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VWC Viewpoints February 2008

Governance of Virtual-Worlds Economies
Author: Rob Edmonds

The new economies within virtual worlds are becoming more complex than ever before. Linden Lab recently had to shut down Second Life's banking operations, Gaia Interactive set up a Council of Economic Advisors headed by leading economist Michael Boskin, the U.S. Joint Economic Committee is taking extra time to learn the complexities of virtual-worlds economies, and Mindark has pushed ahead and issued its own banking licenses. (Mindark is the developer of Entropia Universe, a virtual-world platform that is the basis for a very ambitious joint project with Beijing Cyber Recreation District. Clients of the Virtual-Worlds Consortium can read more in the Virtual Worlds 2007 Fall Conference report.) Although the financial structures of virtual worlds will eventually stabilize—likely with greater regulation, tax collection, and a role for traditional financial-services companies—the next couple of years are likely to see significant turmoil.

Download the report here:
Governance of Virtual-Worlds Economies