Virtual Property Auctions Nixed By eBay

    January 29, 2007

Since the dawn of EverQuest, the godfather of Massively Multiplayer Online Roleplaying Games (MMORPGs), companies have turned a tidy profit from selling virtual items and currency that only exist within the game in exchange for real life cash.

The practice has been met with much scrutiny by the developers of these types of games, sometimes leading to the banning of accounts linked to the sale of virtual property.

The parent companies claim that, while the player is in virtual possession of said items, ownership of the property ultimately remains with the game developer.

IGE is a service that directly sells currency, items and other services to MMO gamers. The bulk of virtual property transactions, however, take place on the world’s most utilized auction site, eBay.

Blizzard Entertainment, makers of the insanely popular World of Warcraft MMO, have been putting pressure on eBay for some time to halt the sale of its virtual property. It appears that within the last month, those appeals have finally been answered.

According to a Slashdot article, eBay has begun taking down any auction pertaining to virtual currency or items associated with MMOs. A representative from eBay comments in the piece:

Mr. Hani Durzy, speaking for eBay, explained that the decision to pull these items was due to the ‘legal complexities’ surrounding virtual property. “For the overall health of the marketplace” the company felt that the proper course of action, after considerable contemplation, was to ban the sale of these items outright.

Of course, not everyone is in agreement that Blizzard (and other MMO developers) have a legal leg to stand on concerning the sale of virtual property. This commenter writes:

Selling virtual ownership of a virtual item such as a gold coin in an online game does not come close to infringing upon the copyright in the image or other representation of the coin. The ‘work’ of which the coin is an instance or embodiment is not being copied, and the coin remains within the game, under the control (with respect to the real world) of the company hosting the game.

Whether Character A within the game acquires it from Character B by running him through with a sword, or by his owner agreeing through eBay with Character B’s owner that in exchange for some number of dollars, Character B will meet Character A at a certain virtual location and hand the coin to him, or deposit it with a trusted third character, is irrelevant. The physical (within the game world) transfer of possession of the coin is not a copying (in the real world or the virtual one).

And it is not a ‘digital distribution’ because, as I said before, it is still within the game, and with respect to the real world, it is still in possession of the gaming company.

With eBay taking itself out of the picture, you can expect more sites like IGE to pop up across the Internet. Most of these companies, IGE included, have their operations based overseas (China in particular) so it will be difficult for U.S. based MMO developers to go after them in the legal arena.

This is a semantic issue, to be sure, and not one for the weak of heart. I expect a vicious tirade of litigation to ensue as the MMO industry is rapidly closing in on becoming a billion dollar business.

(Disclosure: I play World of Warcraft. A lot.)

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Joe is a staff writer for WebProNews. Visit WebProNews for the latest ebusiness news.