Plans to link the internal markets of Second Life and Entropia Universe announced

Anshe Chung, proclaimed “the virtual Rockefeller” by Business 2.0, has published plans to launch an inter-virtual world financial market, linking the internal markets of Second Life (SL), Entropia Universe (EU) and IMVU. The public launch of the service is set at early June. As I understant, the service makes it possible for e.g. users of SL to use their Linden Dollars for purchasing shares of portfolios consisting of EU assets.

The press release states that RMT is not involved. A possibly related piece of old news: Chung got one of the EU banking licenses a while back.

It’s interesting to see how this works out, where do the virtual world operators stand in this, and whether there’s demand for such markets or not. If the markets thrive, there are interesting related issues – for example, the currency unit of EU, the PED, is pegged to USD, whereas the Linden Dollar is floating. Anyway, the markets inside virtual ecomomies and their external connections are getting more complex, which I guess is not a surprise.

(via 3pointD)

Bad RMT vs. Good RMT

Korea Times and Terra Nova’s Korean correspondent Unggi Yoon write about Korean lawmakers’ plans to carry out a regulatory precision strike on Bad RMT without inflicting too much collateral damage on Good RMT. The problem is defining what is acceptable real-money trade of virtual property and what is not.

You would think that a simple way to draw the line would be to follow the rules set out in the operator’s end-user license agreement: if the operator allows RMT, it’s ok; otherwise it’s not. There are a some complications, however.

Korean MMORPG companies seem to have a much more ambivalent attitude towards RMT than some Western operators. This may be related to the fact that in the case of Lineage, it has been argued that RMT was actually helpful or even vital for the commercial success of the game. From the Korea Times article:

Major operators of online games, such as NCsoft, NHN and CJ Internet, say that they are not sure of the government’s real intention at this point. “We don’t think the ban will severely damage us, because gamers will find another way to trade,” an NCsoft official said.

I’m actually surprised to hear that this NCsoft official seems to prefer players trading.

So if the regulator would empower the operating companies to make decisions regarding RMT, it might not get the results it desires. Scamming and freak violence related to the virtual under-economy has made RMT an area of societal concern in South Korea. Steven Davis describes a recent scandal and suspects that the ‘law grew out of these agencies desire to appear to be “Tough on”… something.’ Thus the regulation might not actually be designed with the game industy’s benefit in mind.

Another complication is that real-money trade of virtual property is by no means restricted to MMORPGs in Korea. Various community sites and other services make use of the virtual economy phenomenon. Their value chains may be more complicated than just operator—RMT company—consumer -relations (this is certaintly the case in China, where I am at the moment). In these cases, unduly restrictive regulation might harm the growth of a interesting new sector of business that creates real economic value.

Meanwhile, the MMORPG item traders have formed a trade union of their own, obviously promoting pro-RMT policies:

“We believe it will be practically difficult for the government to punish or ban such trade,” said an official of the Association of Digital Asset Trade Promotion, an interest group of the item trading firms. “There is no clear definition of ‘unfairness’ anywhere in the regulation. Plus, how can they separate illegal deals from legal deals when there are millions of them?” cites the Korea Times article.

On the other hand, scamming and account hacking are known to be real problems for users, so it’s not really a solution to say that “regulation won’t help, so let’s not do anything.”

One solution to the security problems would be to build more robust virtual property platforms. Many of today’s services that ended up being storehouses of valuable virtual property were designed like entertainment services, not like the financial systems they unwittingly became. For those operators that are willing to allow RMT to take place, constructing their own Station Exchange could be a solution.

At the same time, I understand that many developers would just like to make neat online role-playing games with absolutely no real money involved in in-game matters. Not sure if the new Korean regulation will help with this.

Second Life moves to China, becomes family friendly?

Shanda, one of the leading MMORPG companies in the world, plans to create a new service similar Second Life. This was reported today by Financial Times, quoting Shanda’s founder and chairman Chen Tianqiao. According to Chen, the Nasdaq listed company wants to diversify away from fantasy worlds, but he wouldn’t say anything about release dates.

Earlier this year, another “Chinese Second Life” called HiPiHi attracted attention in the blogosphere. HiPiHi is already in the beta stage, but lacks the resources of China’s biggest MMORPG company. The graphics look somewhat dated by today’s standards, although so do Second Life’s.

Second Life’s concept is being copied left and right in the Western market as well. Sony is building a SL clone into PlayStation 3, and recently I blogged about EA’s plans to bring avatars to television shows. SL’s developer Linden didn’t invent virtual worlds or avatars though, so it may not be fair to talk about copying. I can’t help thinking that SL’s successful media hype contributed to these other plans going forward though, so in that sense we have Linden to thank.

Meanwhile, the original Second Life is in hot water over virtual child abuse taking place in the service. According to BBC News, Second Life is being investigated by German police following allegations that some users are trading real child abuse images inside the service. Simulated child abuse has been played out by some users of the service for some time already.

Perfectly legal and moral sexual activities also take place in the service, forming a core part of the attraction for some. The suprisingly insightful FT article speculates that “two major elements of Second Life’s virtual world could be difficult to replicate in China: online sex and gambling.” Will China give birth to a “family friendly” virtual world, or will users rather go elsewhere?

Thanks to Jaani from FinChi for the heads-up.