Gene Yoon, Linden Lab’s former General Counsel and current Vice President of Business Affairs, spoke in Second Life yesterday as part of the Metanomics / Metaversed series of events, hosted by Cornell’s Robert Bloomfield. SLCN has made a video of the event available. Yoon focuses on economic policy in virtual worlds, not legal issues, but obviously, there’s a lot of crossover.

The discussion quickly turns from macro to microeconomics, because Yoon refers to the Linden Dollar “a product” and encourages users not to think of the world as possessing an economy. Throughout the discussion, he consistently discourages the use of terms like “monetary policy” and “macroeconomics” in reference to Second Life. Bloomfield pushes the macroeconomic angle, while Yoon wants to draw a line between the user experience, where he says metaphors regarding “economics” and “ownership” do apply, and the business and legal world, where he says the metaphors are largely invalid. His comments will almost certainly be controversial.

Yoon’s position, while perhaps not formally reflecting Linden Lab’s corporate policy, is exactly the position that the company has to take from a legal perspective. As long as the land and money metaphors don’t apply beyond “the user experience,” then the small-print EULA and TOS provisions (which, in part, run counter to the big print) can operate to preserve Linden Lab’s ultimate control of key aspects of the offering — Lindens, land, and objects — that users typically feel they “own.” This question is at the heart of both academic inquiries and litigation over the nature of “virtual property.”

Yoon and Bloomfield also discuss micropayments, intellectual property rights, alternative dispute resolution, Linden Lab’s relatively laissez-faire policies, competition for Second Life, and more.

Commentary

This is off topic a bit, but I want to compliment Robert Bloomfield’s Metanomics series, and Nick Wilson’s Metaversed site generally, because they are becoming my favorite source for serious business and economic discussions about metaverse issues. The speaker series is outstanding, and Metaversed is rapidly turning into a business counterpart to Terra Nova.

I have to say that I generally find podcasts, interviews, presentations, and the like that focus on serious issues to be waste of time; it’s just faster to read research papers. So I was a little reluctant to dive to these. But the Metanomics series, which started out strong, has only been getting better.

Recently, they’ve started taking on the feel of a high-quality PBS interview show, from the brief mention of underwriters at the beginning through the fairly academic and respectful pace that Bloomfield sets. Picture Charlie Rose talking to Alan Greenspan. Bloomfield isn’t attacking his guests (to the occasional disappointment of the Second Life audience) but he shouldn’t be; a good interviewer knows that evasive answers tell smart viewers a lot, and Bloomfield does a good job pointing them out without antagonizing his guests. It’s a fine line, but it works, and the format lets Bloomfield get guests like Yoon and ‘Anshe Chung,’ who don’t often make public appearances.

Wilson has recently made significant cosmetic improvements to the main venue that these are held in as well, and more importantly, has involved a number of partner sims, allowing more residents to participate in the live discussions. He has also been proactive in keeping the audience free of griefers and eliminating problems before they get out of hand. The series is well attended and the backchat is great, but if your schedule doesn’t let you make these live, watching them on SLCN later (or even just listening to them while making dinner, as I often do) is a good substitute.

Little gives me greater academic pleasure than finding an original source that adds significantly to an idea that I’ve been batting around. That happened today.

Regular readers know that I am approaching an early, self-imposed deadline for my non-fiction book on virtual law, and as part of that, I have been digging in to some of the older works on this stuff. I’d seen references to Homo Ludens: A Study of The Play Element in Culture, a 1938 book by Dutch historian Johan Huizinga (originator of the concept of the “magic circle” to protect play spaces from the world, and vice versa), but I hadn’t tracked it down yet.

I just got a copy, and I was excited to find that it has a chapter entitled “Play and Law,” which includes the following passage on the relationship between play spaces, the magic circle, and legal systems.

Every place from which justice is pronounced is a veritable temenos, a sacred spot cut off and hedged in from the “ordinary” world. The old Flemish and Dutch word for it is vierschaar, literally a space divided off by four ropes, or, according to another view, four benches. But whether square or round, it is still a magic circle, a play-ground where the customary differences of rank are temporarily abolished. Whoever steps inside it is sacrosanct for the time being.

[...] Let us turn back once more to the archaic forms of legal procedure. Any proceeding before a judge will always and in all circumstance be dominated by the intense desire of each party to gain his cause. The desire to win is so strong that the agonistic factor cannot be discounted for a single moment. If this does not of itself suffice to disclose the connection between legal justice and play, the formal characteristics of the law as practised lend added weight to our contention.

I’m sure this rings true for some of the litigators who read this blog, and it also helps explain the large number of attorneys I have met who play online games, and who have a secret desire for a second career as game designers.

A new resident-created Second Life service called “AgeLock” offers parcel owners the ability to require an affirmative statement of age before allowing access to adult content, potentially reducing civil and criminal liability for access by minors. Users who enter a parcel that has been secured with AgeLock are asked to confirm that they do not object to viewing adult material and confirm that viewing adult material by someone their age is legal in their jurisdiction. Users are also asked to provide their date of birth.

AgeLock is positioned as an “alternative to Integrity” in materials on the AgeLock web site. “Integrity” is the name of the identity verification system Linden Lab announced last summer, which is slowly being rolled out. AgeLock recently entered free, open, beta testing.

