Patents, Lawsuits and More

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.  Read more

Follow-up: 20% Tax Rate on Virtual Currency Brokering in China?

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.


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Sellers’ liability? Nexon to buy back virtual items in a game due for shutdown

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.  Read more