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Cybercrime and virtual laundering in video game marketplaces: A Bayesian P-inductive argument

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  • Higgs, James
  • Flowerday, Stephen

Abstract

Virtual assets distributed in online video games are a novel medium of exchange that are exploited for fraud and money laundering because of the low-risk environment within which the assets are exchanged. Virtual asset marketplaces inadvertently facilitate money laundering operations by functioning as critical entry and exit points for illicit proceeds. While prevailing scholarly discussion emphasizes the suitability of online video games to small-scale laundering operations, this paper challenges that perspective. A three-part argument is formulated which demonstrates the occurrence of large-scale money laundering in the online video gaming ecosystem. Analyzing virtual asset sales on three marketplaces over a 12-month period reveals significant marketplace vulnerabilities which can (and are) exploited by cybercriminals. Employing Bayesian confirmation theory, this paper combines empirical analysis with further corroborating items of evidence to demonstrate the occurrence of large-scale virtual laundering. The results provide scholars, practitioners and regulatory bodies a foundation on which future interdisciplinary research and discussion can build to mitigate cybercrime-related harms inflicted on society.

Suggested Citation

  • Higgs, James & Flowerday, Stephen, 2025. "Cybercrime and virtual laundering in video game marketplaces: A Bayesian P-inductive argument," Technology in Society, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:teinso:v:83:y:2025:i:c:s0160791x2500168x
    DOI: 10.1016/j.techsoc.2025.102978
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    References listed on IDEAS

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    1. Higgs, James & Flowerday, Stephen, 2024. "Towards Definitive Categories for Online Video Game Money Laundering," SocArXiv ckxa8, Center for Open Science.
    2. repec:osf:socarx:ckxa8_v1 is not listed on IDEAS
    3. Akartuna, Eray Arda & Johnson, Shane D. & Thornton, Amy, 2022. "Preventing the money laundering and terrorist financing risks of emerging technologies: An international policy Delphi study," Technological Forecasting and Social Change, Elsevier, vol. 179(C).
    4. Elena Petrovskaya & David Zendle, 2022. "Predatory Monetisation? A Categorisation of Unfair, Misleading and Aggressive Monetisation Techniques in Digital Games from the Player Perspective," Journal of Business Ethics, Springer, vol. 181(4), pages 1065-1081, December.
    5. David Zendle & Rachel Meyer & Nick Ballou, 2020. "The changing face of desktop video game monetisation: An exploration of exposure to loot boxes, pay to win, and cosmetic microtransactions in the most-played Steam games of 2010-2019," PLOS ONE, Public Library of Science, vol. 15(5), pages 1-13, May.
    6. James Higgs & Stephen Flowerday, 2024. "Towards definitive categories for online video game money laundering," Journal of Money Laundering Control, Emerald Group Publishing Limited, vol. 27(6), pages 1051-1062, April.
    7. Angela S.M. Irwin & Jill Slay & Kim-Kwang Raymond Choo & Lin Lui, 2014. "Money laundering and terrorism financing in virtual environments: a feasibility study," Journal of Money Laundering Control, Emerald Group Publishing Limited, vol. 17(1), pages 50-75, January.
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