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Congressional report says you 'may' owe taxes on your WoW income
If you're a World of Warcraft or Diablo 3 player, the federal government would like to have a word with you. Congress's U.S. Government Accountability Office (GAO), at the request of Senators Max Baucus (D-MT) and Orrin Hatch (R-UT), just wrote and filed a 23-page report on the tax implications of earning gold in MMORPGs. Seriously. The report, titled "Virtual Economies and Currencies," focuses on buying, using, and selling virtual currencies like WoW gold. The key takeaway for World of Warcraft players is that the in-game economy is a "closed-flow system" -- because you can't exchange your gold for U.S. dollars, you don't need to worry about claiming those 26 gold pieces from completing a quest on your 2013 income taxes. If, however, you decide to sell your accumulated WoW items through a third-party exchange (Don't do it! It's against the Terms of Service and could get you hacked!), then you "may have earned taxable income from the sale of these virtual goods."
High-end gear in Dust 514 costs 24 cents in real money
CCP Vice President Morgan Godat has revealed the real-world cost of a high-end set of gear in the upcoming EVE Online companion, Dust 514, and it might be cheaper than you expect: About 24 cents. If you were to equip a character in the game with some of the highest-level gear out there and send them out into battle with equipment all purchased directly with real money, it would really only cost you a cent less than a quarter.But that figure is a little misleading, unfortunately, on both ends. On the one hand, that's the cost to equip a character once. When you die (which you'll do a lot in the match-based first-person shooter), you'll have to rebuy all of that gear, so players will probably buy their guns and armor by the hundreds or even thousands, not just one set at a time.And just like EVE Online, most of the gear in the game will be purchasable with in-game cash, called Isk, not just real-money purchased gold, called Aurum. EVE Online players will even be able to buy gear for Dust 514 players, so if you're a great shooter some ship jockey might fund your gear bill once the two games are finally connected. Dust 514 is currently heading into a series of betas (so these costs are still in flux anyway), and readying itself for a launch later this year.
Blizzard brings Balance and Battletags to Battle.net
Blizzard Entertainment has been steadily updating the Battle.net online multiplayer service recently, presumably in anticipation of Diablo 3's release next year. Last week, the company introduced what it's calling the Battle.net Balance, a currency total stored on its servers that players can use to pay for Blizzard items -- from a World of Warcraft subscription to in-game items and plushies in the company store. This is where funds not translated directly into cash will go from the real money auction house in Diablo 3, whenever it arrives. Today, Blizzard introduced the BattleTag system, which is a specific public username that will identify players publicly on Battle.net services (similar to Xbox Live's Gamertag name). This is likely the compromise Blizzard came up with over its controversial Real ID service, which was originally meant to utilize real player names. BattleTags are not unique, but players will have a number in their public profiles that will let you identify just which "touchFuzzygetDizzy" you're talking to. BattleTags will appear first in the Diablo 3 beta, and get used in all of Blizzard's games and services sometime after that.
The Lawbringer: Q&A on Diablo's real-money auction house
Pop law abounds in The Lawbringer, your weekly dose of WoW, the law, video games and the MMO genre. Mathew McCurley takes you through the world running parallel to the games we love and enjoy, full of rules, regulations, pitfalls and traps. How about you hang out with us as we discuss some of the more esoteric aspects of the games we love to play? Since Blizzard dropped the Diablo 3 bombshell on us early Monday, I will post the second article in my series on micro-transaction models next week. For those of you who have been living under the proverbial internet rock (you are missing some awesome memes right now), Blizzard announced that Diablo 3 would feature two auction houses, one using in-game gold as currency and the other using real currency that would be deposited into a Battle.net account wallet and used from there. The whole system gets more intriguing when you take into account that sales made on the real-money auction house can make their way to your own very real wallet through an unannounced third party or deposited back into your Battle.net wallet for use on anything digital in the Blizzard store, including WoW game time. If you're a regular reader of The Lawbringer, you already know how excited I get over virtual currency. This is my wheelhouse. I feel like a master carpenter at Wood Con 2011, cosplaying as my favorite oak tree, quercus alnifolia. Pair that with real currency, and excitement levels hit the stratosphere. I may break through the atmosphere at some point. That faint sonic boom you hear will be me hurtling through the air in excitement and wonderment. Sure, the Diablo real-money transaction (RMT) auction house is not related to World of Warcraft -- or is it? Oh, it very much is. Faithful readers and not faithful alike (how could you, Debbie?) have been writing in questions via Twitter and email asking me to explain the auction house and talk about some of the potential legal and tax issues that could come around because of it. Also, many people want to know how the RMT auction house could benefit World of Warcraft, despite Rob Pardo's saying there are no plans to bring it over to WoW. Let's take a look at your questions.
Study suggests one in three gamers has purchased virtual goods
Let's say you're playing an MMO with two of your mates. They could be online friends, real-world friends, or some combination of both. According to a new study conducted by PlaySpan and VGMarket, one of you has used real-world money to purchase virtual items. The research was compiled last month and samples a pool of 1,000 gamers drawn from a VGMarket database. While the one-in-three statistic is interesting in its own right, even more compelling is the evidence that suggests 57 percent of participants purchase virtual items on a monthly basis. You might think that social networking games are responsible for the lion's share of these percentages, but VGMarket's data show console games with online play accounting for 51 percent of the purchases, with social titles claiming second place at 30 percent (MMOs came in third, if you're curious). The study presents quite a number of curious factoids despite its relatively small sample size, and you can check out all the findings at the official PlaySpan website. It's also worth noting that downloading the full study requires providing PlaySpan with your personal info via a web registration form.
What are the implications of a real-dollar auction house?
It was just revealed that Diablo 3 will feature a dual-currency auction house for in-game gold and for real currency, allowing players to spend real money for Diablo 3 items. Blizzard will not sell those items directly but rather will facilitate auctions between players. Players will receive real currency for their sales, and Blizzard will take a cut off the sales of real-currency items. Blizzard is entering some pretty crazy territory with the Diablo 3 auction house, and the implications may be even more huge for the massively multiplayer market than for the Diablo multiplayer experience. One of WoW's biggest issues that currently plagues Blizzard (as well as the MMO genre in general) is the existence of a gray market in which companies sell in-game currency to willing buyers against the game's terms of service. Many free-to-play MMOs and online games combat this market by selling their own currencies for use in-game, making the currency non-tradeable, or selling items in a microtransaction marketplace. Blizzard has not yet made a free-to-play MMO where these concepts could come to any kind of fruition, and WoW's virtual goods store is very limited in scope and price point.
The best of WoW.com: November 3-10, 2009
It's been a big week in the World of Warcraft -- aside from both the impending patch 3.3 release and the onset of the game's fifth anniversary (yes, it's been almost five years since Blizzard brought their MMO online), Blizzard has finally done something that many thought they would never directly do: start selling in-game items for real money. There was lots of argument about that one this last week, and you'll find that, along with the usual news and insights, over on Joystiq's sister site WoW.com. Check out our most popular posts of the last week in the second half of this post.
