Synthetic Economies

Saxo Bank sets up branch in Second Life

2007-03-18T14:21:00.000-07:00

Wall Street & Technology reports that Danish investment bank Saxo Bank joins Dutch bank ABN AMRO in setting up a branch in Second Life.

Humanitarian Marketing

2007-03-18T14:09:00.000-07:00

So far, it's been the commercial industry marketing real-world services and products on virtual worlds (namely Second Life). Now Reuters reports that humanitarian organizations are promoting Camp Darfur, a refugee camp in Second Life, to bring attention to the humanitarian crisis in Darfur.

RMT Definitions

2007-03-04T12:02:00.000-08:00

VERN has an extensive article on what Real Money Trading (RMT) really means.

Sparter can pick up the slack

2007-02-18T02:07:00.000-08:00

ArsTechnica reports that Sparter, an RMT startup, has launched its eBay-like "Gamer2Gamer" service. It will be competing against IGE, the other major player, but can pick up some of the slack that eBay has created by banning RMT.

"Real Money Trading," or RMT for short, is a growing phenomenon in which real currency is exchanged for virtual currency or property, purportedly a $800M to $1bn industry in 2006, according to the BBC News and The Korea Times.

China to regulate RMT?

2007-02-18T01:53:00.000-08:00

According to Xinhua, the Chinese Ministry of Culture announced in December that China should regulate Virtual Item Trade (VIT), as it is known in China. VIT is known in the US as Real Money Trading, Real Money Transfer, or Real Money Transactions, all abbreviated as RMT.

The Korean Ministry of Culture also announced in December proposed legislation to regulate gold farming.

Instant Messaging Virtual Economy

2007-02-18T01:40:00.000-08:00

VERN reports on how QQ, a popular instant messaging service with in-program currency in China, is being used for virtual gambling and pornography (both illegal) and raising legal concerns.

Swedish embassy and recruiting firm join Second Life

2007-02-18T01:35:00.000-08:00

VERN reports that Sweden plans to set up an embassy in Second Life for marketing purposes. No real business will be taking place.

Reuters reports that TMP Worldwide, a major recruitment ad agency, intends to recruit for real-world jobs via TMP Island in Second Life. That makes TMP the first company to do as such. Previous recruitment was limited to virtual jobs.

Sweden and TMP join a long list of entities establishing a presence in Second Life, including GM, Scion, Nissan, IBM, Sun Microsystems, AMD, Sears, Circuit City, Reuters, CNET, and ABN AMRO.

Sweden to tax virtual trade

2007-02-18T01:22:00.000-08:00

VERN reports that Sweden plans to tax virtual property sale proceeds stemming from out-of-game trades. Australia and the United States may be taking a similar stance, whereby existing rules will be applied. VERN also points out that virtual trade can be used for tax evasion.

SOE Publishes RMT White Paper

2007-02-18T00:54:00.000-08:00

Sony Online Entertainment (SOE) has released a white paper on a study done on SOE's Station Exchange TM, the online auction site for Everquest II.

Here are some interesting findings:

The younger crowd (22-year olds), presumably with more leisure time, is the one selling. The older crowd (34-year olds), presumably with more responsibilities and less time to play, is the one buying.
Although total spending by males outnumbers spending by females 8-to-1, both male and female individuals spend about the same.
Although the highest concentration of participants was in Northern California, the highest concentration of activity was in Pennsylvania, followed by Tennessee.
"Interviews and anecdotal evidence suggest players also make purchases to stay aligned with friends who have attained a higher level within the game ..."
The exchange rate for Everquest currency is $7.35 per piece of platinum.
Looks like there is still plenty of room for growth as most of the sales were instant purchases rather than auctions, although it would help to see data on inflation.

Australia may tax virtual trade

2007-02-18T00:46:00.000-08:00

According to The Age, the Australian Tax Office warned in October of last year that traders of virtual goods may be taxed. A senior economist in the United States gave similar implications in December.

Taxation Inevitable

2007-02-18T00:29:00.000-08:00

According to Dan Miller, a senior economist with the Congress' Joint Economic Committee, "given growth rates of 10 to 15 percent a month, the question is when, not if, Congress and IRS start paying attention to these issues."

Taxation may come about if game publishers are required to distribute 1099 forms to account for the value of virtual items obtained by gamers. But Mr. Miller clarifies that "the Joint Economic Committee is not seeking to impose a new tax on virtual economies ... we have a very clear record of supporting lower taxes in free market."

Read the CNET article for the full report.

eBay to stop auctions on virtual property

2007-02-17T23:45:00.000-08:00

Slashdot reports that eBay will delisting all "virtual artifacts" due to "legal complexities surrounding virtual property."Mr. Hani Durzy, media representative for eBay, explained to Slashdot that eBay's policy is that "the seller must be the owner of the underlying intellectual property, or authorized to distribute it by the intellectual property owner."

