Taxing Times

We all know how the government likes to get its greedy little mitts into our pockets and remove our hard earned moolah to spend on things like trillion dollar bailouts, pork barrels, and congressional office refits. It makes it hard sometimes just to make ends meet. Now, the punters are saying the governments of the world are eyeing our hard earned virtual dosh. How much harder would it be to afford that epic mount if a third of your gold earnings disappeared into the tax mans coffers?

I have to admit when I first started hearing about this I just figured it was all a poorly timed April Fools Day prank. Unfortunately it doesn’t look that way at all. There’s been a lot of talk over the last year that several governments including the EU and US are seriously looking at taxing virtual worlds, with a number of reports having been prepared.

So how likely is it that some time in the near future, every gold, plat, or isk that we earn in a game will have a taxable component? Will future tax forms have tables of exchange rates between gold pieces and dollars for the different worlds? Will Blizzard, SOE, and NCSoft become defacto tax collectors for the governments of the world?

Barring complete blindness and stupidity by our elected officials I’m going to go out on a limb and say that I don’t believe that governments will go this far in taxing games. — barring stupidity and blindness, maybe I should say it’s a certainty — There are a several things to consider, factors that might heavily influence our policy makers.

Deductions

First, and probably most importantly, nearly all governments — as far as I know — allow taxpayers to deduct expenses made in the process of earning incomes.

• It could be considered that everytime you spend in-game currency, you are doing it to improve your character. If that development is essential to making more virtual income then it will be deductible.
• The real world cost of a subscription, around $15, is essential to making virtual income. It will be deductable.
• If I make less gold in a year (converted to real world currency) than I spend in subscriptions or micro-transactions, I’ll make a real loss and end up paying less tax.
• Casual players tend to play less, make less gold, but pay the same in subscriptions. There are far more casual players than hardcore players. Casuals will end up with better tax refunds. The government will end up losing money.

Juridiction

This is a big issue. Who gets the cash?

• Does the country where the player resides get to collect the tax? Or does the country where the servers are housed get it?
• If the latter, will we see server farms set up in tax havens like the Cayman Islands?
• More importantly, if the Australian government — for example – decides to tax WoW gold and the US doesn’t, how do they know I actually play that game? Blizzard doesn’t have a presence in Oz, how will the ATO (Aust Tax Office) find out I play? How will they force Blizzard to tell them?
• A lot of nations have tax treaties that enable their citizens to relocate around the world and not get double taxed. It may be possible that parts of these treaties will have to be renegotiated. 

Logisitics

There are a number of other questions that make it difficult to tax in-game income.

• What happens when the game shuts down? Everything, all your in-game assets now have real world value. How does this sort of loss get handled at tax time?
• What happens if your account is hacked?
• Here’s a biggie. In the real world when someone defrauds you, it’s a crime, possibly punishable with prison time. What happens when someone cons you out of a lot of virtual currency, as has happened in Eve Online? Could that sort of fraud now attract criminal penalties?
• What if a game is designed to allow that sort of interaction as is the case with Eve and Darkfall?
• Game economies don’t work the same as the real world, money keeps getting pumped in often resulting in extreme inflation. How will this be taken into account?

Will Virtual Worlds Be Taxed?

I don’t think so. At least they won’t be taxed any time soon. There are too many questions to be answered first, and there will definitely be downsides for any government that does try to tax in-game currency. It won’t be the easy windfall that they’d like, and could end up costing them more than they expect. And there is potential for the new rules to go before the courts if the laws aren’t implemented properly.

What I think the government(s) should do is simply enforce the existing tax laws. The people who trade in virtual good and cash for real world money are getting that real world money in the real world where it forms part of their income and can be fairly — if you consider taxes fair – taxed.

That way the government gets their cut, and players can keep playing their games free from tortuous government interference.

Popularity: 2% [?]

Just In The Nick Of Time

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MMOCrunch Darkfall Review

If you are keenly interested in the upcoming release of Darkfall, there’s a fairly comprehensive review of Darkfall at the beta stage over at MMOCrunch. Paragus has gone into quite a bit of detail about what the game is about — although you should know that already if you’re keenly following — and doesn’t pull any punches about what he thinks works, and what he thinks doesn’t work.

