A Shanghai man was sentenced to death this week after a dispute over ownership of a virtual sword in an online game led to a real-life slaying.

Online gamer Qiu Chengwei received the death sentence with a two-year reprieve from Shanghai Number 2 Intermediate People's Court after he slew another player, Zhu Caoyuan, last October, according to a report published this week in the official newspaper China Daily.

As long as Qiu behaves well in prison and is not found to have committed other crimes, his sentence will be commuted to life imprisonment, and he may only serve 15 years, the newspaper says.

The pair had argued over ownership of a virtual sword that Qiu and another player had won in the online game Legend of Mir III. Qiu loaned the item to Zhu, but Zhu then sold it for approximately £477.

When Qiu tried to involve the police in recovering the item or the money, he was told that such virtual items are not protected by Chinese property laws. After Zhu refused to return the item or pay compensation, Qiu went to his home and stabbed him in the heart, according to the report.

Online gaming is a high-stakes business in China, and is set to grow further over the next five years, according to market researcher IDC. Around 20.3 million Chinese played online games last year, spending £163 million to do so.

A parallel market trading in-game items for real-life money is also springing up, observers say.

Back in March Blizzard, developer online game World of Warcraft, permanently banned more than one thousand accounts for "gold farming" — a practice where players farm items for gold, then sell the gold for real-world money.

At the time the In-Game Support Manager going by the name Maleki, said “we have been investigating the activities of certain individuals who have been farming gold in order to sell it in exchange for real world currency. After researching the situation, we have issued permanent suspensions to over one thousand accounts that have been engaging in this practice. We do not condone such actions and will take decisive action as they are against our policy and damage the game economy as a whole."