Virtual Worlds in Asia: Business Models and Legal Issues

Abstract

This paper uses two Asian case studies to illustrate the issues that developers of virtual worlds should address as they mature. The Korean case emphasizes the phenomenon of item trading. This involves emergent markets linking real world currency to items existing on company servers. The practice has resulted in controversial and unresolved legal issues. Companies such as ItemBay have grown to take advantage of these opportunities. The Chinese case emphasizes the transformation of business models over time as well as community control. The paper discusses feedback effects between broadband adoption and online games as well as issues such as Waigua, private servers, virtual property trade, and developer control. The experience of these countries shows that initial technical challenges for business models were overcome but new ones are beginning to emerge as the industry evolves. The new environment requires a change in the assumptions under which the game industry has operated.