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Virtual Power Brokers

There's real money to be made selling unreal stuff, such as digital weapons and land, to online gamers. It's a controversial market.

May 16, 2005|Alex Pham | Times Staff Writer

Robert Kiblinger's online shop does brisk business in items fantastic.

For $179.88, there's the Blade of the Righteous, a sword forged specifically to slay demons. The $69.88 Shadow Dancer Leggings allow their wearer to sneak about undetected. And then there's Titan's Hammer, which wreaks $129.88 worth of unmitigated havoc.

All command real money, but none are real.

Like a rapidly growing number of online merchants, Kiblinger traffics in virtual goods that exist only in the realm of Internet-based games such as "Ultima Online," "EverQuest" and "Second Life."

As intricate fantasy games like these grow more popular, they are spawning real-world economies full of digital arms dealers, cyberspace land speculators and virtual currency traders.

About $100 million to $200 million a year changes hands for stuff that exists only as bits of data on the hard drives of far-flung computers, said Edward Castronova, a professor at Indiana University and author of the upcoming book "Synthetic Worlds: The Business and Culture of Online Games."

Some enterprising vendors employ dozens of people who do nothing but play online games to collect items for sale.

"When I first went to my accountant, she was flabbergasted that I could sell things that weren't really there," said Kiblinger, whose UOTreasures website gets more than 1 million visits a month. "But for my customers, these items are very real. They love these games, and the items have real value to them."

The 34-year-old Kiblinger says he makes more money selling nonexistent merchandise than he did as a chemist at Procter & Gamble, where his research yielded two patents. His six-figure salary -- he declined to be more specific -- is enough to support his wife and toddler son and a house in a gated community in Daniels, W.Va.

And that irks some players and many of the companies that make, market and manage the so-called massively multiplayer online games, which started out as text-based adventures in the late 1970s and blossomed with computer advances to include realistic graphics and sound.

The games, which usually charge a monthly fee to play, allow millions of intensely devoted players to live out fantasies of medieval derring-do. As they slay dragons and demons, they can collect armor, potions and money that can be used to increase the power of their characters and their status among other players. Some games even allow players to build and furnish houses for their online avatars.

Rather than earn that loot through time-consuming quests, though, a growing number of players visit online shops like Kiblinger's and just put it on their PayPal account. The practice raises legal issues, including whether there's anything to sell and, if there is, who really owns it.

"Right now, most companies assert full ownership of virtual goods as a condition of play," said Beth Simone Noveck, an associate professor at New York Law School. "That works when games are just fun. But people are spending a good deal of time building and creating things in these games. And they feel strongly invested emotionally in these items.

"The question is whether there should be laws to protect the rights of players. If so, what body of law? Should it be intellectual property law? Or property law? What is a digital piano? Is it a piano? Or is it a piece of art? These are just very complicated questions."

In an effort to answer at least some of those questions -- and make a few bucks in the process -- Sony Corp. last month said it would begin brokering the buying and selling of virtual items for its "EverQuest 2" game, taking a cut of each transaction.

Sony said it had cut off thousands of accounts of players caught buying or selling items.

"We feel pretty strongly that we own the intellectual property" for game items, said John Smedley, president of Sony Online Entertainment. "What we're doing is giving players the right to use these items for a period of time. But that doesn't mean they own the items. That's like getting a gym membership and saying you own the equipment. You don't. You just simply have the right to use them."

Sony and other companies say it's a hassle to deal with the fallout of some of these transactions. Sony estimates that as many as 40% of the calls to its customer service center are complaints about sour deals.

After an item is sold, the buyer and seller generally arrange to meet in the online game for a handoff of items. Some games allow sellers to log in and leave items for the buyers to pick up when they next sign on.

Some game companies encourage players to engage in real world commerce.

In Linden Lab's "Second Life," for instance, the game's 27,000 players buy and develop virtual land that can then be sold to other players in offline transactions.

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