The University of North Carolina at Chapel Hill researchers – Darrell Bethea, Robert Cochran, and Michael Reiter – will present the research in a paper at the 17th Annual Network and Distributed System Security Symposium (NDSS 2010), which runs from February 28 to March 1.

Many cheats use client software that has been developed specifically for that purpose. They engage in what the researchers describe as a "cat and mouse" game with companies such as Blizzard Entertainment, which run popular massively multiplayer online games. The game operators mainly use manual techniques today to try and identify cheats. The cheats can make money by manipulating the games in unintended ways, so that they can rapidly acquire virtual currencies and other goods in the game. These can then be converted to real-life currency by selling them through online exchanges, including eBay.

The researchers will reveal a way to target online cheats using a server-based technology, which they say does not increase the required bandwidth, often a critical expense for game operators.

"Because of the way the technique works, and the opportunities it provides for game operators to validate clients' actions, we believe it opens the door for considering new approaches to designing online games," said Michael Reiter, professor in the University's Department of Computer Science.

The market for virtual currency and other assets, such as character experience points and weapons in multiplayer virtual games, has exploded. Experts now predict it could be worth $5bn in five years. And Slide, a company that formerly focused on advertising revenues, now makes almost all of its money from selling virtual goods, according to its CEO Max Levchin.