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

New Virtual Economy Research Network website launched


We are pleased to announce the launch of the new and improved Virtual Economy Research Network (VERN): a communication hub for scholars, students and developers interested in virtual goods, currencies and economies. The new site features:

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Netherlands Court Finds Criminal Liability and Sentences Two Youths for Theft of Virtual Goods

RunescapeOur 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.  Read more

Mindtrek '08 & Revenue model innovation in Chinese online game market

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Reporting in from Tampere, Finland. I am here at Mindtrek, or should I say, I am ON a Mindtrek. Mindtrek is an annual mediaweek with variety of events and competitions for new innovations and products. Since last year they have also had an academic conference beside all the other wide ranging activities. I also participated in Mindtrek in 2000, which was on the primetime of the dot-com bubble. This year the themes are ranging from games to social media and to ubiquitous computing. Anyway, today I'm here in my original hometown taking part to the academic track on games.

This track consists of three main themes: 1) creativity engagement and algorithms in games 2) games in education, learning and health care, and 3) policies in game industry. All of these are intriguing topics, but what I'm especially interested in is the final presentation/paper about "Revenue Model Innovation in the Chinese Online Market" by Jessie Qun Ren and Philip Hardwick.

Reading Room: “Transactions of Virtual Items in Virtual Worlds” by Michael Passman

This edition of Virtually Blind’s Reading Room features an article addressing legal issues associated with transactions of virtual items in virtual worlds. The article, Transactions of Virtual Items in Virtual Worlds (.pdf), by Michael Passman, is available here courtesy of the author and the Albany Law Journal of Science & Technology. Passman is a recent law school graduate who works at Cassiday Schade LLP in Chicago.   Read more

Transactions of Virtual Items in Virtual Worlds raises some interesting questions, including key inquiries into the nature of virtual goods. Passman argues that “transactions in virtual items are not sales of goods, but, rather, licenses of intellectual property.” His theory is based partly on an analysis of the virtual items themselves, and partly on user expectation, as derived from interviews with Second Life users. From Passman’s article:

Legitimizing virtual consumption

A Japanese lunch box imitating a virtual mushroom

Greg Lastowka over at Terra Nova writes about the way Sulake limits the amount of money users can spend on virtual goods in Habbo. I've written a little bit about the topic in a paper that has been in review for a long time. Basically what interests me in it as a researcher of consumption is how a certain type of spending is legitimized and becomes socially acceptable. Lots of products from jazz music to microwave meals were initially "improper" consumption, not something a respectable person would buy. Gradually, in a process were advertising played no small part, people accepted those goods and started to consume them. At the same time, they left behind some of their earlier ways of consumption.  Read more

The virtual tax question

Are virtual assets tax-free? Should Blizzard pay taxes for the gold it earns by selling items to World of Warcraft players? Professor Theodore P. Seto's analysis of the taxation of virtual assets is the first to distinguish between businesses and ordinary users. In this post, I attempt to explain and comment on his paper.

The discussion on how virtual assets are and should be treated by the taxman is becoming increasingly relevant as business based on virtual assets grows. The taxman wants to make sure that businesses involving virtual asset transactions are treated on an equal basis with other businesses. At the same time, publishers and gamers want to make sure that ordinary gameplay is not hampered by interventions from tax authorities.  Read more

The development aspects of gold farming

The Hindu Gold Dubloon -- photo by Swamibu

Professor Richard Heeks from University of Manchester recently made available a working paper titled Current Analysis and Future Research Agenda on "Gold Farming": Real-World Production in Developing Countries for the Virtual Economies of Online Games. Heeks summarizes pretty much everything that is currently known on gold farming. The approach is systematic and includes meticulously going through e.g. the estimates on on RMT market volume and aggregate spending on gold farming products, trends of RMT market prices and their effect on gold farming, the stakeholders in the gold farming industry, and the virtual world operators' incentives in reacting to gold farmers.

The paper can be found via the VERN bibliography. Instead of listing more of its contents here, I'd like to point out the viewpoint of development studies, which is novel in these circles at least to myself, and which is interestingly visible in many parts of the paper.  Read more

Webcast videos and slides - Seminar on quantitative research in virtual economies

UPDATE: The webcast videos & seminar presentation slides are now available. See the end of this post.

The Monday, 2nd June seminar on quantitative research in virtual economies will be available as a webcast. We'll also make the videos available afterwards. The programme is available here. Note that we're starting 9:45 AM Finnish time, which is GMT + 3 during the summer. Visit this site to figure out the correct time.  Read more

Virtual world events in 2008

Japanese sukiyaki meat -- photo by LHOON Despite advances in mediated presence, for many purposes there still is no substitute to being there in person. Joost van Dreunen has put together a long list of virtual world related conferences and events in meatspace.  Read more

Seminar on quantitative research in virtual economies - programme details

'Projector lens' by libraryman
UPDATE: seminar programme details, including the presentation topics, available below.

On Monday, 2nd June, the AVEA project at Helsinki Institute for Information Technology (HIIT) organizes an open research seminar on so-called virtual economies.

In the seminar we focus on the following question: "Why should economists and social scientists be interested in virtual economies?" Through discussion and presentations by academic researchers and industry representatives, we investigate the potential of conducting quantitative research on virtual economies that is of interest to mainstream, "serious" researchers.  Read more