Interesting Lawsuit – IGE Sued

You had to figure it was coming sooner or later, but a bunch of WoW players have filed a class action suit against IGE for, well, being IGE. (I doff the propeller beanie to Mr. Koster.)

I should say, first of all, that IGE and I have a bit of a sorted past ourselves as they bought out a few websites I was volunteering for and, from which, I eventually fled in horror not quite able to tell anyone what happened. Or something. I don't actually remember the details right now, I just remember being horribly pissed off at IGE and gold farmers in general at the time. So I might have a bit of an axe to grind, if I was the petty sort of person, but really that all happened well above my head.

But, anyway, this kind of suit is only going to get more common. Video games, MMOs, and the virtual worlds within them have been mainstreamed and there's very little established law on just how to treat them. Or, for that matter, things like the ToE. Which is the sort of shady contract that corporations go to great lengths avoiding having challenged in courts. And the violation of which is also a major part of the suit. I'll leave it to those more schooled on legal matters to comment on that.

But what I do want to mention is the second big claim of the suit, namely that, by farming and selling gold, IGE is harming the plantiffs by decreasing the value of their own gold. Now, there's a host of issues here starting with whether those gold piece are an actual object.

According to Blizzard, they're not and they don't have any intrinsic value. They're just registry entries on a database. Just like everything on your character, and you're only paying for the privilege to connect to those databases and have fun by shuffling the values around. And, for that matter, you're not allowed to trade them for anything of real world anyway so we're just going to stick our fingers in our ears and scream until this problem goes away. The plantiff, and a lot of others, I think, might argue that their virtual property is just as valuable and important to them as their actual property. Blizzard doesn't like that position, understandably, because if virtual proper is the same as real property then they're open to all sorts of lawsuits when they have a server crash or someone gets ripped off in scam. Yet, at the same time, these virtual objects are something more than numbers tripping back and forth in some circuitry. You could say the same thing about someone who keeps all of their money in a bank account and only transfers it online or through wires. That money is represented by figures in some table somewhere and stored on any number of memory chips. But it has value – and a degree of legal protection - because it can, at least potentially, be converted into real life goods and services. If these gold pieces are being traded – and they are, including for real life money whether Blizzard says it's okay or not – then they also have the potential to be converted into something of real, physical value. So they're not completely worthless.

Then there's the whole argument about whether gold farming is, in and of itself, okay, which I'm not going to get into beyond saying that moral is not the same thing as legal. But as far as I know, no one's managed to outlaw IGE yet.

But what really interests me is the notion that the plantiffs have been damage as a result of the actions of IGE. The claim that IGE actively harms the in-world economy. Not by making things easier for those who have more time than money but by making it harder for those who don't engage in gold buying and selling. They're devaluing gold, in so many words, by making it worth less than they would if they weren't around.

A common defense I've heard of real life trading is that it doesn't actually harm the economy – the exact opposite of this lawsuit's claim, in other words – because it makes goods cheaper for the average player. Gold farmers don't tend to farm gold – at least not in WoW, as I understand it – they farm items they can turn over quickly for lots of gold. They use the auction house, they fill trade channels, and because the “farming” actually creates objects and wealth where none existed before, the net effect is that they depress the prices of, say, the Uber-Leet Sword of Awesomeness +3. They camp whatever spawns it, run whatever dungeon has it on its loot table, and create as many of them as possible. The more they supply, the lower demand gets and the price sinks – according to Econ 101, anyway.

To some people, that's a benefit because it means the average player needs less gold to afford that Uber-Leet Sword of Awesomeness +3 that's really nice to have. Even if they don't trade some hard earned cash for the gold to buy it, they have to scrounge around in game for it less than they would otherwise. More people get the sword, and they have more gold in their pockets, and that's a net positive.

It's a persuasive argument but I'm not entirely convinced. It seems to me that what the lawsuit claims is true. The deleterious effect on the economy of professional gold farmers isn't causing overinflation, it's deflation. While it might be easier to buy an Uber-Leet Sword of Awesomeness +3 (And, yes, I'm kicking myself for coming up with such a long name right about now.) it's not nearly as easy to sell one. The result is that you'll work harder to earn what you wanted in the first place which, from what I know of economics, is a bad thing. If you fight your way through whatever digital hell it takes to get one, then you won't be as rewarded for your efforts as you would be if there weren't dozens of others flooding the market daily. It might cost you less gold to have one but having one will put far less gold in your pocket. At a certain point, it becomes untenable for the average player to go and spend the time it takes to get one (There's a catchy economics term for this that I forget. And boolean searches aren't very good for concepts. My google fu fails me. Still, the general idea is that there's a point where the labor involved in making something is more valuable that the purchase point of that item. At that point, it's better to just plunk down the cash. And it's especially true when it comes to an MMO because it's all about subjective value. It's also why, while the price of an Uber-Leet Sword of Awesomeness +3 might fall, it'll never bottom out, as long as people still want it.). It's just not worth it when you could spend an equal amount of time gathering up gold or fairly priced items (If there are any.), buy up your sword, and still have cash left over.

That feeds into the cycle of real money trading but also impoverishes the overall economy. Not only are you not farming for the Uber-Leet Sword of Awesomeness +3, you're not grouping with other people who might do so, you're not picking up the incidental loot that might drop there, you're shifting your attention to another area, another monster, and the value of everything in your inventory has been altered. And the overall effect is that you're left with something less than you would have been otherwise. I'm not sure that companies like IGE exert more influence on the economy than any other group of players who's behavior alters things but they're definitely doing something. I'm not even sure if that something is necessarily bad – we're talking about a video game here, not whether people starve, so while deflation might ruin a normal economy it might actually benefit a virtual one.

Still, should be an interesting lawsuit. Especially if it actually gets resolved and some actual case law goes on the books.