The growing prominance of the software-as-a-service pricing model in the video game industry has renewed unresolved questions about the legal ownership of virtual goods. Publishers are increasingly offering in-game items in exchange for real-world currency, or providing purchasable “credits” that can be exchanged for in-game benefits. Meanwhile, players demonstrate a recognition of the real-world value of their items through both third-party and publisher-supported real-money transactions.
The question of virtual ownership was simpler the first time it came to the courts. In 2006, a dispute over a plot of digital land in Second Life ended up in federal court.1 A user gained unintended access to an auction where he purchased a $1,000 plot for $300. The provider of Second Life–Linden Lab–banned the user, who sued for the loss of his other virtual assets, which were worth up to $6,000.
Ultimately the case was settled with a restoration of the user’s account and, frustratingly, no resolution of the central issue of virtual ownership.2
And now 13 years after that case’s resolution, transactions between players for virtual goods has grown into an economy that moves over $1 billion each year.3 Although some transactions occur unofficially on third-party services, there are many developers who openly embrace the availability of real-money item trade as a feature of the game, like Linden Lab with Second Life, Daybreak with EverQuest 2, and Blizzard with Diablo 3.
With a real-world value attached to the virtual items, it is not unreasonable that players would feel property interest in them. Their intangibility is no obsticle; the law recognizes intangible personal property like trademarks and partnership interests.
However, modern developers — and Linden Lab since 2006 — seek to preempt player’s claims of property ownership with carefully drafted End-User License Agreements. The EULAs give the developer/publisher exclusive ownership over the game and its items, with no legal obligation to the players:
Excerpt from EverQuest 2 EULA:
Please note that Virtual Items are not chattel and you do not acquire any ownership rights in the Virtual Items. Daybreak reserves the right to […] change the prices and/or difficulty of obtaining Virtual Items, at any time in its sole and absolute discretion. As a result, the value and desirability of a Virtual Item may significantly increase or diminish over time. By purchasing a Virtual Item license you assume the risk of any such changes and agree never to assert any claim against Daybreak based on the actual or perceived value, or change in value, of a Virtual Item.
A player who agreed to such a term would have a difficult time asserting ownership over their in-game items, but there may be extreme scenarios. A player whose expensive items are specifically targeted for devaluing by a malicious developer may convince a court to agree in equity that he has a property interest in his virtual goods. Though more likely, the case would settle to avoid that potential precedent.
The most probable future is that the strength of these terms will never be tested in court. Whether players have a legally protectable interest in their digital items is moot if publishers and developers simply decide that it is in their best business interests to act as if players have a type of quasi-ownership of the in-game items they buy.
The revenue from premium items and transaction fees on real-money trades between players means that publishers are financially invested in the stability of their virtual markets, and need player faith in the predicted value of their purchases to promote a healthy digital economy.
As long as developer and player interests surrounding real-money item trading remain aligned, courts will probably not look beyond contract law to resolve virtual property disputes. The real interesting personal property questions will start when virtual reality reaches more regular adoption.
Bragg v. Linden Research, Inc. ↩
Although the court’s ruling on personal jurisdiction did suggest that interacting with a player’s in-game avatar may be sufficient minimum contacts to give a state personal jurisdiction over you. ↩
Peter Quinn, A Click Too Far: The Difficulty In Using Adhesive American Law License Agreements To Govern Virtual Worlds, 27 Wis. Int’l L.J. 757 (2010). ↩