[Dave Birch] Virtual worlds, digital money and mobile, all in one story! ! It’s all about the Japanese virtual world S! Town, run by Softbank Mobile, which attracted 100,000 subscribers in its first couple of months of operation. In S! Town, subscribers design and dress their avatar and room, using the virtual world’s currency for purchases. Friends share pictures, download music and meet friends in the public plaza. There are community events like treasure hunts, which often have monetary prize incentives that serve to give subscribers more currency to personalize their avatar and digs. That’s what’s great about virtual worlds, everyone’s happy. Well, I say everyone. I mean everyone except the regulators, spoilsports that they are.

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China and South Korea have already initiated stricter regulation of virtual world economies, so perhaps Japan won’t be too far behind. I wonder which regulatory model they’ll choose though? South Korea certainly provides a useful case study for them. Apparently, the South Korean market reached a trillion won, or about a billion dollars, last year. Itembay, the leading virtual asset exchange in South Korea, saw assets worth 300 billion won traded via its Web site in 2005, with roughly 5 percent charged as commission. A large part of this economy rests of sweatshops: clandestine, untaxed garage businesses that hire dozens or hundreds of people to collect up in-game virtual assets for resale. One has to wonder whether the major virtual worlds operators — such as NCsoft, NHN and CJ Internet — are that concerned about a government crackdown on asset trading. In fact, a NCSoft official is quoted in that article saying that “We don’t think the ban will severely damage us, because gamers will find another way to trade”. Quite.

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]

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