II.

The Virtual World of MMORPGs

a. What is an MMORPG?

An MMORPG is an acronym for a Massively Multiplayer Online Role-Playing Games. “Massively”

refers to the fact that it is meant to be played by a large group of users; “Multiplayer”, identifies the fact
that people play simultaneously in the same computer-generated environment online, not a copy of it;
“Online” indicates that the game is hosted on a server that can be accessed through an Internet
connection1; and “Role-Playing Game” refers to the fact that users or players assume the roles of their
characters in a fictional setting wherein they act out these roles within a certain narrative through a
process of structured decision-making within the game2.

It is an interactive video game which allows millions of its users or ‘players’ to assume a persona
in a computer-generated environment. Because it is played online and its nature as a ‘multiplayer’ game,
they are enhanced in terms of mediated communication and social interaction3. Thousands of players
around the world are allowed, usually after the payment of a subscription fee, to co-locate in shared virtual
gaming spaces.

A typical MMORPG provides its own large-scale backdrop in which the players can immerse
themselves. The virtual world in these games are usually based on popular themes in science-fiction,
fantasy, martial arts, or military conquests. Many narratives are rooted in mythology4, novels5, films6,
comics7, and other video-games which were originally single-player platforms8. Distinct from other video
games, MMORPGs do not have a linear narrative where the goal is for the player to finish playing until the
end. (Insert Author) states that:

MMORPG gaming activities entail character development, dungeon adventures, and

object manufacturing and trade for both individual and group players. Game designers
use diverse activities to attract players from different backgrounds and with different
interests […] Menus are periodically upgraded, with successful MMORPG companies

1 Researchgate.net
2 Cover, Jennifer Grouling (2010_. The Creation of Narrative in Tabletop Roleplaying Games. As suggested by the name, TRPGs are
played face-to-face (around a table, most likely), and involve players 'acting out' a role. This acting is not always literal. Players do not
arrive in costume or speak exclusively in-character — something that differentiates TRPGs from live-action role-playing games (LARPs).
Instead, players develop characters based on certain rules and are responsible for deciding what those characters do over the course of
the game.

3Dafjasf Making way, therefore, to economic opportunity. The process of buying and selling exchangeable
virtual items has boomed as these games become more popular. Players who intend to progress quickly or
those who, because they are too busy with responsibilities in the real-world, are willing to spend on virtual
equipment with actual currency. This even led to an increasingly commercialized industry called “gold
farming”3 in several countries.
4 Ragnarok
5 LOTRO
6 Battleground
7 Justice League
8 Final Fantasy
 releasing a completely new version once every year or two and providing patches to
enhance interim versions – all available through downloads. Many new players join
and many leave over time, resulting in a dynamic in-game social network […] As a
result, MMORPGs do not fit the standard definition of games, but are more like online
theme-park playgrounds in which players choose from a long menu of activities with
different tempos and intensity levels.9

As earlier mentioned, many players come and go during the lifespan of the game, resulting in a
dynamic in-game social network. Most of the first MMORPGs operated according to a subscription or pay-
to-play business model. Players would download the game software (usually for free), and then purchase
gaming time from the developers (called ‘subscription fees’) in order to log on to game servers to play.
Gaming time units could be minutes, months, or a complete season.10 Modern MMORPG players are
known for playing the same game for long durations. The most famous example is World of Warcraft (WoW)
(2004), which at its peak had more than 10 million subscribers – the largest base of any MMORPG11.

In order to gain access to these virtual worlds, a player selects a game server and establishes
an account that can be used to create character-avatars which are generated by a computer code. The
system used by the players input commands that will be executed by the avatar, while player and game
data are transmitted from the computer server which are then projected onto player monitors.12 This
arrangement supports a sense of player cognition among a large number of avatars located in the same
game world; the spatial cognition provides the context for MMORPG social interaction13.

Players navigate and interact within multilayered game maps consisting of continents,
countries, districts, cities, streets, and buildings. While MMORPGs vary in terms of content, the main goal
is generally the development of the player’s character14. Its gameplay features a character progression
system in which players, in performing certain acts, earn points or ‘EXPs’15. The accumulation of these
points allows the character to increase its ‘levels’16, which allows said character to be more powerful.

9 Id
10 Making way, therefore, to economic opportunity. The process of buying and selling exchangeable virtual

items has boomed as these games become more popular. Players who intend to progress quickly or those
who, because they are too busy with responsibilities in the real-world, are willing to spend on virtual
equipment with actual currency. This even led to an increasingly commercialized industry called “gold
farming”10 in several countries.
11
12adfalfjafj “This arrangement supports a sense of player cognition among a large number of avatars located in the
same game world; the spatial cognition provides the context for MMORPG social interaction

13
14 Character-Avatar These characters are expressed as avatars and controlled by computer code. Player

computers execute scenarios and object movement, while other player data (e.g., appearance and
behavior) are transmitted from a system computer and projected onto player monitors.
15 EXPs Making way, therefore, to economic opportunity. The process of buying and selling exchangeable

virtual items has boomed as these games become more popular. Players who intend to progress quickly or
those who, because they are too busy with responsibilities in the real-world, are willing to spend on virtual
equipment with actual currency. This even led to an increasingly commercialized industry called “gold
farming”15 in several countries.
16 Veloso
 Conventionally, fighting monsters and completing quests through the use of non-player characters (NPCs)
are the primary ways of ‘levelling up17’. After reaching a certain point in the game, players would attempt
to gain an edge over other players by training in special skills, acquisition of armor, weapons, and
currencies.

