I'd heard of people who play Everquest selling virtual items such as swords and armor on EBay for real US dollars, but I didn't really understand it until I recently started playing World of Warcraft.

Here is a recent article in Wired about the phenomenon of virtual economies and their interaction with real economies (though some might validly argue that all economies are virtual).

For years, companies like Sony Online Entertainment have prohibited the buying or selling of goods from games such as EverQuest. Despite such rules, which are commonly spelled out in MMOs' terms of service, the secondary market for virtual goods is estimated at $880 million annually.

Holy crap. $880 million. That's a lot of dough for virtual swords and armor.

The people who make Everquest are against the policy, and so, apparently are Blizzard, the folks who make WoW:

In its announcement on the World of Warcraft community site, Blizzard stated its policy against the buying or selling of the game's objects for real-world money. Its goal, which many MMO developers share, is keeping the game pure from an inflated economy and from players who buy game attributes rather than earning them. And they often claim that such objects have no real-world economic value.

"If you are found to be selling in-game property (such as coins, items or characters) for real money," the policy says, "you will lose your characters and accounts, and Blizzard Entertainment reserves its right to pursue legal action against you as well."

I think they're mostly pissed that some people are making money in association with their product and they aren't getting a cut. Which is pretty stupid, really. These subscription-based role-playing games are a cash cow for software companies. WoW, for example, costs $50 for the base game, and around $14 per month to continue playing.

Take this guy, who is selling 50 virtual gold pieces in World of Warcraft on EBay. The current bid as of this writing is $20.50, having started at $10. Assuming the guy didn't hack the program to get the gold, that he actually earned it through game play, what's the big deal?

The problem, say some virtual world experts, is that many players see the objects they earn or build through countless hours of play as property. And property has value.

Well, yeah. They're not really selling the sword, they're getting money for the 10 hours it took them to kill hundreds of monsters for that particular drop. And people would like to pay for it rather than spending the 10 hours.

It's kind of interesting that within the game, quite a bit of bartering and trade goes on. In fact, it's almost a necessity to join a guild, a collection of other players, who each possess various harvesting and manufacturing skills, in order to have well-rounded players. But if people would rather spend additional money for potions or armor, what's the big deal?