Virtual underworld

Organized crime is going virtual. A recent McAfee report outlines how virtual world economies are being used by organized crime as a new way to launder money. Because many of these virtual worlds have an internal economy tied to real world economies, they have become a focus of organized crime. Additionally, the lack of governmental oversight or policies on virtual goods provides additional motivation.

This trend is not limited to virtual economies directly linked to a real world economy, such as Second Life. MMORPGs like World of Warcraft are equally susceptible due to the widespread practice of gold farming or “power leveling” services that raise a character’s level. A new study indicates gold farming employs more than 400,000, and is at least a $500 million dollar industry. While these services are illegitimate according to the game companies, the players themselves both buy and sell gold, items, and characters, which could easily mask illegal transactions. The game characters are high cash items, with the record sale at around $10,000, but most characters averaging around $400.

These behavior patterns and crime trends indicate a significant underlying design issue. Future incarnations of virtual worlds and massively multiplayer games will need to better account for isolation or integration with real world economies, and the end result will very likely be a system relying on increased control and oversight.

Ultimately, those sorts of changes will bode well for marketers, as they go hand in hand with a safer brand environment. However, in the meantime, this news may make virtual worlds less of an ideal setting for many brands, as even upcoming systems are vulnerable to abuse – any player to player economy offering virtual goods or services could host money laundering, and while marketer virtual storefronts will not be a target, they may unknowingly have a virtual front for organized crime set up next door.