Pacific Epoch reports:

Shanda (Nasdaq: SNDA) has been ordered to pay 5,000 Yuan and apologize to a gamer of its in-house developed MMORPG The World of Legend for taking away his virtual tools, reports Changsha Evening Newspaper. The gamer surnamed Zhang discovered six virtual items, worth more than RMB1,500, missing from his game account on November 22, 2006 and contacted Shanda regarding the disappearance. Shanda said that the company had taken the items in accordance with a police investigation regarding the sale of stolen virtual items. According to the report, Shanda failed to follow police instruction and return the items after the investigation ended. Having spent much time away from the game, Zhang said he plans to take Shanda back to court. This time he plans to sue for the RMB150,000 he claims to have spent in the game during the past five years. Zhang sued Shanda in the Hunan Qiyang People’s Court.

The secondary market for virtual assets is flourishing in China. It’s also the marketplace for the underground, hacker, economy.

Online gaming companies benefit from secondary markets. Virtual assets still have to be “earned” by someone before they are sold (or stolen). Purchasers of the assets are sure to spend even more time online playing with them. Secondary markets help online games become more profitable.

The virtual assets being traded are not fungible - they only work within a specific game and when used by specific players. The games track all this information in user’s accounts. After all, gaining virtual assets is half the point of an online game. Companies know who used what to slay the dragon, when they used it, and when they got it.

Shanda lost in court because they didn’t return stolen property to its purchaser. As strange as that may sound, it’s actually progress. Shanda has the means to control the trade in its game’s virtual assets, but chooses not to. They turn a blind eye to asset trafficking as long as it encourages users to stay online.

Good luck with that new suit, Mr. Zhang.

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