It focuses a little more on Second Life, but is as every bit applicable to WoW.
I can see a point in taxing money that you convert to real currency, as that's income like any other. However, I'm curious if they would want to tax in-game money, and if they do, will you have to pay in in-game currency, or in real money?
Only, it's not as applicable in WoW as in Second Life, since in WoW it's explicitly against the rules to try to convert your in-game money to real-life money...
Edit: err. I should read things more closely, that's pretty much what you were saying.
Last edited by Liryn : 03/19/07 at 11:56 PM.
Reason: phrasing
This comes up literally every month on FoH boards, but it's semi-interesting that the American and South Korean gov'ts are actually pursuing the idea as of late. Taxing cash-outs is unsurprising and technically matter-of-course already, though it's just so easy to fail to report it.
Taxing in-game transactions is absurd in the extreme, though. Such a law would immediately destroy all MMOs which had a currency system ("YOU HAVE TO PAY TAX TO PLAY??? screw that") , and thus we'd return to the Stone of Jordan barter market.
Furthermore, how do you track currency transactions which are exclusively individual to individual? Sales tax and the like are impossible to implement without corporations to bear the work. And presumably we'd pay our in-game taxes in in-game currency, and the government would do WHAT with their gold? Sell it to China?
More importantly, just about every MMO, including WoW, says in the ToS that the game and everything in it is property of the company. You can't tax WoW players since they're only producing additional revenue for Blizzard in the form of WoW gold, not actually receiving that revenue.
Warriors - Highest tax bracket
Paladins - Tax accountants who get the most bang for their buck.
Hunters - People who dont pay.
Mages - Robber Barons who make the most and almost always pay the least.
You've got the robber barons wrong. It's not the mages. It's the guildleaders who wait to loot the gold till everyone's at the next pull.
But seriously though, this topic is kinda funny. I can see it going both ways. One, tracking just cyber-to-meatspace transactions, especially if companies deem them against ToS, seems like an absolute nightmare. On the other hand, I've heard vague mention of criminal elements laundering money through MMO economies. It may be entirely unfounded, but if it is the case then I can't see the legal apparatus staying out of it forever.
Taxes are just the clear tip of the proverbial iceberg. Assigning legal value to posessions in a virtual world opens up a whole world of headaches that stem from property and, yes, criminal law. Kill stealing turns into petty theft when the items dropped aren't fun virtual trinkets but goods with a value measured in American dollars. Balance changes become economic tampering. Even banning a player ceases to be a termination of service, and becomes a deprivation of private property.
I'm actually somewhat surprised that Second Life is as open about its currency market as it is (though less so when considering how it ties in with their own business model). Most companies will be fighting tooth and nail for a long time to keep their in-game economies private intellectual property with no real-world cash value or legal consequences.
You've got the robber barons wrong. It's not the mages. It's the guildleaders who wait to loot the gold till everyone's at the next pull.
But seriously though, this topic is kinda funny. I can see it going both ways. One, tracking just cyber-to-meatspace transactions, especially if companies deem them against ToS, seems like an absolute nightmare. On the other hand, I've heard vague mention of criminal elements laundering money through MMO economies. It may be entirely unfounded, but if it is the case then I can't see the legal apparatus staying out of it forever.
To be technical, one member of the raid (other than the master looter) will always be able to loot the Gold 96% of the time (25-man raid assumed) - regardless of Master Lootership, based on the standard loot rotation. That person will see sparkles, and willl only see Gold when opening the body, assuming Master Loot.
I'll admit, the first thing I thought of when I read into Second Life's economy was:
My.... it would be so easy to launder money here....
Then I went out and made an account. o.o
I see a lot of problems in the future of SL, not the least of which is that it appears to be a business run by visionaries rather than analysts- but it's populated by both. Eventually (if not already), people with the kind of number crunching/break the system bent like we have on EJ will take an interest in it, and have the potential to wreck havoc with the legality of a lot of virtual things. The stronger the SL economy and presence grows, the more we'll see of people finding virtual loop holes with real world monetary impact.
The"problem" with SL is that it doesn't even pretend it's just a game. You can get away with living off back room poker- hell make a fortune in drugs if you have the right ties.. but the moment you shove all that money out into the open and try to standardize it or document it publicly... it's no longer just a game or a alleyway transaction- and that's when the government tends to get involved.
There's more than one way to make a living off WoW- gold sale, character trade- it's all back room deals through since it's not sanctioned by Blizz. Blizz won't ever acknowledge a standard G to $ conversion and allow players to make real world $ off G. It's a giant looming pit trap for virtual games.... once you go that far, you start reporting to the IRS, and from there is a slippery slope towards government regulation- and THAT'S a mess that an international virtual world won't be able to handle without massive changes.
