We reported earlier about the 20% tax rate legislation on virtual currency transactions in China. Shanghai Daily has now published an article concerning this legislation and about the fall-out that followed.

Professor Richard Heeks from University of Manchester recently made available a working paper titled Current Analysis and Future Research Agenda on "Gold Farming": Real-World Production in Developing Countries for the Virtual Economies of Online Games. Heeks summarizes pretty much everything that is currently known on gold farming. The approach is systematic and includes meticulously going through e.g. the estimates on on RMT market volume and aggregate spending on gold farming products, trends of RMT market prices and their effect on gold farming, the stakeholders in the gold farming industry, and the virtual world operators' incentives in reacting to gold farmers.

The paper can be found via the VERN bibliography. Instead of listing more of its contents here, I'd like to point out the viewpoint of development studies, which is novel in these circles at least to myself, and which is interestingly visible in many parts of the paper.

PlaySpan is a company offering a transaction platform for MMO publishers that wish to integrate microtransactions and real-money trading into their products. Now they say they've secured USD 6.5 M in venture funding. Worlds In Motion has the story.

At some point during the discussion described in the previous post, Joshua Fairfield wanted to contest the status value of high-level characters by arguing that there is no correlation between the the level of a character and the skill of the player. Be that as it may, I think he eventually conceded that there may still be status value, if for no other reason than that the player has spent a lot of time leveling, and is thus a member of what Joshua called "time aristocracy" (which I think is an excellent term by the way).

We can question the status value from our own standpoints ("they are just kids with too much time"), but it is nevertheless real for some MMORPG players and may be worth protecting by operators that wish to cater to that segment. To explore this point a little further, I thought I would re-post a comment I left in a Terra Nova discussion long time ago.

I am not intensely interested in MMORPG secondary markets that exist despite the operator's wishes, and I certainly don't have any agenda of legitimising them. But after the last SoP V workshops yesterday there was a rather lively coffee table debate on RMT in MMORPGs that resulted in a neatly economistic re-telling of that story. I'll try to convey the tale without misrepresenting the particpants too much.

Already during one of the panels Joshua Fairfield reminded us of the positive aspect of RMT: trade creates welfare gains ("Every time you stop someone from trading, God kills a kitten", as he politely put it). Richard Bartle obviously wouldn't have any of that and brought up the negative aspects, centering on the violation of the achievement hierarchy associated with character levels.

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.

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.

Last month I blogged about how the virtual Q Coins are being traded for real money and used as an online payment system in China, and how the Chinese government has reacted to this. In the comments section, one Boaz Rottenberg provided some additional details and also offered some disagreeing views. In particular, he wrote:

There is no secondary trade going on in Q Coins in the open market. The currency itself is not transferable through QQ's platform and definitely not cashable by QQ. [...] From my findings, I believe all real money trade in virtual currencies in China is in gaming currencies - mainly WoW gold.

In this posting, I describe how Q Coin secondary market trading (or one facet of it) works in practice, and illustrate the process with some screenshots. I also provide some figures from a trading site. Many people have seen the news articles about QQ, but for most non-Chinese speakers, this is probably the first glimpse of the actual Q Coin market.

A couple of weeks ago it was reported (via PlayNoEvil) that China aims to restrict the trading of virtual currencies that have become popular as a payment method even for third-party services. According to the joint announcement of 14 Chinese government agencies including the Ministry of Public Security and People's Bank of China, virtual currencies should not be used to buy real commodities and can only be traded back to real money for amounts not exceeding the original purchase price, eliminating any opportunity for profits.

This is the most severe notice so far in a series of growing government attention to the use of virtual currencies and real-money trade of virtual property in China. At the time of writing, however, RMT markets seem to be operating as usual. For example, Taobao lists thousands of sell offers for Q Coins, the virtual currency of Tencent QQ. I dug a little bit into Chinese language sources to find out more about what's going on.