"Real Money Trading," or RMT for short, is a growing phenomenon in which real currency is exchanged for virtual currency or property, purportedly a $800M to $1bn industry in 2006, according to the BBC News and The Korea Times.

Gold Farming documentary in the works

2007-01-27T14:20:00.000-08:00

Ars Technica reports that University of California, San Diego PhD student Ge Jin is heading a team working on a documentary on Chinese gold farming, providing a viewpoint from the Chinese gold farmer and the American gamer. Brokers and Chinese gold farmers see this as a business opportunity while many gamers feel cheated. Watch the preview on YouTube.

IBM invites corporate customers to Second Life

2007-01-27T13:52:00.000-08:00

IBM announced in November its plan to move into "v-business."

IBM now announced that it is taking its annual Lotusphere conference virtual by holding it at the Lotusphere Complex in Second Life. Internetnews.com reports that "[IBM] is encouraging customers to create avatars (flying Second Life characters created and manipulated by real-life users) so they can interact with Lotus experts, learn about software solutions, and experience Lotusphere from wherever they are."

Other companies conducting business on Second Life include Sun Microsystems and AMD.

Sears joins the fray

2007-01-27T13:14:00.000-08:00

Reuters reports in two articles (1, 2) that Sears has partnered with IBM to open the "Sears Virtual Home" showroom in Second Life, where "more than a half a million U.S. dollars change hands ... daily." Sears' goal is to drive more real-world business and joins Circuit City, Reuters, and CNET with a Second Life presence.

Organized crime looking at MMORPGs

2007-01-27T12:51:00.000-08:00

Dave Weinstein of Microsoft has warned gamers that organized crime is targeting MMORPGs, or Massively Multiplayer Online Role-Playing Games, such as World of Warcraft. Crime organizations could use trojans to hijack accounts and steal virtual items, which then can be sold for real-world money. That's in addition to establishing gold farms.

BBC News also reports that "some estimates have put an $800m (£418m) price tag on the global market in game items and cash" and that F-secure has "already dealt with hundreds of malicious programs that seek to steal players account details."

Korean gold farmers form trade association

2007-01-27T12:21:00.000-08:00

Ars Technica reports that South Korean gold farmers have formed the Digital Asset Distribution Promotion Association in response to government legislation in the works to restrict gold farming. The association will lobby the Korean government in an effort to influence the outcome of the legislation.

Gold farming is the act of hiring individuals to acquire in-game currency. This currency is then sold for real money to gamers wanting to purchase in-game items or even characters. According to The Koeea Times, the "item-trading" industry was worth $1 billion in 2006.

ABN AMRO opens branch in Second Life

2006-12-30T17:27:00.000-08:00

ABN AMRO, a Dutch bank, has opened a branch in Second Life, a virtual world. It will offer financial advice but will not perform the more typical services, such as taking deposits.

ABN AMRO joins Toyota, IBM, and Adidas (which sells clothes and accessories to avatars), in having a presence in Second Life.

IBM uses Second Life for business

2006-12-30T17:20:00.000-08:00

This Reuters article describes how IBM has established a presence in Second Life, a virtual world, not only for marketing, but to conduct development, training, and meetings, both internally and with clients. It's online collaboration taken to another level.

Music industry warming up to Second Life

2006-12-30T17:00:00.000-08:00

Reuters has an article on how the music industry is attempting to market on Second Life. a virtual online world. The industry wants a part of the $350,000 daily market.

Sony BMG, the largest participant, has created an island where avatars listen to music and watch videos. "On August 3, Suzanne Vega became the first major recording artist to perform live in avatar form," while Duran Duran is preparing to do the same. While such activities receive plenty of short-lived press, bandwidth is a problem, Reuters describes:

Too many members in one spot can cause a lag in the time it takes for the graphics to load, which commonly results in avatars walking around with no clothes. As such, live events are restricted to only a few hundred members at a time.

Virtual bank in EVE Online a scam

2006-12-30T16:01:00.000-08:00

Ars Technica reports that Eve Intergalactic Bank (EIB), a virtual bank in the MMORPG EVE Online, turned out to be a scam. EIB was supposed operate as real banks do, taking deposits and extending loans, earning a profit on the interest spread.

While no real money was stolen, it raises two questions:

Should in-game regulators be created?
Should real-word regulators become involved when real currency is used to purchase in-game currency?

Korea considering gold farming regulation

2006-12-30T15:39:00.000-08:00

Ars Technica reports that the Korean Ministry of Culture and Tourism is considering legislation to restrict gold farming, the act of hiring individuals to acquire in-game currency, in an attempt to regulate gambling.

Many individuals and companies join the fray to earn a profit. They hire low-wage workers to farm gold and then sell the in-game currency to willing gamers in return for real currency. The gamers participating in these transactions are essentially paying for saved time and money.