I’m in two minds about Darkfall. On the one hand it’s a trip down memory lane. Paragus compares it alot to Asheron’s Call and Ultima Online as Darkfall is a skill based system. A system I think has been poorly neglected in this class based MMORPG world. There’s also the notion that Darkfall will be a challenging game. The developers aren’t looking to make life easy.

On the other hand, there are some mechanisms I’m not sure that I’ll like very much, and some that I know I won’t enjoy. For instance, not being able to use the mouse pointer when playing — other than being in menu mode — doesn’t appeal to me. I like using the mouse, it’s convenient.

High Impact PvP where everything carried is lost is another thing I’m not sure about, especially if there is no way of avoiding it. Eve Online has the same mechanism. If you’re killed, you lose your ship, cargo, even your skills if you don’t have an appropriate level clone and are podded. But Eve has high-sec space where, while not completely risk free, there is a high measure of safety from gankage. Does Darkfall have the same safety net? I’m not sure. I don’t particularly want to be attacked everytime I set a foot outside a town.

Other things, for instance graphical quality don’t worry me that much. Don’t get me wrong, I like gorgeous graphics, but I learned a long time ago fantastic graphics mean squat if the gameplay sucks. Cough**Conan**Cough.

So, I’m certainly tempted by Darkfall, but I think I’ll leave it for a few months before I give it a try. It will give the devs a chance to iron out any bugs and gameplay issues, and to get the inevitable launch day/month blues out the way. 

Darkfall should be released by the end of February.

Popularity: 5% [?]

Blizzard’s New MMORPG Will Be A New IP

I doubt that Blizzard’s next MMORPG will be either Starcraft or Diablo. It’s always been at the back of my mind that perhaps they will use these properties, but there are a couple of factors at play here.

1. Both Starcraft and Diablo have sequels in development. In the case of Starcraft 2, Blizzard has announced a 3 part release schedule which puts the release of the last game in 2012 or later. Diablo 3 will be released sometime in 2010 or thereafter.
2. While Blizzard doesn’t really come up with new IPs very often, it’s probably past due. Kinda like a meteor impact or Yellowstone exploding, it might not be next week but it will happen eventually. It could be time for Blizzard to come up with a new IP. It’s certainly past due.
3. Or, Blizzard could use someone else’s IP. I imagine the big wigs on the top floor of Blizzard Central receive daily calls from Hollywood producers keen to get their next movie made into a MMORPG. It has to be better than a single player version of their movie, right?

I strongly doubt that either Diablo or Starcraft will be the subjects of the new game. Diablo is too similar to WoW in too many ways, and will be too much of a competitor. I’d think Blizzard would want to open up new subscriptions, not take from World of Warcraft.

Starcraft on the other hand would offer a different experience, but could still steal WoW subs. But the problem here is that Starcraft 2 is still in active development and will be for years to come. I doubt Blizzard want to jeopardize that.

Using a Hollywood, or perhaps a book, intellectual property for the next game is, I think, also unlikely. Blizzard do tend to be a go-it-alone sort of company, and using someone else’s IP puts on them all sorts of constraints. Just look at LotRO. Turbine was restricted heavily to what they could do with the Lord of the Rings universe. I doubt Blizzard would want such encumbrances.

Any third-party IP owner would have to be willing to let Blizzard have a lot more creative control than is normally the case for this sort of arrangement. This makes a Blizzard-foreign IP MMORPG a low chance of happening.

My feeling is that Blizzard’s new MMORPG will be an original wholly owned property created by Blizzard.

Popularity: 21% [?]

Blizzard’s New MMORPG – More Of The Same, Or New And Improved?

The big Blizzard news of the last week was the transfer of Jeff Kaplan (Tigole) from the World of Warcraft team as lead designer to a lead role on the team developing Blizzard’s new MMO, World of Unnamedcraft.

Kaplan, as Tobold suggests, is the reason that World of Warcraft is such a raid centric game. He was a hardcore raider in Everquest and the inference is that Kaplan bought that influence into WoW. It leads into one of the rumors that Kaplan is moving on because Blizzard have recently softened WoW raiding, making it more casual.

