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Monday, January 11. 2010
Korea Supreme Court rules virtual currency convertible
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see also http://3.ly/7RX8, But there is one condition to keep that you should not earn the money in MMOs thru hacking or botting.
After the ruling, korean government agencies are dwelling on the effective way to tell virtual money gained thru normal play and the money thru hacking/botting.
Trading cyber money for MMORPG is in gray area. It has not been illegal, but not legal either in Korea.
The Korean government always wanted to crack down the trading cyber money for online board game such as poker or go-stop (a kind of Korean card game) to fight against (pseudo-) gambling issues. Cyber money trading for MMORPG is not their primary concern.
for your referrence!
The Korean government always wanted to crack down the trading cyber money for online board game such as poker or go-stop (a kind of Korean card game) to fight against (pseudo-) gambling issues. Cyber money trading for MMORPG is not their primary concern.
for your referrence!
I'm not sure how I would feel about a similar ruling in the US. I don't have a problem with conversion, but I do have a problem with anything that moves towards putting fiduciary duties upon game developers as regards to the game currency of players.
This is a sad day for the industry. If this catches on internationally, all hell is going to break loose on every online game, from Zynga to Blizzard.
That is a very interesting twist. Thanks for flagging it. If anybody has a link to the ruling itself, I'd love to get a look.
"Meanwhile, a court ruled in September of last year that profits from the trading of "cyber money" should be subject to 10 percent value added tax (VAT)."
You missed an important line.
Hmm, well, VAT is paid in the country of sale in most countries. In other words, if you in Korea sell a good to someone on mainland Britain you need to pay Her Majesties Revenue and Customs (HMRC) 17.5% VAT. Or, you're breaking the law.
If anything, it is the Tax implications which will get governments to recognise the sales and the sales implications (and for those game companies wishing to stamp out such services, reporting the gold seller to the governmental tax collection body in the meantime might be a solid line of attack to pursue their goals)
With current estimates of the trade at around $1-2bn (with some as high as 3-4) at lets say a modest 10% thats around $100m -$200m (lets take the lower value) of lost Value Added Tax revenue or sales tax revenue at the very least.
In the current economic climate, is that something the tax authories (and governments) are going to pass up?
You missed an important line.
Hmm, well, VAT is paid in the country of sale in most countries. In other words, if you in Korea sell a good to someone on mainland Britain you need to pay Her Majesties Revenue and Customs (HMRC) 17.5% VAT. Or, you're breaking the law.
If anything, it is the Tax implications which will get governments to recognise the sales and the sales implications (and for those game companies wishing to stamp out such services, reporting the gold seller to the governmental tax collection body in the meantime might be a solid line of attack to pursue their goals)
With current estimates of the trade at around $1-2bn (with some as high as 3-4) at lets say a modest 10% thats around $100m -$200m (lets take the lower value) of lost Value Added Tax revenue or sales tax revenue at the very least.
In the current economic climate, is that something the tax authories (and governments) are going to pass up?
Kudos for Korea, Gamers 1 Game Companies 15 WE FINALLY SCORE 1!!!!
I know some folks who are working on getting one. I will post it when they do.
can anyone say massive inflation?
that is money that appears out of nowhere decreasing the value of it.
take a game where an average player can make 1mil in-game cash in a day (players who dedicate themselves to collecting cash getting over 100x more) conversion rate 100k in-game cash to $0.01
that's 10 cents a day coming into the economy per player per day, with 50k players that is $0.1*50,000*365=$1,825,000 on a yearly basis for that game minimum
given that there are several thousand MMO's ...
and don't forget what happened in 1929 in germany, the government they started printing money massively and before anyone realized it a loaf of bread cost millions
that is money that appears out of nowhere decreasing the value of it.
take a game where an average player can make 1mil in-game cash in a day (players who dedicate themselves to collecting cash getting over 100x more) conversion rate 100k in-game cash to $0.01
that's 10 cents a day coming into the economy per player per day, with 50k players that is $0.1*50,000*365=$1,825,000 on a yearly basis for that game minimum
given that there are several thousand MMO's ...
and don't forget what happened in 1929 in germany, the government they started printing money massively and before anyone realized it a loaf of bread cost millions
I'm pretty sure you will only be able to sell the in game currency to another player, meaning the money is just changing hands. Even if the government exchanges the in game currency for money, they won't just be printing to compensate (theoretically...) and they would probably resell the currency.
The inflation doesn't have to spill over into the real world, unless the game developers somehow manage to tie their currency to a real-world currency - in which case they would go bankrupt in short order.
No, what's more likely is that you get hyperinflation in the game world qua real world. So today 1 plat costs 1 dollar, tomorrow the exchange rate is 2 plats to the dollar, the next day 4 plats, etc... The value of game money as "real money" will tend to decrease drastically due to inflation, but real money doesn't get affected, because the supply of real money remains constant. The real money doesn't disappear or appear when you buy or sell virtual currency, it just goes into (or comes out of) somebody else's pocket.
In fact, if the company "mints" virtual money at that sort of rate, very soon its currency will be nearly worthless in the real world. Assuming that the currency is tradable for real-world money, the long-term effect is that anyone can pay a dollar and get a nigh-infinite amount of virtual money, which would tend to undermine the effects of this court decision. The companies to be watched carefully will be the ones which are extremely careful to control their inflation rate by "sinking" excess money from the system - transforming it into, say, non-transferable upgrades for high-level characters.
No, what's more likely is that you get hyperinflation in the game world qua real world. So today 1 plat costs 1 dollar, tomorrow the exchange rate is 2 plats to the dollar, the next day 4 plats, etc... The value of game money as "real money" will tend to decrease drastically due to inflation, but real money doesn't get affected, because the supply of real money remains constant. The real money doesn't disappear or appear when you buy or sell virtual currency, it just goes into (or comes out of) somebody else's pocket.
In fact, if the company "mints" virtual money at that sort of rate, very soon its currency will be nearly worthless in the real world. Assuming that the currency is tradable for real-world money, the long-term effect is that anyone can pay a dollar and get a nigh-infinite amount of virtual money, which would tend to undermine the effects of this court decision. The companies to be watched carefully will be the ones which are extremely careful to control their inflation rate by "sinking" excess money from the system - transforming it into, say, non-transferable upgrades for high-level characters.
That hasn't shown to be the case in RMT transferable worlds like Entropia Universe.
Games, unlike the real world, can implement limitless forms of money-sinks to control the effects of virtual hyperinflation. See, e.g., Julian Dibbell, Play Money (2004) (available at: http://www.juliandibbell.com/playmoney/).
Games, unlike the real world, can implement limitless forms of money-sinks to control the effects of virtual hyperinflation. See, e.g., Julian Dibbell, Play Money (2004) (available at: http://www.juliandibbell.com/playmoney/).
Can someone explain to me the process in which someone would exchange virtual currency (in this case gold in world of warcraft) into real-life money? I'm a bit confused.
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