.Games Without Frontiers

Darryl Chin makes real cash selling make-believe pets in Second Life, a fantasy world that blurs the boundaries of law and ethics.

“Have you seen our dogs before?”

Two customers have just shown up in Darryl Chin’s store, D&D Dogs, and he has instantly switched from shooting the bull to salesmanship. The two say no, they’re new customers. So Chin starts showing off the canines he has for sale. He instructs a St. Bernard to poop — just to demonstrate what his pups can do.

“Too funny,” responds one of the customers. Her name is Eve Callahan, and she’s dressed in neon-orange Daisy Dukes and a matching halter top. Eve turns to her friend, a big guy wearing what look like leather pants. “Pick one, hon.”

After a moment, the pair settles on a bulldog. With the added purchase of a trick from the obedience school in the corner — they choose “growl” — the whole transaction comes to 450 Linden dollars.

Showing off a pet’s scatological prowess may not be a traditional sales technique, but little about this business is traditional. These are digital pooches, sold in a virtual store in an online role-playing game called Second Life, which boasts close to 25,000 players around the globe — and growing. Its players log onto an Internet server that contains the gamescape, where sophisticated graphics depict land, waterways, and buildings. They are represented onscreen by animated characters called avatars who communicate via their creators’ typed messages, which pop up in the corner of the screen.

Second Life has no explicit purpose. People spend their time shopping, creating, and socializing — online poker tournaments are popular, as are nightclubs. They erect buildings and create other objects using the 3-D equivalent of old-school drawing programs. Using scripts — short strings of computer code — they can make the things they draw move or respond to commands. And players who have design know-how, or coding expertise, or business smarts, can sell what they create or buy to other players who may lack those skills.

And while Darryl Chin’s customers pay with Linden dollars — a make-believe currency named for the game’s creator, San Francisco’s Linden Lab — that currency has a real-world value. It comes down to supply and demand. New players are given a stipend of Lindens along with their game subscriptions, but it isn’t enough to score prime real estate, fashionable clothes, or other digital desirables. The result is a thriving currency market. That 450 Linden dog purchase netted Chin and Ed Caggiani, his partner in the cyberdog business, about $1.84 at the prevailing rate of 245 Lindens to the US dollar. Yeah, that might buy them no more than a cup of coffee, but the purchases add up. In the month prior to that small transaction, the pair of twentysomething software engineers pulled down 310,790 Lindens, worth about $1,268.

Players cash in their virtual earnings at online currency exchanges such as GamingOpenMarket.com, where the market for Lindens resembles a stock page on Yahoo Finance, with charts, graphs, and daily highs and lows. The creators of at least one Web site, IGE.com, have made a business of buying Lindens and other gaming currencies cheap and selling them at a profit.

Indeed, Second Life isn’t the only game whose currency can be exchanged for real money. Aficionados of Web-based adventure games such as EverQuest and Ultima Online routinely shell out for fantasy gold pieces or magic swords that let them advance more quickly within the game. The trade in Lindens, in fact, is small compared with these older, more established games. GamingOpenMarket, which operates ATMs all over the gamescape, oversees about a quarter of the Linden market; in January, it handled trades in excess of $196,000 US. In all, the international trade in virtual goods and cash is worth at least $100 million a year, estimates Edward Castronova, a professor at Indiana University who is writing a book about these virtual economies. And he isn’t talking Linden bucks.

Yet Linden Lab — unlike most of its gaming industry rivals, which either ignore or discourage the trade of real money for digital goods — openly encourages such commerce. It’s one of several ways the company treats Second Life more as a simulated reality than a game, which makes its product both fascinating and potentially troublesome. The commingling of real and imaginary economies raises puzzling ethical, social, and legal questions. For example, is it wrong, or even a real crime, for a player to steal cybermerchandise from another within the context of a game? What of a player who hacks into another’s account to steal or delete fantasy cash? Should a company be compelled to reimburse its players for stolen make-believe goods? And who, if anyone, should control the virtual cash flow once a game currency becomes susceptible to real-world volatility?

