End User Liscense Agreement

Popular online games are commonly bound by an End User License Agreement (EULA).   The consequences of breaking the agreement vary according to the contract; ranging from warnings to termination, such as in the 3D immersive world Second Life where a breach of contract will append the player warnings, suspension and termination depending on the offense.

Enforcing the EULA is difficult, due to high economic costs of human intervention and low returns back to the firm. Only in large scale games is it profitable for the firm to enforce its EULA.

Edward Castronova writes that "there are issues of ownership and governance that wrinkle the affairs of state significantly". He has divided the online governance into good governance and "strange governance". Castronova also mentions that synthetic worlds are good ways to test for government and management.