The growth in the computer game market is leading to real legal issues in virtual worlds

The popularity of computer games continues to boom. We are playing more, and we are playing longer. The growth in popularity of these massive multiplayer online role-playing games (MMORPGs) is attributed to the attractive, alternative life these virtual worlds offer players, free from real world stresses. Yet despite this view, real world issues are starting to enter the virtual arena.

A key issue is whether virtual property within these MMORPGs should be recognised and protected by law. Most MMORPGs allow players to collect ‘assets’ within the game such as virtual money, weapons and clothing. Along with their value within the game, virtual assets can attract a substantial real world value, with players trading virtual assets for real money.

Many games companies prohibit real world trading of virtual assets, but a black market exists through online auction sites. Once the trade is complete, players meet within the game to transfer the asset. Some games address the problem of black market trading by allowing players to convert real money into virtual money to purchase assets within the game (rather than trading outside the game). Project Entropia is one such example, where one player infamously spent $26,500 (£14,000) buying a virtual island.

Many players believe that, where they have spent money and/or time acquiring virtual assets, they should be entitled to legal protection against the theft or destruction of those assets. They complain that there is practically no legal redress at present. This issue was highlighted by the case of 41-year-old Qiu Chengwei, who killed a fellow gamer following a dispute over the theft of his ‘dragon sabre’. Chengwei had won the sword in the game The Legend of Mir 3 and lent it to Zhu Caoyuan, who then sold it for 7,200 Yuan (£460). After initially approaching the police for assistance, he was informed that they were unable to help. Chengwei then took matters into his own hands, stabbing Caoyuan and killing him.

The legal recognition of virtual property is not without precedent. In a first instance ruling in December 2003, the Chaoyang District People’s Court of Beijing ordered the Beijing Arctic Ice Technology Development Company, which was behind the game Hongyue (meaning Red Moon), to return virtual property to an online gamer following its theft by a computer hacker.

Despite this, many games companies would prefer the law not to recognise and protect virtual assets, arguing that they are just computer data without real value worthy of protection. In particular, they point out that some games encourage theft as part of the gaming experience – for example where a player chooses to play the role of a pickpocket. The companies are also concerned that, should they decide to stop supporting a particular game, they may be faced with a number of legal suits for the virtual property that will be destroyed when the game is shut down. These particular concerns coexist with more traditional legal issues such as choice of law and jurisdiction and the extent to which games companies that facilitate virtual trading should be subject to financial regulation.

Not all games companies are opposed to the idea of attaching real world value to virtual property, though. Sony recently reversed its opposition to the trading of virtual assets, announcing its intention to set up a market for buying and selling virtual goods, while Microsoft’s new Xbox 2 is rumoured to facilitate a micropayment system for virtual trading.

With these examples in mind, online computer gaming is set to become big business. The law typically recognises the need to regulate big business in the interests of encouraging sustainable business growth and consumer protection. However, caution must be exercised to ensure that premature regulation will not adversely affect the developing economies of virtual worlds and the (virtual) people who live there.

Phil Lee, assistant, Denton Wilde Sapte