Stropp's World

Games And Gamery

Taxing Game Gold. Likely Or Just Silly?

Posted by Stropp on September 15, 2010

One of the sillier concepts that goes around the MMORPG blog rounds from time to time is the idea that the virtual currency that someone can earn in a game might one day attract the icy gaze of the tax monster man who then decides that the 150 gold I earned last year in WoW, or the 200 plat I made in EQ2 by questing and selling a few rares should be added to my taxable income.

Tobold, once again, has put this spin on a recent incident in Eve Online where a bunch of players were scammed out billions of the games currency, Isk. Apparently the Isk scammed, if bought using CCPs official means of buying currency called Plesk, amounted to around 45000 US dollars if it could be transfered out of the game.

Now even though I think taxing game currency is a silly concept, and something of a stupid thing… well, that doesn’t mean it can’t happen. After all, if I had an Isk for every time a government did something nonsensical, I’d have the equivalent of US$45000.

But I don’t think, in reality, that this could happen. Here’s why.

If a goverment decided that the gold you made in WoW was income, then in many countries the activities and costs associated with making that income are tax deductable. This means:

  • Your subscription costs become deductable. If you’re playing a Free To Play, then item shop costs become deductable. Make sure you keep your receipts.
  • Your in-game costs become deductable if you spend gold. Let’s say you buy copper to make a dagger, the cost of that copper can be deducted from your gross revenue before tax is applied.
  • The in-game costs of buying abilities, respeccing talents, and buying mounts is deductable.
  • Mounts may be considered vehicles, and may require depreciation schedules to be created.
  • Most players don’t make fortunes in in-game currency. Most don’t make all that much at all.

The thing is, if a government decided to tax World of Warcraft gold (for example) it’s more likely that the majority of players would spend more in real world costs than they would earn in-game in equivalent currency. That is, they’d make a loss. Raising crafting skills in WoW costs a fortune in gold before you make any real profit, so someone who loves crafting may actually make huge in-game losses.

These losses would then offset against real world income. You subscription for instance would become a tax deduction.

It’s highly unlikely a government would make any money taxing in-game currency earnings. In fact, they’d probably make a loss.

And in anycase, if the scammer does transfer that $45K out of Eve into real money, that does become taxable income. They’d have to pay tax anyway so there is no need for the government to implement any tax rules for MMORPGs.

Unless they’re silly.

Admitting To Punching Puppies

Posted by Stropp on March 15, 2010

Last week Suzina of Kill Ten Rats admitted on a blog post to buying gold. That’s kind of like admitting to the world that you enjoy punching puppies. It’s not going to win you any friends, other than those who also punch puppies and are looking for some kind of justification.

Okay. Perhaps I am being a little harsh here. For the most part I don’t care if someone goes out and buys gold. It really doesn’t make any difference since, with a couple of exceptions, it doesn’t really affect me in a PvE game. And Suzina’s stated reason of needing the 1000 gold to get the dual spec talents really affects no-one since it just makes it easier to change over for different play styles.

But to a lot of players, admitting to buying gold is near enough the same thing. After all, someone who has had their account hacked, and had lost uncountable hours of time building up their characters, to a gold seller might feel a little touchy that Suzina has in effect (possibly) received gold that might consist of the proceeds from some of that stolen gear. The fact that she bought it from a so called reputable dealer means nothing. These guys outsource gold collection, and likely have no idea how that gold is obtained. Kinda like a shoe company denying knowledge that their shoes are made by five year olds chained to finger crushing machines.

That she was surprised about the negative reaction from other players did surprise me though. I’d have thought that anyone who’d hung around the MMORPG community for any length of time would be aware that the gold selling issue is a hot button to many players. After all, from gold spam to account hacks, it’s the same players who have to wear the bad behaviour of the gold sellers. I’m sure any player who’s played for any length of time or has been in a guild or is sociable would know someone who’s been hacked. That another player would change his opinion of her character at such a revelation and put her on ignore isn’t that unexpected.

You see, that’s what I care about. The fact is, gold sellers make the games I like to play less enjoyable. If I have to keep ignoring gold spammers just to read chat, or need to go out and spend extra money buying an authenticator, or have to distrust anyone I give guild bank privileges to, then the gold sellers have made the game a little less fun. And the gold sellers wouldn’t be messing with my play if no-one used their services.

And that’s why, I’m just a little annoyed by Suzina.

But at least she had the guts to admit it. (It’s sure pulled a bit of traffic into her blog too, hasn’t it?)

You Know The Dollar Is In Trouble When…

Posted by Stropp on October 1, 2009

…you see Adsense adverts advertising¬† gold sellers on MMORPG web sites…

Real gold sellers that is.

One of the rules of economics, it seems, is that investors buy real gold, not WoW gold, when they a nervous about paper currencies. Hence the price of gold over the last year has risen to around $1000 an ounce.

The funny thing about this real gold ad is that the guy was promising to sell an ounce for 300 quid.

Looks like it’s not just the WoW gold sellers who are the scammers!