A new QQ service–iTQQ

As Vili introduced before, Tencent QQ is the dominant form of instant message for online communications in China. It supports instant messaging, games, and other value-added services, all of which are paid for with Q-coins. With the usage of Q-coin, you can buy everything from QQ sausages and clothing to QQ credit and debit cards, which builds the QQ virtual world. According to Virtual China, there is a new QQ service called iTQQ. Tencent has partnered with TCL to produce a low-cost some kind of IPTV that provides access to QQ services as well as TV programmes through a new service called iTQQ. Nowadays the online PCs are still out of reach for some Chinese at home, this new service could further increase online activities for Tencent since the Internet can be always available at home. As a result, Tencent will further expand QQ’s dominance for communications and expand the usage of Q-coins to pay for that new value-added service.

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eBay bans virtual property auctions?

Game asset auctions on eBay - soon to be history? According to an original article on Slashdot, a representative of eBay has confirmed that they are delisting auctions on “virtual artifacts”, said to include currency, virtual items, characters and accounts. Neopoints from Neopets are specifically mentioned, but I wonder if this applies to non-game virtual property such as ICQ numbers? From Slashdot:

Mr. Hani Durzy, speaking for eBay, explained that the decision to pull these items was due to the ‘legal complexities’ surrounding virtual property. “For the overall health of the marketplace” the company felt that the proper course of action, after considerable contemplation, was to ban the sale of these items outright. While he couldn’t give me a specific date when the delistings began, he estimated that they’ve been coming down for about a month or so.

This would not be the first time eBay bans RMT auctions. In 2001, it pulled down auctions over assets in EverQuest, a fantasy MMORPG operated by Sony Online Entertainment. The pull-down was in response to demands by SOE, with which eBay seemed reluctant to comply. What happened after the pull-down was that trading over EverQuest assets moved over to other marketplaces such as PlayerAuctions. Eventually, SOE opened its own RMT trading platform called Station Exchange, where players can securely trade assets that exist in designated EverQuest II servers.

This time though, it sounds like all RMT transactions would be banned. From Slashdot:

Mr. Durzy pointed out that in reality, the company is just now following through with a pre-existing policy, as opposed to creating a new one. The policy on digitally delivered goods states: “The seller must be the owner of the underlying intellectual property, or authorized to distribute it by the intellectual property owner.”

There are two points I’d like to raise. The first is that some virtual world operators allow player-to-player RMT, Ultima Online’s operator Electronic Arts being one. UO items are still being traded on eBay for hundreds of dollars (talk about vintage virtual property!) – will they be removed as well?

The second point concerns the legal side of the matter. Unspecified “intellectual property” subsisting in virtual property and owned by the operators is cited as grounds for the ban. Intellectual property rights that could apply in this case are copyright and trademark (and in the EU, database rights). I am not equipped to deal with the question of trademark (though I suspect it would not play a part), but I can speculate about copyright. For starters, I am not sure if copyright can subsist in virtual assets such as currency units. If it does, I think it would subsist in their graphical representation and not the database entry. Assuming copyright does subsist in a virtual asset, it grants the owner (assumed to be the operator here) certain exclusive rights over the assets, most importantly the right of publication and the right to produce copies. However, neither of these rights are infringed when control over a database entry is transferred from one user to another, regardless of whether payment is involved or not.

The vague references made by MMORPG operators to unspecified intellectual property rights are intended more as a deterrent, as is often the case with IP today. An actual cause of action would be breach of contract: players have agreed to keep away from secondary markets by accepting the EULA. But the thing is that eBay or any other marketplace is not party to the agreement, so I suspect they have no obligation to take down the auctions on their own initiative.

To avoid misunderstandings, I should point out that I fully support an operator’s right to ban RMT from its services should it wish to do so. I am just saying that its ability to enforce that decision through legal means may be limited. I am also sceptical as to how much it will achieve if the service is designed in a way that incentivises RMT.

In any case, if eBay carries through with banning game-related virtual property transactions, it is kind of historic, because eBay is the place where RMT first started in significant volumes. From a 1999 press release by Electronic Arts:

Electronic Arts, the world’s largest interactive entertainment software company, appears to be breaking new ground once again with its popular virtual world Ultima Online. In recent weeks, people have been flocking to one of the Internet’s best-known auction sites, eBay, to bid on Ultima Online (UO) accounts, being sold by UO players. Several of the accounts have traded at more than $2,000 and two accounts have sold for $3,000 each.

Rumour has it that IGE has been having it tough lately. Will eBay’s decision help trading companies flourish? In any case look to underdog auction sites like PlayerAuctions as the winners in this deal.

Sweden to set up embassy in Second Life

House of Sweden in Washington According to Sweden’s largest newspaper Dagens Nyheter, Sweden is planning to set up an official embassy in Second Life. Modeled after the House of Sweden in Washington, the building is to be the virtual world’s first official embassy.

In reality though, the facility will not deal with passports or visa applications like a normal embassy, but rather acts as a marketing outpost for Sweden designed to reach the digital generation. The idea is being developed at Swedish Institute instead of the Ministry of foreign affairs.

A critical piece by Randolph Harrison recently highlighted the fact that inaccuracies in the media hype surrounding Second Life may be leading individuals and organisations to make bad investment decisions. Dagens Nyheter says Second Life has close to three million residents, while the actual number of users is probably much smaller. Which number did Swedish Institute base their embassy plans on?

After a long season of astonishing news like this one, the buzz is that Second Life and other 3D worlds along with it may be in for a bit of a media backlash. This would be unfortunate for Second Life, since companies setting up marketing operations in-world have been a big driver for the pioneering platform.

Big virtual property markets like World of Warcraft or Cyworld will probably not even flinch though, driven as they are by consumer demand borne out of individuals’ social behaviour in the user community.

Human resources

In my last post, I said I would have a small announcement to make. Well, here it is: our research group at Helsinki Institute for Information Technology has welcomed two new economics grad students to work on virtual economy issues. In the coming weeks, Tuukka Lehtiniemi and Jiaping Xu will be blogging here about their research and things taking place in the field. Let’s wish them success in their work.

As for me, I’ll be leaving for Tokyo next week to stay there for the spring. My main objective is to dedicate time for writing to get some results published. I will also be visiting Seoul and Shanghai and am always happy to meet people with related interests.