Virtual Cash Breeds Real Greed 

To the developers of some of these games, such behavior is anathema. And for now, Hale and his partners are hoping that they can either fly beneath the radar long enough to establish a reputation for protecting players or, alternatively, convince the developers to let them continue unheeded.

But Philip Rosedale, the CEO of Linden Lab, which produces Second Life, thinks there's nothing at all wrong with what Hale is trying to accomplish.

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never settle.

"It's so great. It's hyper-liquid," said Rosedale. "When you reduce trade borders you get faster development.... If you're a casual player of an online game, say, Star Wars Galaxies, you're not going to go on eBay and make a bid. I mean, that's lame. You go on Gaming Open Market, and it's done."

But Rosedale admits that Linden Lab's terms of service, which give players control over what they create and all their Lindenbucks, goes against the industry's norm.

"I'm sure the guys at Gaming Open Market will start receiving letters" from game companies demanding they stop, he said.

Hale also acknowledges that likelihood.

"It's possible that it could be very soon," he said. "We're getting to the point where we're getting a reasonable amount of attention. I'm sort of afraid that the game companies are going to step in and terminate my accounts because we're violating the terms of service."

From Dan Hunter's perspective, terms-of-service violations may not be the biggest hurdle to GOM's long-term viability. An assistant professor of legal studies at the University of Pennsylvania's Wharton business school and a moderator of Terra Nova, a blog about the economies of virtual worlds, Hunter thinks the biggest threat to the success of a virtual currency exchange may be the devaluation of the currencies themselves.

"Pretty much all these worlds have rampant inflationary forces," he said, and that means there's no way to guarantee that a block of Ultima Online gold will be worth tomorrow what a buyer pays for it today.

That's because games like Ultima Online and EverQuest have flaws that allow cheaters to duplicate currency, and that ultimately leads to what Hunter calls "MUDflation," short for inflation in a multiple-user dimension.

"To the extent that you want to provide this market for people to trade, you have to account for that, and to try to get a sense of seeing how prices fluctuate over time," said Hunter. "I think that will affect the long-term viability of these systems where you're trading currencies between worlds."

But James Evarts, a GOM trader and player in several virtual worlds, said he thinks the service gives a lot of value to players who want an easy way to stay liquid.

"I see it like this -- all of the currency available had to have been 'made' by a player somewhere," said Evarts. "These players did do their work and got the supply they have.... I think they can do whatever they want with the money they worked for."

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