South Korea Rules Virtual Currency On Par With Real Money

This week, the South Korean Supreme Court made a ruling stating that online games' virtual currency, or "cyber money", can legally be exchanged for real world currency. The ruling also stated that transactions using this "cyber money" will be taxable.

This week, the South Korean Supreme Court made a ruling stating that online games’ virtual currency, or “cyber money”, can legally be exchanged for real world currency. The ruling also stated that transactions using this “cyber money” will be taxable.

If such a measure was implemented in the US, the implications for gamers and social games would be large. With Zynga reportedly on a $300 million revenue run rate for 2010, and 90 percent of revenue coming from virtual goods, we know that virtual currency is an estimated $270m per year market, just for Zynga. Now this ruling becomes interesting when we see players attempting to sell their purchased currency and items outside of the game, with taxes. This would be a source of revenue for the government, but also may cause Zynga to lose revenue. If I could sell some of my spare currency when I was tired of the game, or sell exclusive items I had won, this is money that Zynga does not receive.

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