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Earning Virtual Currency on your Credit Cards 47

ptorrone wrote to mention an article on the MAKE blog, where the author theorizes that perhaps someday instead of frequent flyer miles we'll get WoW gold or EQ plat as a reward for using our credit cards. From the article: "It's not a matter of if, just when - credit card companies, Pay Pal, Amazon, eBay and the individual "gaming" companies eventually bridge the real and virtual currencies with loyalty programs and private label credit cards - there's too much money out there to -not- to do this. This 'demographic' is the battleground. The more you spend, the more you earn, sorta. Virtual $ isn't a crappy electronics doo-dad, it's just a number in a computer. Maybe you'll get some discounted airline tickets when you hit level 60 too, you deserve it! Earn your way to a new graphics card, why not."
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Earning Virtual Currency on your Credit Cards

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  • I thought credit cards already enabled you to use "virtual currency"
    • No, my credit cards allow me to use my real money that I've earned. It's no more virtual than paper money - there's no conceptual difference between giving someone £10 in paper than authorizing £10 of your money be sent to them via your credit card company, other than that you're trusting a third party to do the transfer.
      • no, the credit card allows you to spend money on the premise that you will later repay the money. You do not have to actually have any money to use a credit card. What you described is a debit card. [/pedantic]
  • by Opportunist ( 166417 ) on Wednesday March 29, 2006 @03:02PM (#15019676)
    If you get in-game cash for spending money with your credit card (or whatever "out of game" way), one of two things will happen:

    1. Inflation kicks in worse than ever.
    2. It gets harder to get money the "normal" way.

    All fluff stripped, it's just another way to "buy" in-game currency. So one or the other will happen.
    • You're absolutely right. Why are gold farmers often against the TOS, but something like this isn't? It just means the richest people will have the most powerful characters. Why screw with our suspension of disbelief by correlating real money with game money?
      • Why screw with our suspension of disbelief by correlating real money with game money?

        Because it has already happened, and was inevitable for any successful game. Open market or black market, real money will be able to purchase anything of value. That's what makes it real money.
    • 1. Inflation kicks in worse than ever.

      No. If WoW gold was tied to your credit card, then it would be pegged to a static value to the dollar. Kind of like how the yuan is pegged to the dollar. Now it would be a matter of how much money your are willing to spend rather than how much gold a single farmer can farm.

      2. It gets harder to get money the "normal" way.

      Not really. They'll be less farmers since you can just get WoW gold from your credit cards directly and I'm assuming that unless your credit card compan
      • Not quite. WoW can also take money OUT of the economy. Lets see - many gold to train skills at each level, how much stuff was taken out of the economy to open the gates of AQ?. Then there are bird flights, repair, mounts to buy (1000 Gold for epic don't forget), even more rare weapons to construct (Someone in my guild was gathering 100 Aracanite bars, and some other rare stuff just to make a sword)

        True those don't even begin to take as much gold out as gold is being put into the system - but it is woul

        • Yes, WoW takes money out of the economy. But the system of incoming and outgoing gold is not correlated in any way. In a "normal" economy, the amount of money is fixed while the supply of goods determines its value. It is exactly the other way 'round in MMORPGs. The amount of goods is "fixed" (with the spawn rate) while the amount of gold is variable. In theory, you can hold on to your gold and not spend any, and you can still harvest more gold.

          Also, Gold traded to other players (for buying Arcanite or othe
          • Yep. Final Fantasy XI did something pretty clever. Most player-to-player trades happen through the Auction House in that game. The AH had always charged a small fee for placing items on Auction; what Square did is change the fee to depend on how much you were asking for the item. So as prices go up, people pay more in auction fees.

            Chris Mattern
            • Still rather little money compared to the influx. How high a fee can you ask for? Make it too low and the effect is zero. Make it too high and nobody uses it.

              In fact, "fees" for some service cannot balance money matters in an MMORPG. They can slow the process a little but they can't halt inflation. To halt inflation, the amount of money in the game would have to be static (obviously, since NPC prices and drops, i.e. the other variables in the inflation equation, are static). This would, in turn, require peo
              • Well, Square did some good planning from the outset, too. For one, there's not that much money flowing *into* the economy, because most mobs don't drop cash, they only drop items. As far as I can recall, only Beastmen drop gil, and they don't drop much. Nobody is *ever* excited about the money when farming--it's always about the items. That really cuts down on the cash inflow compared to most MMORPGs where everybody drops money. You still have selling items to vendors (rarely done because the prices ar
      • You forget that this not only applies to those who buy ingame money from farmers but to everyone. Believe it or not, there are still people who either don't know about money traders or who do not want to use them. I belong to the second group. Currently, the influx of money comes from people who buy their gold from farmers. Then it would come from everyone who spends money with their CC. And unlike farming, who still have to fight mobs for money, this money would come literally from thin air. Poof, it's her
  • Fiat Money (Score:4, Insightful)

    by Dolly_Llama ( 267016 ) * on Wednesday March 29, 2006 @03:03PM (#15019683) Homepage
    Virtual $ isn't a crappy electronics doo-dad, it's just a number in a computer.

