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When Blizzard Entertainment recently announced an aggressive policy against trafficking in the virtual goods of the massively multiplayer online game World of Warcraft, it stirred up an old controversy about whether secondary market trading is something game companies can stop.
For years, companies like Sony Online Entertainment have prohibited the buying or selling of goods from games such as EverQuest. Despite such rules, which are commonly spelled out in MMOs' terms of service, the secondary market for virtual goods is estimated at $880 million annually.
Many in the virtual worlds community are now trying to determine what methods game developers can use, if any, to retard the growth of such transactions or even if anything should be done.
"There's a lot of debate about whether anything could be done," said Ed Castronova, an expert on the economies of virtual worlds. "People get wrapped up in the mechanics of this particular technology. The broad question is whether someone with policy tools can affect how someone acts."
In its announcement on the World of Warcraft community site, Blizzard stated its policy against the buying or selling of the game's objects for real-world money. Its goal, which many MMO developers share, is keeping the game pure from an inflated economy and from players who buy game attributes rather than earning them. And they often claim that such objects have no real-world economic value.
"If you are found to be selling in-game property (such as coins, items or characters) for real money," the policy says, "you will lose your characters and accounts, and Blizzard Entertainment reserves its right to pursue legal action against you as well."
Castronova, and others, feel that Blizzard can stop such illicit activity, much of which happens on eBay, through actively tracking down buyers and sellers and banning them from the game.
"I think that could have a substantial impact on the demand," Castronova said.
But others think such campaigns are pointless.
"The secondary market continues to grow exponentially," said Brock Pierce, CEO of IGE, one of the largest secondary market trading companies. "Someone will always be there, because someone else is willing to pay for it."
The problem, say some virtual world experts, is that many players see the objects they earn or build through countless hours of play as property. And property has value.
"In cases where the users' contribution to the game constitutes a new intellectual property or new content," said Philip Rosedale, CEO of Second Life developer Linden Lab, "I'd say it makes no sense and is probably indefensible to claim that you can't traffic in those products and that those products have no inherent value."
Linden Lab is one of the few developers that encourages transactions in the goods and services created in its game. But some economists agree that it is fruitless to ignore the common perception that virtual goods have a measurable economic value outside the game.
"They can stop in-world transfers completely," said Dan Hunter, an assistant professor of legal studies at the Wharton School of the University of Pennsylvania. "If you do that, you have a completely different property system than you have now, where only that which you have is yours.... That goes against our expectations of capitalism."
In fact, said Hunter, the game companies are often two-faced in their opposition to secondary market trading.
Publicly, the Blizzards and Sony Onlines of the world say these virtual worlds are role-playing games and that the users want the games to be about play, said Hunter.
"If you talk to them in private," he said, "they will accept, or at least start to tell you, a significant number of the power players – the guys they count on to drive the world – if you didn't allow the transfer of these things, they would just head off into another (game)."
Blizzard could not be reached for comment for this story.
Sony Online spokesman Chris Kramer said his company does not intend to change its contention that secondary market transactions, which are afforded no protection by eBay or PayPal, are an invitation for fraud and a detriment to the purity of game play.
"In our opinion, as long as there's not a safe and secure way to buy and sell and trade items in a game," Kramer said, "it's just not going to work."
Yet Kramer also acknowledges that there is little that can be done to stop the illicit trafficking.
"It's a matter of man hours, literally how much time you can devote to the subject," he said. "For us, and the nature of our games, as the recording industry is finding, when something is out on the internet, there's no way to stop it. Once it's out there, it's out there."
Some say the solution may be marriages between game developers and the secondary markets, like the relationship between Second Life and the Gaming Open Market, which has ATMs in that metaverse for the depositing and withdrawal of Lindenbucks, its currency.
"If it ever gets to the point where the majority of those playing the games are involved," said Gaming Open Market co-founder Jamie Hale, "the players will benefit from the game companies accepting this."
