Virtual Property Rights

Qiwi found the following news article, which is slightly relevant to my recent post on Diablo II:

BEIJING (Reuters) - A Chinese court has ordered an online video game company to return hard-won virtual property, including a make-believe stockpile of bio-chemical weapons, to a player whose game account was looted by a hacker.

Li Hongchen, 24, had spent two years, and 10,000 yuan ($1,210) on pay-as-you-go cards to play, amassing weapons and victories in the popular online computer game Hongyue, or Red Moon, before his "weapons" were stolen in February, the Xinhua news agency said on Friday.

Li asked the company, Beijing Arctic Ice Technology Development Co Ltd, to identify the player who stole his virtual property, but it declined, saying it could not give out a player's private details, it said.

Police also gave Li no satisfaction, so he took his case to court, demanding 10,000 yuan in compensation, Xinhua said.

"I exchanged the equipment with my labour, time, wisdom and money, and of course they are my belongings," it quoted him as saying of the virtual property he collected online.

The company argued that the value of the virtual property only existed in the game and was "just piles of data to our operating companies."

In the end, Beijing's Chaoyang District People's Court ruled on Thursday that the firm should restore the player's lost items, finding the company liable because of loopholes in the server programs that made it easy for hackers to break in.

Even if you are skeptical of intellectual property rights in general - and virtual items in a video game are certainly intellectual property if anything is - I think this court's ruling is a fair one. Mr. Hongchen purchased the game and devoted an enormous amount of time and money under the pretenses that his efforts would be well spent; that is, he believed the company would protect and secure his game account. That the company failed to do so, and refused to help catch the hacker seems not entirely different than an online bank that would allow thieves to steal its customers' money.

I was involved in a similar mishap a few years ago. Through much effort and a little bit of luck, I found the most valuable item in the game at the time: a Windforce bow. And while I enjoyed playing with this weapon for a while, the opportunity costs were too great for me to keep it. So I decided to sell the item on Ebay, and unsurprisingly at the time (prices dropped a few months later), it sold for just over $300.

The sale went well, until a few weeks later I received an email from Paypal.com (the firm that handled the money transfer) notifying me that the buyer claimed he never received the item, and demanded a proof of sale, in the form of a shipping receipt, until which time my Paypal account would remain frozen. Since the actual item transfer occurred online, there was obviously no shipping receipt or proof of sale.

Luckily, I had transferred the $300 out of my Paypal account just a few weeks earlier, so instead of losing the money, I simply lost my ability to ever use Paypal again. Which is just as well, since I wouldn't want to deal with a company that enforced such an asinine rule. Paypal should not be in the business of ensuring shipping transactions; if anything, that is Ebay's role.

The point of this story is that the current market structure is not yet prepared to deal with virtual property transfers. Fortunately, as this court case attests, things may be beginning to change.

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