Broken Toys

How I translated this announcement: Tencent wrote this new law for us and then paid the proper… “lobbying fee” to get it passed. I bet Tencent just made Activision’s Christmas card list.

While I’m uncertain if this meets the definition of ironic, it certainly is poetic.

I love that they’re called “QQ coins”. Brilliant.

I very much doubt that this will be interpreted or enforced against mainland chinese farming gold to be sold exclusively to gweilo.

All this means is that the chinese MARKET for gold will be more informal.

There’s going to be some consequences, that’s for sure. But I wonder about the exact wording of the law, and whether or not some companies currently in violation of it will actually find some way around it.

RMT became more than what people called it, whether it was a plague, a disease, or a necessity. It became a viable business model. I can’t help but wonder what the next model of virtual-to-real currency might became, or if the banning of third party RMT means that in-game or official RMT will become more prevalent. Time will tell.

well India is happy

I guess that with globalization around, you cant really promote an industry that its illegal in other countries. That and people in China want to leave behind the stigma of “sweatshops”. Too bad that all the gold trading industry its going underground and its going to requiere a lot of police force for stopping it. If such thing its possible.

Given how easily corruptible the mainland China Police (and the courts) are. I highly doubt that there will be any serious enforcement let alone prosecution of any of the big money Chinese RMT operators. ESPECIALLY against the ones catering to Western games like WoW being played in the West (non-China). There won’t be any lessening any of the RMT happening in the foreseeable future.

In fact, I would think the Chinese Police and the politicians would be happy to have another revenue stream to collect bribes and protection money from.

Hmm, I’m not sure that this is exactly RMT they’re outlawing. As a non-lawyer outsider, I think this is more to prevent competing currencies. Tencent’s QQ coins were being used widely outside the game as a form of exchange. It’s like if the local 7-11 accepted Puzzle Pirate Doubloons to purchase cell phone minutes. The only western game company that will have to worry is Mindark and their Entropia Universe since they explicitly allow you to change game currency to real currency.

We’ll see if this rule stops gold farming businesses. I suspect it may not, since it’s slightly different than stopping an alternate currency as the QQ coins were becoming.

Brian ‘Psychochild’ Green :
…I think this is more to prevent competing currencies. Tencent’s QQ coins were being used widely outside the game as a form of exchange. …

I agree. Though, the policy geek and economist in me occasionally wonder about alternate currencies anyway. The statism inherent in protecting a currency tends to ignore what actually happens in the “real” economy, where people are trying to get by and make a buck, rather than protect political power. It’s a dangerous road, and you can never really stop barter anyway. People will just find new ways to do business, and new ways to keep the State from taking a bite out if it.

(For example, “macks” have supplanted cigarettes in prison “economies”. People always find a way to make trade happen.)

@Mann – That’s why I said /legal/ difference. Private barter systems involving tokens are only illegal in specific situations, for instance involving gambling in much of America and in payment for work in the UK.

Brian – I disagree. Watch Eve China, where timecode trading has previously stamped on most other RMT, go back to goldseller spam after this.

@Brian ‘Psychochild’ Green

Yeah, I agree. I’m not sure this is actually aimed at the WoW gold farming peeps.

I believe this law is designed to prevent virtual currencies (such as TenCent’s QQ Coins) from competing with China’s official currency, the Yuan. China’s government controls the Yuan’s exchange rate, resulting in Chinese goods being cheap in other countries, while other countries goods are relatively expensive in China. The Chinese government fears that a commonly used virtual currency might threaten that.

Also remember that Chinese law enforcement is ALWAYS selective. National laws are regularly ignored by regional governments if it goes against their local interest. As long as gold farmers are selling virtual gold for real world dollars to foreigners, I expect the Chinese will look the other way and let the local industry flourish. What the Chinese are trying to prevent is a future where people use QQ Coins to buy lunch, get a taxi ride or have their hair styled – because QQ Coins are worth more dollars than the Yuan is!

To repost what I already told Scott anyway:

1) The fact that it is a joint announcement from the Ministries of Culture (very important) and Commerice (pretty important), signals that this is a Big Deal.

2) The fact that TenCent is specifically mentioned means that the reporter writing the story was likely (not 100% obviously, but very likely) fed their name specifically, which means it is a shot across their bow from Culture.

3) Since this is only about output transactions and not input ones (i.e., buying things ingame is still OK, but taking virtual cash out of the system for real world money), it is likely more about money laundering and currency control than anything else, hence the involvement of Commerce. Culture has enough clout in the online-game sphere to have taken care of it alone if need be; this ruling has wider implications.

4) In short, if you are planning a Chinese-language game with RMT in it, just don’t plan on letting players ‘cash out’ in some way and you should be fine. This is about bigger fish than yours.