In the 1990s and 2000s, gold farming was the practice of playing a massively multiplayer online game (MMO) to acquire in-game currency later selling it for real-world money. People in several developing nations have held full-time employment as gold farmers.
While most game operators expressly ban the practice of selling in-game currency for real-world cash, gold farming was lucrative because it took advantage of economic inequality and the fact that much time is needed to earn in-game currency. Rich players from developed countries, wishing to save many hours of playing time, were willing to pay substantial sums to gold farmers from developing countries. Trading of virtual game items or currency can take place between individuals or through gold farming businesses and gold sweatshops usually via online platforms.
- 1 History
- 2 Figures
- 3 Rules and enforcement
- 4 Ill effects on in-game economy
- 5 Law, regulation and taxation
- 6 Game sweatshop
- 7 Development potential
- 8 In the media
- 9 See also
- 10 References
- 11 External links
While in the past players used eBay and PayPal to sell each other items and gold from games like Ultima Online and Lineage, 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. This model, with full-time gold farmers working long hours in cybercafes, was outsourced to China and initially served demand from Korean players. Gold farming in China was experiencing swift growth c. 2004. Cheap labor from inland provinces had washed into more cosmopolitan cities, and these real-life farmers were promptly pressed into service farming gold. In 2011, The Guardian reported that prisoners in some Chinese labor camps were forced to engage in gold farming for the benefit of prison authorities.
Academic studies of gold farming reveal that the social networks of gold farmers are similar to those of drug dealers.
Although gold farming has since fallen out of favor, hiring another player to level up your avatar by increasing its supply of experience points may continue to be a popular practice. The term elo boosting may refer to a similar activity in games that features Elo rating system or some other competitive ladder system.
In 2005, The New York Times estimated that there were over 100,000 full-time gold farmers in China alone, by 2009 the number had increased to one million. And in 2006, sales of such virtual goods were thought to amount to somewhere between 200 and 900 million USD.
Another estimate, drawn from 2005/2006 data, valued the market at not less than 200 million USD per year and suggested that over 150,000 people were employed as gold farmers with average monthly earnings of 145 USD. This same report estimated that 80-85% of all gold farmers were from China a fact which has led to prejudice towards Chinese players. 2008 figures from China valued the Chinese trade in virtual currency at over several billion yuan, or nearly 300 million USD.
Rules and enforcement
Many game developers expressly ban gold farming in their game's EULA or terms of service. In order to combat this, game developers such as Blizzard and ArenaNet are attempting to discourage third-party gold farming by implementing official real-money transaction systems within their games. For example, in 2015, Blizzard implemented in-game items and tokens that cost players real money to purchase. These can then be auctioned off to other players for in-game currencies.
Ill effects on in-game economy
These ill effects can occur whether or not such practices are sanctioned by the game operator. Citing such concerns, Activision Blizzard shut down their real-money transaction system for Diablo III in 2014.
Law, regulation and taxation
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.
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.
A Korean high court's 2010 ruling meant that exchanging virtual currency for real money was legal in this country although subject to taxation. However, in 2012 this practice was set to be banned alongside a raft of other means to cheat in games, and gold farmers could face stiff penalties—up to $45,000 in fines and five years in jail.
A United States Congressional committee investigated taxation of virtual assets and incomes derived from them in 2006, 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.
Lawsuits by game companies
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.
A business producing avatars and in-game currency in MMORPGs is sometimes labelled a game sweatshop. Workers employed by these companies either collect in-game currency (known as gold farming) or generate high-level avatars (known as power leveling). Such organizations are referred to as sweatshops because the gold farmers are usually paid very low wages.
Gold farming has been discussed as a tool for socioeconomic development by the United Kingdom's Department for International Development and University of Manchester professor Richard Heeks. The money involved is small enough to flow easily from many first-world players but 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.
In the media
Alan Harris's radio play The Gold Farmer was broadcast on BBC Radio 3 as part of The Wire series on February 6, 2010. It features a man who plays an online role-playing game and whose next door neighbour is a gold farmer.
Julian Dibbell's 2006 book Play Money: or, How I Quit My Day Job and Made Millions Trading Virtual Loot chronicle's the author's efforts to earn enough virtual money playing online games that he could quit his day job.
- Digital currency
- Gold farming in the People's Republic of China
- Virtual economy
- Virtual good
- The business end of playing games bbc.com, Wednesday, 25 April 2007, 14:55 GMT
- Heeks (2008). p. 2.
- For Chinese gold farmers, see Davis, Rowenna (March 5, 2009). "Welcome to the new gold mines". The Guardian. London. Retrieved May 3, 2010.