III. Gray Market Economy: Commodification of Virtual Assets

Because the prevailing goal is the “rags-to-riches” character progression18, they end up having to
pay for functional and decorative virtual items which are central to the gaming experience. These items are
generally sold by the game’s preprogrammed NPC vendors. However, the more valuable items are only
acquired through skill and luck from monster drops19 making way to economic opportunity. MMORPGs allow
for rich social interactions where players are generally given autonomy with their characters to do as they
please as long as the coding of the game allows it. However, it is very difficult to take into account for every
action (and human interaction) that players may conceivable do. There is evidence indicating that many
players do not follow intended or encouraged ways of playing as described in game rules or reflected in game
design features. These players take advantage of design bugs or use plug-in programs to increase gameplay
efficiency, to gain an edge over others, or to develop innovative ways of game play.20 An example of this
practice which does not conform to the intended game play is the birth of what is now known as Real-Money
Trading (RMTs)21.

Players who intend to progress quickly or those who, because of lack of sufficient game time because
of a tight schedule (or those are reluctant to keep rolling the system dice until they kill a monster who provides
them with what they need), are willing to spend on different items and equipment with actual currency. This
demand, along with rich player to player interactions, are the foundation of most virtual economies. These
markets function like traditional capitalist economies22: a typical player can forage in the woods, grind23 a
plethora of boars, skin their hides and craft them into leather workings, sell them through the marketplace
for currency, and use that currency to purchase a new virtual weapon. This type of economic activity is
considered to take place in a “structured economy,” which is the economic bubble of the virtual game world.
Even if the administrators of the game discourage or explicitly prohibit such transactions, the increased
complexity of the Internet today has allowed the market for virtual property to boom. Recent estimates posit

17 Id
18
Players on this quest to glory will inevitably acquire virtual wealth during their online
journeys. Completing game quests, destroying opponents, or crafting items from in‐ game
resources all reward the avatar with virtual items and currency that can be used to enhance the
character and make it more powerful
19
Monster drops Making way, therefore, to economic opportunity. The process of buying and selling
exchangeable virtual items has boomed as these games become more popular. Players who intend to
progress quickly or those who, because they are too busy with responsibilities in the real-world, are willing
to spend on virtual equipment with actual currency. This even led to an increasingly commercialized
industry called “gold farming”19 in several countries.
20
Find source
21
RMT
22
source
23
grinding
that this market may exceed $1 billion in transactions annually 24. (In Asia alone, the real-cash virtual item
market exceeds $100 million annually. More broadly applied, the online gaming market is forecasted to
reach $13 billion by 2011 with China accounting for # billion in 2010) FIND MORE RECENT SOURCES. For
example, many players of Second Life and Entropia Online have become millionaires by virtue of these trades.
There has also been a rise of gold-farmers25 as feasible sources of employment in several countries in spite
of tacit restrictions in the EULAs26. (discouraged by the game developers not intention game conceit)

But as Mars Veloso has succinctly put in his research, “[t]he economic success of this secondary
industry is not without its set of varying social harms.”27 In spite of the widespread involvement of millions of
people (involving millions of dollars) in gray market transactions, where the trade of virtual goods is “neither
illegal nor sanctioned by official governing bodies” 28, there are no distinct protection for property rights in
virtual property have arisen.

Edward Castranova warns that while the full scale effects of this burgeoning gray market is currently
unknown, there are indications that it can lead to unjust and unacceptable outcomes29. The earlier story of
Qiu Chengwei is an example where the lack of legal redress for the player resulted in an unfortunate outcome.

“Although Qiu had sought the help of the authorities, both the game
developer and the police, to recover the virtual item before confrontation, the
latter refused to take steps to redress the injury thus propmpting the eventual
attack and fatality. Unlike black markets where participants presumably know
that their only recourse would be through extralegal self-help, gray-markets
allow participants like Qiu to hope that such disputes are still capable of being
settled in court.

As a corollary to unsupported court action, a second problem surfaces

in the form of virtual crime. Gray markets create incentives to defraud as well
as incentives to exploit. While hackers who exploit the game developer’s
database might face criminal prosecution against the latter, gamers whose
items were manipulated in the course of the hack would be without legal
recourse against either the hacker or the developer for the value lost from the
‘stolen’ virtual goods.”30

This problem is better illustrated with this: A player, using the character-avatar named “Cally” in the
popular MMORPG “Eve Online”, formed a fully functional financial institution within the game. This was
known among the other players as ‘Eve Investment Bank’. Over the year following its creation, Cally decided
that running the bank was not enjoyable anymore. Due to his capacity to access the entire system of Eve
Investment Bank, he withdrew everything in the coffers of the institution and cleaned out the assets that other

24
source
25
gold farming
26
27
Mars Veloso
28
Castranova real products imaginary worlds
29
Castranova
30
Mars Veloso
players had invested. In this case, made a considerable profit, ending up with more than 700 billion ISK31
(around $280,000.00 during the time of the incident)32. The failure to recognize any property interest in
virtual goods resulted in his unjust enrichment by the player.33 His clients, even while bringing the incident to
the attention of the administrators, were forced to swallow the bitter losses they endured.

With the billions of players and the money that they put into these in-game gray-market transactions,
should not legal protections follow?

31
ISK Eve Online’s currency
32
33
Cally