The year that is 2016

Japan’s Financial Services Agency is nearing a landmark decision on the status and securitisation of PokeCoins, the virtual currency used to breed rare monsters in the highly successful mobile game Pokémon Go.

The FSA, which has not formally disclosed when it will make its ruling, is debating the issue with Pokémon Go’s US-based creator, Niantic. The outcome, according to lawyers scrutinising the matter, could oblige domestic Japanese and overseas companies whose games are available in Japan to secure the virtual money they have sold to local gamers with substantial deposits of real-world yen.

Analysts say that while the FSA is focused on PokeCoins, the regulatory time-bomb could threaten the magic stones of Puzzle & Dragons, the green gems of Clash of Clans and the rainbow orbs of Monster Strike.

The FSA is so far the only regulator in the world weighing the measure, but its decision looms over Japan-based pools of cash worth tens of millions of dollars, according to industry consultants. Yen-denominated sales of virtual currencies are especially high in Japan because of its status as the world’s most valuable mobile games market.

According to SuperData Research, annual revenues from mobile games in Japan have nearly tripled since 2012 to an estimated $8.6bn in 2016 — much of that, say analysts, driven by sales of virtual currency.

Pokémon Go, the Nintendo smartphone game that was launched in Japan in July and surged at record speed to the top of the accumulated revenue charts, has made the sale of its virtual currency especially appealing to players eager to complete the full collection of monsters. One hundred PokeCoins, costing Y120 ($1.16), will buy a monster lure while 500 will buy eight lucky eggs.

That is from Leo Lewis at the FT.

Comments

First!

First substantive comment here. This dovetails with George Mason University's Robert Hanson's thesis of virtual reality becoming real reality. People will soon be discombobulated heads, tethered to a VR machine playing out their fantasy. Then, as Hanson says, the physical head will be dispensed with and just your likeness will be stored in computer memory, the theme behind the groundbreaking Sci-Fi classic by Egan "Permutation City", where they will 'live' forever. There's even a short sci-fi story where the virtual beings opt to go back into a physical body and die, preferring reality with a certain death to an endless artificial VR world.

Is "Robert" Hanson one of Robin's ems?

This comment is funnier than most people realize.

Cap 2016 all off with the theft of the election due to massive Democratic voter fraud

Yes all those republican controlled states are rigging the election against their own candidate.

Democrats control the major cities such as Miami and Philadelphia and have shown themselves historically to have no qualms about breaking the rules to win elections. This is in sharp contrast to Republicans whose idealism sometimes borders on naivety about how this process works. I would not expect Republican governors to out-wit Democrats when it comes to the election fraud game. Trump supports have a valid point.

No, Trump supporters don't have a valid point. There is no evidence that voter fraud exists in any statistically meaningful sense. It is easy to understand why....it simply wouldn't produce many votes and carries very high penalties. There are many legal ways of affecting the final vote that are both more effective and less risky/costly than voter fraud. Would be election riggers of both parties focus on those techniques (i.e. advertising, voter ID laws, knocking on doors, etc).

...and voter fraud would make even less sense in this presidential election. Even if everyone who died last year voted for trump, it still wouldn't be enough to save him. Billary doesn't need the votes of the dead.

I'm not entirely on board with Gil's comment, but he makes one excellent point: there is no point in undertaking fraud when you have a large lead in the polls.

Trump has the lead in all the properly unskewed polls. Almost all of the polls you see in the news over-sample Democrats by a huge margin.

Unskewed polls...ha. We went through all of this in 2012...including the whole "oversampling democrats" thing. And that was actually a fairly close race in comparison.

https://www.theguardian.com/commentisfree/2012/nov/21/2012-election-polling-skewed-for-mitt-romney

Hope springs eternal I guess...

It's pretty reliable, every single election, how one or both groups insist the polls are biased against them. Take two words out of that comment and you can paste it in any past or future polling debate.

@Weber: too bad for Nixon he didn't understand that (ok, that wasn't exactly voting fraud, but still)

Interesting issue, a software glitch lead to loads of candy crush players from losing boosters and there are some quite sophisticated crime rings on eve online. Question is are game items a) property b) currency?

I think closer to property because you can't spend poke coins anywhere else. Similar to gift cards from restaurants or supermarkets. However, gift cards are securitized anyway.

They aren't property either, since Niantec can ban/dissolve your account for violating ToS (which includes any coins you may have), which are written extremely loosely "doing something to gain an advantage",

You're right. From Pokémon GO Terms of Service https://www.nianticlabs.com/terms/pokemongo/en Any lawyer that can give an opinion on these terms?

"Virtual Money is a category of Content, so the purchase of Virtual Money grants you only a limited, nontransferable, non-sublicensable, revocable license to use such Virtual Money to access and purchase Virtual Goods in conjunction with your personal, noncommercial use of the Services. You acknowledge that you do not acquire any ownership rights in or to the Virtual Money, Virtual Goods, or other Content; any balance of Virtual Goods or Virtual Money does not reflect any stored value. You agree that Virtual Money and Virtual Goods have no monetary value and do not constitute actual currency or property of any type. Virtual Money may be redeemed only for Virtual Goods and can never be sold, transferred, or exchanged for “real” money, “real” goods, or “real” services from us or anyone else."

I think the problem of having to sell "virtual money" arises from selling the service to minors without income. It is expected that minors ask for permission to buy virtual money and then choose how to spend it in the game. In other games or services, spending real money yields an immediate perk or function, real money is never stored in a virtual form.

Amusing, but kind of dumb, like calling carnival tickets a currency. It is a one way purchase, not redeemable like poker chips.

I've never understood why anyone is willing to spend real money for virtual goods (although I don't see why adults should be prohibited from doing so).

And, no, virtual goods are not like a carnival ticket. A carnival ticket (like a paperless airplane ticket but unlike Poke coins) gives one the right to something (a ride, transportation) in the real world.

Will we someday read sob stories of how some sucker sold his house and stole from his friends, relatives, and employer to chase fame and fortune in some virtual world?

Is spending more money on a video game to enjoy it more any different than spending more money on a stadium ticket in order to enjoy the scoreball game more?

It's fundamentally different from purchasing a game once and advancing only from skill. There starts to be an incentive for the game makers to introduce pain points or to dribble out features slowly to make players pay for upgrades.

A slot machine is the perfect example of this style of game. Steady payment for unpredictable rewards.

The same reason you spend money on any entertainment good--entertainment! How is buying a movie any different--lets say a movie online from amazon since there is a physical difference otherwise in the way its stored/processed,

Minsky vidicated

should be: vindicated

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