Dutch Supreme Court on Virtual Theft

It's different this time, this is a landmark case.

I suspect the threats of physical violence are what brought it to the supreme court. What's particularly interesting is how the court handled that a thing doesn't have to be translateable into real world currency to be counted as something that can be stolen. Especially since nominally players don't even own their virtual goods, they own the right to those virtual goods in those instances provided by the gaming companies.

Terra Nova: An Exodus Recession?

Let’s construe the notion of “virtual economy” quite broadly: If you receive an experience by yourself through a machine that runs on digital technology, without doing or buying anything physical (other than press a few buttons), it’s virtual. To download a song and listen to it on your iPod is virtual; to go to a concert is real, to buy a CD and play it is real, to play your own instrument is real. The difference I want to highlight is in the physical nature of the economic transaction. The virtual transaction does not require the movement or alteration of anything physical. Not even physical money changes hands. The real transaction involves material being created, moved, consumed, all by human hands.

Using these concepts, there’s some evidence that an exodus from the real to the virtual is not only already underway (as I argued in my second book) but that’s it’s gotten big enough to affect our sense of a whether the real economy is healthy or not. In support, here’s a series of random judgments about the state of the real world.

TV viewing is down among 18-34 year old males, and movie attendance is flat. Meanwhile, more and more time is being spent online or playing videogames. If you want to get 80 hours of fun watching movies, you need $1000. You can get the same fun from a game for $50. Spending time online or playing videogames simply involves less expenditure in the real economy.

Human eyeballs see a lot fewer ads than they used to. As noted, some people are watching less TV. For most others, the TV they’re watching is increasingly DVR’d or Hulu’d, that is, stripped of ad content. On the internet, we avoid ads easily – they are usually in the periphery, and if not we can click them away, or surf to something else. Advertisers have made an industry on the presumption that ads make people buy things. If they are right, it follows that fewer ads would result in us buying less. Ads are less and less a part of our daily experience. HBO’s success with a show about evil advertisers is perhaps apt now, because we feel we finally have gotten the upper hand on these miscreants. The net result of our power over advertisers, according to their own model, would be a weakness in general real-world consumption.

Facebook is a great way for people to connect. In some FB games, you can buy someone else a beer. You can poke them, write on their wall, friend them. None of this causes anything in the real world to be moved or changed. There are 500m people on FB, hundreds of millions more on other, similar social networking sites. If you’re friending people on FB, you’re ever so slightly less likely to be sending them a real Hallmark card, ever so slightly less likely to write them a note on paper, ever so slightly less likely to give them a call. That’s probably not going to turn around, either. Our ability to socialize online puts a crimp in our general need to move stuff or change stuff in the real world.

People who spend time online don’t have to worry about what they are wearing. Suppose that some percent of a given day can be spent in pajama’s, the rest must be spent in decent clothes. For decent clothes, you need a whole and varied wardrobe. For PJ’s, you need a few comfy ones. Now increase the amount of time that can be spent in PJ’s. The demand for decent clothes falls, if ever so slightly. The internet allows us to do all kinds of stuff in our PJ’s – so it must have an ever so slightly dampening effect on the market for fashion.

One could go on. It is possible, slightly, that there’s a general weakness in consumer spending simply because, to get our social, emotional, informational, and needs met, we just need fewer movies, fewer beers, fewer trips, fewer shoes, fewer things in general. What if the world of human beings suddenly became converted to the idea of consuming less stuff? Why, there’d be a recession, of course. Less buying means fewer jobs and less investment, which means economic contraction. It would mean a general pessimism about the prospects of business.

Really interesting and balanced post on how the move to virtual goods and services is influencing economies, complete with a highly intelligent (and answered!) comments section.

One of the things that makes it so convincing is that Castronova isn't running around splooting blood like a headless chicken (!the sky is falling!), but rather emphasizing how little things can add up.