Ever have one of those days when total strangers (well, to each other anyway) all bring different parts of a puzzle? Conversations that return to a theme? AHA! moments abound? Today has been like that – about virtual economies and currencies.

IGE Sued By World Of Warcraft Player

In a new twist on an old MMOG debate, gold-farming company IGE has been sued by a World of Warcraft player.

Instigated by long-time World of Warcraft player Antonio Hernandez, the class action suit filed against IGE claims that the company made a “calculated decision to reap substantial profits by knowingly interfering with and substantially impairing the intended use and enjoyment associated with consumer agreements between Blizzard Entertainment and subscribers to its virtual world called World of Warcraft.”

At issue is IGE’s practice of using low-wage labor in third-world countries to “farm” virtual property or currency within the game, which can then be sold for real currency on eBay or other industry-related websites. According to critics, these activities not only directly violate the World of Warcraft terms of service, but also diminish the enjoyment of legitimate MMOG players by interfering with their normal in-game activities. The practice of gold-farming greatly reduces the amount of resources available to legitimate players, it grossly devalues the in-game currency, and it puts players who do not partake of IGE’s services at a significant in-game disadvantage to those who do.

Most MMOGs have outlawed the practice of gold farming, although IGE continues to operate in a number of high-profile games, including Anarchy Online, Dungeons & Dragons Online, EVE Online, Everquest, Lord of the Rings Online, Star Wars Galaxies and, of course, World of Warcraft. While many members of the online gaming community are critical of IGE’s practices, demand for the service has remained high, allowing the company to continue operating despite setbacks and an often hostile environment. Recently, in fact, Jeffrey Steefel, executive producer at Lord of the Rings Online developer Turbine, said that ongoing changes in the MMOG “secondary market” may force online gaming companies to adapt to new realities in which outfits like IGE are an unavoidable fact of life. “The ‘secondary market’ is a huge topic of conversation across the industry, and we’re watching it really closely,” he said. “We all know that something will happen in the next two to five years to business models in general, so we’re paying attention to what’s going on.”

The ongoing infusion of gold in World of Warcraft by IGE, outside the normal parameters of the game’s economy, means a constant devaluation of the in-game currency held by honest subscribers. Based on the cost of gold being sold on IGE’s website, this devaluation is conservatively estimated to be in the millions of dollars. As a result, the lawsuit seeks an injunction preventing the company selling items and gold online, as well as court costs and unspecified damages to be determined at trial. Representatives from IGE have not issued a comment.

The full text of the suit is available here.

Interesting revelations at the games law blog. Remember, this is the exact opposite business model to Second Life.

BTW You think this stuff is unimportant, and can’t see how or why it impacts you. But it does. Or at least, it will. More than you could ever ever possibly imagine. Think of the day when Google owns everything and pays you in Google dollars for every blog post you make or comment on, every foto you upload to Flickr (or whatever the Google equivalent would be), every time you participate in a *fun* application in Facebook. Now take those Google dollars or Yahoo!Dimes or NewsCorp Yen and spend them on sponsored products. A ringtone, a iTune, a T-shirt… a brand new Toyota. Imagine what this *fake* Google currency would do to currency exchanges. And puleaze don’t tell me it’s not really monetising user generated content, and that it’s just *play money*… (see post below and one from 2005).