EBay bans auctions of virtual treasures

Citing "complex legal issues," EBay Inc. has decided to yank auctions of virtual items garnered from popular online games such as "EverQuest" and "World of Warcraft."

"We can't say definitely if it's legal or illegal," EBay spokesman Hani Durzy said. "It's complex. And when something is complex like this, we have a history of disallowing the items."

For years, players of online games have traded unreal goods for real money. The items, which are often difficult to come by, can give players an edge in games.

Buyers can, for example, purchase a pair of Weatherbeaten Shoulderpads for "EverQuest," for $74.99 on ige.com, a site operated by Internet Gaming Entertainment Ltd. in Hong Kong. On another site, uotreasures.com, a Krol Blade for "World of Warcraft" sells for $119.

And on EBay this week a pair of EverQuest game accounts went for auction with an opening bid of $200 before they were taken down.

Researcher Edward Castronova of Indiana University estimated in his book, "Synthetic Worlds: The Business and Culture of Online Games," that more than $100 million changes hands each year for these digital items — a good portion of it on EBay.

With so much money at stake, disputes over the ownership of these digital bits are getting more heated.

Irvine-based Blizzard Entertainment, publisher of "World of Warcraft," has shut down several hundred thousand game accounts for buying and selling of virtual items, spokesman Shon Damron said.

"We have clearly maintained that all of the content in 'World of Warcraft' is the property of Blizzard," he said. "We do not allow in-game items to be sold for real money."

Nearly all online game publishers take similar positions.

"Our standpoint is that everything in our games is the property of Sony Online Entertainment," said Greg Short, director of Web development at Sony, which publishes "EverQuest."

Even so, Sony decided in 2005 to get into the market by hosting auctions for "EverQuest" items with its Station Exchange service, taking a 10% cut of each transaction.

Business has been brisk. One seller made $37,435 from 351 auctions in the first year of Station Exchange. In total, Sony has brokered $2 million in transactions since launching the service, Short said.

What's being bought and sold, Short said, is the right to use the items.

EBay's policy of taking down auctions of virtual game property, which went into effect last week, does not include items from online game "Second Life," operated by San Francisco-based Linden Lab, whose investors include EBay founder Pierre Omidyar.

"This policy applies to virtual game items," EBay's Durzy said. "We don't think it's appropriate to classify what happens in 'Second Life' as a game."

Another key difference is that Linden Lab gives users full ownership of the items they create in "Second Life."

"You create it, you own it, and it's yours to do with as you please," Linden Lab spokesman Peter Gray said.

"The book is your creation. It's the same with these games. You're talking about people who play these games for 30, 40 hours a week, crafting these communities and characters. It's the players themselves who created those worlds," he said.

EBay's move, however, had a positive effect for Kiblinger: Traffic on his Web store has doubled since EBay pulled the plug on auctions.

Richard Andrews, who has made a living selling virtual items exclusively on EBay for eight years, wasn't as lucky. Notified Thursday of the decision, he stopped posting new items and decided to let his current auctions run their course. By Friday, all his remaining auctions were pulled down and his account was suspended.

"You work a long time to build a customer base and now the public might say, 'If EBay doesn't allow it, it must be bad,' " said Andrews, who lives in Vancouver, Canada.

The items have no physical properties, so they are delivered in the games themselves. After a sale, the buyer and the seller often meet in the game to hand over the goods. Payment, though, is real — usually by credit card or PayPal.

From a legal standpoint, game companies hold all the cards. Subscribers to these games explicitly agree to a contract, called a user agreement, stating that the intellectual property rights of anything they create in the game belong to the game publishers.

"It's extremely clear that these contracts are enforceable," said Beth Noveck, a professor at New York Law School. "That's not open to debate. It's a question of whether the players will tolerate this over the long term."

It doesn't help that the sale of digital goods is also difficult to police, Durzy said.

"When you're talking about virtual items, it's inherently harder to confirm delivery," he said.

Article from Chicago tribune

Nicktropolis: Second Life for the young set

Nickelodeon, the children's TV network, is launching an online virtual world just for children, reports Reuters.

