Gold farming

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Gold farming is playing a massively multiplayer online game to acquire in-game currency that other players purchase in exchange for real-world money.[1][2] People in several developing nations have held full-time employment as gold farmers.[3]

While most game operators expressly ban the practice of selling in-game currency for real-world cash,[1] gold farming is lucrative because it takes advantage of economic inequality and the fact that much time is needed to earn in-game currency.[4] Rich, developed country players, wishing to save many hours of playing time, may be willing to pay substantial sums to the developing country gold farmers.[5]

History[edit]

What began as a cottage industry in the late 1990s became increasingly more commercialized in the 2000s with the growing popularity of massively multiplayer online games.[6]

While in the past players used eBay and PayPal to sell each other items and gold from games like Ultima Online[7] and Lineage,[8] contemporary, commercialized gold farming may have its origins in South Korea. 2001 reports describe Korean cybercafes being converted into gold farming operations to serve domestic demand.[8] This model, with full-time gold farmers working long hours in cybercafes, was outsourced to China and initially served demand from Korean and Western players.[5] Gold farming in China was experiencing swift growth c. 2004.[8] In 2011 The Guardian reported that prisoners in Chinese labor camps were forced to engage in gold farming for the benefit of prison authorities.[9]

Academic studies of gold farming reveal that the social networks of gold farmers are similar to those of drug dealers.[10]

Figures[edit]

While reliable figures for gold farming are hard to come by,[11] there are some estimates of the market for in-game currency.[12]

In 2005 The New York Times stated that there were over 100,000 full-time gold farmers in China alone.[5] And in 2006 sales of such virtual goods were thought to amount to somewhere between 200[13] and 900 million USD.[4]

Another estimate, drawn from 2005/2006 data, valued the market at not less than USD200 million per year[14] and suggested that over 150,000 people were employed as gold farmers with average monthly earnings of USD145.[14] This same report estimated that 80% of all gold farmers were from China[11] a fact which has led to prejudice towards Chinese players.[15] 2008 figures from China valued the Chinese trade in virtual currency at over several billion yuan, or nearly USD300 million.[16]

Rules and enforcement[edit]

Many game developers expressly ban gold farming in their game's EULA or terms of service.[17]

Game developers such as Blizzard and ArenaNet have tried to discourage third-party gold farming by including real-money transaction systems within their games.[18][19]

Ill effects on in-game economy[edit]

Gold farming and power leveling can affect a game's economy by causing inflation.[20] They may degrade the game experience for users as was noted in a legal case against IGE.[21]

These ill effects can occur whether or not such practices are sanctioned by the game operator. Citing such concerns, Activision Blizzard will shut down the real-money transaction system for its Diablo III title in 2014.[22]

Law, regulation and taxation[edit]

Some governments, perhaps recognizing that current regulatory systems may be ill-suited to address activities such as gold farming, have made statements concerning the sale of virtual goods.

Australia[edit]

In 2006 a spokesperson for the Australian Government stated normal earned income rules also apply to income from the sale of virtual goods.[23]

China[edit]

The Chinese government banned using virtual currency to buy real-world items in 2009 but not the reverse.[24]

Japan[edit]

In response to increases in gold farming, in 2006 the Japanese Government urged the computer gaming industry to self-regulate as well as vowing to investigate this species of fraud.[25]

South Korea[edit]

A Korean high court's 2010 ruling means that exchanging virtual currency for real money is legal in this country although subject to taxation.[26]

United States[edit]

A United States Congressional committee investigated taxation of virtual assets and incomes derived from them in 2006,[27] and the IRS has, in its National Taxpayer Advocate's 2008 Annual Report to Congress, expressed concern that virtual worlds are a growing source of tax noncompliance.[28]

Lawsuits by game companies[edit]

Zynga, the makers of FarmVille, sued to stop online sales of its in-game currency. The lawsuit however never went to trial.[29]

Jagex, the makers of RuneScape, have engaged in legal actions against several gold farmers and bot programmers.[30]

On February 1, 2008, Blizzard Entertainment, the makers of World of Warcraft, won a lawsuit against In Game Dollar, trading under the name Peons4Hire. The court ordered an injunction that immediately halted all business operations within said game.[31]

Game sweatshop[edit]

A business producing avatars and in-game currency in MMORPGs is sometimes labelled a game sweatshop.[32] Workers employed by these companies either collect in-game currency (known as gold farming) or generate high-level avatars (known as power leveling).[32] Such organizations are referred to as sweatshops because the gold farmers are usually paid very low wages.[20]

Development potential[edit]

Gold farming has been discussed as a tool for socioeconomic development by the World Bank and University of Manchester professor Richard Heeks. The money involved is small enough to flow easily from many first-world players, and large enough to make a difference to the people doing the work. Gold farmers receive a higher percentage of sale revenue from their work than do farmers of fair trade coffee.[33]

In the media[edit]

Neal Stephenson's 2011 novel Reamde has a plot centered on T'Rain, an online game that encourages gold farming, but whose players become vulnerable to losing control of their own data after being infected by the REAMDE "ransomware" virus, written by gold farmers who aspire to a higher-stakes income model.

Cory Doctorow's 2004 short story Anda's Game[34] and 2010 novel For The Win[35] is based around gold farming and the fictional growth of unionisation among workers in developing country economies.

