An executive from Shanda Interactive has been handed a sentence in a Chinese court for creating virtual assets out of thin air and selling them through accomplices to players. This is according to PlayNoEvil’s report of a story in China Daily yesterday. The copying took place in The Legend of MIR II, a popular Korean MMORPG operated in China by Shanda.
The story helps to highlight how the value of virtual assets is often based on their artificial scarcity. Many virtual assets are positional goods, meaning that their value is derived not from their absolute attributes, but from the relative advantages they confer compared to other goods of similar kind.
The relative advantage is obviously reduced if a powerful asset is duplicated in quantity. This applies to MMORPG swords just as well as to virtual skirts. Second Life users took to the streets when a CopyBot made it possible to duplicate SL objects.
However, not all virtual assets are artificially scarce. While virtual “land” can be easily duplicated, good neighbourhoods can’t be. There are also limits to the amounts of unique and interesting names and numbers.