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Virtual Power Brokers

Times Staff Writer

Robert Kiblinger’s online shop does brisk business in items fantastic.

For $179.88, there’s the Blade of the Righteous, a sword forged specifically to slay demons. The $69.88 Shadow Dancer Leggings allow their wearer to sneak about undetected. And then there’s Titan’s Hammer, which wreaks $129.88 worth of unmitigated havoc.

All command real money, but none are real.

Like a rapidly growing number of online merchants, Kiblinger traffics in virtual goods that exist only in the realm of Internet-based games such as “Ultima Online,” “EverQuest” and “Second Life.”

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As intricate fantasy games like these grow more popular, they are spawning real-world economies full of digital arms dealers, cyberspace land speculators and virtual currency traders.

About $100 million to $200 million a year changes hands for stuff that exists only as bits of data on the hard drives of far-flung computers, said Edward Castronova, a professor at Indiana University and author of the upcoming book “Synthetic Worlds: The Business and Culture of Online Games.”

Some enterprising vendors employ dozens of people who do nothing but play online games to collect items for sale.

“When I first went to my accountant, she was flabbergasted that I could sell things that weren’t really there,” said Kiblinger, whose UOTreasures website gets more than 1 million visits a month. “But for my customers, these items are very real. They love these games, and the items have real value to them.”

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The 34-year-old Kiblinger says he makes more money selling nonexistent merchandise than he did as a chemist at Procter & Gamble, where his research yielded two patents. His six-figure salary -- he declined to be more specific -- is enough to support his wife and toddler son and a house in a gated community in Daniels, W.Va.

And that irks some players and many of the companies that make, market and manage the so-called massively multiplayer online games, which started out as text-based adventures in the late 1970s and blossomed with computer advances to include realistic graphics and sound.

The games, which usually charge a monthly fee to play, allow millions of intensely devoted players to live out fantasies of medieval derring-do. As they slay dragons and demons, they can collect armor, potions and money that can be used to increase the power of their characters and their status among other players. Some games even allow players to build and furnish houses for their online avatars.

Rather than earn that loot through time-consuming quests, though, a growing number of players visit online shops like Kiblinger’s and just put it on their PayPal account. The practice raises legal issues, including whether there’s anything to sell and, if there is, who really owns it.

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“Right now, most companies assert full ownership of virtual goods as a condition of play,” said Beth Simone Noveck, an associate professor at New York Law School. “That works when games are just fun. But people are spending a good deal of time building and creating things in these games. And they feel strongly invested emotionally in these items.

“The question is whether there should be laws to protect the rights of players. If so, what body of law? Should it be intellectual property law? Or property law? What is a digital piano? Is it a piano? Or is it a piece of art? These are just very complicated questions.”

In an effort to answer at least some of those questions -- and make a few bucks in the process -- Sony Corp. last month said it would begin brokering the buying and selling of virtual items for its “EverQuest 2" game, taking a cut of each transaction.

Sony said it had cut off thousands of accounts of players caught buying or selling items.

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“We feel pretty strongly that we own the intellectual property” for game items, said John Smedley, president of Sony Online Entertainment. “What we’re doing is giving players the right to use these items for a period of time. But that doesn’t mean they own the items. That’s like getting a gym membership and saying you own the equipment. You don’t. You just simply have the right to use them.”

Sony and other companies say it’s a hassle to deal with the fallout of some of these transactions. Sony estimates that as many as 40% of the calls to its customer service center are complaints about sour deals.

After an item is sold, the buyer and seller generally arrange to meet in the online game for a handoff of items. Some games allow sellers to log in and leave items for the buyers to pick up when they next sign on.

Some game companies encourage players to engage in real world commerce.

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In Linden Lab’s “Second Life,” for instance, the game’s 27,000 players buy and develop virtual land that can then be sold to other players in offline transactions.

Tim Allen and his fiancee 1 1/2 years ago paid Linden Lab $1,200 for 16 acres of virtual land, which exists as a pulsing database on its own server in San Francisco. They also pay $195 a month in “property tax” to Linden Lab, which charges players based on the amount of land owned. To make ends meet, they operate a website that sells game items such as jewelry and a home security turret that automatically ejects unwanted visitors.

For Allen, the land, which he has dubbed Indigo, has a purely sentimental pull.

“I’d give up my widescreen television before I give up Indigo,” said Allen, 30, who lives in Philadelphia. “I know it’s all virtual, but this virtual place is as much home to me as any place in the real world. It’s become an extension of our imagination and dreams. That’s what makes it so special.”