Alan Harris's radio play The Gold Farmer was broadcast on BBC Radio 3 as part of The Wire series on February 6, 2010.[36] It features a man who plays an online role-playing game and whose next door neighbour is a gold farmer.

A 2006 art project by UBERMORGEN.COM, Chinese Gold, used found video and machinima to document and explore the Chinese gold farming phenomenon.[37]

See also[edit]

References[edit]

  1. ^ a b The business end of playing games bbc.com, Wednesday, 25 April 2007, 14:55 GMT
  2. ^ Current Analysis and Future Research Agenda on "Gold Farming": Real-World Production in Developing Countries for the Virtual Economies of Online Games - Page 2 Richard Heeks, Development Informatics Group IDPM, SED, University of Manchester, UK - 2008
  3. ^ For Chinese gold farmers, see Davis, Rowenna (March 5, 2009). "Welcome to the new gold mines". The Guardian (London). Retrieved May 3, 2010. 
  4. ^ a b China's full-time computer gamers bbc.com, Friday, 13 October 2006, 19:20 GMT
  5. ^ a b c Ogre to Slay? Outsource It to Chinese nytimes.com, December 9, 2005
  6. ^ Gold Trading Exposed: Introduction eurogamer.net, 19 March 2009
  7. ^ Current Analysis and Future Research Agenda on "Gold Farming": Real-World Production in Developing Countries for the Virtual Economies of Online Games - Page 4 Richard Heeks, Development Informatics Group IDPM, SED, University of Manchester, UK - 2008
  8. ^ a b c Current Analysis and Future Research Agenda on "Gold Farming": Real-World Production in Developing Countries for the Virtual Economies of Online Games - Page 5 Richard Heeks, Development Informatics Group IDPM, SED, University of Manchester, UK - 2008
  9. ^ Vincent, Danny (25 May 2011). "China used prisoners in lucrative internet gaming work". The Guardian. Retrieved 25 May 2011. 
  10. ^ "Gold Farming Research Digs Up Similarities With Drug Dealers". Kotaku Daily. Retrieved July 23, 2010. 
  11. ^ a b Poor earning virtual gaming gold bbc.com, 01:36 GMT, Friday, 22 August 2008
  12. ^ "The Decline and Fall of an Ultra Rich Online Gaming Empire". Wired. 2008-11-24. 
  13. ^ The high cost of playing Warcraft bbc.com, Monday, 24 September 2007, 07:58 GMT
  14. ^ a b Current Analysis and Future Research Agenda on "Gold Farming": Real-World Production in Developing Countries for the Virtual Economies of Online Games - Page 10 Richard Heeks, Development Informatics Group IDPM, SED, University of Manchester, UK - 2008
  15. ^ Chinese WOW players speak out eurogamer.net, 17 January 2006
  16. ^ China Limits Use Of Virtual Currency informationweek.com, June 29, 2009
  17. ^ Gold Trading Exposed: The Developers eurogamer.net, 9 April 2009
  18. ^ Auction House Services Diablo III us.battle.net 12 June 2012
  19. ^ Mike O'Brien on Microtransactions in Guild Wars 2 arena.net, 3 March 2012
  20. ^ a b Jin, Ge (May 2006). "Chinese Gold Farmers in the Game World". Consumers, Commodities & Consumption (Consumers Studies Research Network) 7 (2). Retrieved 03/10/12.  Check date values in: |accessdate= (help)
  21. ^ Chalk, Andy (1 June 2007). "IGE Sued By World Of Warcraft Player". The Escapis (Themis Media). Retrieved 03/10/12.  Check date values in: |accessdate= (help)
  22. ^ Kelion, Leo (18 September 2013). "Diablo 3 auction houses are doomed by developer Blizzard". BBC News. BBC. Retrieved 21 September 2013. 
  23. ^ Virtual world: tax man cometh theage.com.au, October 31, 2006
  24. ^ China bars use of virtual money for trading in real goods PRC Ministry of Commerce, Monday,June 29, 2009 2100 GMT
  25. ^ Japanese gov't looks into gold farming gamespot.com, Jul 19, 2006 5:48 am AEST
  26. ^ Play money is real money, says high court moremoney.blogs.money.cnn.com, January 22, 2010
  27. ^
  28. ^ IRS Getting Closer to a Virtual Goods Tax insidesocialgames.com, January 20th, 2009
  29. ^ [1]
  30. ^ Bot-Busting Update: Legal Proceedings Runescape.com, November 9, 2011
  31. ^ [2] Virtuallyblind.com, February 1, 2008
  32. ^ a b Thompson, Tony (2005-03-13). "They play games for 10 hours - and earn £2.80 in a 'virtual sweatshop'". The Observer. Retrieved 2007-06-29. 
  33. ^ Fair Trade Gold arstechnica.com
  34. ^ Doctorow, Cory (2004-11-16). "Anda's Game". Salon. Retrieved 2014-04-01. 
  35. ^ Cory Doctorow’s “For The Win” creativecommons.org, May 11th, 2010
  36. ^ The Gold Farmer bbc.co.uk
  37. ^ Space Invaders artists and works Netherlands Media Art Institute

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