The Game Is Virtual. The Profit Is Real.

Last December I wrote about people buying and selling virtual property for real money on eBay and elsewhere. Today the New York Times updates that story.

A thriving market has sprung up in which players spend real-world cash to buy game currency or desirable items from other players. Transactions take place on eBay or on sites like gamingopenmarket.com or www.ige.com. Payments are made through PayPal and other online services. Players then log into the game and transfer the virtual goods or currency. …

While most game companies do not encourage the buying and selling of virtual goods, none have found a way to stop it, and most simply ignore it. Many players dislike the practice, saying that it gives those with more money an unfair advantage. But game companies are beginning to accept 'real-money trade' as a fact of life. Sony Online Entertainment recently began a service that allows players of its EverQuest II game to buy and sell items through a Sony site.

Linden Lab, based in San Francisco, has taken an even more open approach on the question of intellectual property rights. In November 2003, the company said it would permit Second Life subscribers 'to retain full intellectual property protection for the digital content they create.' …

But virtual merchants must often track the same vagaries found in real-world economics. Since Electronic Arts, the publisher of Ultima Online, made it easier for players to create castles, their value has fallen. And as new games like World of Warcraft draw users, Ultima Online is becoming "a dying market." …

With about 10 million people worldwide playing at least one of the 350 or so massively multiplayer online games, there is no shortage of income-producing possibilities for the imaginative. Steve Salyer, a former game developer, is now president of Internet Gaming Entertainment, a Los Angeles company that runs Ige.com. He estimates that players spend a real-world total of $880 million a year for virtual goods and services produced in online games - not counting sales of the games themselves, and monthly subscription fees, often around $10.