Governance in Virtual Environments

Nic SuzorQUT Law School

Institute for Creative Innovation

virtual environments

Multiplayer Real time simultaneous Immersive Persistent

suspension of disbelief, not virtual reality

picture: AlexPGP @

flickr

evolution

picture: kgeiger @ flickr

evolution

evolution

picture: stuartp @ flickr

evolution

AA store, built by Aimee Weber

narrative environments vs social spaces

Game style worlds World of Warcraft, Lineage (I & II), City of

Heroes, Everquest (I & II), Star Wars Galaxies, etc.

Strong central narrative Social spaces

Second Life, A Tale in the Desert, Project Entropia, There, etc.

No central narrative – free form

Who cares about games?

subscribers care about games

mmogchart.com

publishers care about games

market value for MMOs in the West hit $1bn for the first time in 2006 (screendigest)

WoW accounted for 54%, revenue: USD$471m

http://www.gamasutra.com/php-bin/news_index.php?story=10824

economists care about games

Castronova on Everquest in 2001: Nominal wage USD$3.42/hour GNP per capita USD$2,266

77th in the world, between Russia and Bulgaria

Project Entropia, Second Life real currencies, real exchange rates booming virtual real estate business

It's not just about property

Castranova: 20% of Everquest players live in Norrath and commute to Earth

to support themselves

Not just money!

Social relationships people live, love, learn in these spaces play, trade, socialise – no real limit to

motivations of participants

“Virtual worlds are entitled to respect because real people care about them

and come together in them.” -- Grimmelmann

What are the rules?

what are the rules?

Governed by contract (EULA, ToS) Blizzard may terminate this Agreement at any

time for any reason or no reason. In such event, you must immediately and permanently destroy all copies of the Game in your possession and control and remove the Game Client from your hard drive. Upon termination of this Agreement for any reason, all licenses granted herein shall immediately terminate. (WoW EULA, cl 6)

The virtual world is the property of the platform owner a (mostly) benign dictatorship

What are the problems?

near-term tensions

Real Money Trades (RMTs) Virtual crimes Virtual liberties Intellectual property – copyright Privacy

Tension: Real Money Trades

MMORPGs are boring Time-poor players pay others to grind for

them money, items, status

Game-based worlds often prohibit RMTs seen as a breach of the magic circle potentially harms subscription model –

removes grind, and lowers barriers to exit players dislike both 'eBayers' and 'farmers'

eBayers obtain benefits without labour; farmers cause inflation

RMTs (cont)

Blizzard banned 114,000 EU accounts in April 2007

Actively encouraged by other worlds Everquest, Ultima Online – centralised trading Project Entropia, Second Life – fluid economy

Selling property of the publisher, or buying the labour of the participant?

sweat shops, or new economy entrepreneurs?

Fox News – WoW sweat shopsAnshe Chung @ Business Week

who gets to make the rules?

UO farming rigInternet Gaming Entertaiment

PunkBuster

what happens if the rules change?

Expect virtual environments to adopt a services based economy power-levelling, custom designs, etc

Economy based primarily on artificial scarcity vulnerable to inflation, flooding by platform

owner or participants Detinue and Conversion of virtual wealth? Suits against platform owner for unfair

competition?

Should we ever prevent platform owners from making changes which

affect perceived value?

(Bartle warns that admins must have the power to make changes)

Question

Tension: Virtual liberties

Freedom of expression Freedom of the press Freedom of association

As more of our interactions occur in these virtual environments, who controls our relationships?

Public activities in private spaces Who has rights of exclusion?

Are these places going to be countries or country clubs? -- Prokofy Neva, upon being banned

from a 'public library' in SL

Freedom of the press

Anshe Chung, self proclaimed Second Life millionaire, has had a lot of publicity over the past year

Second Life's first Property Magnate

Organised a Q&A session for CNET in December 2006

Freedom of the press

Anshe claimed copyright in videos of the attack, and made a DMCA complaint against reporters

Complaint withdrawn after advice from the EFA that the videos were fair use

Freedom of the press

Video removed from YouTubehttp://video.google.com/videoplay?docid=5387867190768022577&q=Anshe+Chung

To what extent should the press be able to report on incidents in a VE without being sued for copyright

infringement?