Based on the popular virtual world, Second Life, visitors to Nicktropolis will be able to create their own personalized 3D rooms on the site. Children make up their own 3D "avatars" where they can choose their hair and skin color and what to wear.

Not surprisingly, the theme will be all things Nickelodeon including games and video featuring Nickelodeon brands and characters. MTV, Nickelodeon's parent company, is positioning itself to capture the younger market. A recent study found that 86 percent of kids aged between 8 and 14 were playing games online.

"Nicktropolis is built from our knowledge that kids' interest in social networking is all about gaming," said Cyma Zarghami, president of Nickelodeon.

Vodafone's Second Life interactive island opens

Vodafone is reaffirming its commitment to Second Life, the virtual online world, with the official opening of an interactive island.

The island is part of the telecoms company's "Make the most of now" strategy and is designed to help as part of Vodafone's ongoing brand building. The island has been developed by advertising agency Bartle Bogle Hegarty with Rivers Run Red.

Visitors to island will be able to experience features such as "photographic ice skating", "butterfly flights" and a user-generated "sound garden".

The sound garden gives residents an "intense sensory experience" as they make their own music depending on the direction they are facing, the number of residents in the same space and the direction of movement, so that more residents co-operate the sound becomes richer and more varied.

BBH and Rivers Run Red will be keeping the island updated with regular up-loads of further features and events.

David Erixon, head of brand strategy and manifestation, Vodafone says : "The launch of the island marks an important point in the evolution of Vodafone's 'make the most of now' brand strategy and we hope that it delivers something of real benefit to the Second Life community. In the long term we are looking to engage even more fully with the community, further opening up communication channels between real and virtual life."

Earlier this month, as reported exclusively on marketingweek.co.uk, Vodafone rolled out a new telecoms service which means residents can call each other via virtual mobiles, as well as "punch out" into the real world and speak to friends outside Second Life.

Article from Marketing News

iVillage Hosts Second Life Fashion Show

AIMING TO BOOST ITS REAL-WORLD popularity, NBC Universal's iVillage Monday will host a "fashion show" in the simulated world Second Life.

The initiative, coinciding with the start of Fashion Week in New York, will mark the third time since December that iVillage has held an event in Second Life, where it aims to connect with the Internet-savvy Web users who frequent the site.

"If we can get this group of women--who are chatty, who look to one another, who frequently are bloggers themselves--that's a great way to market ourselves in a new form of media," said iVillage Chief Marketing Officer Linda Boff.

Monday's show will feature virtual clothing and accessories designed by fictional Second Life-only companies. Second Life residents who go to the event will be able to "teleport" to the designers' game-world stores, where they can use Linden dollars to outfit their avatars with the featured items.

iVillage has hired Electric Sheep to launch its area in Second Life, the iVillage Loft; for the fashion show, iVillage tapped a virtual modeling agency, Boff said.

Yet, for all the work that has gone into the event, no more than 400 avatars will be able to attend in Second Life due to technical limitations. Boff said iVillage is investigating streaming the event elsewhere on the Web.

Article from MediaPost Publications

Does Your Business Need a Second Life?

Why are companies like Toyota (NYSE:TM) and Dell (NASDAQ:DELL) and Starwood Hotels (NYSE:HOT) getting immersed in this pixilated fairyland? Why did IBM (NYSE:IBM) announce it was going to spend $10 million developing a presence in Second Life and other virtual worlds? One word: research.

Entrepreneurs can do research, too. In fact, American Apparel was the first major real-world company to formally enter Second Life when it opened a virtual store in June 2006. Now denizens of Second Life can buy American Apparel clothing there for their avatars (and pick up free virtual tacos and Tecate beer).

Raz Schionning, Web director at American Apparel, says the company's investment in Second Life has been inexpensive. For one thing, American Apparel doesn't need to employ salespeople in the virtual world--to buy something, customers just click on the items they want and agree to transfer money. He says the company's presence in Second Life has cost it about what it typically pays for a Web banner ad campaign. For its investment, it's received plenty of buzz in the press (and some attacks from Second Life residents), sales of some virtual T-shirts ($300 in Linden currency, about $1.10 in real money), and perhaps a banner ad's worth of visitors who've made the leap from Second Life to American Apparel's real-world website.