SL not only does that, it encourages it.
I think in 20 years, if we do wind up with the taxation of virtual worlds (and I don't necessarily think that's guaranteed- yet) I think the textbooks will also point to Second Life as the straw that broke the camel's back. SL won't be remembered for it's vision of a true virtual world... it'll be remembered for the way it broke down the line between virtual economies and real economies.
Those of you who volunteered to be injected with praying mantis DNA, I've got some good news and some bad news.
Bad news is we're postponing those tests indefinitely. Good news is we've got a much better test for you: fighting an army of mantis men.
Pick up a rifle and follow the yellow line. You'll know when the test starts. BSG Quick Reference
I see no problem with standardized forms of taxation on good things that need regulation. One of my sources of income for a long time was online poker. Now, since the government couldnt figure out a way to get it's cut, its been shut down while other online forms of gambling are overlooked; ie Football or sports betting. Why was football not touched? They get their cut, plain and simple. These games seem here to stay, and if they are, so is virtual trading\selling whatever, so I would rather they get this stuff sorted out before we have a situation like online poker, it just gets banned or something equally drastic until things are figured out.
The problem is, as always, where to draw the line.
Virtual real estate gods in Second life who turn over a million real dollars in virtual real estate, and cashes those lindens out on a regular basis- they're pretty easy to see and say- yes. That income/exchange should fall under the taxation laws of whatever country they reside in.
Take your average Second Life entrepreneur though. They buy or rent a patch of land from the linden "allowance" you get from a basic subscription. They spend a few days/weeks designing X commodity. They sell a few hundred of the commodity, generating less than 100$ in real cash. 2 months down the line, they get bored and "cash out"- generating lets say 60$ cash. But they've been paying a subscription to the game for 4 months, and that's 60$ in fees.... so basically they cashed out with no net gain.
Should that activity be reported to the IRS? Perhaps, but it's a LOT more of a fuzzy line than the guy who's actually turning a $$$ profit... and what about the guy who has 3million dollars in SL assets- and only withdraws 12k for living expenses over a year. Is SL a bank? A mattress to stuff your savings under? Can you tax him for virtual property worth 3 million- or for a profit of 12k?
Set aside SL entirely- lets talk about World of Warcraft.
Bekah, 60 shadow priest with a pristine reputation and one of the better geared shadow priests in the game... with a beautiful healing set as well, transfer available!- based on a few other ebays I saw- was worth at *least* 2k real dollars at the height of Naxx progression. The character was geared enough to pass muster for any guild in the world with a semi competent player behind the wheel. Top that off with the account having 2 other 60's (mage/warlock) in T1/T2 gear.
I played the game for approx 18 months at that point, so my cash put in on the character was only 270$. Had I decided to sell (and had that sale been sanctioned and monitored) how would they count my profit? Would it be a snapshot transaction- 1800$ profit instantly... as though I won the lotto. Or would character worth be judged like real estate? Have an appraiser come by once a year, appraise your account, slap a total worth value on it, and tax you based on that?
The second is much more representative of the purchase- you're purchasing an original painting not a kmart sweater.... the second is, however, virtually impossible to implement- especially since the investment may never be realized due to the collapse of the game. It'd be like taxing you on a painting that might one day simply disappear from existence. Blizzard is the god of WoW gold and items- they can mint it or destroy it.
Bringing in companies with the capacity to mint and inflate/collapse an intangible market- and requiring them to put tangible worth on it is asking for disaster... it's no wonder to me that the government has stayed out of virtual worlds for so long.
/end ramble.
This is the kind of thing that keeps me up at night- puzzling at. Forgive me if I'm long winded.
Those of you who volunteered to be injected with praying mantis DNA, I've got some good news and some bad news.
Bad news is we're postponing those tests indefinitely. Good news is we've got a much better test for you: fighting an army of mantis men.
Pick up a rifle and follow the yellow line. You'll know when the test starts. BSG Quick Reference
Had a thought on how this could be done. Create a sanctioned system. If you want to have RMT in your virtual world, then you have to talk to the IRS when you're developing it, and they will be heavily involved in the coding of your game, both to help track the taxing issue, and to help ensure the security of your game and the assets it contains. Things like making sure you're not just copying files to mint cash. Or, if you don't do that, then RMT is deemed illegal both to the ToS, and to federal law.
Basically, there's X games that have endorsed RMT, and have been theoretically provided with security and tracking features. And there's Y games that do not allow RMT and have no taxation. Presumably there would also be a criminal enforcement section to crack down on illegal RMT.
