News, research and discussion on virtual goods, currencies and economies globally.

Virtual Economy Research Network @ GDC 2010

Juho Hamari and Vili Lehdonvirta of Virtual Economy Research Network / HIIT will be attending Game Developer's Conference 2010 for the whole of next week.

Looking forward to seeing you there.

Contact us here and let's schedule a meeting.  Read more

Game Design as Marketing: The Business/Game Developer's Dilemma

A brief presentation I gave at Games-As-Services Seminar on March 2nd about the dilemma developers face when balancing between monetization and retention on game design level.

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

Virtual Goods and Regulatory Insights from the European Perspective

Guest article by Petteri Günther on EU regulatory issues in connection with real-money trade on digital items in virtual worlds.


Virtual worlds, for example various massively multiplayer online role playing games (MMORPGs) are becoming increasingly real to many people around the world. This emerging field of digital economy within virtual worlds has made us to face the interdependence of those and “real” offline worlds. This occurs e.g. in form of real-money trade (RMT) on digital items, while the question on property rights over digital items remains basically unresolved in Europe, although the US and the rest of the world are pretty much in the same situation.  Read more

Walled gardens are opening their gates: Linden acquires Avatars United, Habbo on Facebook

In December, the world's biggest teenager virtual world Habbo plugged into Facebook Connect. This week Linden, the operator of Second Life, announced the acquisition of Avatars United. Avatars United can be described as a sort of "Facebook for avatars", complete with a third-party applications ecosystem.

What does this mean? It's a sign of walled gardens opening up. Virtual worlds and MMOs are traditionally silos where users and data are locked in. Through Avatars United, Second Life users will be better able to link their SL profiles with the outside world: the whole universe of existing social media services, feeds and applications. It will also enable new kinds of third-party innovation in the way SL integrates with other services. All this will increase the value of having an SL account to a user. This is assuming that SL opens up some interfaces to Avatars United: as of yet there is next to no data flowing.  Read more

Three Phases of Gold Farming: Scientific American Article

The January 2010 issue of Scientific American carries an article (by me!) that divides the development of gold farming into three phases (pre-history; golden age; and "backlash and beyond"), and examines the phenomenon particularly from a developing country perspective.

The article has been available online at:, though may get closed off behind a subscription firewall.  Read more

Virtual currency convertible to real money in Korea says Supreme court

In a case concerning two "gold farmers" doing mark-up trading with Lineage's currency Aden, the Korean supreme court ruled that it is OK, because the profits were generated based on skill, not luck. The Korean Times says that this is a landmark ruling.

The virtual currency was obtained by buying it from websites (worth $200 000) and then re-selling it in form of goods and currency to players (profit ~$20 000).  Read more

The price of eggs in World of Warcraft

In discussing the ease associated with having someone else do the work of gaming, more often than not large-scale services working to create offline profits like gold farming and power leveling operations are discussed. However, on a smaller scale the in-game economic systems of games like World of Warcraft can also provide players a way to avoid working for the things that they want, while simultaneously allowing other players the opportunity to profit from their in-world efforts.  Read more

Upcoming changes to XStreetSL

This came out awhile ago, but Linden Labs has announced changes to the way it operates its online XStreetSL marketplace, a significant player in its virtual economy and source of a wide variety of virtual goods for use in Second Life.

The major change seems to be to the way in which XStreetSL will handle free items, or “freebies”. Despite being given to other residents for free, these items will now have a monthly listing fee of L$99, or about $0.40 USD each. At the same time, other costlier items will be subject to new rates for listing and commissions on the site.  Read more

Resolving Goldfarming through Concealed Validated Auctions

Guest post by Jan Pontzen on a RMT free trade mechanism for MMORPGs and other virtual worlds.  Read more