Funny you should ask. It turns out Linden Lab is searching for its very own Alan Greenspan. The company wants to hire an adviser to independently monitor the game’s economy and recommend policy changes to keep it stable. “As both the government and the maker of the software, it’s important to keep Chinese walls up to make sure we we’re fairly making decisions as these things grow,” says Philip Rosedale, the company’s founder and CEO and the mastermind behind Second Life. The company doesn’t actually sell its game currency, and therefore doesn’t stand to profit when the Linden dollar gains against the US dollar. But Rosedale is concerned about the appearance of a conflict of interest. Such worries were not something he had envisioned when he first conceived of Second Life.

Sitting in Linden Lab’s offices in San Francisco’s South of Market, the CEO marvels at how fast his creation took on a life of its own. The company’s digs are a dot-com relic. Situated near South Park, ground zero of the tech explosion, the office features the wide-open layout popularized by 1990s startups — desks are scattered about, unhindered by cubicle walls. A whiteboard at the entrance greets visitors with notes, jokes, and drawings. Linden Lab, one joker has suggested, should opt for an inflatable office that could easily be moved, for example, to Hawaii (cons: no scissors or other sharp objects allowed).

Rosedale’s workstation is in the middle of the large room, a circular command center of desks covered with papers, monitors, and books — among them, appropriately, Lord of the Rings. The young CEO was one of those former boy geniuses we heard so much about during the tech heyday. A computer fanatic since childhood, he started his first company in high school. After college he started another company, which was later acquired by Real Networks, where he then worked until he left to start Second Life in 1999. Now 36, with graying blond hair, Rosedale’s tanned, unlined face is animated as he traces the evolution of the world where he is creator, dictator, and — for the moment — Mr. Greenspan. His pale blue eyes open wide and his hands fly with enthusiasm as he talks. For him, Second Life isn’t a game; it’s a grand social experiment.

When the company’s experiment first became available to beta testers — the game’s earliest adopters — in 2002, it was essentially a blank slate, a 3-D landscape devoid of buildings but equipped with the tools to let its settlers build their own world. The gamescape grew rapidly and developed a bustling economy faster than Rosedale could ever have predicted. That’s when Linden Lab decided to start breaking tried-and-true industry rules.

Within a few months of the game’s commercial launch in June 2003, the company tackled the most fundamental issue in online gaming: ownership. People who spend long hours obtaining virtual possessions generally argue that what belongs to their avatar should belong to them. Game companies, however, traditionally require subscribers to automatically relinquish rights to anything they acquire or invent. Linden Lab broke with that tradition. Giving players ownership of their virtual property, its visionaries concluded, would encourage creativity and entrepreneurship. “We felt that Western and other countries that gave citizens property rights experienced more economic growth and innovation in their early years than did other economies,” Rosedale explains. So in late 2003 the company made gaming history by announcing it would grant intellectual property rights to its subscribers. Which meant Chin and Caggiani owned D&D Dogs, and their wares remained their sole intellectual property.

While the players adore Linden Lab’s ownership policy and its encouragement of currency trading, the company’s decisions opened up a legal and ethical can of worms. Once that make-believe property has a tangible value, after all, any action that deprives a player of that property — or depresses its worth — comes into question.

Chin and Caggiani discovered as much shortly after they launched D&D Dogs. The pair founded their business early in 2003, when Second Life was still in its beta mode. Chin designed the cartoon dogs from a computer in his Hayward home. Caggiani joined him online from his Silicon Valley residence, where he wrote the code to animate the cyberpets.

The men were among the earliest contributors to the gamescape. As they discovered new ways to form the software’s building tools into doglike shapes, other early Lifers also were hard at work. Around them, a digital world was taking shape, populated with amusement parks, re-created fantasy worlds like Oz and Neverland, and even secondary games created by other Second Life “residents” — adventures and shoot-’em-ups along the lines of traditional arcade games.

