Virtual Goods Banned From eBay; Second Life Gets An Exemption

Posted on February 1, 2007 by

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This has been buzzing around since Friday, when Slashdot amplified it: eBay has made a decision to ban auctions—real money trade, in industry parlance—for the characters, currency, weapons, attire and accounts of online games such as World of Warcraft, City of Heroes and others, effectively cutting off an already big and fast growing underground economy, though there are many alternatives around. The value of this economy has been estimated to be between $250 million and $800 million US a year, according to experts, though no real numbers are available.

Given that a significant slice of the multi-hundred-million-dollar business took place on eBay until now, the move presents a significant opportunity for other players in the market, reports CNET News.com, such as Internet Gaming Entertainment.
eBay said its decision stems from a desire to protect users, but didn’t explain it well. Greg Short, director of Web development for EverQuest II publisher Sony Online Entertainment, eBay’s move is likely a result of its wanting to avoid the time-consuming annoyance of dealing with customers who are defrauded over virtual-item sales.

Ed Castronova, a professor at Indian University, said another sign the real-money trades (RMT) market has been deemed too risky is that IGE, which does millions and millions of dollars in annual business brokering virtual goods sales, has not been purchased.

On Second Life, eBay’s policy: “We think there is an open question about whether Second Life should be regarded as a game.”

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