Virtual Property and Virtual Economies

For any object or structure found in a virtual world, one may ask the question: who owns it? This question is already ambiguous, however, because there may be both virtual and real-life owners of virtual entities. For example, a user may be considered to be the owner of an island in a virtual world by fellow users, but the whole world, including the island, may be owned by the company that has created it and permits users to act out roles in it. Users may also become creators of virtual objects, structures,and scripted events, and some put hundreds of hours of work into their creations. May they therefore also assert intellectual property rights to their creations? Or can the company that owns the world in which the objects are found and the software with which they were created assert ownership? What kind of framework of rights and duties should be applied to virtual property?

The question of property rights in virtual worlds is further complicated by the emergence of so-called virtual economies.Virtual economies are economies that exist within the context of a persistent multi user virtual world. Such economies have emerged in virtual worlds like Second Life and The Sims Online, and in massively multi player online role-playing games(MMORPGs) like Entropia Universe,World of Warcraft, Everquest, and EVE Online. Many of these worlds have millions of users.Economies can emerge in virtual worlds if there are scarce goods and services in them for which users are willing to spend time, effort, or money, if users can also develop specialized skills to produce such goods and services, if users are able to assert property rights on goods and resources, and if they can transfer goods and services between them.

Some economies in these worlds are primitive barter economies, whereas other make use of recognized currencies. Second Life, for example, makes use of the Linden Dollar (L$) and Entropia Universe has the Project Entropia Dollar (PED), both of which have an exchange rate against real U.S. dollars. Users of these worlds can hence choose to acquire such virtual money by doing work in the virtual world (e.g., by selling services or opening a virtual shop) or by making money in the real world and exchanging it for virtual money. Virtual objects are now frequently traded for real money outside the virtual worlds that contain them, on online trading and auction sites like eBay. Some worlds also allow for the trade of land. In December 2006, the average price of a square meter of land in Second Life was L$ 9.68 or U.S. $0.014 (up from L$6.67 in November), and over 36,000,000 square meters were sold. Users have been known to pay thousands of dollars for cherished virtual objects, and over $100,000 for real estate.

The emergence of virtual economies in virtual environments raises the stakes for their users, and increases the likelihood that moral controversies ensue. People will naturally be more likely to act immorally if money is to be made or if valuable property is to be had. In one incident that took place in China, a man lent a precious sword to another man in the online game Legend of Mir 3, who then sold it to a third party. When the lender found out about this, he visited the borrower at his home and killed him. Cases have also been reported of Chinese sweatshop laborers who work day and night in conditions of practical slavery to collect resources in games like World of Warcraft and Lineage, which are then sold for real money.

There have also been reported cases of virtual prostitution, for instance on Second Life, where users are paid to (use their avatar to) perform sex acts or to serve as escorts.There have also been controversies over property rights. On Second Life, for example,controversy ensued when someone introduced a program called CopyBot that could copy any item in the world. This program wreaked havoc on the economy, under mining the livelihood of thousands of business owners in Second Life, and was eventually banned after mass protests. Clearly, then, the emergence of virtual economies and serious investments in virtual property generates many new ethical issues in virtual worlds. The more time, money, and social capital people invest in virtual worlds, the more such ethical issues will come to the front.

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