Real Money Trade
Real Money Trade, or "RMT" is when game assets, such as characters, currencies, and items are traded for real world currency. This virtual economy is an emerging market where people enter for recreation and entertainment purposes rather than by necessity.
Real money trade is a phenomenon that has existed ever since the advent of multiplayer video games. However, it did not become prevalent until the release of large scale MMORPG's such as Ultima Online, EverQuest, and World of Warcraft. It became as a cottage industry in the late nineties with players using eBay and PayPal to sell items and gold in the game Lineage; ever since, it has been growing exponentially. In 2001, Edward Castronova claimed that the virtual economy in EverQuest had a GNP comparable to some real world developing countries; four years later, the real money trade industry was estimated at $880 million USD. 
It comes to great surprise to many that people would pay real world money for digital items that are not tangible. The question now is: why would people pay for goods that hold no innate functionality? The reason behind this is simple: the exchange value at which a good is traded at is what other people will pay for in the market; thus, exchange value does not equal to innate usefulness. Even though virtual goods can be produced exponentially at the developers whim, there is an artificially controlled scarcity which makes these goods valuable to buyers in the market. 
The academic debate around RMT has been centered around two positions: the first is that real money trade is a natural extension of player's economic rights while the other position is that RMT is Online Cheating and thus destroys user experience. For example, a wealthy player can simply "buy into" a game in order to circumvent the trials of acquiring virtual wealth, goods, or statuses. Castronova argued that "RMT is like a pollution of a service that designers are attempting to provide to their customers", and that it undermines the achievement hierarchy in MMORPGS. On the other side of the coin, RMT can be see as a natural extension of gameplay because players who work hard to acquire marketable goods put in hours of labor to produce a good. Whether or not it is ethical to sell virtual property in games is still under heated debate; however, one fact remains clear - virtual items command real economic value because it does require work and effort to to acquire them.
The emergence of new economic opportunities has created incentives for a new kind of crime. In late 2006, one of the greatest scams in online gaming history occurred. It took place in the game EVE Online, where users built armies and flew spaceships. During this time, a user by the name of "Cally" built a functioning financial institution by the name of Eve Investment bank. The bank immediately grew in popularity and magnitude as there was nothing like it before. However, after a year of operations, Cally took all the money from the bank and stole his client's invested access. It was estimated that he made off with 700 billion ISK, which was equivalent to about $100,000 at the time of the heist.
Real World Implications
Businesses and Worker Exploitation
Many for-profit ventures such as IGE (www.ige.com) have built businesses to service communities around certain niches, such as World of Warcraft gold. Some businesses have even gone as far as to set up real world sweat shops to harvest these virtual assets. There are known facilities in China that employ hundreds of workers to farm in-game items to sell to MMORPG players; this practice is known as "gold farming", or building virtual credits through a long and arduous repetition of tasks online. In 2011, the Guardian reported that there were as many as one hundred thousand gold farmers in China alone. Jin Ge, a researcher at the University of California San Diego claimed that employers would make workers play twelve hours a day, with no vacations during the year. 
Recently, a scandal was uncovered in China where prisoners were force to play online games to build credits that prison guards would then trade for real money. A fifty-four year old prison guard was jailed for three years for corruption. It was found that prison bosses made much more money forcing inmates to play online games than they would from forcing people to do manual labor.
Although the United States does not have explicit laws regarding Real Money Trade, courts in South Korea have addressed various subjects. One court claimed that since virtual items are produced in MMORPG's, and MMORPG's were designed by their developers, in-game items cannot be claimed as good or property by the user and would remain the intellectual property of the game designer.The legal debate over virtual property trade is still in the nascent stages, no definitive legislation has come out to address it as the phenomenon is relatively new. In 2009, the central government in China issued a directive on how fictional currency could be traded, making it thus illegal for businesses without licenses to trade.
Response by Game Developers
As Real Money Trade becomes more prevalent, game developers are taking counteractive measures. Games such as World of Warcraft, RuneScape, Warhammer, and Final Fantasy explicitly prohibit buying gold and items related to the game with real world cash. Runescape went as far as remove the possibility of unbalanced trades while World of Warcraft actively monitors the mailing system and the auction houses to spot discrepancies in the movement of resources and goods that are suspicious.
Recently, Blizzard Entertainment has been one of the first major game developers to implement an in game system that allows players to buy and sell items for real world money in their upcoming title Diablo III. This system has created controversy amongst the community of the game.
- Blizzard Entertainment
- Online Cheating
- World of Warcraft
- Video Games
- Ethics in Computer & Video Games
- Castronova, Edward. "Virtual Worlds: A First-Hand Account of Market and Society on the Cyberian Frontier." Social Science Research Network. Web.
- Urschel, Augustus. "Understanding Real Money Trading in MMORPGs." Web. <http://www.gelman.gwu.edu/eckles-library/eckles-prize-documents-1/Augustus%20Urschel.pdf>.
- Drain, Brendan. "EVE Online Player Steals $45,000 worth of ISK in Massive Investment Scam." Massively. Web. 15 Dec. 2011. <http://massively.joystiq.com/2010/09/11/eve-online-player-steals-45-000-worth-of-isk-in-massive-investm/>.
- Jin, Ge. "Chinese Gold Farmers in the Game World." Web. <https://netfiles.uiuc.edu/dtcook/www/CCCnewsletter/7-2/jin.htm>.
- Vincent, Danny. "China Used Prisoners in Lucrative Internet Gaming Work | World News | The Guardian." Latest News, Sport and Comment from the Guardian | The Guardian. Web. 15 Dec. 2011. <http://www.guardian.co.uk/world/2011/may/25/china-prisoners-internet-gaming-scam>.
- "Diablo III Beta Announcement." Blizzard Entertainment. Web. 15 Dec. 2011. <http://us.blizzard.com/en-us/company/events/diablo3-announcement/index.html>.