Coming Soon: Virtual DebtFollow

heard this on NPR yesterday on the way home. interesting audio segment on how Norrath's, and other on-line worlds, virtual economy may require regulation.

http://marketplace.publicradio.org/shows/2005/11/16/PM200511168.html

the tangent i picked up, plat buyers/sellers, beware, the Fed may intervene.

what's really scarey is the number they quote in virtual currency sales for all games.

btw, someone should smack the reporter for knocking the shrunken goblin skull earring--junk buffs are good things sometimes. =D

note, the audio file is in Real Player format.

while having a bit of a tongue-in-cheek fun, it brings up some good points. what amazed me, and i don't know why i didn't think of it before, are the sweatshops.

apparently, there shops set up with folks who do nothing but tradeskill for a few dollars a day, and then the stuff is either ebayed the plat laundered through the bazaar.

hrm. think the mafia might start setting up rackets? good lord, RICO investigations, treasury agents showing up at your house "did you buy a ceramic shield of valour from VinnydaShark?" where's it stop? =)

um, i should clarify, Marketplace is carried by NPR. the originates from American Public Radio.

as far as ted kennedy--i'd rather leave the name calling and political tags out of it considering the current administration spends like new deal democrats on a drinking binge. * :D

economically speaking, he's correct. when the currency exchange occurs, the money isn't an across the board exchange like 4 peso's for a dollar.

*edited in smiley

Edited, Thu Nov 17 16:36:25 2005 by joev

well, economists are studying the economy of on-line worlds. for instance, take the blog from the von mises institute:

http://blog.mises.org/blog/archives/001965.asp

let's take the 100million figure. considering the only thing standing between on-line purchases and increased taxation is the commerce clause, such a figure would entice cash strapped regions to lobby harder for taxation rights. i'm not saying that's right or wrong, just a reason such a thing might come under scrutiny.

on-line games, unlike drugs, and to some degree panhandling, are not illegal and, even if 1/4 of that 100 mil figure is true, even greater reasoning why we may see the Station Sales thing SOE runs for EQII (i think will gladly stand corrected) expand and possible take off in other on-line worlds.

it's worth looking at even if we disagree with the motivations behind it, we can still learn something. =)

I have heard of blogs on all sorts of subjects. Doesn't mean I will pay attention to a white supremacist's rants any more than a global warming alarmist's.

Saying something doesn't make it so...(Unless of course you are Captain Picard)

ah. now, here's the rub elinda. if the IRS taps into it, does it fall in the regulartory nightmare of the feds? and, how do they reconcile the trade practices of sweatshops churning out tradeskills for plat resellers?

it boggles the mind and brings up some fascinating tangents on-line communities may face in the future.

Well the IRS is still trying to sort out how to track and get their fair share of internet commerce - they got some work to do before they'll ever have the tools and savy to try and track virtual sales. That doesn't mean it's not something that they and economists won't be paying attention too.

(I might go find work in one of these sweat shops so I can play EQ all day. )





Edited, Thu Nov 17 17:41:09 2005 by Elinda

i'm talking from a purely american pov prof. =D

globally it's even stickier eh?

so say someone fomr england buys stuff does that mean they get taxed as well?

100 million is not very hard to believe. I would guess if FV is anything near a representative sample, perhaps 10%-15% of MMORPG players have participated in some sort of real market transaction.

because it's a lot more than a few thousand.

Edited, Thu Nov 17 18:47:18 2005 by Groogle

ok maybe i am missing something here but again the entire premise is totally flawed.

When you buy virtual plat with real world cash the real world cash doesnt disappear. If I run a website that sells plat the rl money goes to my account it does not magically disapear to never never land .. so what exactly is the problem here?

Also unless I am cheating on my taxes the profits I show are fully taxable according to whatever business type (sole-proprieter, INC. LLC etc) I am running.

100 million is a miniscule drop in the bucket in relation to worldwide commerce or even e-commerce.

Also i may be mistaken but it sounded like they wanted to setup institutions to monitor the ingame economy? Can you get anymore ridiculous. I may be mistaken about the ingame thing but man either way this just seems idiotic.



.. yes i know and considering todays massively diverse radio programming as well as 2 fully operational satelite radio companies NPR is an outdated idea.

Edited, Thu Nov 17 19:07:24 2005 by dracoboars

He is incorrect.

The flow of currency in all directions for goods and services is an economy. There are too many examples of spending money and not getting anything physical in return to list them all. Here are a few:

Tipping a waiter is paying for a service.
Buying virtual currency is paying for a service.
Paying a $10 table charge at a bar is paying for a service.
Renting a bicycle in the Bahamas is paying for a service.

An economy is not just an exchange of goods for currency.
__________________________________________________________

To Professor Galthran.

You point out something that makes more sense than most people discussing this have. Companies like IGE already pay taxes. Individual transactions can't be taxed.

Try this one for example. I am a US citizen living in Japan and I buy virtual plat from a Chinese citizen living in Denmark playing Lineage, a Korean game. Silly.
Regulation is just double-speak for getting in on the action. Everyone wants to make money, governments are no exception.

Edited, Thu Nov 17 19:28:38 2005 by Reyla

k reyla, i hear you and really, i agree. but lemme throw on my debil's advocate horns and try this out.

is something purchased in game, really a service? furthermore, is it possible in the future, in-game currency would be seen as foriegn currency, and thus, subject to whatever laws govern such thing?