Gem of an idea?

At the end of 2006 (can you tell I'm still catching up?) EA put their stamp on Pogo Games - a casual game service for PC players, also accessible through AOL - by offering an intermediate currency called "Gems." The Gems sell for about 0.06 USD and can be exchanged for the opportunity to earn special badges or upgrades for the player's Pogo Mini avatar. Gems can be bought in bulk from %5 to $20 and virtual items are said to cost between $0.50 and $2.00 each.
Badges are the status symbol in Pogo. One of the interesting attributes of online gaming is that players from a wide range of social and economic statuses enter the game with an equal opportunity to achieve and earn in-game wealth. With the Pogo Gem system some players can now outspend others to get more badges - giving an advantage to players with a higher real-world economic status. At least the big spenders still have to play the game well enough or long enough to earn the necessary points to be awarded the badge. There doesn't seem to be any mechanism for players to transfer gems, so don't go running to ebay to look for a bargain...or an investment. And yes, we do need stinkin' badges!

Officer, Arrest That Avatar!

An article last year by Honolulu's KITV introduced their readers to how gamers cash in characters and assets for real world dollars. This is not a big surprise to readers of this blog, but what interested me was a short mention at the end regarding South Korea's real-world police units that investigate video game related thefts and *murders.* In a country that claims 17 million "gamers" out of a population of 48 million, they may be writing the book on how to investigate and prosecute these kinds of crimes - a book which may soon become reference material for similar police units in the US and elsewhere. What happens when the crime takes place strictly in a virtual world - e.g. how is evidence of the crime (such as theft of an item) collected and preserved? Will virtual criminals step up their tactics to crashing servers or erasing game files to hide their nefarious deeds? Will players form their own "citezens watch" or private investigator services? Stay tuned to the internet to find out...

One For You, Nineteen For Me

Less than a year after my post "Easy Come Easy Go" (see January 2006 archive), CNet reported in December of 2006 that governments are becoming aware of the massive amount of assets held by virtual gamers, which makes taxation "inevitable." Jim Miller, an economist working with Congress, suggests that not only could the IRS become involved in tax policy, but Congressional oversight of virtual worlds could also be in our future. Inheritance taxes could also be affected by the value of the deceased's virtual assets.
I'm neither an economist nor a lawmaker nor a lawyer, but it seems to me that the players who are in the virtual world business for serious money would simply respond to such legislation with the same tactics used to minimize the impact of real-world wealth. That is, anonymous off-shore accounts, tax-deferred forms of investments, assigning the wealth to a business entity rather than an individual person, and so on. And wouldn't that open the door to virtual write-offs? Donate $200,000 of virtual property to your favorite charity and get a sweet deduction.

Entropia Ends with Bang - More Bangs to Come

Right at the end of 2006, Project Entropia received $179,668 in real money for the sale of three virtual shopping mall properties. Besides the possibility of profit from resale, the owners receive a 2.5% land owner sales tax on any items sold within their mall. The virtual world is also on the verge of letting players start up banks with the authority to lend money that's convertible to real-world dollars. I'm guessing that's going to draw the attention of some regulatory institutions and legal representation. Hey - maybe there's a new opportunity for some virtual lawyers to pop up and set up shop in Entropia. And expect sometime inthe future you can get your virtual diploma from a virtual school in the virtual world.
To keep up with what's going on at Entropia, visit the Entropia Universe WIKI.