"There's definitely something there," Schionning says. "But I know we haven't really figured it out yet. The only thing we know right now is that we need to leverage the platform better."

American Apparel is still feeling its way along in this world, but Second Life has been great for Wes Keltner's business. Keltner is president and CEO of the Ad Option, a year-old Lexington, Kentucky, agency. It was Keltner's idea to get American Apparel into Second Life, and the buzz from that has meant a swarm of clients and prospects. He says he has another five or six clients ready to launch Second Life presences. Keltner is even developing what he calls Second Life's equivalent of Times Square and has a commitment from Lego for advertising.

Vivox, a start-up based in Framingham, Massachusetts, sells VoIP telephone services to online games and social networking sites so people don't have to type at one another while they're in those worlds. (For all the buzz about people talking with one another in virtual worlds, what they're doing is instant messaging.) One of its customers in Second Life is Languagelab.com, which is building out property in Second Life as a way to immerse language students in the language they're learning. Vivox also has placed 3-D phone booths in various parts of the virtual world.

Rob Seaver, Vivox's CEO, says he has every intention of making real money in Second Life. But mostly, he thinks Second Life lets him explore the future of the Internet and think about what that might mean for his business. "A lot of what Second Life portrays is the future," Seaver says. "This 3-D virtual realm is a significant part of the evolution of the Internet and more and more activities will be presented in the virtual world."

Article from Inc.com

Peace Point sets up stall in Second Life

Canadian producer Peace Point Entertainment has given itself a presence in online 3D universe Second Life, the first of several moves by the company's director of new media, Eric Blais.

Blais has been tasked with providing the company with a virtual presence in online 3D universe Second Life, producing mobisodes for mobile distribution company Ithentic and overseeing the placement of Peace Point series on platforms including DVD, and online via iTunes.

In an effort to build audience awareness in both local and international markets, the company is introducing its TV series Food Jammers to the virtual inhabitants of Second Life, with an online incarnation of main character FJ Newman occupying an in-game multimedia point from mid-February.

The Second Life 'market stall' takes the form of a virtual lemonade stand, created by Loop Media, where Second Life inhabitants can chat with Newman and watch video footage from the series on the stall's in-world television set.

Les Tomlin, Peace Point's president and CEO, said the new move displays the company's recognition of the digital age. "We are currently positioning ourselves as a major player both offline and online. This is why I'm thrilled to welcome Eric Blais as the most recent addition to the Peace Point family," he said.

Article from C21 Media.Net

Dividends in virtual property

SOME of Australia's biggest brand names are rushing to join the multinational companies seeking exposure in the virtual world of Second Life.
Telstra will launch its presence later this month through BigPond, becoming the first major Australian corporate to embrace the virtual world, which boasts more than three million members.

Taxpayers are also investing, with the Queensland Government funding the purchase of a virtual island through the University of Southern Queensland.

The ABC is also moving in, having purchased an island in the shape of the ABC logo with a view to giving Second Life residents a chance to make the most of their "8c a day" in the virtual world.

Second Life was created four years ago and allows people to create virtual versions of themselves, known as avatars, in the game and then live second lives online.

People can create businesses, own land and even convert the game's currency, linden dollars, to real money using an exchange rate of 270 linden dollars to $US1.

Telstra has brought three islands in Second Life for an undisclosed sum, plastering them with BigPond branding and creating representations of the Sydney Harbour Bridge and Uluru. Second Life charges $US1675 ($2169) for each island, with a monthly maintenance fee of $US295. BigPond spokesman Craig Middleton said the launch date for BigPond's The Pond had yet to be finalised but work on creating the islands was well under way.

"We are extending into the new spaces that are emerging," Mr Middleton said.

"We think we will be the first Australian corporation interacting with the online community in this way. It is largely experimental, but it is also interesting."

Construction of the ABC website is also well under way and Tourism Australia, too, has plans to set up in Second Life.

Big name brands that have already invested in creating a presence include BMW, Nissan, Adidas, Sony BMG, Dell and ABN Amro. Russel Howcroft, chairman of the Advertising Federation of Australia, said the decision by Australian companies to set up in Second Life was simply a question of "going where the people are".