    Dollars, and any other fiat money are too. Just cause it's printed and you can carry some in your wallet doesn't give it any intrinsic value - only the one that we agree to give it.
    • Well, technically it does cost money to *produce* the physical currency, and therefore it must have some intrinsic value... for example, I could take a thousand dolars worth of pennies, smelt the copper and zinc into ingots and sell it as scrap metal. The value of the metal is less than the coin, but it still has value.

      Virtual currency doesn't even have that, unless you count the value of the physical storage the data occupies - which is so tiny it's just as good as zero.
      • Yes, technically money isn't purely fiat currency (with a value derrived entirely from government edict). It is what is sometimes referred to a "token currency", where an item of some value is agreed to represent a much higher amount of value than it actually does.
        Pedantic enough for you?
      • Over 90% of Federal Reserve Notes (FRN) exist only as bits and bytes. Paper costs 3 cents to produce, regardless if it's a 1, 10, 100, etc. Coinage costs a bit more, and have exceeded their face value many times in the past. For example, dimes are smaller than nickles because dimes were originally silver and nickles were made out of (ahem) nickle. Both quantities of metal are now worth way more than their original face. Pennies before (fuzzy, so check yourself) 1983 are worth more for their copper cont

        • The truth is there is very little difference between WoW gold and FRN, only how wide the acceptance.

          WHile you can use any agreed-upon currency for private debts, a FRN is quite a bit different from WoW gold when it comes to public debts. This, in fact, is what *makes* a currency a national currency: you have to pay your taxes in dollars, and the federal government only offers to repay its debts in dollars. It's kind of a big deal.

          • True, the Gubmit only accepts taxes in FRN in violation of the Constitution Article I, section 10. The ability to discharge all your debts in one currency has quite a bit of appeal. "One stop shopping" is what creates most of the acceptance, as well as demand. Although to be fair, the vast majority of people out there have no idea what money or currency represents and use it without question.

            That doesn't change the fact that there are huge problems with any fiat currency. Back in the recesses of time,

            • Atricle 1 Section 10 restricts the states from creating their own currencies. It's not a restriction on federal power.

              Men with guns want you to pay taxes. They accept dollars. They do not accept WoW gold. A government is an entity which can force people to pay taxes. That government has a currency only if it accepts payments in that currency. I have to accumulate dollars to pay taxes with even if I don't want to use dollar for any private transaction (at least, according to tax law, people do get buy
              • Atricle 1 Section 10 restricts the states from creating their own currencies. It's not a restriction on federal power.

                Not really. In the beginning, the Constitution limited the Federal Governments revenue to "billing" the states in proportion to their population. It wasn't until much later that they set the stage to escape the fiscal dicipline of gold by direct taxation of the people. I won't get into the whole 16th amendment thing because as you point out, the men with guns are asking you "nicely" to

                • You also have to accumulate dollars if you want any commodity, since they are also priced in FRN. (Oil, gold, silver, palladium, etc.) This is one reason central banks need FRN in their vaults, and gives an artificial boost to the percieved "value" of the FRN.

                  This is really a non-issue, and I don't get why people think it's of more than importance than the "perceived value" you mention. Anyone can buy commodities in Euros or whatever, as any broker will do the exchange. Prices are *listed* in dollars, bu
  • I'd much rather have a system whereby my credit cards get credited with payments for playing more online games. If I make level 60 in WoW, I should get 10 bucks credited back or something. Of course, that goes directly against their current business model, so that will never happen.
  • the author theorizes that perhaps someday instead of frequent flyer miles we'll get WoW gold or EQ plat as a reward for using our credit cards.

    My old work place used to give out credit-card points as a reward to their employees, which we could cash in on gift cards to various places like best buy and what not. It was great, considering they paid us next to nothing.

    Recently (after I quit, thank god), the management decided to keep all the points for themselves. We're talking about a half a million points per
    • Most of the comments seem to be missing the fact that the Post Title is (surprise surprise) highly misleading. This is NOT an imminent plan to do this. THis is one blogger's wishful thinking that's being repeated as gospel by WOW and Everquest addicts who desperately want this to be true.
  • Why not get special in-game items? Make them untradeable/unsellable if you don't want to muck up your marketplaces.