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Some players seem to take this emotional attachment to extremes. A Shanghai man, Qiu Chengwei, in a fit of rage stabbed to death a friend this year after the friend sold a virtual sword that Qui had lent him.

“These are games, and that’s all they should be,” said Mark Jacobs, chief executive of Mythic Entertainment Inc., whose “Dark Age of Camelot” game has 175,000 subscribers.

Others object to letting some players buy their way to the top.

“On the whole, I think it’s unfair,” said Tim Chetelat, a 33-year-old computer consultant in Cupertino, Calif., who leads a guild of 40 “EverQuest 2" players. “I’ve put in 80 hours or so into this game to build my character. It’s unfair for someone who has not put in those hours to just be able to buy a high-level character.”

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Another effect of real world commerce on fantasy worlds is that it opens the door to profiteers who monopolize game resources and prevent other players from getting access to sections of the game that yield valuable prizes.

“These people camp out at certain places to kill these monsters over and over to collect the items so they can sell them, and they refuse to leave,” said Ryan Bohmann, associate editor of Vault, an online game news site operated by IGN Entertainment Inc. “They do it for the profit, and they’re affecting other people’s fun. They’re very much hated by the other players.”

In some games, such as “Second Life,” however, entrepreneurs are sought out by other players.

Take Ailin Graef, who supports her aging parents and sends two children to private school with the money she makes selling virtual land.

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Graef leases 224 acres of virtual land in “Second Life” -- enough to occupy 14 servers -- at $12.19 an acre. Graef develops the land by adding terrain features, zoning restrictions and other amenities, then sublets slices of the land to others at about $25 an acre a month. Much of her property is sold out.

Graef, whose online name is Anshe Chung, gave a tour of her virtual empire. First stop was a winter wonderland of gently swaying snow-tipped pines and ski cottages. Next was a wedge of land with soothing minstrel music and dotted with 19th century English cottages. Across the pond lay a plot of land leased by a group of Quebecois who have built chateaux and speak only French within the game.

Graef, 32, has a keen grasp of what people will buy and for how much. Climate, neighborhood makeup and proximity to roads and water are some of the factors that feed into her calculation of what kind of terrain to develop and how much to charge. Parcels in tropical climates are easier to sell, even though there is no such thing as temperature online.

“It’s in their imaginations,” Graef said. “They feel it in their minds.”

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Working more than 40 hours a week from her home near Frankfurt, Germany, Graef makes more money as a virtual real estate developer than she does as a part-time English teacher.

“It’s a job in that I am largely motivated by economic success,” she said. “Here my achievement is creating real value for other residents.”

Graef sometimes is paid in Linden Dollars, the game’s equivalent of Monopoly money. But she’s able to convert that currency to U.S. dollars via several websites, including gamingopenmarket.com, which looks like a stock market, complete with charts and opening and closing prices. On any given day, a player can sell 240 or so Linden Dollars for one U.S. dollar. Payments are made through PayPal.

Game currency is among the most widely sold virtual commodities.

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To Raph Koster, chief creative officer at Sony Online Entertainment, the company that runs “EverQuest,” the notion that Platinum, or “Plat,” is equivalent to legal tender is unreal.

“You can’t take Plat and buy groceries,” Koster said. “Outside of EverQuest, Plat has no real value. It’s just a string of zeros and 1s in our database.”

But it can lead to a string of zeros in someone’s bank account.

The largest of the commercial purveyors of virtual game items is Internet Gaming Entertainment Ltd., a New York company with 200 employees and contractors, which pledges a money-back guarantee and full transaction security.

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“A lot of players get ripped off, even if they use PayPal,” Bohmann said. “Unlike with physical goods, you can’t e-mail PayPal and complain that you got ripped off. That’s the main reason IGE is in business. They provide security.”

That’s also what Patrick Bernard offers. Bernard founded Gamersloot.net in 2002 in Sunnyvale, Calif., while looking for a job. Now, Gamersloot provides him and 15 other people with jobs. They include a team of 10 in Romania who are each paid $120 a month to play online games full time and build up high-level avatars.

Although armor, money and weaponry top the list of online merchandise, some of the most coveted items are neither useful nor attractive. Instead, they’re oddities that appear occasionally in game worlds as programming flukes, said Julian Dibbell, author of “My Tiny Life: Crime and Passion in a Virtual World.”

“My favorite was horse manure,” Dibbell said. “The game designers forgot to lock down the item, so people could just come and collect them. This would happen until the programmers got wind of it and fixed the bug. Until then, there was a period when people helped themselves to piles of horse manure. These were selling for about $75. They were considered collectibles.”

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