>In-game trading virtual goods is a niche novelty activity, and trading them for real money even more so.

There are some very successful entrepreneurs who made their fortunes off of in-game trading that would disagree.

Do they have multi-billion dollar globe-spanning industries and vast amounts of lobbying power? A handful of people making lots of money does not make it any less a niche or novelty.

A handful of people making money does make it not a novelty activity. It's still a niche, but it's not a novelty. You aren't going to see an organized crime ecosystem on the level of the consequences of alcohol and drug prohibition, but I think it's reasonable to think that making it illegal will drive it underground rather than getting rid of it, especially when the market will continue to thrive outside of South Korea.

>A handful of people making money does make it not a novelty activity. It's still a niche, but it's not a novelty.

How so? A handful of people make money out of ANY novelty. A handful of people making money of it, is actually, the very characteristic of a novelty.

A handful of people made money off of hula-hups, the rubik cube, and yo-yos...

I would say that what makes it a novelty is that people are making significant money off of the act itself. Take your example of hula hoops. People make money off of selling hula hoops, and there are a very few people who make money off of the exhibition of their hula-hooping prowess. But nobody is really making a business model out of hula-hooping itself. You could swap rubik's cubes and yo-yos in to the previous sentence, and it would still hold true. Hula hoops are a novelty, but selling hula hoops is not.

But there are people out there making gobs of money off of the trade of virtual items and then manipulation of virtual economies, and not by enabling it (although that is also profitable) or by doing it as a parlor trick for others' amusement, but by the same means as any other economy is exploited.

In particular, what makes this not a novelty is that the attraction that these people have to it is not that it is a video game, or that the idea is new and interesting, but that it is simply an unexploited opportunity.

How many people made money off defensive HN comments?

There was a period in 1920s during which alcohol was banned in US. It was based on morality of the time. This shows that authorities can decide to ban something based on morality of the time irrespective of how deep the association of the subject/object is with our culture.

In game economy is nascent but becoming more complex every day. It required Valve to hire an economist. It may have been a novelty. But for how long?

> Games cannot really go "underground" though.

I meant the economy will go underground to meet the demand of in game favors.

I'd add that those economies are far from nascent and are pretty complex beasts already.