Virtually Blind interviewed one of AgeLock’s creators, ‘Allana Dion.’ ‘Dion’ explained how AgeLock works and addressed potential concerns regarding privacy and access.

Virtually Blind: In general terms, what is AgeLock?

‘Allana Dion:’ AgeLock is a scripted device connected to an off world (outside Second Life) database. It is set to either scan a sphere shaped area of as low as 2m or as high as 96m around the unit, or scan an entire plot of land by reading the property lines. Unlike the default scanner, this scanner will scan up to 100 people all at the same time.

As a new visitor arrives, the unit scans the avatar and checks that avatar name against the database. If the avatar name is already in the database, the unit will simply go back into standby mode and wait for the next visitor. If the avatar name is not in the database, the unit will address the avatar with a blue pop up window, warning the visitor that the area may contain adult content.

The warning states: Warning! You have entered an area which may contain sexually explicit material. If you are underage, find adult material offensive, or if it is illegal for you to view adult material in your community, you should leave the area. If you wish to remain and continue to have access to this area, please check ‘Enter.’

Basically the same warning that is used on adult websites all over the internet.

After the visitor has made it clear he/she wishes to stay, he/she will be asked to state for the record that he/she is 18 years of age or older, then state his/her real life date of birth for the record. This information, avatar name, date of birth given, are added to our database so that the individual will never again be asked to give this information when they revisit that plot of land or any other connected to the AgeLock system.

If any visitor indicates by the buttons they select on the pop up window that they either prefer not to view adult content or can not legally view adult content, the unit will thank them politely and leave them alone for 120 seconds (two minutes). If after two minutes the individual has not already teleported away on his/her own, the unit will teleport him/her to his/her home location with another polite message.

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Guest Commentary – Part Two of VB’s Three-Part “Click to Agree” Series on Terms of Service and End User License Agreements in Major Games and Virtual Worlds

Even in the largest online game experience, the player can always leave. This is the primary difference between a real world economy and a “virtual economy.” Much academic and game-design attention is focused on controlling cash flow in games and virtual worlds. I’ll cover some of the roots of virtual currency, and illustrate why in-game currency can only go so far in approximating a real life economy. Along the way, we’ll take a close look at the terms of service (TOS) of a number of well known games and virtual worlds and examine how they handle virtual currency.

Online games and virtual worlds generally use some form of in-world currency for buying and selling virtual goods. There are several sites that track the exchange rates and valuation of these currencies, one of the best known is GameUSD. You can use that site for up-to-date exchange rates for Second Life, World of Warcraft, and other virtual worlds and games (the site is mainly a portal, but it does provide some real-time data; some the data is out-of-date).

Real money trading, (“RMT”) is available for most world and games, even those that do not acknowledge or condone it. This raises several questions, including what happens as the world shrinks after the expansion – where does that money go? Is there a responsibility to the user to continue, even if the game fails? Who decides when and if the plug if pulled on a currency market? Do users have a true property interest; what happens if they are terminated – fairly or unfairly?

In most games, currency serves as a “points” system. Why is currency used in online games? The obvious answer is that it is lifelike — sexier than points. “Points” seems like a ballgame or a pinball machine, but in an alternate universe, “money” validates the time put in. But what value is money in a virtual world or game? How is it like money in real life? How is it different?

Consider the base duties of a developer in an online world. The main goal for developers is an “even playing field.” Known bugs and cheats must be sought out through the testing period and then ongoing monitoring. The terms of service (TOS) for many games make explicit that a player can be banned from the game for “cheating others” or making use of exploits outside of the contemplated game or virtual world experience. In The Sims Online’s TOS (from Electronic Arts) states, “[t]hough the Game is a role-playing game, the claim of ‘role-play’ is not an excuse to commit any of the disruptive behavior mentioned above. For example, you may not defraud another player because you are ‘role-playing a con man.’” Even in the many games that don’t explicitly state this, the TOS always grant a right to ban within the sole decision of the administrative staff.

An online multiplayer game arguably has no greater duty to its users than this: outsmart cheaters, beaters, and whiners. However, many games have seen ad hoc vigilante justice committees form to punish those who break rules or act against their spirit. These groups, which have been around since the early days of online MMO gaming, typically operate within the confines of the world, but not always. In the case of Second Life, there are several pending user-driven lawsuits that arose because users found that they could not successfully curtail activity that fell outside of the terms of service (and allegedly the law) using in-world tools.

If virtual worlds have real world value, then “video game cheating” becomes “real world theft.” On the other hand, if you are a gold farmer using a game or virtual world to make your real world living, and you are taking advantage of your extensive knowledge of the world to make money as fast as possible, you may argue that actions in the gray area of not-prohibited-but-not-authorized are just part of your legitimate business plan, particularly if there aren’t obvious victims. See this Findlaw article for a more detailed analysis of the ethics and practicality of this argument/philosophy.

Notably, no TOS listed below tells its user it has a duty to “prop up” the currency in its game, although Entropia Universe claims it does back the currency (albeit not in the Terms of Service). Below is a summary of the major MMO games and virtual worlds, and what their TOS say about the rights of users as to currency and other virtual property, and whether there is a right to convert currency by trades or real-world money conversion.

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