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China's virtual goods taxation sparks price increases and controversy
China's State Administration of Taxation recently imposed a 20 percent income tax rate on profits made from virtual currency and virtual items, sparking price increases for virtual goods. While this tax rate (if actually enforced) clearly impacts the virtual space, it also affects transactions happening outside of MMO servers and virtual world grids. The taxation policy could ultimately extend to the virtual currencies linked to the largest IM providers in China such as Tencent, drastically increasing the percentage of the population affected by the new laws. Despite this, the positive benefits of eliminating gray and black markets for virtual items and currency may outweigh the drawbacks for gamers and users of the various digital services in China. Questions remain about what will and will not be taxed in the virtual space, but it's clear that individuals who gain virtual income are expected to declare their profits and pay taxes on this, and do so within seven days of having earned the profit, according to Shanghai Daily.Taxpayers who can provide proof of the value of this property or the value of the transaction are taxed at 20 percent on their profits, while those who cannot provide sufficient verification are taxed at three percent of the total transaction value. But how many people are affected by this new system?
The Daily Grind: Can we solve problems intertwined with MMO economies?
In-game economies can make MMOs more vibrant places to play, lending depth to these games that generally isn't found in regular PC or console titles. Then again, the perceived value attributed to virtual currency and items can lead to a slew of problems, not limited to acts of real world violence, the plague of gold spamming, and the slippery slope of ownership in the virtual space. At least one company out there is working with MMO publishers to create a regulated secondary market, the hope being that it's possible to reclaim the black and grey market commerce so often attached to massively multiplayer titles. Do you think this approach is a viable solution to some of the problems associated with MMO economies? What are your ideas on how these issues intertwined with virtual currency and items should be resolved? Is there even a solution at all?
Dutch court convicts 2 minors of stealing virtual items
Should the theft of virtual items be punishable by law? This varies from country to country, but today's ruling in a Dutch court emphasizes that virtual crime is actual crime under their country's laws, regardless of whether the individuals involved are minors. Associated Press reports: "These virtual goods are goods (under Dutch law) so this is theft," the court said Tuesday in a summary of its ruling. The court did not reveal the identities of the minors, but they are 15-years-old and 14-years-old, respectively. They apparently coerced a younger boy into giving them a 'virtual amulet and virtual mask' in RuneScape. The offenders have both been sentenced to community service -- 200 hours for the 15-year-old, and 160 hours for the 14-year-old. Do you feel this is too steep a penalty for virtual extortion, or not steep enough? Should it matter if the items or currency involved are real or virtual?Update: It's been communicated to us by our readers in Holland that the crime in question was not, in fact, a virtual one, but involved actual violence. The victim in question, according to this source, "was kicked and threatened with a knife." The original Associated Press source omitted this detail, which obviously changes the tone of the discussion below. To clarify, this was real world violence inflicted over virtual items, hence the community service sentences for both of the offending minors.
Final Fantasy XI collectible confers unique in-game ability
Final Fantasy XI players who are into collectibles have a new item to lust over. There's a new addition to the Final Fantasy XI Player's Collection, which is available for a limited time only: The Tidal Talisman. It's a $43 silver-plated pendant with a side-benefit that's the real selling point. It comes with a virtual counterpart, which could prove very useful. The in-game version of the Tidal Talisman allows a player to teleport to locations previously visited in Vana'diel. Or, as it's described over at FFXI's site, it confers "the ability to project phantasmal robes over the wearer's body and enabling the wearer to teleport to distant lands in the blink of an eye." For those who are on the fence about shelling out $43 for a FFXI pendant, Square-Enix appeals to a gamer's sense of urgency regarding scarcity of virtual goods: "We have no plans to bring this item back in the future, so all players are encouraged to take advantage of this unique one-time opportunity!"
Blizzard on Live Gamer: No way, no how
I've been reporting on our sister site Massively (just like WoW Insider, but for all MMOs) about Live Gamer, a startup that claims to be legitimizing RMT (real-money trading, which is spending real money on virtual items) in MMOs. But while there are a few big names supporting them already (Funcom, which is making Age of Conan, and Sony, which makes lots of different MMOs, including all the Everquests), there is one name that's missing from their supporters: Blizzard.And now we've heard that that's not going to change anytime soon. A "Blizzard rep" says in no uncertain terms that they're not interesting in RMT at all, in a sanctioned form or otherwise. "Not only do we believe that doing so would be illegal," they say, "but it also has the potential to damage the game economy and overall experience for the many thousands of others who play World of Warcraft for fun." Wow. Tell us how you really feel.If I can be biased for a moment, that's great to hear. Blizzard has definitely been taking steps to make RMT obsolete rather than legit (by doing things like adding in daily quests and requiring things other than gold-- reputation, turn-ins-- to buy virtual items). There's no question that there's a lot of money to be made in RMT-- every day, virtual items seems to gain more and more real world value. But it's good to hear that Blizzard is invested in making their game fun, not selling the virtual items they create.
What Rase Kenzo means for virtual property
Our own Tateru Nino has been covering the Second Life case of Rase Kenzo very closely, but with the settlement yesterday, it seems the ruling might have effects on the concepts of virtual worlds at large. At issue is whether or not an avatar named Rase Kenzo could use an exploit to duplicate items created by Second Lifers-- does copyright and intellectual property matter when the items you're talking about are virtual? As Tateru herself noted, yes-- virtual theft matters.And Raph Koster agrees. He points to the Rase Kenzo settlement as all the precendent any court would need to consider virtual goods "merchandise" in every sense of the word, with all the normal protections and inherent properties included.Now, the Second Life items had some properties that most other virtual world items do not-- they were actually coded and created by the creators, and while you do hit a button to create, say, an Epic in WoW or a ship in EVE, the item you create wasn't actually created by you. So the intellectual property laws probably won't cross over-- whether you virtually "crafted" an item or not, you don't have a lot of claim on it when the design didn't come out of your head.But we are another step closer to putting a real (and real-world) value on virtual items. This case took place in Second Life, but like many things in the Lindens' world, odds are it will have repercussions in lots of different virtual worlds.
