eBay Delisting All Auctions for Virtual Property

The growing popularity of Massively Multiplayer games has brought the issue of ownership rights in virtual worlds, and the appropriateness of what is called 'real money transfer' (RMT) into an increasingly public light. The success of the company IGE, as well as the launch of Sony Online Entertainment's 'Station Exchange' service would seem to indicate that RMT is now an acceptable part of Massive gaming. The well-known auction site eBay has recently made a policy decision that may throw these assumptions into a different light. Following up on a rumour that's been going around I spoke today with a media representative for the company, who confirmed that eBay is now delisting all auctions for 'virtual artifacts' from the site. This includes currency, items, and accounts/characters; not even the 'neopoints' used in the popular Neopets service is exempt from this decision. Read on below for the company's rationale for this decision, and a few words on the impact this could have on future RMT sales. Mr. Hani Durzy, speaking for eBay, explained that the decision to pull these items was due to the 'legal complexities' surrounding virtual property. "For the overall health of the marketplace" the company felt that the proper course of action, after considerable contemplation, was to ban the sale of these items outright. While he couldn't give me a specific date when the delistings began, he estimated that they've been coming down for about a month or so. Mr. Durzy pointed out that in reality, the company is just now following through with a pre-existing policy, as opposed to creating a new one. The policy on digitally delivered goods states: "The seller must be the owner of the underlying intellectual property, or authorized to distribute it by the intellectual property owner." Given the nebulous nature of ownership in online games, eBay has decided the prudent decision is to remove the possibility for players to sell what might be the IP of other parties via their service. Mr. Durzy made it a point to say that initial listings of virtual property would not have punitive actions. Their assumption, he said, is that most users break with policies because they're unaware of them, rather than maliciously. Initial infractions will result in a delisting of items, and an attempt to educate the user on the policy. Persistent disregard for the policies, of course, will result in a removal of the seller's account.

We've spoken before on the possibility of taxation of virtual goods in the U.S. and abroad, as well as the economic impact these sales can have. With the removal of a very popular, very public source of virtual currency and goods from the market, what does this mean for the future of RMT? Will small businessmen who previously worked via eBay now turn to larger independent sites like IGE? Given that eBay is ipso facto declaring virtual goods to be the property of the game makers and not the players who 'earn' them, what does this mean for the future of virtual rights in general?

Comments

Just Sell the Time

[eldavojohn]

So, I'm aware that things like this have been implemented in the past. But the easy way to get around them is to not offer the item, gold or online property but instead offer to the bidders your personal time and service to acquire the items.

Examples:

• "level 60 epic gear warrior for sale" => "leveling services to get you a epic gear warrior"
• "5000 gold on Thunderlord" => "the five days of playing time it takes me to get you 5000 gold"
• "1337 item" => "time it took me to farm this item and give it to you"

I mean, are they safe guarding against this also? Because, in the end, what's wrong with selling people your time or services to them? Once they complete the service, you pay them. I don't know how they could find some way around this or tell which auctions for services need to be revoked.

Re:Just Sell the Time

[SatanicPuppy]

It's just eBay being stupid. IGE and all the other sites that cater specifically to gold/equipment/character farmers are just going to get more business because eBay is "worried about the legal complexities" of selling virtual property.

Honestly, I'd thought better of them than this...eBay sells so many things of purely subjective value, you'd think that some policy maker on the inside would have cottoned to the fact that value is a fairy tale, and that their business is to make money off people's experiments with value, not to "decide" that there are some things that don't have a place in their auctions.

Moron's who try to fight Supply and Demand by messing with supply get no pity from me. Where there is enough demand, and supply is not flat impossible, there will be supply. The only way to prevent the sale of in-game artifacts is to make them non-transferable, and that's never going to happen.

Re:Just Sell the Time

[Znork]

Of course, one can question the wisdom in allowing real-world money to be exchanged for what is essentially a particularly tedious and inefficient database update.

In fact, should this type of exchange become prevalent in the economy I'd suggest anti-monopoly regulators come down on the MMORPG businesses like a ton of bricks and force them to allow many companies access to the database tables to update them so we can get a real free market evaluation of the 'goods' in question (ie, approaching zero).

You see, someone making their living off producing strictly artificially scarce items is someone not employed producing real scarce items; ie, it is a net loss to the economy as a whole, which means we _all_ get poorer by allowing such abberations to continue.

Re:Just Sell the Time

[beakerMeep]

Because, in the end, what's wrong with selling people your time or services to them? Because it's a thinly veiled end run around the rules. I would imagine that since this isnt law, but rather a TOS policy, ebay can easily just say "Selling virtual items or services to provide virtual items is prohibited." Especially since the items aren't the intellectual property of the seller. I'm sure some clever folks will still sell this stuff more subtly. But having to be subtle will decrease your exposure to your customers, and thus your profits.