Maybe. But the truth is that any raiding in the original Everquest required a hardcore, achievement focused mindset. Tigole wouldn’t have been alone in the WoW dev team. Blizzard would have sourced quite a few developers from the ranks of the veteran (pre-2002/03) massive gamer ranks.

Anyway the conclusion is that this will lead to many of the same design principles being incorporated into Blizzard’s new MMORPG, whatever it is going to be.

Well, that’s all great as a rumor, but it doesn’t necessarily follow. There are a few factors that will determine if hardcore raiding will be a part of the game or not.

1. Blizzard’s new MMORPG might not be a hardcore game at all. It’s entirely possible that Blizzard will aim for the other end of the casual market. There are more than a few Asian MMORPG’s that are doing extremely well indeed. One or two of them have more subscribers that World of Warcraft. Could Blizzard be aiming at that market?
2. Blizzard’s next MMORPG might be a hardcore game after all, but it might not be PvE focused. A solid PvP or RvR experience, perhaps like Warhammer Online, would not really need hardcore raiding.
3. Raiding might not be appropriate to the setting. Blizzard might attempt to try something really different in their next MMO. It’s been suggested they might attempt an Eve/Elite style game. Would that sort of game be suitable for Hardcore raiding.

I’m thinking that Blizzard will try to move away from the way that they’ve designed World of Warcraft. The prime reason for this is simple. Competition. They are not going to want to compete with themselves.

Blizzard’s goal will be to draw in players who have never played a MMORPG before, and the players who have stopped playing World of Warcraft (and MMORPG’s in general) who would number in the millions. They won’t want to draw people out of WoW.

So my bet is that Blizzard’s new MMORPG will be very different from World of Warcraft, and possibly most of the other MMORPG’s on the market. Jeff Kaplan is probably enjoying himself with work that is very different than what he is used to doing.

Of course, anything is possible.

Popularity: 55% [?]

WoW Tourists? The Market Is Not To Blame

The recent publication of subscription numbers for Warhammer Online has stirred up a bit of a meme among MMOG Bloggers and other commenters. That meme is the concept of WoW Tourists and the damaging effect they are having on the massive gaming scene, in particular the viability of massive games that don’t fit the World of Warcraft mold.

The idea is that there are a huge number of players, who most, if not all, are World of Warcraft players who will jump into a new MMORPG when it is released. They will then complain that the game is buggy, unfinished, and different. Many of these players then cancel their subscriptions and go back to WoW. On their way out, they’ll be quite vocal about how the game doesn’t meet expectations and they’ll deter other players from buying in.

The blame then seems to be placed on these so-called WoW Tourists for the failure of the new MMORPG to reach its target subscription numbers. The idea, it seems, is that it is wrong for a player to expect a quality experience, or a substantial amount of content in a new game. The early adopters of MMORPG’s had it tough, what do these casual players want anyway?

I think this blame is misplaced.

There are a few things that we probably should consider

1. The total size of the massive online game market, pre-WoW, was probably just short of 1 million players. I’m guessing here, but taking into account the subscriber numbers of Everquest, Anarchy Online, City of Heroes, and Star Wars Galaxies at the time, including the players who had tried and left the MMORPG market, I reckon that’s a reasonably safe guess. Pretty much all of these players would have experienced poor game launches, server issues, and other bugs. There’s a reason the saying, “don’t bother playing on patch day” become very often repeated.
2. It’s true that the launch of World of Warcraft was rough. However, it didn’t take that long before the worst issues had been ironed out. By the time I started playing, sometime in mid to late 2005, the game was stable and provided a decent gaming experience. Since that time it’s only got better, apart from times of overcrowded servers and queues. It’s this experience that the majority of WoW players have encountered. A polished, well-made game, with enough content and activity to keep them happy.
3. Blizzard also did a great job marketing World of Warcraft. Not only did they have an already well established and popular franchise, they got on the television and pumped a bunch of dollars into promoting the game. Blizzard also continued to promote. We’ve all seen the Mr T WoW adverts, they’re even shown in Australia. This has had the effect of bringing millions — literally millions — of players into the massive game space.
4. A players first game, perhaps like a first kiss, becomes memorable and can even take on a somewhat mythic quality. I still remember crossing the countryside in Asheron’s Call — my first MMORPG — dodging mobs and Lugian boulders, just to climb a mountain and take in the view, and there are plenty of other events in that game that are just as memorable. These memories then cause players to compare every new game with the first game, and since the first MMORPG is mythical to the player, the comparisons tend to be unfavorable to the new. There are one million players whose first games were not WoW, given the attrition factor, it’s possible there are ten to fifteen times that many players whose first game was WoW. Most of these players will compare any new game against WoW. That’s just human nature.

