'Synthetic Economies' may need Regulation

Last week on All Things Considered, NPR covered the popular topic of economies of MMORPGs. Host Robert Siegel talks with Edward Castronova, an economist who studies “synthetic worlds” and their interaction with real money/economies. Despite successful attempts to commodify the practice of selling game goods for money, Castronova fears it could damage the game: “What’s at stake here is the game itself. These things could be destroyed if we don’t try to put a wall between the real economy and the virtual one.” An exampe he gives, why isn’t the IRS taxing people on the profit they make selling gold?

NPR’s game reviewer, Richard Holt, talks about the ethical problems of buying levels, gold, or goods. The balance of the game is damaged once people start buying their status and not earning it. He writes, “There should be no advantage to you in the game if you’re rich in real life. This may be idealistic, but I play games to get away from things like this.” Will the relationship between synthetic economies and real ones need to be regulated?