Rights in a Virtual World

Thu, Mar 13, 2008

An article over at Gamasutra discusses a panel at the SXSW conference about human and property rights in a virtual world. The panelists included Erik Bethke, the CEO of GoPets; Greg Boyd, an attorney; and Andrew Schneider, co-founder of Live Gamer. Susan Wu of Charles River Ventures moderated the panel. Though human rights were touched on briefly, the main concern of the panel seemed to be the property rights of users of virtual worlds.

In an environment where an increasing variety of users, across a broad swathe of demographics, are spending more time and money online, there is naturally a market for criminals. Not only are users of casual MMOs like Habbo Hotel and Club Penguin less internet-savvy on the whole, they are also spending money through micro-transactions on furniture or clothing for their avatars. The combination means that there is a new segment of users that is vulnerable to virtual theft. As these assets exist entirely in a virtual realm but have definite value in the real world, they occupy a gray area. Does the company running of the virtual world have the right to deprive a user of their virtual goods (with real world value) based on a terms of service agreement? Does theft in a virtual world equate to theft in the real world? The panel discussed a few examples of cases that had gone to court:

Wu began by discussing the recent Bragg v. Linden Labs court case -- in brief, a legal battle between a Second Life user and the world's parent company over land that Bragg apparently improperly acquired, resulting in a ban from the world by Linden. . . . In another recent incident, a Dutch teenager was arrested for stealing $6000 in virtual furniture from Sulake's Habbo Hotel. He was arrested for burglary, rather than hacking.

It is curious that a teenager who "stole" virtual furniture from Sulake, the company who runs Habbo Hotel, was charged with burglary given that the damages to the company were surely less than $6000. The company could have easily changed the ownership of the furniture, so why is it necessary to charge him with burglary unless Sulake is trying to reinforce the real world rights of virtual property. These court cases go toward protecting the rights of the companies running virtual worlds, so what is it that users are guaranteed for their money. If they spend real money, even if it's first converted into Linden dollars, they are entering into some form of contract with the company running the MMO. Schneider opined that the terms of service governed these exchanges:

"It’s all about the terms of service, especially for a company like mine that does allow the cashing out of virtual goods for money. The terms of service need to be absolutely rock solid. We’re talking about limited licenses. What are the rights you are granted? What happens if the servers go down? What happens if you’re banned? It’s almost as though every MMO and virtual world has its own constitution."

The question of what happens when servers go down is intriguing given that there is no way to guarantee 100% up time for any server. Though many users of casual MMOs might not realize that their purchases will not be available to them 24/7/365, it should be noted in every terms of service that some server down time is to be expected. If the users are paying for subscriptions, then they are entitled to certain rights based on a reasonable expectation of usage. Moving away from the realm of virtual worlds, when Xbox Live went down during this past holiday season for days at a time, Microsoft realized that they needed to reimburse their users and repair the breach of trust. As a result, they offered Undertow for free to all users. Of course, they did not offer a cash refund on the cost of those days of service, nor did they offer a discount on further service. Instead, they offered users more virtual currency. Certainly that virtual currency has value in the real world, but there was no way for a Live user to extract that "value" from virtual community and take it into the real world.

For the most part, there is an implied limited license for any purchase inside a virtual world. The rights of an individual to an asset in game extends only as far as the game, and those rights are subject to certain conditions of the virtual world. Take World of Warcraft as an example. If a player were to spend months leveling up a character, reaching the level cap, gathering the best possible gear, and then made a few inappropriate comments in a general chat, he might be banned. His character, which could have conceivably been worth some amount of money on eBay before the ban, would vanish in a cloud of electrons:

Stated Bethke, "I consider WoW the biggest MMO failure ever. The gameplay is amazing, and graphics, and everything. But at the end of the day, people know it doesn’t mean anything. Their stuff can be taken away from them. They can be banned at any moment. I believe what they earn becomes their property."

Although it is unfortunate that users in WoW don't have pure property rights over any equipment they obtain, they still have the right of all consumers: the right to withhold their patronage. As a result, Blizzard endeavors to help users who experience hacked accounts, particularly the users who put the most time into the game. For a subscription service like WoW, time is money, and Blizzard, while not guaranteeing anything, does its best to keep that flow of time and money healthy.

Another topic that comes up when considering virtual worlds and their financial repercussions is the necessity of applying real world regulations to that virtual world:

Said Boyd, "You cannot think about property rights without thinking of RMT. You need to consider gambling regulation, banking regulation, money laundering, taxes. These are not really things that we know yet. All these are magnified when you go full ownership over license and when you have a cash-out component. These are things we are sorting out right now."

Where would these real world regulations originate? Would they come from the site of the user? The site of the company? The internet provider? The server? No matter which location provides the governing laws, there will be loopholes until enough cases go before the court to set precedents. The panelists felt that the rights of users to these virtual properties needed to be addressed in a definite manner:

But all of the panelists agree some kind of resolution is inevitable: "If you think about things that gain a lot of people’s attention… you need a lot of people to invest money, time, and creativity. You’re going to need to give them property rights to get those things."

It is well and good to believe that real world rights should apply in virtual worlds, but they don't necessarily apply in games or in computing in general. I have a right to all of the documents on my hard drive, but if I don't properly backup my data, and my hard drive becomes corrupted, it isn't as though something has been stolen from me. If those documents weren't on my hard drive but instead in Google Docs, and Google lost them, the onus of backup would still be on me. I think, by and large, if one is intelligent about protecting one's password and diligent about adhering to reasonable terms of service agreements, that limited licenses of the sort we see in virtual worlds now is perfectly acceptable.