When the virtual property hits the fan

The only massively multiplayer game that gets more mainstream press articles than World of Warcraft is surprisingly Second Life, which at 170,000 subscribers, and a far lower rate of online users to subscribers than WoW, is a relatively small game. But unlike World of Warcraft, players of Second Life are legally owning their virtual property, paid for in Linden Dollars, which are exchangeable freely against US dollars. So many stories have been reported on people running a virtual business that ends up paying their real-world rent.

Now something happened that many people have been waiting for, a lawsuit over virtual property in Second Life, as Wired reports. It seems that Second Life botched their auctions page, on which you can buy virtual land, having auctions on it which weren't accessible unless you fiddled with the numbers in the URL. Some clever guys did fiddle with the numbers, accessed auctions that nobody else saw, and bought lots of virtual land for $300 a plot, instead of the going rate of $1,000 per plot.

Linden Labs, the company behind Second Life, promptly banned the guy for hacking and closed his account. Unfortunately the guy was a lawyer, and equally promptly sued Linden Labs. Not surprisingly he wants his money back, at least the $8,000 he paid for the virtual land auctions, not to talk of the over $30,000 in Linden Dollars he owns. He might have a point there, if Linden Labs claims that the auctions were invalid because of his URL "hacking", they shouldn't be allowed to keep the money and not deliver the virtual land.

But of course the lawsuit could have much wider implications on the legal status of virtual property. If Linden Labs allows their players to have legal ownership of their virtual property, then what exactly can the company still do or not do without hurting their players property rights. Banning a player obviously makes his virtual belongings worthless. But even changes in gameplay which cause inflation could destroy somebodies virtual fortune. And what if the game company, like Blizzard, claims that there is no virtual property, and accounts and virtual goods can only be traded on a black market, does that change the owners property rights? Can you sue Blizzard for banning you from World of Warcraft, based on the value of your characters and belongings? Questions like these have been discussed for a long time, but now it might be the first time that US law is pronouncing on it. (Not counting a mock trial with a real judge on some game conference)