article: Game Theories, by Clive Thompson (May 21, 2003)

I love the notion of virtual economies that can exchange wealth with the real world precisely because they bring into striking focus the coming challenges as the virtual and the real overlap more and more. The internet is really good at making previously scarce resources ubiquitous, and virtual worlds are, in a way, a representation of post-scarcity space; when everything exists on a server in the sky, every person can have a planet. This has all sorts of implications for property law (is it intellectual property, real property, or somethine else?), and the economics of virtual good and property already suggests that the virtual and the real are more similar than most people would think.

It will be interesting to what happens when, as Thompson suggests, one of the major virtual worlds shuts down. (My money’s on Ultima or Star Wars Galaxies, which have been holding on for far too long.) The games have become integral not only in the emotional and intellectual lives of their players, but in their economic lives as well. And if there’s one thing lawmakers and juries understand (well, American ones, anyway), it’s cold hard cash. Until recently, there hasn’t been an appropriate basis for a legal test of property, as a property dispute without real-world value would most likely be dismissed. But if even one player in that world is making a significant income from their in-game pursuits, and they are not appropriately reimbursed by the operating company, any lawsuits could have far-reaching implications on the definition of virual property and the rights of users versus the operators of virtual worlds.

A world closure could be the catalyst that helps entrench the virtual into the physical in a formal way. In doing so, it would also probably explode virtual worlds into the public eye, guaranteeing mass adoption (or is it immigration?) as mainstream consumers learn exactly how real those worlds can be. It seems to me that Second Life, by adopting a system similar to real world economics and property law, is ahead of the pack, while the companies most at risk for losing control of their creations are also, unsurprisingly, running the worlds which are more at risk for closure.

And all this begs the question of how the outdated tangle of laws over copyright and patent will be affected. If ever there were a sign that all our property laws, for IP and real property alike, need to be reworked from the ground up, it’s the entrance of virtual property onto the legal scene. But the legal troubles run deeper than just property law: I have no doubt that someone will be tried for the murder of an avatar in my lifetime, and I think the best way to be prepared for that case is to start delineating the less emotional economic aspects of virtual worlds sooner rather than later.