Monday, April 30, 2007

Prices for WoW Goods posts weekly reports on the median sale prices of more than 100 goods commonly seen at the World of Warcraft Auction Houses. The report for the week of April 26, 2007 can be found here.

When these prices are paired with the market value (in U.S. dollars) of gold, it is easy to see that even fairly mundane crafting and consumable items have substantial economic value. One study surveyed third party gold vendors to estimate that the cost in dollars for 1,000 WoW gold pieces averaged $259.52 across all American servers (Horde and Alliance). That study is available on-line at

Here is a list of the top 10 most expensive items on the list, in gold and U.S. dollars (using the above dollar-gold exchange rate):

  1. Blacksmithing Plans for Hand of Eternity: 1,250 gold; or $324.40
  2. Blacksmithing Plans for Dirge: 1,200 gold; or $311.42
  3. Blacksmithing Plans for Felsteel Longblade: 925 gold; or $240.06
  4. Blacksmithing Plans for Black Felsteel Bracers: 870 gold, 2 silver, 63 copper; or $225.79
  5. Enchanting Supplies for Void Crystal (per 10): 795 gold, 5 silver; or $206.33
  6. Blacksmithing Plans for Blessed Bracers: 777 gold, 50 silver; or $201.78
  7. Leatherworking Pattern for Thick Netherscale Breastplate: 600 gold; or $155.71
  8. Tailoring Pattern for Girdle of Ruination: 555 gold 55 silver, 55 copper; or $144.18
  9. Leatherworking Pattern for Gloves of the Living Touch: 550 gold; or $142.74
  10. Leatherworking Pattern for Netherdrake Gloves: 500 gold; or $129.76
Of course, prices can vary significantly from server to server, and between Horse and Alliance. But these figures still give a sense that even in a game like WoW, which specifically bans RMT, there is still significant economic value to the items.

Wednesday, April 25, 2007

RMT Sites for MMORPGs

Interesting round-up and review of 10 third-party real money trade (RMT) sites.

MMORPG Service Reviews 2007

Not surprisingly, IGE tops the list. The summary table lists sample pricing for each site, like how much 500 gold costs in WoW. The reviews also cover which sites allow players to sell or trade items to the third-party sites.

Wednesday, April 18, 2007

New Research on Tax Issues Affecting Virtual Worlds

A pair of recent articles by legal scholars attempts to shed light on the tax questions related to virtual worlds.

The first is by Bryan Camp, a tax law professor at the Texas Tech School of Law who previously worked in the IRS Office of Chief Counsel. His paper is available for download from the Social Science Research Network: The Play's the Thing: a Theory of Taxing Virtual Worlds

The second paper is by Leandra Lederman, who is the William W. Oliver Professor of Tax Law and Director of the Tax Program at the Indiana University School of Law. Her paper is also posted on the SSRN: 'Stranger than Fiction': Taxing Virtual Worlds

World of Warcraft Tops 8.5 million Users

A recent news story posted on reports that the MMO World of Warcraft has now surpassed 8.5 million paying subscribers.

Press Release: Virtual Economies Need Clarification, Not More Taxes

WASHINGTON, D.C. – The past few years have seen a dramatic increase in the popularity of online gaming and the virtual economies that accompany them. The population of these online worlds has been estimated to exceed 10 million people worldwide. Because of their newness, some uncertainty exists regarding taxes and intellectual property rights.

“There is a concern that the IRS might step forward with regulations that start taxing transactions that occur within virtual economies. This, I believe, would be a mistake,” Chairman Jim Saxton said today.

In response to this concern, the staff of the Joint Economic Committee has begun an examination of the public policy issues related to virtual economies. A virtual economy is defined as the universe of transactions that occur within an online community, such as Second Life or World of Warcraft. These transactions include the sale of goods and services and take place entirely within virtual economies; there is no real-world or physical exchange. However, a real-world value can often be assigned to such transactions using exchange rates or other methods.

Based on existing law, if an individual generates cash income in U.S. dollars from transactions in virtual economies, the question may arise whether a tax is due on that real-world income. However, if the transaction takes place entirely within a virtual economy, then it seems there is no taxable event. Such distinctions should be addressed and resolved in a common-sense

Clearly, virtual economies represent an area where technology has outpaced the law. The goal of the forthcoming JEC study is to help lawmakers understand the issues involved and head off any premature attempt to impose a tax on virtual economies.