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  • Xova
  • Member Since Apr 11th, 2008

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What are the implications of a real-dollar auction house? {WoW}

Aug 1st 2011 3:56PM This isn't as revolutionary an idea as it's being made out to seem. Second Life and Entropia Universe have allowed the transfer of virtual currency to RL currency for 8 years. In a more direct comparison, SOE has had their Station Exchange (now LiveGamer Exchange) in action for 5 years, where EQ2 players on certain servers could broker virtual goods for real money in the same fashion as what is being proposed with Diablo III.

There was considerable discussion in 2007 about the IRS taxing virtual currency, particularly in regard to Second Life, and as another poster above put it, the IRS's "official" policy on it is that the money doesn't exist until it's withdrawn. So whatever third-party site Blizzard uses - most likely Paypal - will end up reporting what you cash out to the IRS, and it'd be up to you as an individual taxpayer to report your earnings as well, where you'll end up paying takes much like a person who is self-employed would.

This is exactly how I make my RL living, since I work for a company based in Second Life. I get paid in virtual cash, which I then cash out via Linden Labs and Paypal, and at the end of the year, I'll have to report it and pay taxes on it.

If the IRS was going to do any kind of taxing of currency while it was still in its virtual form, they'd have done it already. The most they would probably do is add a tax, like the VAT that the European Union charges for Second Life transactions, to transactions made at the company level (like adding an extra fee to AH fees that Blizzard would already charge.)

Also, the "sky is falling" outcry and "slippery slope" argument is nothing new. There was similar grumbling when SOE introduced Station Exchange, and nothing earth-shaking came of it. You could argue that perhaps this is more relevant since Blizzard is a much bigger company than SOE was at the time, but it doesn't change the fact that these types of transactions already exist illegally, and all Blizzard would be doing is removing the illegal third-party middlemen and handling the transactions themselves in a manner that they can control.

Color me "meh" about the whole thing. I mean kudos to Blizzard for wanting to try something different, but this is hardly innovative or game-changing in my opinion and experience.