On a recent evening, Chin is sitting on a sofa in his bachelor pad, facing his laptop. He lets his fingers fall from the keys he uses to control his avatar as he recalls D&D’s early days. On screen, his alter ego Darrly Chang stands inside D&D Dogs, clad in jeans and a black T-shirt with the Nike swoosh. The avatar is a leaner, sleeker version of the real guy, a stocky 28-year-old with short black hair, similarly clad in khakis and a black Nike shirt. His barnlike store, built on a raised platform over an ethereal-looking waterway, is open at the front, its three walls lined with canines of different shapes and sizes perched on pedestals. They are chunky and a bit primitive, but recognizable as various breeds, and oddly cute.

After D&D opened, Chin and Caggiani had sold just a handful of dogs before they realized they’d made a rookie mistake: They hadn’t protected their source code. Anyone could view and even copy it. “We were young and innocent,” Chin laments. They fixed the problem and quickly recalled the unprotected pups, which had gone only to friends. But the duo hadn’t heard the last of their error. Soon afterward, another dog store opened. Curious, Chin and Caggiani flew over to check out the competition (avatars can fly). They bought a dog and tested it. To their surprise, it acted just like theirs.

It turned out the owner of the competing shop owned land in Second Life next to one of the friends who’d received an unprotected dog. When Chin’s friend heard about her neighbor’s new product — and its similarities to D&D’s dogs — she was convinced the neighbor had seen her dog and copied its code. She was livid, and when Caggiani posted these suspicions on the game’s online message board, other gamers were, too. “I know competition is good,” one wrote. “But to copy something as large-scale as D&D’s dogs with exactly the same commands is just being a$$holes.”

“Competition is nice,” another concurred, addressing the alleged copycat. “But not when it takes your code that you worked months to perfect, and your models, and sells them for their own profit. You, sir, are a jackass.”

Still, there was little the business partners could do but fume. Linden Lab could have taken action against the suspected thief, but didn’t; Rosedale prefers to stay disengaged from “local” affairs in Second Life. Instead, he encourages gamers to protect their own code and enforce their ownership through US copyright law if necessary.

Since Chin and Caggiani left their code vulnerable, they couldn’t have sued even if they’d been so inclined, according to Beth Noveck, an associate professor at New York Law School who specializes in new technologies. “Under the terms and conditions of the game, they agree to allow their intellectual property to be copied unless they change the settings not to allow copying,” she says.

Some lawyers who follow these virtual worlds think courts are liable to rule that what happens within the game stays in the game. “The law does provide for particular rules that occur within play spaces,” notes Dan Hunter, an assistant professor of legal studies at the Wharton School in Philadelphia.

Chip Matthews, a Maryland artist and animator who designs and sells fashions in Second Life under the name Chip Midnight, says he thinks the lack of legal protection keeps the virtual world creative. “If something gets pirated or pilfered I wouldn’t be happy about it, but it wouldn’t be worth legal action,” he says. “In a way, the risk of that keeps people creating new things and not resting on their laurels.”

That’s precisely what Chin and Caggiani did. They built more and better dogs, capable of more and better tricks, while the competitor’s dog shop stagnated. The rival store shows only four models for sale, capable of only the handful of tricks that D&D’s originals knew, plus one addition. D&D Dogs, meanwhile, has added a dozen or so new tricks and numerous new breeds, and business remains brisk.

The theft of virtual goods becomes an even thornier issue when it isn’t part of the game. Suppose Chin and Caggiani had remembered to protect their code, but the copycat had found a way to steal it anyway — or had hacked into their accounts to get the code. To give another example, is there any difference between a hacker stealing $100 worth of digital merchandise from a gamer’s account and one who pilfers $100 from a PayPal account?

Courts in this country have yet to try anyone accused of stealing gaming currency or merchandise, but it’s only a matter of time, experts say. “If there are things that aren’t part of the game play, but you dupe or hack, the courts probably will accept arguments” under antihacking laws, says Wharton’s Hunter.

