Hold on to your keyboard: the world of online gaming is in the grip of a festering crimewave. As role-playing computer games such as EverQuest and Lineage have surged in popularity, a dark criminal underworld has emerged to capitalise on their internal economies. So sought-after are high-ranking characters and the virtual trinkets that they amass that extraordinary amounts of real-world money are changing hands as they are traded. Inevitably, the bad guys are now cashing in – bringing everything from in-game fraud and protection rackets to gang-controlled digital brothels.

The latest variation on identity theft focuses on finding passwords to access unsuspecting players’ game characters, with a rash of computer virus attacks targeting games including World of Warcraft, Lineage and Prison Tale. This follows the counterfeiting of in-game currencies, extortion attempts by virtual "mafias", and the introduction of "fake" character accessories which are then sold at auction. A student was arrested in Japan last month for allegedly "mugging" players of the game Lineage II. The man is accused of programming software "bots" to beat up players and run off with their Shields of Nightmare or Earrings of Wisdom, the rewards earned by characters for mastering challenges.

Such nefarious activity sounds absurd – we are, after all, talking about the theft of objects that exist only on screen. Yet that would be to ignore the obsessive demand among players for their in-game characters to achieve high status, and their willingness to value that status in physical dollars and pounds. In these MMORPGs (massively multiplayer online role-playing games), the more possessions your character acquires, and the greater his or her rank, the higher that character’s cash value on the informal commodity markets that have sprung up.

If you bear a grudge against another player, you can hire an in-game group of hitmen to harass them and destroy their property: in The Sims Online, these digital enforcers openly advertise their services as "the Sim Mafia". At auction websites such as eBay, the games’ currencies are being traded as if they were iPods or DVD players. If you want to advance in The Sims Online, you can currently buy a million Simoleans, the local currency, for around £9; a million Linden Dollars, for the game Second Life, will set you back £2,000. Last December, a 22-year-old Australian spent $26,500 of real cash to buy a virtual island in the game Project Entropia. No wonder the economist Edward Castronova was able famously to calculate the financial value of EverQuest’s fantasy world, Norrath, as more or less equivalent, in terms of GNP per capita, to Bulgaria’s.

With so much real money at stake, it is little wonder that criminals are targeting these imaginary worlds. It can only be a matter of time before the British police become involved, as they have in South Korea, where a special "virtual crimes" unit is investigating in-game criminality. The underworld will follow the money, in whatever play currency it first manifests itself. There is a wider lesson to be drawn. The bad guys have been attracted to the financial opportunities they perceive in these online fantasy worlds. The games themselves did not create these criminal desires. People in the real world can be violent, greedy and dishonest. But don’t let’s blame the internet for making them so.

Explore Tech & Web

• Personal Tech

• The Web

• Gadgets & Gaming