So what does this give us?

We now have a different market than we had in 2004. Where once it consisted of a small number of players willing to put up with a lot of crap — indeed a lot of veteran players look back at the hard times with fondness, wearing their MMO scars as a badge of honor — however the market is now a group of consumers who have a set of expectations of quality and style.

To call them WoW Tourists or WoW Lemmings and to blame them for unsatisfactory subscriber numbers and the failures of highly anticipated games makes as much sense as calling television viewers ‘Cop Show Tourists’ or ‘Medical Show Lemmings’ because the early ratings on that great new SciFi series were excellent, but the viewers went back to their cop, doctor, or lawyer shows — the most popular TV genres for decades by the way — and the great new SciFi series was canceled after five episodes.

The market for TV SciFi is much smaller than the market for cop shows. It doesn’t mean that SciFi TV can’t succeed, it just means the expectations from mainstream viewers are higher. It’s the same for MMORPG’s. Expectations are higher. The question is, is this wrong?

I also tend to think that the term ‘WoW Tourist’ is a little misleading. Warhammer Online sold over 700,000 copies and the initial days after release experienced an influx of more players than the servers could handle. This lead to EA Mythic installing a bunch of new servers to cater for that growth. The launch went of better than they expected.

So… Over 700,000 people purchased Warhammer Online knowing full well that the game was highly PvP focused and offered a lesser PvE experience. A box in the US costs… what? Around sixty dollars these days. Should we believe that all of these players paid full tote to buy a game they were only going to play for the free month?

I don’t think so.

I believe that most of these players were hoping for a different experience from WoW, and that they would have stayed had the game met their expectations. These expectations could only have been expectations of quality. WAR was not released in a marketing vacuum. The Mythic team had been quite vocal that Warhammer was not Warcraft, and most customers would have known that.

That Warhammer wasn’t released with the same quality as four-year-old-WoW or with the promised content — don’t get me wrong, it was still a great launch — hurt it more than the fact that it was a different style of game.

I reckon that a significant portion of WoW players are willing to try new things, but if that new game is buggy or lacks ‘promised’ content they will head back to the quality experience that they are used to. A worse case for the new MMORPG is if a player bored with WoW is presented with a Warcraft clone. In that event, why would that player play WoW-Lite or WoW-Buggy when he can play the real thing?

For better or worse, the MMOG Market has changed.

And here’s the thing. Every market changes over time. Every market is subjected to forces beyond it’s control. Look at the US big car market. SUVs were selling like hotcakes a few years ago. Then oil prices headed north and the bottom fell out.

A few years ago, the MMORPG market was doing okay, not as well as the single player market, but okay. New games were coming out, and the genre was slowly improving. It’s likely the massive game space would have continued a slow and steady increase in market share over the long term if the industry had continued the way it was going. Then World of Warcraft came out, targeted to casual players.

World of Warcraft changed the market. It changed the dynamics of the player demographic and what those players expect, not just with the game, but with the game launch.

What Game Developers are going to have to accept is that this will change the way they do business.

And those old veteran jaded gamers, like me, are going to have to get used to the fact that things are going to change, like it or not.

Popularity: 4% [?]

You’re Messin’ With My Head Man!

If I hadn’t seen this myself, I’d never have believed it.

Hello Kitty Online

My brain hurts.

Popularity: 2% [?]

Happy Birthday Vanguard

Vanguard – Saga of Heroes recently celebrated its second birthday. I think congratulations are in order considering how bad the problems were at launch, and the generally negative impression that the game generated. For me, it was unplayable. Constant crashing, and a GUI graphics bug where the dialogs were corrupted and unreadable were the biggies for me. I stopped playing it at the time and haven’t done much with it since.