"It is exposure in a new market and beyond that it is turning into a commercial market," Mr Howcroft said. News agency Reuters has perhaps the highest profile presence, establishing a virtual bureau in the game and appointing a correspondent.

This week at the World Economic Forum in Davos, several world and business leaders were interviewed by Reuters in Second Life. However, while Australian companies are beginning to turn their attention to the game, questions remain about just how many Australians are playing.

Get a Second Life

A few weeks ago some hackers ‘stole’ Justice Michael Kirby’s identity to create a presence on the social networking site, MySpace. As The Age put it, ‘The identity thieves posed as the Australian judge to put sordid and sexually charged material on a fake Justice Kirby profile page.’

While there is no doubt that the use of Kirby’s personal details was offensive, so was the breathtaking ignorance of the article’s next sentence:

The case, which MySpace said could be the first confirmed instance of malicious identity fraud on the site, underlines the flimsy or fraudulent nature of much of the internet’s so-called ‘citizen journalism.’

Kirby’s identity thieves were not bloggers — although that is what the article means by its smug and ironic use of the phrase ‘citizen journalism.’

Mainstream media can be as dismissive as it likes, but so-called citizen journalism is becoming the journalism of choice of more and more people. It is fair to question the lack of editing and fact checking on the internet, and the partisan nature of many blogs — but then the mainstream media is looking increasingly shaky on those fronts as well, just read any Caroline Overington column.

As Antony Loewenstein wrote in the Sydney Morning Herald two weeks ago:

In Western nations, blogging has grown in popularity as public trust in the mainstream media has declined. Much of what passes for debate in the Australian press can be called ‘corkscrew journalism’ … According to Fred Halliday, professor of international relations at the London School of Economics, the phrase is defined as ‘instant comment, bereft of research or originality, leading to a cycle of equally vacuous, staged polemics between columnists who have been saying the same thing for the past decade or more.’

In a fairly dramatic recognition of the internet’s key role in breaking news, both Hillary Clinton and Barack Obama recently chose to announce their respective candidacies for President of the United States on their websites.

It is true that part of the attraction of the internet is that people can invent personas that are hard to verify. Myspace is currently being sued by the families of four teenage girls who were sexually assaulted by men they met through the site. In these cases and the case of Justice Kirby, criminals have made use of the anonymity that the medium provides and it would be disingenuous to suggest that technology makes no difference at all. The internet does enable certain behaviors and it does give some people the level of anonymity they need to entrap.

In an attempt to manage this Myspace has hired a security officer, Hemanshu Nigam, and made it more difficult for users who are over 18 to contact users between the ages of 14 and 18. Nigam said that, ‘ultimately, internet safety is a shared responsibility … We encourage everyone to apply common sense offline security lessons in their online experiences and engage in open family dialogue about smart web practices.’

Second Life is being hailed as the next MySpace

So I show up, first time in the place, and this fox is speaking to me.

Not talking here about the way-old-school slang for a beautiful woman but something closer to Animal Planet than the Playboy Channel. Bushy tail. Canine features. The works.

Can’t remember exactly what the conversation was - a mere exchange of passing pleasantries before it walked off - but the whole thing left an unsettling feeling, like this could really get weird. Like I’d fallen through the looking glass and Alice definitely wasn’t living here anymore.

That’s because it was my first foray into Second Life, the buzzed-about and controversial online role-playing and social-networking site that’s being hailed as the next YouTube, the next thing to bedazzle the tech-savvy and befuddle the technophobes.

Sort of a combination of My Space, The Sims and Monopoly with the three-dimensional touch of Star Trek’s holodecks and the videogame World of Warcraft, Second Life is not a competitive pursuit - even though it’s technically what’s called a “massively multiplayer online game” - as much as an alternative state.

Users choose a fictional name and create an avatar, an animated version of themselves that can walk, run and dance, and then are dropped into a landscape where they interact with others’ avatars, including those of real-life friends who are also “in world,” buy or sell Second Life land, set up businesses, build houses, buy clothes, work a job, go bar-hopping, make art and, yes, even some NC-17 activities. It’s free to join but potentially expensive - in the site’s made-up Linden dollars or in real currency - if you want a super kickin’ SL lifestyle. Just like real life.