Federal regulation of virtual worlds, especially taxation if applied to the individual user and not the parent company, invalidates most of Blizzards EULA. Everything on our character(s) becomes personnal property. All items, money, etc become private commadities and Blizzard looses a large amount of control over it's game. As someone mentioned denying someone the service(banning) becomes the equivalent of theft, essentially. Blizzard is denying you your property unless they can prove that you have yourself broken the "law" in obtaining that property. Gold Farming becomes completely legal and sanctioned, and most likely regulated to maintain stable dollar values.
Here's the thing, taken a step further. "Ninja Looting" becomes theft or fraud, a felony. The perpetrator has willfully decived and stolen property which belonged to someone else. Ganking becomes something akin to assault.
Would screenshots be admissable in the courtroom?
Edit:
If I, as a player, have to put up with the downsides of government(intrusion, regulation, taxation), then I should have the benefits as well. HMO plan for consumable use on a budget. No taxation without representatives in Congress. Equal Oppurtinity regardless of Race, Class or Talent spec. Affirmative Action for Moonkins and Retadins. An epic in every stable, and loot available to all. I had a dream today.
I could go on, this just struck me as funny.
Last edited by Phlis : 03/20/07 at 1:02 PM.
Reason: even more over lunch
"Linden Dollars are not money, they are neither funds nor credit for funds. Linden Dollars represent a limited license right to use a feature of the simulated environment. Linden Lab does not offer any right of redemption for any sum of money, or any other guarantee of monetary value, for Linden Dollars."
Been a while since I spent any time in SL (I'm one of those people without premium account access, although I do long on every so often and play around) but this is a much more firm statement than any other I've heard from Linden Labs regarding virtual currency.
Good. I do not look froward to the turmoil regulation would bring to online games.
Those of you who volunteered to be injected with praying mantis DNA, I've got some good news and some bad news.
Bad news is we're postponing those tests indefinitely. Good news is we've got a much better test for you: fighting an army of mantis men.
Pick up a rifle and follow the yellow line. You'll know when the test starts. BSG Quick Reference
I've gone through the whole SL thing and found some glaring inadiquacies in it, not the least of which is that anybody opening a virtual gambling hall or casino has access to all of the random number generation in said site so that if the owner of the place decides to sit down to a game of poker the cards always seem to fall in thier favor and people lose what amounts to real money.
As a way to lighten the mood though, it's an interesting thing to think about if class rebalancing were seen as economic tampering. I personally think it would be funny if before every set of class changes in a patch Blizzard had to submit it to a federal oversight commitee.
I thoroughly disapprove of duels. If a man should chellenge me, I would take him kindly and forgivingly by the hand and lead him to a quiet place and kill him.--Mark Twain
On a somewhat unrelated note, I think it's only a matter of time before you see someone sue for "murder" in a MMORPG. You laugh now, but remember hot coffee and McDonald's folks.
I can just see it now, some judge issuing a restraining order for someone in WoW.
Liebeck was wearing cotton sweatpants; they absorbed the coffee and held it against her skin as she sat in the puddle of hot liquid for over 90 seconds, scalding her thighs, buttocks, and groin.[6] Liebeck was taken to the hospital, where it was determined that she had suffered third-degree burns on six percent of her skin and lesser burns over sixteen percent.[7] She remained in the hospital for eight days while she underwent skin grafting. Two years of treatment followed.
This comes up literally every month on FoH boards, but it's semi-interesting that the American and South Korean gov'ts are actually pursuing the idea as of late. Taxing cash-outs is unsurprising and technically matter-of-course already, though it's just so easy to fail to report it.
Taxing in-game transactions is absurd in the extreme, though. Such a law would immediately destroy all MMOs which had a currency system ("YOU HAVE TO PAY TAX TO PLAY??? screw that") , and thus we'd return to the Stone of Jordan barter market.
Furthermore, how do you track currency transactions which are exclusively individual to individual? Sales tax and the like are impossible to implement without corporations to bear the work. And presumably we'd pay our in-game taxes in in-game currency, and the government would do WHAT with their gold? Sell it to China?
In short, it's never going to happen.
I believe blizzard keeps records of all gold transactions especially over a certain size for tracking purposes so there is no extra work really. Essentially every trade of cash would have an AH like percentage loss on it. Then blizzard could give the gold to the government and then what? Ban the governments accounts for engaging in gold selling activities?
On a related note it should be noted that if you wanted to funnel money from one country to another while avoiding certain barriers wow gold would work, you would just take a larger hit to clean the money.
03/19/07, 11:00 PM
Similar Threads