Federal law forbids people from accessing online accounts without authorization, whether or not they steal anything, but Hunter adds that we also can expect cases that test the limits of ownership. “We haven’t yet got to the point where the courts have said, ‘This stuff looks like property and smells like property and we’re going to treat it like property,'” he says. “I think it’s inevitable that at some point we’ll have a series of cases that look at the property aspects of this.”

Some countries are already tackling this issue, according to news reports. In China, a court ruled in 2003 that a game company should restore goods that one player stole by hacking into another player’s account, even though the merchandise had no monetary value. In Japan, a woman was arrested recently for using her ex-boyfriend’s password to delete his game account. And in South Korea, hackers were arrested for robbing a game’s central bank. They broke into its server and helped themselves to make-believe currency reportedly worth close to $500,000. All of these cases establish the precedent, at least in those countries, that virtual merchandise can have legal value. The Chinese and Japanese cases also affirmed that the game goods belonged to the players, regardless of what the companies said.

Rosedale expects that similar cases will pop up in the United States. “The more real-world value is placed on things, the more likely it is that there’ll be legal disputes that arise between people,” he says. In Second Life,such quarrels can often take the form of business partnerships gone sour: “People will sometimes make business deals with each other, where they say we’re going to do this business together and make an arrangement to split the profits, and then there’s a dispute.”

While turning to the courts may be an option, Rosedale would prefer that Second Life legal disputes get resolved within the game. Linden Lab, he notes, may establish some kind of cybercourt or arbitration process in which the accused is judged by his fellow avatars. Better, the CEO hopes — even predicts — that his subjects will beat the company to the punch and create their own way to resolve legal conflicts. Even so, Rosedale has the power to act as judge, jury, and executioner. For while his citizens may benefit from a scantily regulated capitalist economy, they are not operating in a democracy.

The game world, however, mimics life in more ways than one, and in July 2003 a group of Lifers rebelled against their benevolent dictator. When Second Life was first launched, it included a complicated tax structure under which users had to pay fees on the buildings and objects they owned. But some big builders got frustrated with this system, according to Wagner James Au, a contract writer for Linden Lab who travels Second Life as a journalist avatar and chronicles the world’s happenings in his blog, New World Notes. Au says a group of players had been building digital versions of American icons, from Fenway Park to the Washington Monument. They were outraged by the amount of taxes they had to pay, on top of their monthly subscription fees, for building content aimed at making the world more fun for all.

So began the Tax Revolt, Second Life‘s version of the American Revolution. Decrying Linden Lab as “Mad King George Linden,” and wearing T-shirts that stated “Born Free, Taxed to Death,” the rebels surrounded Fenway Park and the other monuments with virtual tea crates. Soon, a backlash of Linden-loyalist Redcoats appeared. “It was partly tongue-in-cheek and ironic and partly genuinely trying to put out their opinion,” Au recalls.

The revolt eventually fizzled, but rather than hang the rebels, as any self-respecting dictator would have done, Linden Lab threw them some bones. The company ended its monthly subscription fees — players now pay a onetime $9.95 fee to join the game — and simplified the taxes down to “land maintenance fees,” which players pay based on their land holdings.

Rosedale concedes that as the game becomes an investment, even a living, for some players, they may demand a say in how things are run. Indeed, as in Saudi Arabia, Linden Lab has been introducing some limited democratic reforms. For instance, the company recently delegated the power to ban problem users from Second Life to the world’s residents. In the past, the company simply banished troublemakers. Now it empanels a jury, selected at random from a set of active players, to hear their cases. But don’t expect too much. The CEO argues that the company’s guiding hand, in many cases, will be better for everyone than any messy democracy.

To date, that guiding hand has kept things running relatively smoothly. Until Rosedale finds his Alan Greenspan, the company will continue acting as the Federal Reserve Bank, keeping the game’s economy stable for players who might not be thrilled if all their assets were suddenly to plummet in value. Linden Lab monitors economic stats including currency trading rates on GamingOpenMarket; gameworld price indicators; and per-capita GDP (currently about $1,000 US). Based on these figures, it forges economic policy.

