The Joint Economic Commission of the US Congress has announced that it will be launching an investigation into the amount of money that is being traded within the environs of virtual worlds of online roleplaying games like the World of Warcraft. Over the past few years, these online games have captured literally millions of participants. An integral part of these games is the trade aspect, where gamers buy and sell equipment, potions and weapons. This has created an economic community where individuals use real money and transactions can be of enormous value. There are in fact now individuals who rely on the World of Warcraft game as their sole income, buying and selling equipment. We are not talking about some loose change here; a recent study found that the real world economic activity that is tied to the online worlds is greater than the GDP of Namibia (!!). So, are we likely to see teams of IRS collectors rubbing shoulders with orcs and elfs within virtual worlds, trying to make sure the government gets its share of the revenue?

Not likely, at least not in the short term. This virtual tax haven, combined with a loyal, captive and massive audience does present advertisers with unique opportunities. Expect to see product placements appearing in these virtual worlds, with advertisers paying on a pay per click basis, generating revenue both for the companies that run the virtual worlds, as well as for the users themselves.