Question

Freedom of expression

Participants unable to represent their environments machinima game guides (Kopp v

Vivendi)

Image: Tristan Pope

When everything a participant can see is a digital copyright work, it

becomes impossible to represent their environment without infringing

copyright.

Should we allow people this ability?

Question

Freedom of association

Naked gnome protest

http://www.cesspit.net/drupal/node/491

Freedom of expression – political protest

Protest at Le Pen's Front National's SL HQ NWN <http://nwn.blogs.com/nwn/2007/01/stronger_than_h.html>

Freedom of expression – political protest

Neighbouring land used to erect protest signs NWN <http://nwn.blogs.com/nwn/2007/01/stronger_than_h.html>

And the protest degenerates into days of violence NWN <http://nwn.blogs.com/nwn/2007/01/stronger_than_h.html>

Community reactions

SL Left Unity group “will be manning a protest [...] until FN go or are ejected. Wherever fascists are we will ensure they get no peace to corrupt and lie to decent people.”

"With this persons we can't debate or ignored. We can't because it's not acceptable."

"They're a bunch of losers, [...] We're gonna tighten security and come back." - FN Officer Wolfram Hayek

Fantasy Westward Journey

http://www.zonaeuropa.com/20060709_1.htm

Fantasy Westward Journey

http://www.zonaeuropa.com/20060709_1.htm

Fantasy Westward Journey

Around 10,000 protesters

http://www.zonaeuropa.com/20060709_1.htm

Fantasy Westward Journey

High level alleged ringleader locked up in a permanent prison, guild disbanded

Playing for 2 years, leader of a top-five guild, spent AUD$6500+ on points and equipment

Avatar name translates to “Kill the little Japs”

Guild name to “The Alliance to Resist Japan”

http://www.zonaeuropa.com/20060710_1.htm

Examples demonstrate the power of protest in virtual environments

If it weren't for issues with server load, do we have an obligation to

allow non-violent in-world protests?

Question

Virtual liberties – discrimination

Tired of intolerance, Sara Andrews wanted to start an in-game guild which was friendly to lesbian, gay, bisexual, and transgendered players:

“OZ is recruiting all levels, but especially 50-60s! [...] We are not "glbt only", but we are "glbt friendly"!”

Response from Blizzard:

Please remember that it is up to our sole and absolute discretion whether or not to allow certain types of language in the game. While some language in and of itself may not be offensive, it may incite certain responses in other players that will allow for discussion that we feel has no place in our game. As such, I am afraid that I am unable to reduce, reverse or otherwise amend our previous decision.

Blizzard changed their mind and apologised.

Is this a situation where we would have expected the law to intervene

to prevent private censorship?

Question

Tension: Virtual crimes

Fraud? online

gaming? tax

evasion? Money

laundering?

Virtual crimes

Extortion? Griefing?

http://www.secondlifeherald.com/slh/2005/01/extortion_anshe.html

Who decides when an action in a virtual environment is a 'crime'?

Should criminal law ever regulate purely internal actions, or should these be within the control of the

platform owner?

Question

How do we decide what to do?

Evaluating potential approaches

Essential tension:

allowing virtual environments to develop

vs

regulating to protect legitimate interests

If you don't like it, leave...

Solution

Limits to a contractual solution

EULAs and ToSs are one-sided

Virtual worlds are designed to encourage high switching costs

Play is constructed in a way that benefits the subscription model

“if you don't like it, leave”?

right of exit dependent on low switching costs high switching costs important for continued

subscriptions Very difficult to leave an environment which

is designed to attach you property, status, social relationships

Evaluating potential approaches

In the next few years, courts and legislatures will be asked to make decisions in these matters

The decisions that will be made will shape the development of future virtual environments

How do we know when to regulate and when to let these realms develop for

themselves?

The wisdom to know the difference