There are three key ways Linden Lab can influence the Second Life economy: It can vary the amount of new currency that enters the game in the form of monthly allowances granted to subscribers. It can also vary how much currency leaves the game — it does so by charging in Lindens for selected land and services for which players normally pay real dollars. Finally, the company can control the flow of new land into the gamescape.

These management techniques appear to be working. The real-world value of Linden dollars has been amazingly stable compared with other game currencies. Still, the market has seen its ups and downs. Last year there was a false alarm when a prankster caused what seemed to be a currency crash on GamingOpenMarket. Another time last year the value of Lindens really did skyrocket and then plummet, keeping time with a Second Life real-estate boom.

The president of GamingOpenMarket, a Canadian software engineer who operates the site in his spare time, followed this roller-coaster ride closely. What happened, he says, was this: Linden Lab had been releasing land too slowly to keep up with the demands of new players. The rookies, anxious to own, were willing to pay high prices. This drove up the bids at Linden Lab’s land auctions, and led to speculation as older players began snapping up auctioned property and selling it off in smaller plots at a huge profit. As real estate prices soared, so did the demand for Linden dollars, along with their real-world price.

To get things under control, Linden Lab took a page from the socialist playbook. It changed the rules to let new users buy a plot of land at a set price, and it also put more land into play. As virtual real-estate values returned to normalcy, and speculators stopped getting so rich so fast, the Linden began sliding back toward its former value. Of course, there still is money to be made buying and selling land because, as in real life, price is determined by location. Buyers are willing to plunk down more for land in a good neighborhood — near a telehub, or on the water — than in the sticks. A telehub is where avatars go to be transported to any other telehub in the gamescape at the touch of a button. The foot (and air) traffic near these transportation portals draws customers or new friends to the owners of nearby land. So this is where you’ll find the game’s fat cats, along with their malls, clubs, and chic retail establishments.

Rosedale estimates that there are a few hundred of these big-time entrepreneurs who are making significant real-world profits from their make-believe businesses. Probably the most successful avatar out there is real-estate and retail mogul Anshe Chung, a teacher in real life whose virtual net worth is nearly $98,000 US.

But who buys these gamers’ goods — and their Linden dollars?

Some of the buyers are players looking to invest for profit. Like Bob Bravo, a virtual real-estate agent who hopes to eventually take $500 to $1,000 monthly out of the game. Bravo started his venture last August and says he sank between $5,000 and $6,000 into it before he started covering his costs. He hopes to break even on his initial investment within the next few months.

Most people, though, are playing for pleasure. One player in it purely for kicks is Reno Parks, one of D&D Dogs’ biggest customers. When he lands in the dog store one evening, Parks looks like something off a Parliament album cover: a tall man clad in a black fur jacket, bell bottoms, and a wide-brimmed white hat, with a diamond earring flashing in his right ear. His chat bubbles fill with jive talk and slang; every other word is “doll.”

Parks takes a look around. He spots the Valentine’s Day collector’s-edition dog on display. Chin and Caggiani periodically sell special limited editions for a higher price than their mainstay breeds. This one sports a heart mark and a pair of cupid wings.

“Oh hell, I want the Valentine one,” Parks announces. “Let me run to GOM” — GamingOpenMarket — “an’ get me some cash.”

Parks — who declines to provide his real-world details, except to say that he has a well-paying job — doesn’t earn money off Second Life and doesn’t plan to. He’s having fun. In the process, he estimates he has spent upward of $4,000 US, a quarter of that on Linden dollars from GamingOpenMarket.

After Parks returns to buy his latest dog, he takes Chin and Caggiani to his Second Life home. The real estate for this joint cost him $1,200 US, paid directly to Linden Lab, plus $189 US in monthly land maintenance fees. (Real-estate purchases and land fees based on a player’s holdings make up the bulk of Linden Lab’s revenues.)

