Virtual goods face an eBay embargo

Just scored an awesome sword on World of Warcraft? Forget about selling it for a quick buck on eBay.

That's because the online auction site has decided to remove listings for most virtual goods and real estate. The ban affects auctions for characters, currency, weapons, and attire from games including Warcraft and City of Heroes. The one striking exception: The ban specifically exempts sales tied to Second Life, a virtual world that revolves around a functioning economy.

There is a real market for these pretend goods; estimates range in the hundreds of millions. But the owners of the games claim that many of these "real money trades," or RMTs, violate their intellectual property rights. Rather than deal with disputes over how much that cloak of invisibility is worth, eBay is just ending the business altogether.

Blog community response:

"I fully support an operator's right to ban RMT from its services should it wish to do so. I am just saying that its ability to enforce that decision through legal means may be limited. I am also sceptical as to how much it will achieve if the service is designed in a way that incentivises RMT."
--Virtual Economy Research Network

"Of course, eBay's implication that user creations belong to the developer or publisher is a topic that has seen many reams of internet debate. If Blizzard decided to auction off a special WoW item, would eBay allow it?"
--Joystiq

"This is a set back to the world of virtual property as it removes a large central market place. However in away it may be a blessing in disguise as it just gives a boost to many of the smaller extra legal entrepreneurs who already have setup alternative markets."
--ExtraEagle