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The boys were taking part in Rune Scape, a medieval fantasy game which has more than 100million players worldwide.
It revolves around collecting gold coins which characters can use to buy magic potions, spells and weapons in a world of dungeons and dragons.
The hacker can then gain control of the player's character - or avatar - and sell off his or her weapons, skills, equipment and clothing, which can be worth tens of thousands of pounds in the real world.
Though against the rules of the game, a lucrative black market exists where players can buy powerful characters and items within Rune Scape, without having to spend hundreds of hours building up their own profile.
It can take years for players to accrue wealth and skills through a series of challenges from fighting goblins to activities such as fishing, farming and mining.
Police believe the hacker obtained password details through a so-called phishing scam where a fake internet page tricks users into handing over their personal information.
They can train their in-game skills, engage non-player character (NPC) monsters and other players in combat and complete quests at their discretion.
Players set their own goals and objectives as they play the game.
Police believe the man, who has not been named, simply wanted to boost his own standing in the computer game.
He was arrested last Tuesday in the Avon and Somerset area and accepted a police caution for hacking into 284 accounts. It is free to anyone over the age of 13, although players have to pay £5 a month if they want more conquests and skills.
A hacker has been arrested for stealing players' identities, skills, weapons and virtual money in an online computer game.
In the first case of its kind, the 23-year-old man was held for hijacking hundreds of teenage boys' accounts to gain access to their hard-won virtual abilities.
The most popular characters chosen by players are wizards, rangers and fighters, while the most feared monster is the corporeal beast, which eats souls.