Virtual Currency Becomes Real In South Korea

garylian writes "Massively is reporting that the South Korean Supreme Court has stated that virtual currency is the equivalent of real-world money. For those of you who might not be drawing the link, the core there is that selling in-game currency for real money is essentially just an exchange of currency and perfectly legal in South Korea. This could have sweeping implications for RMT operations the world over, not to mention free-to-play games and... well, online games in general. The official story is available online from JoongAng Daily."

Comments

The real reason

[sopssa]

It's lucrative for the government to say that. After all, now they can add tax between exchanges, in top of the service costs too.

Re:The real reason

[hey!]

It's not the *government* saying that. It's the courts.

I have serious doubts about the article summary and title here. Reading the article behind the article, it seems that the courts haven't ruled that in game money is "real", otherwise they'd be taxing in-game transactions. It's just saying that in-game money can be sold.

It seems reasonable that they should treat the sale of in game things (currency or objects) like any other kind of sale of any other kind of property. Why should you be able to earn in-game money and sell it without tax, while somebody selling the fruits of his labor in something else has to pay tax? Or vice versa?

Re:The real reason

[Naturalis Philosopho]

I think you better take a hard look at how currency is currently issued by real governments. It's been a long time since the gold and silver standards made money even somewhat real, and even longer since a piece of eight made money ultimately real. Heck, an argument could be made that outside of barter we all use the equivalent of star trek type credits already. All the courts are really saying here is that online currency is a form of property like any other than can be bought and sold.

Not really surprising

[multipartmixed]

Assuming the South Korean currency is not backed something solid (like gold), then their currency is just as virtual as online virtual currency -- it has no actual intrinsic value.

Re:Not really surprising

[pclminion]

their currency is just as virtual as online virtual currency -- it has no actual intrinsic value.

Neither does real gold, unless you happen to need to make really really thin wires, or build something which is extremely reflective, or actually make use of gold's natural properties in some other way. Don't delude yourself. There is no such thing as "intrinsic value."

Re:Not really surprising

[Anonymous Coward]

actually make use of gold's natural properties in some other way. Don't delude yourself. There is no such thing as "intrinsic value."

Of course gold has intrinsic value. Just not very much intrinsic value.

The vast majority of the current price of gold is due to the fact that people think it has value, which is the same reason the US dollar or Euro has value.

I like Warren Buffet's quote on gold:

It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.

Re:What implications will this have for the Won?

[nedlohs]

No more than the ability of the Zimbabwe government to print Zimbabwe dollars, or the Chinese to print yuans, or the US to print US dollars does.

In other words, none at all, if the game currency is "printed" then the exchange rate will devalue it - just like already happens in every MMO game I've seen.

Article misses the mark

[mmalove]

Article is horribly misrepresenting the Korean supreme court ruling.

It claimed such an exchange was not criminal.
It did not:
-Create any kind of exchange between virtual/real currencies.
-Create any kind of obligation on gaming companies to be accountable to player's virtual bank accounts.
-Negate the EULAs of the majority of games which state RMT is a violation of your use of their services and will result in your account being banned from their servers.

In other words, Bliz can continue to cancel your WOW account, they just can't arrest you. In Korea.

-.-

Re:Money isn't real

[hey!]

If by "real" you mean "non-tangible", that's been the case for centuries, and was finally recognized when we went off the gold standard. The Fed alters the money supply, not by printing money, but by altering the amount of money people agree exists.

If you're a big bank and the Fed loans you a million dollars, nothing tangible changes. Everyone just agrees you have a million dollars at your disposal because the Fed says there is. If they alter their interest rates to make borrowing attractive, suddenly there's lot more money floating around in the economy. If the raise interest rates so you (as a big bank) don't want to have so much debt to them on your books, suddenly you start demanding people you've lent money pay you back so you can pay your bills. That sucks money out of the economy, even though nothing tangible has happened (like zapping a pile of gold with a disintegration ray).

It's really simple in a completely non-intuitive way.

But that's not the sense I mean when I say "real money". "Real money" is something anybody with any sense would agree is money. In-game money has many of the characteristics of "real money"; it is liquid, and you can exchange it for some things of value. It lacks the property that anybody of any sense would treat it as "just as good as money", which means you can't trade it for just about anything the way you can real money. You've got to barter it for something else people agree is money before it has that all important universal buying power.

There's an obvious reason for this. The company that operates the game would literally have system that could generate unlimited amounts of money. Banks can be a *little bit* like that. They can create travelers checks and other documents that say "pay to the bearer such and so", but they have to carry those as liabilities on their books. They can't print as much of this money as they like without altering their ability to pay their obligations to people who demand something "as good as" what the Fed provides. The game company has no incentive to limit the amount of money it creates, other than its impact on game play. If the government gave me the power to make *real* virtual money without any kind of downside, I wouldn't care about what it did to my game.