And if that doesn’t sound all that much different from everyone’s first life, it’s their life buffed to perfection. You can be whomever - or whatever - you want. You can fly. You can teleport. No taxes. No politicians. No war. No terror. No War on Terror.

But there is plenty of hype.

Hatched in 2000 by a San Francisco company called Linden Lab, which didn’t make the site publicly accessible until 2003, Second Life includes eBay co-founder Pierre Omidyar and Amazon pioneer Jeffrey Bezos as backers. Major companies and organizations - from Dell and MTV to the American Cancer Society - are flocking to the site to set up “islands,” worlds within the world dedicated to their products.

Former Virginia Gov. Mark Warner and Sun Microsystems have held press conferences in Second Life. Reuters news agency even has a reporter “embedded” in Second Life full time.

Although most of the site’s 2 million-plus residents conduct their commerce in Linden dollars, some are raking in real money. Last fall, Linden Lab CEO Philip Rosedale estimated that $1.5 million (in actual currency) changes hands through Second Life monthly. In November, a German woman named Ailin Graef - known on the site as Anshe Chung - reportedly became the site’s first real-life millionaire, buying and selling Second Life real estate.

Gary Leland, 52, of Arlington, Texas, who runs podcastpickle.com, a Web site aimed at the podcast and vidcast community, set up Second Life’s Podcast Island, where podcasters from all over the world meet and promote what they do. He pays $200 a month - in real dollars - in rent and sees SL as the next step beyond two-dimensional, text-heavy Web sites and instant messaging.

“I think it’s the future,” he declares. “Second Life, or something like it, will become such a mainstay ... once the young kids and college kids get into it, there’s really going to be a boom at that point.”

Second Life is the brainstorm of Rosedale, 38, a former chief technology officer at RealNetworks who helped develop the streaming technology that is the lifeblood of Second Life.

“He had a great idea: to create a collaborative online space where people could do things together,” says Linden Lab marketing director Catherine Smith. “I don’t think anyone knew how it would evolve.”

One of the ways SL is being used is for education. Anne Beamish, a professor in the graduate program in Community and Regional Planning at the University of Texas at Austin’s School of Architecture, has had her students utilize SL to envision ideas about public space.

“… One of the projects was they had to design a project that really fostered public life,” she says. “Somebody created a space to discuss virtual reality. Another created (in Second Life) the building he was designing. ... Somebody else did a performance-art kind of work where your avatars would move through space with sound and art.”

“Sun (Microsystems) is using it as a way to meet each other and a way to communicate with their audience,” Smith says. “American Apparel has opened a store ... They can create a prototype for jeans and ask for feedback from residents ... It’s a way to be super-creative and to fulfill a fantasy, say, of being a fashion designer or building something and going inside.”

“There are a lot of smart, creative people in Second Life,” says reporter Adam Pasick, dubbed “the Reuters Second Life bureau chief” who has been stationed in-world since October. “Some are there to start a business, some are here to create art or write software, and some are in it for purely the social nature.”

For all the glowing talk about community, sharing and a bright, shiny, happy future - an anarcho-libertarian paradise of unfettered creativity and commerce - there’s a potential downside to Second Life. As the world becomes more populated - and subsequently moves away from being just a high-tech monkey bar for early adopters - it can become more prone to crime, hacking and inappropriate behavior, just like real life.

Second Life is no less susceptible to the same elements that have haunted the Internet since its inception - people not being who they say they are - than the often-criticized MySpace. Meanwhile, in September, Linden Lab’s system was hacked into, forcing the company to contact the FBI and mandate that all residents change their passwords. There also have been cases of online harassment, called “griefing.”

On top of that, the government may start to take a closer look at the tax responsibility of those making money on so-called “unreal estate” through sites like Second Life. Economist Daniel Miller, whose congressional Joint Economic Committee has been investigating virtual gaming since October, is due to deliver a report early this year. “Congressional and IRS interest in this issue is simply a matter of time,” he was quoted as saying in The Weekly Standard.

“If you take money out of Second Life, then you’re responsible for claiming that income, like eBay,” says Linden Lab’s Catherine Smith.

