At the 2005 Digital Money Forum, many of
the delegates were genuinely astonished by Richard Bartle’s presentation on “real
money trade” (RMTs) in virtual worlds.

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These are big money.  A
current favourite is The World of
Warcraft
.  This grossed $500m worldwide in 2005, more
than most hit movies
ever take at the box office!  He also pointed out that the virtual worlds based in the US and Europe, such as Sony’s Everquest, are small in comparison to their Asian cousins: South Korea’s Lineage
II
, for example, currently has three million
players (who pay around £15 per month).  And the boundary with the real world is getting blurred, especially for “traditional” financial service providers.  Because virtual worlds are where the next generation of
customers are.  In fact, Wells
Fargo have recently bought one of the islands in There (now renamed Stagecoach
Island
) to “teach young adults important
lessons in financial literacy
”.

The economist Edward Castronova, known as
the first
person to study virtual economies
, famously calculated that the GNP per
capita of Norrath, the imaginary world in Everquest, was somewhere between Bulgaria and Russia.  Avatars from Everquest trade for hundreds of dollars and there is a ready market for magic
swords and the like.  There’s also
an F/X market in platinum pieces (the currency used in Everquest).  Hong Kong-based IGE is one of the biggest virtual currency
dealers and they have
spent $25 million
buying up rivals to the point where they claim to have
half of the market.  At some point,
banks will have to take notice: why shouldn’t my bank offer me Platinum Pieces
as well as Euros?  And if it does,
how far away are futures and other derivatives? Come to that, how far away is the FSA?

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