Software Nerd

Saturday, May 12, 2007

Laws about virtual reality

I don't play any role-playing games, but I find it disconcerting that people are starting to treat games like they're "real".

Taxation of in-game transactions: The first example of this is the discussion about taxation in games. If someone builds something in a game which he then sells for real money, I can understand that being treated as income. However, there are some people who're discussing real-world taxation of exchanges that happen completely within games, without any real-world trade.

Here's their argument (not being a gamer, my example will have to be abstract): suppose I build something inside a game that has value in the real world -- I could sell it, even if I actually don't. Let's say another person also builds something inside a game. Now, we exchange what each has created. A taxman could say I've exchanged something that has "real world" value for something else of "real world" value, therefore I've entered into a barter transaction, no different from a programmer writing software and giving it to a baker in exchange for a year's worth of chocolate cakes (yummy)!

Barters are taxable (if they're reported). If two people each have things that have $100 market values and exchange it, it is treated as Person A selling the item for $100 and buying Person B's item for $100. Thus, each ends up with $100 of taxable income, even though no money changed hands. (Of course barter transactions go under the radar and "market value" can be stretched, but that's not the point here.)

The blogger I linked to above argues against taxing "in game" trades, but her reasons are very poor. She argues against the...
...regressive nature of the tax because players who put in the most time and the east money would owe the most tax, although players who put in the most time 40-80 hours a week or more) tend not to be employed full-time (e.g., students). layers with higher incomes tend to be those putting in less time; they tend to spend money in the "real market" in lieu of hours of "grinding" to level up.

A very poor argument.

Crime inside games: Now, for a different example: crime in online games. Since a game is programmed, whoever programmed it makes the rules. For instance, one might have a game where players "kill" other players. Now, what if someone has a game that does not allow "killing", but some hacker figures out how to do so anyway. Should the law get involved? I'd say, that depends on the specifics. However, even if the law is involved, it might be a civil case, or it might be some type of computer-crime or property-crime, not murder!

However, a recent news-story says that someone playing "Second Life" in Belgium complained to the police, because she was raped inside the game. While the game allows avatars to "have sex" if the players allow it, it appears that some hackers figured out how to make their avatars "have sex" with another player's avatar regardless of the other player's instructions. However, some people discussing this (links in news-story above) seem to have a hard time thinking of it in terms of a computer crime -- the moving of bits and bytes, and seem to confuse it with the real-life equivalent, even though they don't quite equate the two. Supposedly the police got involved, but they may simply be treating it as a computer-crime/property-crime.

I wonder what Objectivist gamers think about all this.


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