Re:Just Sell the Time

[Cornflake917]

I mean, are they safe guarding against this also? Because, in the end, what's wrong with selling people your time or services to them? Once they complete the service, you pay them. I don't know how they could find some way around this or tell which auctions for services need to be revoked. There's nothing wrong with people selling their time for games like WoW. At least, there's nothing legally wrong. However, in terms of the WoW EULA, the trading of characters and gold out of game is not allowed. eBay probably feels this is unethical, and the fact that they are allowing and making it easier for people to circumvent Blizzard's contracts is borderline illegal. In fact, I wouldn't be surprised if they made this decision because Blizzard is threatening them with legal pressure.

IIRC, almost every WoW character being sold on eBay had the same disclaimer stating something on the lines of "By looking at this webpage you are agreeing that you aren't a Blizzard employee. The sale of this auction doesn't involve any possesions, instead you are paying for my services and time that I put into this character."

That's probably why eBay made the decision to delist all virtual goods, because people were always finding ways to circumvent their rules by changing the wording. Now they won't be able to do that.

Re:Just Sell the Time

[ivan256]

It's just eBay being stupid. IGE and all the other sites that cater specifically to gold/equipment/character farmers are just going to get more business because eBay is "worried about the legal complexities" of selling virtual property.

It's not eBay being stupid, but it's not what they're saying it is either. If eBay thought they could make money providing this service, they would. The real reason is that the associated costs and risks exceed the profit available from these transactions. I'm sure that internally they have statistics that show the rates of disputed transactions, and the administrative costs of dealing with them along with the cost of liability insurance for the potential litigation associated with these transactions. They compared those numbers with the projected revenue and one side won.

This isn't a philosophical issue, or eBay trying to prevent anything. Companies don't work that way (usually). This is almost certainly purely economic.

Re:Just Sell the Time

[KevMar]

I can spend 3 hours in the game farming (not doing the fun stuff) to earn 300 gold

or I can spend 3 hour working extra (or overtime) to make $30.00 and purchase 1000 gold.

what is your time worth to you?

What if it took you 3 hours to make 50 gold?

each game and even game server are different, but that was the exact exchange that many world of Warcraft players would face. Recently the market has shifted around, but at one point it was more economical to just purchase the gold.

Re:Just Sell the Time

[beakerMeep]

Wait what? Why is it stupid to drive away business that opens you up to potentially being sued by game makers for facilitating the sale of someone else's intellectual property? are you claiming it's stupid to get out of bad business practices because "other people will just pick where we leave off"? Also how is ebay "messing with supply and demand"? it's not like they are deleting items from WoW's database. or charging extra fees based on demand for vitual goods. they are just getting out of the business of facilitating transactions for these items.

The only way to prevent the sale of in-game artifacts is to make them non-transferable, and that's never going to happen.

some games actually do this for a substatial number of items. While they couldn't do it for all items it has an added benefit of requiring people to grind for items themselves.

I'm no fan of ebay, but your argument makes no sense.

Re:Just Sell the Time

[xeromist]

Ebay isn't saying you can't sell things of subjective value. Where they have a problem is that they aren't sure who the item belongs to. Sure there are issues of hacked accounts having stuff sold off. However the real issue is that they're not sure whether you or Blizzard owns that epic gear.

You paid for the game time and put the effort in to earn that copy of an item, so maybe it is yours. Artists at Blizzard created the item and it, just like everything else in that virtual world, is the intellectual property of Blizzard. Maybe the item belongs to them then.

There is also the issue that many MMO games have explict prohibitions against selling items. All it would take would be one publisher deciding Ebay was promoting violations and deciding to sue. Would they win? Doesn't matter because Ebay doesn't need the headache. They figure the listing fees wouldn't weigh against the cost of a court battle.

Re:Just Sell the Time

[Anonymous Coward]

We mess with supply and demand when the evolving market is heading in a direction we'd rather not go. In those cases, we correct by messing with the payoff matrix by imposing restrictions or incentives. It's a nice way to ensure that we don't get wiped out by blast when some equation blows up.

Look at organ transfers: There is certainly demand for organs. A free market system might be a very efficient way of meeting the demand for organs, but it would put us in uncertain moral territory. In the absence of a better solution, we prohibit an open market for organs.

Re:Just Sell the Time

[AArmadillo]

Here's an even better solution: spend one hour finding a game that does not require you to work in order to have fun. Then spend the extra two hours actually enjoying playing that game.

Re:Just Sell the Time

[Xaositecte]

Informative or Insightful as per mods discretion.

Parent took the GP's misconception of how and why economic decisions are made (that is, the idea that what the rep says has anything to do with why the decision was made) - and explained what was likely the real reason this decision was made.

Re:Just Sell the Time

[aldheorte]

"but the idea that decisions a large company makes are typically based on risk analysis, balancing potential profit and risk, is not exactly something that anyone should view as insightful."

The truly ironic thing here is that you are dismissing the original poster for making a comment that you view as so obvious it shouldn't be marked insightful, yet the original comment isn't even valid. That is how a large company works in the theoretical, academic model. In reality, any sufficiently large corporation is governed by petty egos and politics and therefore any particular decision may or may not make any economic sense. Like police, economics is a corrective force, not a preventative one, once group dynamics are considered.

Re:Just Sell the Time

[MysteriousPreacher]

Although burglars are on the supply side of the supply and demand system, it's probably still a good idea to go after them.

