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

[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

[maxume]

That's like saying people shouldn't be allowed to practice with their shitty bands or write shitty novels.

The good news is that the damn fool who is farming is lowering the amount of time the damn fool spending money on virtual goods is spending on the game, freeing up the spender to do other actual work in the economy.

Entertainment is an economic sink, it disappears productivity into the (supposed) well being of the person being entertained. Placing a silly regulation on a form of entertainment because it is extra stupid is a bad idea.

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

[Purity Of Essence]

Let's just say I'm not a fan of video games where spending time doing something simple and repetitive is beneficial.

Yeah, right. And I suppose you don't masturbate either.

Re:Just Sell the Time

[x_MeRLiN_x]

Being an ex-Neopets player, that is nothing new. eBay doesn't permit anything that copyright holders can rightfully object to and has routinely removed auctions selling Neopoints for years.

eBay policy: http://pages.ebay.co.uk/vero/
Neopets ToS: http://neopets.com/terms.phtml

#5
* requests for money by using your Neopets, Neopoints or any other Neopets property on third party sites or your personal websites (including Ebay) In my opinion, all this really means is that more will be sold on less well-known sites with an arguably higher proliferation of fraud.

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.

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?

[Barny]

there's no reason why I shouldn't be allowed to sell my character

One thing they point out is that its not YOUR CHARACTER, its never your character, you are paying your little fee each month to use their character in their game.

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.

What about domain names?

[bokmann]

Does this mean they are also going to delist auctions for domain names, downloadable software, and other, not-so-game-oriented property that also happens to be virtual?

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!

Is eBay that lazy?

[Cornflake917]

The seller must be the owner of the underlying intellectual property, or authorized to distribute it by the intellectual property owner. For games such as World of Wacraft which explicity say in the EULA that all characters etc. are property of Blizzard and that the selling of these items break the terms of the license, I can see why you would want to delist them.

What about games that do allow or will allow buying of virtual property? It seems to me that eBay would be shooting themselves in the foot by blindly delisting all virtual items.

On a different topic, now where will I shop for a level 70 blood elf paladin?

Re:Dangerous Precedent. How about CD sales?

[drinkypoo]

So, can I not sell used books, cd's, artwork or games?

Jesus H. Christ, have you never heard of First Sale Doctrine? I assure you that ebay's lawyers have, and will not be advising that they cut out a truly absurd percentage of their revenue over something that is legal. Anyway the two situations are not remotely similar. In the case of a book, cd, artwork, or game, you are selling physical media which contains some data.

In the case of a digital asset, you are selling a promise to make an alteration to a game world. There is no physical good and furthermore there is no intellectual property to transfer! It's not even like you exported an item out of the game world and are transferring the file representing the object. You are trying to sell something that clearly does not belong to you. You are not your character in world of warcraft. That's not even a representation of you. It's more like you've paid a monthly fee to play with someone else's action figures, in their sandbox.

Re:Dangerous Precedent. How about CD sales?

[jonnythan]

You must be the owner of the intellectual property *if you are selling intellectual property*.

If you're selling a physical item, you must be the owner of the physical item.

You don't own your WoW character. You own your CDs. You can sell your CDs but not your WoW character.

Done.

Attention online item and gold buyers!

[DogAlmity]

Yes, you, you people with more money than you know what to do with!

You DON'T need to spend hundreds or thousands of dollars on nothing!

Here's a link to website with a huge listing of charitable organizations. I promise you that giving 2 grand to help the needy or cure a disease will make you feel better than spending 2 grand on a shiny new level 70 rogue.

http://www.charitynavigator.org/

Comprende?

Virtual items = informational PDF files

[radarsat1]

I hope that they can classify "informational PDF files" as "virtual items" and delist them. Ebay is just plagued with people selling "information" on how to get actual products, hoping someone will basically make a mistake and buy it thinking they are getting the product itself. This has got to stop. It's basically Ebay SPAM.

Lucky for me my hunter was so epic

[boarder]

EBay tried to de-list my auction back in October for the character I played. I put up my fully epic hunter for $375 buyout, and it sold in under 12 hours.

The kicker is that about 6 hours after I got the paypal payment for it, eBay sends me an email saying they have taken my auction down because it violated Blizzard's IP. The auction was already done! Hilarious work, eBay... not only did I get the money for my character, but I didn't have to pay eBay for the auction cost.

The other guy got my account;
I got money for the time I put into the character;
Blizzard got the money for the game CDs and my monthly subscription;
Paypal got their bite out of our transaction;
eBay lost money for the bandwidth, site design and hosting.