If ever a virtual crib could be worth that kind of cash, Reno Parks’ villa would be the one. The group lands on a patio tiled in Egyptian-looking prints, next to a pool surrounded by Greek sculptures and palm trees. In the background, a blue sea glints in the sunlight. Parks explains that his complex includes six rooms, including a “Hall of Van” upstairs — a luxurious space furnished in velvety black and decorated with Van Gogh paintings.

Downstairs on the patio, Parks shows off his many D&D purchases. He is a self-dubbed “dog junkie” who owns seven of their models, all named after dogs he has owned in real life. He sends two of them into “attack” mode — a command intended for Second Lifers who want guard dogs — and sets them upon one another, a dog fight. As the cartoon dogs scoot forward, yippy barks emanate from Chin’s computer speakers.

Parks is enthusiastic about his purebreds. They add to his image, and image is what this character is all about. “Hell, I take them out, I get people IM-ing me,” he says. That’s “instant messaging” — the preferred method of conversing privately in Second Life. “‘Hey, cool dogs, where you get ’em from?’ So I take them to the shop if I’m not busy.”

Such word-of-mouth referrals are D&D’s main means of attracting new customers, though its owners recently started advertising through a bulletin board company that operates throughout the game. As one of the few animal makers, D&D has grown quickly in popularity. Recently, two mall owners offered Chin and Caggiani rent-free space, so they now have satellite stores in two locations. They also publicize their store by donating dogs as contest prizes. Tournaments of Tringo, a popular bingo-like game invented by another resident, fill the world’s social calendar; D&D gift certificates are often offered as prizes.

One night, Chin and Caggiani are hanging out in the store as usual when one of the lucky winners shows up. He has a name, Neo Virgo, reminiscent of a ’70s come-on line, with a look to match: a mustache, slightly shaggy hair, and a disco-print shirt tucked into tight pants. Chin is starting work on a custom job, so Caggiani plays the salesman. He greets Virgo, who picks his pup, then wanders over to the obedience school to browse the tricks. “It’s 1k for the tricks?” he asks. “Yes, for all of them,” Caggiani answers. “Or u can buy them one at a time.”

It’s just like a real-world store — almost. But while Second Life lets players bend the laws of physics, it presents some basic challenges. “I just pay the sign?” Neo Virgo asks, surveying the placard that describes the available tricks, and Caggiani has to explain: You right-click the sign and hit “buy,” then “pay.”

A chat bubble pops up as the sign acknowledges the purchase: “Thanks for the $1,000, Neo Virgo.” (Linden dollars.)

Across the store, Chin is busy. A customer has e-mailed him pictures of a real-life pet he wants copied, a Doberman. That’s easier said than done. He opens up a dialogue box, partially obscuring the store scene that fills his computer screen. The box displays three-dimensional shapes and other building tools. He drags two balls out of the box, suspending them in the air of the shop. He clicks on the edges of the balls and drags his mouse, stretching the shapes until they form two overlapping ovals for the body. A few more shapes stretched into skinny verticals — legs — and the dog starts taking shape.

At 10,000 Lindens a pop — about $41 US — custom dogs are one of D&D’s big moneymakers. But their prefab dogs and tricks alone bring Chin and Caggiani more than $900 per month. Even if they never again returned to their digital store, they could expect growing profits as new gamers sign up and take advantage of D&D’s self-serve sales function.

As he works, Chin is surrounded by the trappings of luxurious bachelorhood — a 42″ plasma TV, new sofa, high-end stereo, powerful laptop — in a comfortable San Jose apartment he has just moved into from the Hayward house he shared with his brother. This lifestyle is funded largely by his day job, but it’s padded with his respectable monthly take from D&D Dogs.

