Enter danger zone, Matrix-style

Governments worry about the hazardous reality-blurring effects of online gaming

In the Matrix movie trilogy, film directors the Wachowski brothers envision a future nearly 200 years from now when the human race is enslaved in a computer-generated reality, with little knowledge of the real world.

It could be argued this sci-fi vision is not far from present reality. Online gamers on the mainland spend as much as eight hours a day, if not more, immersed in the fantasy worlds of flying fists and duelling swords.

What has developed is a sort of voluntary, opt-in Matrix - thousands of gamers networked together in an alternative world - and this is having a tremendous implications for government, economic and cultural institutions in the offline world, which have been slow to bridge the two realities.

In January, one Tianjin 13-year-old's perception of reality became so distorted that he committed suicide, believing he would wind up in cyberspace among his online friends. The death prompted much hand-wringing about the social impact of online games, and whether real-world institutions were equipped to deal with them.

Last week, the central government introduced guidelines aimed at reducing the amount of time players spend online. The new system reduces the in-game incentives of long sessions by decreasing the number of 'experience points' available after three hours and eradicating them after five.

It was the second time in a month that the government had moved to check the alarming social impact of immersive online realities among young mainlanders. Earlier this month, the central government banned minors from playing games that allowed 'player kills', on the grounds that young people spent too much time trying to boost the power of their characters.

The government has good reason to stay informed. The mainland online gaming market generated 2.47 billion yuan in revenue last year, and could reach 10.9 billion yuan this year. The central government will seek to capitalise with a US$1.8 billion investment to create approximately 100 gaming companies in the coming years.

At the same time, various sources estimate that 5 million to 6 million mainlanders suffered from internet addiction, a large proportion of which come from the estimated 25 million online gamers.

And the collision of real and virtual worlds that led to the death of the Tianjin teenager is by no means the only such story to hit the headlines this year.

Online gamer Qui Cheng-wei received a suspended life sentence for stabbing to death a friend who sold his virtual 'dragon sabre' from the game Legend of Mir 3. Qui had earlier reported the incident to the police, who could do nothing because Chinese law does not recognise such virtual property.

Meanwhile, governments are also struggling with the growing popularity of online games. The number of cyber crimes related to online gaming is escalating in South Korea, Taiwan and Singapore, among others.

A major part of the problem facing governments was a lack of clear legislation and case law that reflected the growing popularity of immersive realities. In financial terms alone, the convergence between virtual and real worlds now demands attention.

An eBay search for virtual items from online games revealed a Gorath Jedi with 'the best light sabre on the server' for US$750. The record for virtual goods is the whopping US$26,500 paid earlier this year for a tropical island from the game Project Entropia.

This market for virtual goods is increasingly taking on the dynamics of real-world economies. Disputes arising from virtual property theft, intellectual property rights, online fraud, profiteering from cheating and now even suicide and murder have been quick to follow.

Researchers Gregory Lastowka and Dan Hunter argue that many 'crimes' involving virtual gaming worlds 'cause real psychological, social and financial harms to their victims' but do not 'fall within the scope of existing criminal prohibitions due, in part, to the unique nature of virtual spaces'.

A key question, therefore, is whether governments must now recognise virtual goods as having the same rights as real-world property.

China's lack of recognition of virtual property arguably had tragic consequences when there was no real-world legal recourse for a virtual property dispute.

A recent case in Japan, however, highlights what could become the norm if virtual items acquired the same value and rights as real world property. A Chinese exchange student was arrested in Kanagawa prefecture on suspicion of using a software bot to 'mug' other players of valuable items in the game Lineage II, which were then sold for cash.

This issue is critical for all sides. For developers, the ability to purchase character enhancements with real-world money reduces the time spent by players to accumulate valuable objects within the game, thus harming the existing revenue model.

Gamers argue that the considerable time invested in developing the characters should be rewarded at the market rate. Sony Online Entertainment launched an official trading site for EverQuest 2 players, which gives the developer some level of control of the secondary market.

Meanwhile, Hiroshi Yamaguchi, a researcher at the Japan Centre for International Finance, said that as virtual item trade grows, governments will have a financial as well as a social interest in regulating the trade.

'When we denominate values in virtual worlds into real currencies, it is more difficult to defend these values from taxation,' he wrote in a recent paper.

Most experts agree that the coming years will see more government intervention in a virtual space that has so far largely gone unregulated. But the impact of such regulation is far less clear.

According to Mr Lastowka and Mr Hunter: 'If we wish to preserve the benefits of virtual worlds as free and independent social experiments, it may be best if we keep the criminal law at a safe distance.

'Players and designers are therefore duly advised not to let prosecutors peer too deeply into their windows.'