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(Yonhap Feature) Gamers make real money on virtual items, court says OK

All Headlines 08:00 January 14, 2010

By Kim Eun-jung

SEOUL, Jan. 14 (Yonhap) -- For over a year, Lee Sang-eun roamed a medieval fantasy world in an online role-playing game, Lineage. But the 30-year-old life insurance consultant found the game was taking too much time from his real-world life. So he found another way to play -- using cyber game items he buys with real money -- instantly enhancing his game without having to actually improve his skills.

Lee is not the only gamer who buys and sells game items, such as swords and armors, through dealers in a country where online role-playing games and their secondary markets have grown in popularity, especially following a recent court ruling.

Last month, South Korea's top court ruled that unlike online gambling -- games of luck that are banned by law in Korea -- acquiring game items takes time, effort and skill. Therefore, selling them is legal, as long as the real money that backs the trade goes through legal channels.

"I feel a little awkward paying money for something that only exists on the computer screen. But it's a simple trade of money for someone's labor. I mean, it's real work," Lee said.

Real money, paid through credit card or bank account transfer, must be exchanged for cyber money on sites like Itembay and IMI, which then sell cyber items to players.

The amount of money exchanged online in Korea topped 830 billion won (US$730 million) in 2006 and might have exceeded 1 trillion won in 2008, according to the Korea Game Development & Promotion Institute. The amount does not include individual trading and the black market.

Companies that sell online game items to players welcomed the decision and look forward to a boost in the virtual economy.

"With the Supreme Court's ruling, we expect to put an end to controversies over the online game broker sites regarding whether or not the trading is legal and whether it encourages virtual gambling," Itembay and IMI said in a joint statement released on Monday.

Itembay and IMI launched their Web sites in 2001, following the huge successes of Starcraft by Blizzard Entertainment and Lineage by the South Korean company NCsoft, both released in 1998.

Major game developers, however, had a mixed response to the ruling, citing the infringement of product license agreements that discourage players from trading game items.

"This case rather suggests there has been no explicit law to handle online money randomly acquired in online games. Further and more issues have yet to be addressed regarding real-money trading in online gaming," Kim Gwon-woo, public relations officer at NCsoft, said, adding the company will continue to regulate accounts of players who publicly trade online items for money.

Meanwhile, Kim Tae-gyu, a game engineering professor at Hoseo University, expressed concern that the involvement of real money might take away the fantasy experience that gamers can have only in the virtual world.

"If players are instilled with the notion that game items can be easily turned into real currency, the game doesn't end as it is. That could sometimes create actual problems in real world," Kim said.

With the court's conditional legalization of the cyber-trade, Kim said more comprehensive guidelines for gaming should be prepared soon.

"It is true that the online item trading has kept growing, but the system has not evolved to keep pace with the phenomenon. So it is time to begin open discussion to prepare reasonable regulations."

In a related ruling, a South Korean court last year said that profits earned from trading online money should be subjected to a value-added tax as a way to acknowledge the value of virtual property.

Meanwhile, the ruling in favor of trading virtual items for real money has put the government into an uncomfortable position: On one hand, it is trying to nurture the gaming industry as a major factor driving the economy, but on the other hand, it's trying to clamp down on illegal gambling.

The Ministry of Culture, Sports and Tourism has launched a task force to closely monitor trading following the ruling. It stressed that the ruling doesn't apply to money won on gambling sites.

Law enforcement agencies also expressed concern that such a ruling will make it hard for them to crack down on online gambling.

"If online game money is considered to be earned through good skills and hard work, the rule could be also applied to gamblers. If more players get involved in the off-line trade of online items, it could create more real-life problems that might grow until they become too large to take down in the future," a high-ranking police officer said.

But proponents of the online practice say trading online items for real money has become so common that it is time to deal with the practice in the real world, not set up laws to prohibit it.

Meanwhile, Lee, the life insurance consultant, said, "The point of paying cash for game items is not about buying actual goods. With trading, you buy the ability to have more fun playing ... and I don't think it's wrong."


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