With the number of Second Life subscribers — potential dog owners — growing 10 to 15 percent monthly, the pet store is shaping up to be a high-return investment. But not one without caveats. Just as investors in developing countries must weigh whether a government coup could unexpectedly wipe them out, virtual investors must worry about the well being of Second Life‘s dictator. If Linden Lab ever goes belly-up, or decides to pull the plug on the game, its residents could lose all of their assets. As with any real-world venture that beckons with the promise of easy riches, wheeling and dealing in the virtual world can, in the final analysis, be a risky proposition.

A Bone-Crushing Task

Julian Dibbell tried to earn a living at play. In the end, it was just work.

As digital gold pieces, magic swords, and other booty from online role-playing games began to fetch real money on eBay and elsewhere, a handful of gamers have been tempted to try and live off virtual commerce.

Journalist Julian Dibbell is a high-profile example. Last year, he made a splash in the game world when he challenged himself to live off the proceeds of what he could sell in the adventure blockbuster Ultima Online. “On April 15, 2004, I will truthfully report to the IRS that my primary source of income is the sale of imaginary goods,” he wrote on his blog at JulianDibbell.com, “and that I earn more from it, on a monthly basis, than I have ever earned as a professional writer.”

By the time that deadline rolled around, Dibbell had fallen just short of his goal. But he still demonstrated the possibility of making a respectable living dealing in imaginary wares. In his best month, he pulled in $3,917, meaning he could theoretically have made about $47,000 a year. Not bad.

Along the way, though, he ran into some unexpected ethical and philosophical questions. Consider the Bone Crusher. Dibbell had come across a great deal on the rare weapon, which he figured he could sell for fifteen million gold pieces — worth close to $250 at the time. Wanting to verify the going market rate, he checked out an online market, where he saw another one for sale. But when he e-mailed the advertiser, the seller wrote back that his Bone Crusher was gone; another player had stolen it. The thief, it turned out, was the very player Dibbell was planning to buy from.

So what to do? Stealing, one of the capabilities Ultima Online players can develop, is an unpleasant and unpopular part of the game. Dibbell contacted a mentor, who surprised him by advising him to go for it. “There’s a thief class in Ultima Online and that’s part of the game,” Dibbell says the mentor told him. “It’s like losing a hand in poker to a good bluffer. So I did the deal.”

The writer was troubled by the situation, however. Buying from a thief, when stealing the item was a legitimate part of the game — fine. But buying from someone who tricked another player out of the equivalent of $250? “I’m not sure I did the right thing; I’m not sure I did the wrong thing,” Dibbell now says.

Then there was an existential question: When play becomes work, is it still play? “I took up this enterprise wondering if it might not lead me to an El Dorado I have looked for all my adult life: a place where work is play,” Dibbell wrote on his blog. “Not exactly. It took work to make Play Money, and the work was hard, and more to the point, the work did not fit any definition of play handed down to us by tradition. It was not simply a diversion from the path of life; it was the path itself, for a time, and just as fraught with existential care as that path ever is.”

Ultimately, Dibbell gave up gaming to return to his writing career. His book on the adventure, Play Money, is due out next year. He has stopped playing Ultima Online and no longer sells fictional merchandise. “The game is over for me,” he says. — Laila Weir

The Taxman Cometh

Virtual sales may not be safe from future taxation, experts say.

For anyone thinking of getting rich off commerce in the make-believe, a word of advice: Traders in imaginary wares may still have to answer to the taxman. Sellers on eBay and other sites must declare their sales — even if they’re sales of fantasy castles. So don’t go getting yourself audited over that heap of Ultima gold pieces. Nor is it unlikely that traders in virtual goods within their games may one day have to collect sales taxes too. If you pay for a digital dog in Linden bucks, and Linden bucks are worth real money, there’s little to distinguish that from a real business transaction. Online sales are currently exempt from sales taxes as a way of encouraging e-commerce, but virtual legal expert Beth Noveck says there’s no reason game goods would get special treatment if the government decides to tax Web sales. So in that future, gamers may want to budget an extra 7 percent or so for that coveted battle ax. — Laila Weir


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