    It wouldn't take a whole lot to get people to snap up a new credit card.

  • by Ted Cabeen ( 4119 ) * on Wednesday March 29, 2006 @03:16PM (#15019808) Homepage
    If this happens, it will make it even more likely that the IRS actually weighs in on the issue of the taxability of items obtained through online gameplay. There was a story on NPR's Marketplace a few weeks back about the fact that if you work and obtain something in payment that can be exchanged for money, you owe income tax on it, even if you don't sell it. Since eBay clearly establishes a value for a single piece of WoW gold, you are liable for income tax on that $0.05 you've earned when you sell that BoE item in the auction house or when you loot it. Do you claim the value of your WoW gold as miscellaneous income?

    Note: I am not a tax lawyer, and this is not to be interpreted as tax or legal advice. Contact the IRS if you have any further questions.
    • IANAL either, but I had a different view on gold selling. I always thought that gold selling and such wasn't about selling tangible comidities, but rather about hiring a guy to play the game with you. Everything in the game is "owned" by blizzard, and by paying our monthly fee, we're allowed to utilize their environment and virtual items by the rules they set down. So when we buy gold, we're paying some guy to "be our friend" in the game and play along with us, which could range from helping us in a raid
    • Would this mean if you lose an item, you can write it off as a loss?
      How about deducting your monthly subscription fee as a cost of doing business?
    • The current answer appears to be that you shouldn't claim it. The IRS has taken the position of shrugging and meakly walking the other direction.

      More detail here: y-2006/feature_dibbell_janfeb06.msp []
  • by courtarro ( 786894 ) on Wednesday March 29, 2006 @03:24PM (#15019881) Homepage
    This sounds like a really bad financial move, considering the stability of online systems' finances. What happens when you buy $2000 worth of computer equipment on your card, only to have WoW roll back to before you made the purchase and wipe out your side earnings? Until online currency has the same financial and legal protections as true currency, stay away. No thanks.
  • I wouldnt want their in game BS currency for using my credit card. I would rather them pay me on my credit card for earning the gold, or farming it. Wait I can do that now just by selling out to those farming sites.
  • Bad Premise (Score:3, Insightful)

    by Rydia ( 556444 ) on Wednesday March 29, 2006 @03:48PM (#15020087)
    Not only does this pressupose that there are enough people out there that a) play MMOGs and b) want to buy gold for said MMOGs over current cost, but also that marketing and transaction costs given there IS an audience wouldn't swallow any benefit, making the card worthless for all but the heaviest spenders.

    Even if the market DID exist, card companies are only going to want a certain number of brands/external services in their card stable, anyway. So, what percentage of the small amount of the population that would shell out for MMOG gold would make the gold their first-third priority? Over Disney, perhaps. Over cash back? Over groceries? Gas? Travel?

    Plus, a lot of the gold business isn't for the hardcore... it's for those who just want a little boost. If you're only cashing in twice over your career, why the heck would you get a CREDIT CARD to accumulate small amounts over a long time?

    I swear, if I didn't dislike blogs so much, I'd start one to catalogue all the idiocy. People in and around the videogame industry seem to all have a serious case of overinflated sense of importance and think the tail wags the dog.
  • If I write a post in a random blog on an improbable event, but a generally good idea, can I get it posted on /. too? This is beyond simple wishful thinking. The secondary market for online gaming is nowhere near the size of usefulness of the airline industry. If I got a choice between frequent flyer miles and Lineage II Adena, I'd take the Adena, but that would require some deal between NCSoft and a credit card company to provide virtual currency, and I really don't even see this ever happening.
  • Incredibly stupid. (Score:3, Insightful)

    by mattgreen ( 701203 ) on Wednesday March 29, 2006 @04:44PM (#15020558)
    MMOs are always on the cutting edge of materialism it seems.

    In spending *real* money on a credit card, I can apply these benefits toward things that are *not* real? Does anyone actually think this is a good idea? You might as well just not get any benefits from your credit card!
    • Do you mean 'not real' like a movie ticket?

      Would it seem foolish if you were to earn a voucher for a movie ticket? I expect it wouldn't, and if you'll grant this much, then how is it any different from earning an in-game voucher? It's all entertainment. You're making the mistake of thinking it's different because it's a "virtual world" when it's really one more type of entertainment.
  • Has anyone worked with a company that provides private label credit cards? I've found plenty by googling, but none panned out - I can't even tell which ones are legitimate and which only serve huge enterprise customers.
  • I tag thee "speculation"

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