Second Life, Second Mortgage?
Every game is an escape from reality in some fashion or another. Games take some element of reality and simulate it to varying degrees. Battleship, for example, simulates a naval battle by allowing opposing players to select where on a board to place their ships and where to fire their missiles. Fog of war is simulated to increase the challenge. Second life’s goal, as its title suggests, is to simulate life itself. A digital world with digital assets is nothing new. Pixels have long been used to display uber cool gear. Bits have long been used to store phat lewt. However, never before have digital goods been transferable to tangible goods. (Selling characters and gear on EBay doesn’t really count…)
The conversion of in-game money to real life money has created a completely new ethical dilemma. It means that any asset a person has in game can be sold in game and converted into dollars. In fact, these are generally fairly liquid funds that can be used in a pinch if needed. Some may question whether bits should be bought and sold, but that doesn’t concern me. We buy TVs, which merely display bits. We buy internet access, which merely transfers bits. In short, we’re already paying for bits for the sole purpose of entertainment. Why should it matter if people start paying more for entertainment through bits?
The real question is this: if imaginary assets can be quickly and easily transferable to real goods, should they be included as part of a person’s net worth? Should Second Life assets be taxable? These exact questions are being investigated at the moment. It’s actually rather easy to imagine a money-laundering scheme that goes through Second Life in order to avoid government “interference.” Additionally, some people make their living on Second Life. Should they be taxed on their assets in game? Should casual players who merely play the game for some cheap enjoyment also be forced to pay taxes on the bits that they own, even if they never plan to convert them to cash?
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