Shopping in Second Life

The Swedish tax authorities have discovered there is money in virtual worlds. And they want to tax it.

Swedish Radio News reports that the Swedish Tax Board has discovered that hundreds of thousands of Swedes are playing World of Warcraft and similar online games. Moreover, they have discovered that it is possible to earn real world cash selling virtual world bits.

Swedish Radio News talked to a Swede who plays under the name Rob Roy. He says he was more or less even, until he bought a shopping center that cost 75,000 real world dollars. Rob Roy is getting his investment back by renting out space. (I suspect this must refer to Second Life, unless there are other virtual worlds with such expensive property. There certainly aren’t too many shopping centers on that scale in Star Wars Galaxies.) (And there’s even a possiblity that Swedish Radio News has confused Linden dollars with real dollars and the shopping center was a lot cheaper.)

So far the Tax Board has yet to catch anyone they think owes back taxes because of their online activities. But Dag Hardysson, project manager for the agency’s monitoring of Internet commerce, says they have checked the game accounts of a number of people, and they can see that some have earned money.

He gives the example of a fashion designer in Second Life who sells clothes in both the real and virtual worlds, or players in World of Warcraft who earn a virtual weapon they can sell to a lower level player for real money. Hardysson says that while they are following the situation, it probably won’t be for two or three years before players would be actually paying taxes for their online profits.

He adds that there are still technical issues involved in keeping track of income earned in cyberspace.

See also: Sweden the First Country to Set Up an Embassy in Second Life