I'd like to see both sides tackled in MMO gold selling. The only way to stop it is to make life difficult for the sellers and risky for the buyers.

Re:Just Sell the Time

[MayonakaHa]

There's plenty of sites out there that have been very successful in virtual transactions. IGE being one of the most often mentioned since it seems to have a hand in every popular MMO out there. The most I've seen any game publisher do about it is mass banning accounts that are suspicious, ticking off plenty of legit customers whose accounts are banned along with the farming ones. The more successful farming companies also appear to be mostly based in Asia so that could also attribute to their percieved invulnerability.

Really the publishers should be going after users directly since they are the ones who agreed to the TOS in the first place, not eBay. eBay is only acting as a middle man in these cases rather than being the ones holding an account with the actual money on it. But since it seems easier to sue a corporation like eBay for allowing these transactions to take place it's easier for them just to ban those transactions from happening. The RIAA and MPAA also have way more funds to throw away on individual lawsuits.

How about Chinese Counterfeit goods?

[P3NIS_CLEAVER]

Good to see they are pulling virtual goods, how about the real junk coming from China (this has been a real problem, especially with things like musical instruments)

Re:How about Chinese Counterfeit goods?

[CastrTroy]

As long as they are not misrepresenting what they are selling, then I don't see a problem. If I want to pay $100 for someone else to play the first 20 hours of World of Warcraft, so I don't have to play all those low levels, then I should be able to. At the same time, if I get bored with my character, there's no reason why I shouldn't be allowed to sell my character so that somebody else can use it. Who care's if it's not a tangible item. iTunes sells thousands of intangible items everyday, as does every software company that lets you download the product.

Re:How about Chinese Counterfeit goods?

[P3NIS_CLEAVER]

Go check out "gibson les paul guitar" on ebay. They are selling guitars that are complete fakes as genuine. I have heard other horror stories on forums about guitars with thin veneer over chipboard and things like that. Why does ebay allow this?

shot in the foot.. and they're to blame

[User 956]

The well-known auction site eBay has recently made a policy decision that may throw these assumptions into a different light. Following up on a rumour that's been going around I spoke today with a media representative for the company, who confirmed that eBay is now delisting all auctions for 'virtual artifacts' from the site.

This is insane. There's clearly a market for this activity. And there's clearly a way to handle it legitimately (i.e. IGE). Instead of setting up a parallel site (like eBay motors), they just decide they're not going to handle it at all. Way to serve your investors, ebay.

Re:shot in the foot.. and they're to blame

[Dutch Gun]

Insane? Not really. Ebay is just avoiding what is essentially a grey-market area.

I'd guess the potential costs of litigation far outweigh any profits to be made from allowing these actions. It's not like Ebay is lacking in traffic in other, more legitimate transactions. And yes, before someone makes a snarky comment, I'm aware there are plenty of illegitimate ebayers trafficking in other items. That doesn't affect this decision though.

Re:shot in the foot.. and they're to blame

[MBGMorden]

Doesn't matter if there's a market for a particular item; you have to look at your gain vs investment and risk. They just decided to leave it alone as the risk outweighs the gain. If there really is a market, a braver company will pop up and support it.

If you'll remember, originally eBay allowed firearms listings on their site. As long as it is handled properly, it's perfectly legal to sell guns in such a manner (www.gunbroker.com and www.auctionarms.com both cater to this), but the number of sheer ignorant people on eBay meant that a lot of these sales WEREN'T getting handled properly (namely, if you sell out of state you have to ship to a dealer first and have the buyer pickup from the dealer so that a background check can be completed). The seller/buyer would still be legally liable for any errors in the transaction, but eBay decided that the possibility of some lawsuit out of left field simply wasn't worth the hassle, and ceded this market segment to competitors who choose to focus on this niche.

Can't you just offer real goods + virtual?

[Mustang Matt]

Could I still sell a pencil and include my WoW account with it?

But by definition, they have permission

[Colin Smith]

or authorized to distribute it by the intellectual property owner. How could you hand over an item in a game unless you have that authorisation. The game producers are as close to omnipotent gods as you can get, if they want to stop it, they can.

Is this a great country or what?

[sfjoe]

Not only can we buy crap we don't need, now we can buy crap that doesn't even exist. Whattacountry!

Still not clear.

[WED Fan]

Last time I posted about this, some Virtual Fan Boy, with some Level 38 Condescention Skill took me to task but, here goes:

Why would someone spend good hard cash to get virtual stuff simply for the game play? This follows a question of course, after that Korean chap killed himself with exhaustion after DAYS of nonstop gaming, WHY?

Re:Attention online item and gold buyers!

[geekoid]

It's not nothing to people who do that, they have real value.

Assuming you put a value on your time, which you should.

Think about it, there is this great fun game, but there is one part which isn't so fun.
You can spend 100 hour doing the unfun stuff, and then have fun..or you can spend 80 bucks and have it done for you in a few minutes. Which makes more sense in that scenerio?

Too some people, paying 80 bucks to have 1000s of hours of fun is worth money.

Compared to other forms of entertainment, that's pretty damn cheap.