Pasick points out that the site has been the victim of more mundane issues. “As with any new technology, there are a fair amount of glitches,” he says. “The whole grid will go down periodically. That’s been compounded by the fact that it’s growing so quickly ... I get the sense they’re constantly putting out fires to keep the thing running.

“It’s not very user-friendly, and for those who aren’t technologically savvy, or their graphic card isn’t up to speed, they may just get confused and never come back.”

For now, though, there’s not a lot of bad news for Second Life. With a virtual land mass four times the size of Manhattan but with only 2 million inhabitants - and with generally around 20,000 online at one time - there’s room for growth. Many “islands” are empty, real estate just waiting to be bought, traded or populated.

Certainly, there seems to be a lot of smiles at the privately held Linden Lab. Profit figures aren’t released, but Rosedale told the Chicago Tribune, “We’re very close to profitable. The business itself, on an operating basis, is very profitable.”

But some things never change.

As I maneuvered from island to island, group to group, it became clear that it can be just as difficult to make contact with someone in Second Life as in the world of flesh and blood. It could mean stumbling across two women having a rapt discussion in French who obviously don’t want to be bothered - “Bon, tu le veux, mon secret?” (OK, you want it, my secret?) one says to the other who replies excitedly “Ouiiii.”

Or it could mean observing the painful, halting throes of a virtual guy trying to strike up a conversation with a virtual woman sitting on a virtual bench.

“Can I take this seat, miss?” he says.

“No law against sitting is there,” she responds, the testiness oozing through the typing on the screen.

His avatar plants himself at the other end of the bench.

Long, awkward pause.

“Now I’m thinking I over-reacted,” she finally says, perhaps offering a tender olive branch of tentative conversation.

He says nothing.

They continue to sit next to each other in uncomfortable silence.

Just like real life.

What game is eBay playing with Second Life?

eBay has announced that it is cracking down on the sale of virtual goods, such as currency, clothes and weapons from online games and virtual worlds.

eBay’s policy on the sale of digital goods states that “The seller must be the owner of the underlying intellectual property, or authorized to distribute it by the intellectual property owner”. There is some question about whether virtual goods are really owned by the game player, or whether they are the intellectual property of the company that owns the game or virtual world.

Interestingly the ban doesn’t extend to the much-hyped Second Life. eBay spokesperson, Hani Durzy, told CNET that the reason for this is: “We think there is an open question about whether Second Life should be regarded as a game.”

So if Second Life isn’t a game, what is it? And how does eBay decide what constitutes a game and what doesn’t? Why is Second Life different to other games? Is it simply because eBay believes the Linden Lab’s marketing guff (ie that Second Life is more than a game), or could there be some other reason for eBay’s philosophical questioning?

eBay founder and Chairman of the Board, Pierre Omidyar, is an investor in Second Life. According to an interview with Durzy at AuctionBytes, the decision to exempt Second Life was made at a “policy team level” and had nothing to do with Omidyar.

Anyone who has ever worked at a bureaucracy, or any large organization, knows that what the boss wants, the boss gets.

The boss doesn’t have to issue direct instructions to each individual employee; the boss’s interests and inclinations are usually common knowledge within the organization.

For this reason the whole “policy team level” line doesn’t wash with me. If you were in that particular “policy team”, you’re not going to create policy that pisses off the chairman of the board, are you?

Even though there are other sites, such as ige, where you can off load virtual goods, I am worried about the way that eBay has dealt with this issue by making what seems to be an arbitrary decision.

eBay is a global trading platform and has changed the way many markets operate - for example, it has had a profound impact on the antique market, where its global reach has changed the notion of what is considered scarce and what isn’t.

eBay therefore needs to operate at the highest standards of integrity and openness, and decisions like this one need to be completely transparent.

Sweden to open embassy in 'Second Life'

Sweden plans to be the first country to open an embassy in the popular virtual world Second Life. "It will have answers to questions on all aspects of Sweden," Olle Wastberg, general director of the Swedish Institute, an organisation that promotes the country's image abroad, said on Tuesday.

The embassy will be called House of Sweden and will be modelled on the country's new embassy in Washington DC. It will open in a couple of weeks.

Second Life, created by Linden Lab, opened to the public in 2003. The publisher says the online world now has more than 3 million inhabitants from around the globe.