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

Secondary markets

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

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

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

EVE Online’s 3rd Quarterly Economic Newsletter published

This came out a while ago already, but I missed it until now. CCP Games’ Lead Economist Dr. Eyjo writes:

The 3rd Quarterly Economic Newsletter for EVE Online is now available. This issue has the standard economic indicator of population, ships flown in space, price level reports and market snapshots. The specific topic this time around is the latest news on “Unholy Rage,” the Anti-RMT operation that has been ongoing for several months now.  Read more

Deflation of Virtual Currencies, 2004-2009

I’ve published online a spreadsheet of data on the US dollar values of virtual currencies from eight different games, tracked over time from 2004 to 2009. And a Google Motion Chart also for those who like to look at pretty pictures (though this tends to draw attention to the two outliers more than the main deflationary trend).

To be found at:

Richard Heeks  Read more

Virtual consumption: the thesis

Lehdonvirta (2009): Virtual ConsumptionMy PhD thesis on people who spend real money on virtual goods is now published. Thanks to everyone for your support! Here’s the publication info:

Vili Lehdonvirta (2009). Virtual Consumption. Publications of the Turku School of Economics, A-11:2009, Turku. ISBN: 978-952-249-019-3 (printed) 978-952-249-020-9 (electronic) ISSN: 0357-4652 (printed) 1459-4870 (electronic)

You can download the electronic version of the thesis from the university library here. The print version can be purchased from the university’s publisher: KY Dealing, tel. +358 2 481 4422, email ky-dealing(at) I also have some free copies to send to people, so drop me an email while they still last!  Read more

Live Gamer acquires N-Cash – towards integrating primary and secondary markets?

Live Gamer announced the acquisition of Korean virtual good sales facilitator N-Cash. The acquisition expands Live Gamer’s current service repertoire from secondary market targeted v-commerce solutions to facilitating both primary and secondary markets of virtual goods.

As separated these two service elements might not provide anything new. But the possibilities provided by integrating primary and secondary markets under a single platform are highly interesting. What kind of integration strategies would work under which kinds business models and service design? How integrated markets would affect the internal economies of MMO’s? What new revenue streams can be harnessed?   Read more

Press release below.

China attempting to keep virtual and real economy separate

… by restricting purchases of real goods or money with virtual currencies.

Pre-paid cards are also considered virtual currency, but virtual items are not.

The new law states: "The virtual currency, which is converted into real money at a certain exchange rate, will only be allowed to trade in virtual goods and services provided by its issuer, not real goods and services."

Justifications offered:
– prevents illegalities
– prevents gambling
– prevents money laundering
– preemptive step towards preventing "virtual economy" having a negative influence on Chinese financial system

– farmers selling virtual currency – the definition of currency only covers medium currencies between real-money and items. This situation becomes a bit hazy though, because in some VW’s there is only one currency (earned through gameplay AND at the same time purchased with real money). In a way farmers selling virtual currency would still fall into the banned category, but the legistelation doesn’t seem to be targeted to "harmless" currencies such as WoW-gold, but towards currencies such as QQ-coins, which are widely used outside the Tencent QQ service.

– users doing business in VW’s (such as Second Life)
– Prevents gambling? Because you can not convert v-currency back to real money?
– Secondary market of pre-paid game cards
—> everything that includes exchanging virtual currency (as defined by the law) into real money or products.

Doesn’t affect:
– farmers selling virtual goods directly
– operator selling v-currency and v-goods   Read more

Four Phases of Gold Farming

A somewhat downbeat assessment of the current state of gold farming emerges from a discussion with Dr Jack Qiu from the Chinese University of Hong Kong; who has been a regular observer of gold farming and other informal sector activities in China.  I report this as, and appreciate that it is, conversational rather than "hard" evidence.

Jack observes four phases of Chinese gold farming.

1. Globalisation (c.2003-c.2006)
The growth that we are all aware of, serving the global and regional games market
  Read more