China has levied a 20 per cent personal income tax on all virtual currencies. It specifically targets all those that profit from the redistribution of virtual currencies, with officials being able to determine the value of the virtual currency if an individual fails to prove the original price. This will affect those that redistribute currencies for web portals and messaging services as well games.

The repercussions in the Western world will prove very interesting: China is the infamous host to a large majority of almost untouchable MMO gold farmers. This latest development can only come as good news to the likes of Activision-Blizzard, Codemasters Online and GOA, whose terms and conditions for their respective MMOs strictly forbid real-world trading of virtual currencies for cash. If our limited knowledge of economics are anything to go by, then no doubt we will see a uniform increase in the black market price of all MMO currencies even a small decline in trade.

Codemasters Online’s Lord Of The Rings Online is to get an in-game social networking site. Developer Turbine’s boss Jim Crowley announced this morning at the Tokyo Game Show that it would be “a version of Facebook or MySpace that sits directly on top of the gaming world.

“This is a fully featured, rich, robust social network. It has every single feature that you would find in the major commercial social networks such as Facebook and MySpace.”

It will launch at the end of this year and feature profile pages for all LOTRO player characters, with friend lists and communication tools as an extension of the current social networking system. It will also launch for Turbine’s other MMOs around the same time or next year.