From what I’ve heard, Vanguard has come a long way since the launch. The latest comments on the game that I’ve read have been generally positive, I think Tipa describes it as a diamond in the rough, or something along those lines.

After the terrible launch, and the fallout and revelations of Brad McQuaids mismanagement leading to the sacking of a large number of the developers, and the disappearance of McQuaid from the public eye, the future looked grim for Vanguard. I’m happy to see that the future of Vanguard is now a lot brighter.

It’s great that the developers were able to pull this together, and that the game has been able to survive. It takes a lot of hard work to turn this sort of situation around. In my mind, we shouldn’t just be wishing Vanguard a happy birthday, we should be congratulating the developers on a job well done.

Grats Vanguard Devs.

Popularity: 4% [?]

Space Dingle

Okay. This has absolutely nothing to do with MMORPGs, or even gaming for that matter.

A post just popped up on Gizmodo that two satellites have just collided in orbit. One is a NASA satellite, the other is Russian.

Apparently NASA has been expecting this for years. There’s a ton of spacejunk up there, including old inoperative satellites, which is apparently what the condition of the Russian satellite.

NASA is also blaming the Russians for the collision, but I’m just wondering who needed to give way to who.

I hope they’re insured.

Popularity: 3% [?]

Did BoB Really Get Griefed?

I’ve seen a few posts on blogs and forums, including this one by Tobold, suggesting that what happened to BoB was a case of griefing.

First, lets just briefly recap what happened.

1. A senior level Band of Brothers director got bored and sick of all the nonsense that was occurring in the alliance. That director approached a member of GoonSwarm and offered to sell out BoB.
2. The GoonSwarm member was understandably suspicious considering the enmity between the Goons and BoB, and got the senior players involved.
3. The BoB director conspired with the Goons to take down BoBs alliance and did so making them vulnerable to a surprise attack.
4. The GoonSwarm and other unrelated corps and alliances moved in to BoBs former territories in a frenzy of looting.

Now back to wether this incident is a case of griefing or not, Tobold makes the following comment:

Now some people will find this way cool, big drama is one of the features of EVE. But somehow I doubt that the thousands of players who got robbed by a turncoat will feel the same way. Griefing is only funny if it happens to other people, and many people react to being griefed by simply quitting the game (which is for example why I quit EVE, I got podded in the early era of EVE, before they introduced insurance and cloning).

I’m sure a lot of BoB players are feeling the effects of this betrayal right now, and some of them will quit the game. And, I’ll freely admit that I’d be pretty shattered, and might decide to leave the game if the same thing happened to me. There was an awful lot of time and effort that was destroyed in that single action. It’s not nice to lose what you have worked hard for.

However, it should be said that there are a lot of other players who have been on the receiving end of a lot of BoB shenanigans in the past, and some of those see what has happened as just desserts.

Eve is a PvP game. It is designed as a very harsh universe where a single mistake can cost everything, and the players at the level of Band of Brothers know that.

The Band of Brothers mostly live in 0.0 space, and 0.0 is not newbie friendly. The players who head out that way know what they are getting themselves in to, and if they don’t, they soon find out. They either then make it work, or head back to the security of hi-sec space.

I suspect that given a bit of time, at least some of the Band of Brothers will look back and think to themselves that, yeah, it hurt, but it was way cool that that sort of thing could happen in the game.

In a game like WoW / LotRO / WAR / AoC your power as a player only ever goes up. In a game like EVE or Darkfall, your power can go up or down, which is not to everyone’s liking.

That’s true. The Eve Online game dynamics aren’t to everyone’s liking. It’s obvious that they don’t appeal to Tobold. But that’s okay, they do appeal to a lot of players — from what I’ve heard, Eve has nearly half a million subscribers — and that’s what is important. And these days Eve Online is a known quantity. Players are generally aware of what the game is about when they subscribe to it — though that might change once it hits game store shelves.

So even though BoB reached the pinnacle of power and lost it, they are starting to reclaim some of that lost territory and power. It might take months to get back what they lost. It will be a struggle. And do you know what? If they can achieve that, it will be way cool.

So yeah, maybe one guy caused a whole lot of other players a lot of grief, but that is life in New Eden low-sec.

Popularity: 5% [?]