- For non-Chinese gold farmers, see Gamers load for virtual asset swap vietnamnet.vn, 12:30' 10/07/2006 (GMT+7)
- China's full-time computer gamers bbc.com, Friday, 13 October 2006, 19:20 GMT
- Ogre to Slay? Outsource It to Chinese nytimes.com, December 9, 2005
- Myers, Maddy (9 July 2015). "Gold-farming in Heroes of the Storm is My New Part-Time Job". pastemagazine.com. Paste Media Group. Retrieved 13 April 2016.
- Gold Trading Exposed: Introduction eurogamer.net, 19 March 2009
- Heeks (2008). p. 4.
- Heeks (2008). p. 5.
- Dyer-Witheford, Nick (2009). Games of Empire: Global Capitalism and Video Games. University of Minnesota Press. p. 133.
- Vincent, Danny (25 May 2011). "China used prisoners in lucrative internet gaming work". The Guardian. Retrieved 25 May 2011.
- "Gold Farming Research Digs Up Similarities With Drug Dealers". Kotaku Daily. Retrieved July 23, 2010.
- LeJacq, Yannick (July 22, 2015). "League Of Legends Pro Suspended For Allegedly Leveling Accounts For Cash". Kotaku. Retrieved October 29, 2015.
- Poor earning virtual gaming gold bbc.com, 01:36 GMT, Friday, 22 August 2008
- "The Decline and Fall of an Ultra Rich Online Gaming Empire". Wired. 2008-11-24.
- Dyer-Witheford, Nick (2009). Games of Empire: Global Capitalism and Video Games. Minneapolis: University of Minnesota Press. p. 142. ISBN 9780816666102 – via ProQuest.
- The high cost of playing Warcraft bbc.com, Monday, 24 September 2007, 07:58 GMT
- Heeks (2008). p. 10.
- Chinese WOW players speak out eurogamer.net, 17 January 2006
- China Limits Use Of Virtual Currency informationweek.com, June 29, 2009
- Gold Trading Exposed: The Developers eurogamer.net, 9 April 2009
- Auction House Services Diablo III us.battle.net 12 June 2012
- Mike O'Brien on Microtransactions in Guild Wars 2 arena.net, 3 March 2012
- WoW Token us.battle.net 12 April 2016
- Jin, Ge (May 2006). "Chinese Gold Farmers in the Game World". Consumers, Commodities & Consumption. Consumers Studies Research Network. 7 (2). Retrieved March 10, 2012.
- Chalk, Andy (1 June 2007). "IGE Sued By World Of Warcraft Player". The Escapis. Themis Media. Retrieved March 10, 2012.
- Kelion, Leo (18 September 2013). "Diablo 3 auction houses are doomed by developer Blizzard". BBC News. BBC. Retrieved 21 September 2013.
- Virtual world: tax man cometh theage.com.au, October 31, 2006
- China bars use of virtual money for trading in real goods PRC Ministry of Commerce, Monday,June 29, 2009 2100 GMT
- Japanese gov't looks into gold farming gamespot.com, Jul 19, 2006 5:48 am AEST
- Play money is real money, says high court moremoney.blogs.money.cnn.com, January 22, 2010
- Rose, Mike (15 June 2012). "Virtual item trading to be banned in South Korea". gamasutra.com. UBM. Retrieved 13 April 2016.
- US Congress launches probe into virtual economies secondlife.reuters.com, Sun Oct 15, 2006 10:43pm PDT
- IRS taxation of online game virtual assets inevitable news.com.com, December 3, 2006 9:45 AM PST
- IRS Getting Closer to a Virtual Goods Tax insidesocialgames.com, January 20th, 2009
- Bot-Busting Update: Legal Proceedings Runescape.com, November 9, 2011
-  Virtuallyblind.com, February 1, 2008
- 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.
- Dibbell, Julian (17 June 2007). "Video Games - China - Money - Online Games". The New York Times.
- "Converting the Virtual Economy into Development Potential". infodev.org. infoDev. 7 April 2011. Retrieved 13 April 2016.
- Heeks (2008).
- Fair Trade Gold arstechnica.com
- Doctorow, Cory (2004-11-16). "Anda's Game". Salon. Retrieved 2014-04-01.
- Cory Doctorow’s “For The Win” creativecommons.org, May 11th, 2010
- The Gold Farmer bbc.co.uk
- Space Invaders artists and works Netherlands Media Art Institute
- Heeks, Richard (2008). "Current Analysis and Future Research Agenda on "Gold Farming": Real-World Production in Developing Countries for the Virtual Economies of Online Games" (PDF). Development Informatics--Working Paper Series. United Kingdom: University of Manchester. 28.
- Zhou, Ping. "Globalization of Gold Farming". geography.about.com.
- Gold Farmers - Website of Ge Jin, a PhD student from UCSD who made a video documentary of gold farming in rural and suburban China.