Australian David Storey made international news when he stumped up £13,700 for a newly discovered island with sparkling beaches, rich mineral deposits and a spectacular ruined castle- a virtual island, that is. David is just one of the many online gamers who last year pushed the trade in imaginary weapons, property, and characters for fantasy games past the £200 million mark (real cash mind you), more than the entire GDP of some real countries.

Gold, magic hammers and cloaks of invisibility are just some of the tens of thousands of sought after items currently listed on e-Bay. Virtual trading has become an important revenue stream for eBay, with eBay executives treating it just like any other physical exchange. Itembay, a Korean company specialising in trading virtual goods, has 1.5 million customers and revenues of $17 million a month.

Legal disputes are an inevitable consequence of the new environment, according to Seb Belcher, head of interactive entertainment at the legal firm Harbottle and Lewis.

'Virtual property must be recognised in law.' Belcher said. 'The projections for growth in the online gaming industry suggests that the demands for legal recognition of virtual property will only increase.'

In Mexico, a US company was forced out of business after setting up a sweatshop in which poor Mexicans played games around the clock, earning game credits and building powerful game characters that were auctioned off for a profit on eBay. Games developers such as Sony and Mythic Entertainment has recently tried to halt the trade in virtual property and characters, claiming that this was an infringement of the intellectual copyrights of the game.