Gold Farmers on the Web

It seems that there are few things more fun than playing massive multiplayer online role-playing games like World of Warcraft. I don’t play these games, but an incredible number of people do, investing significant amounts of time and money in them.

Last week, the New York Times Magazine published an article on what it seems to consider the dark side of these games: Chinese gold farmers. These are Chinese workers who are paid to “play” these games all day, capturing as much loot as possible so their employers can sell it to Americans who don’t want to spend the time earning it the old-fashioned way. (Not long ago, we blogged about an upcoming documentary film on the subject; the Times has also written about gold farming before.)

While Times writer Julian Dibbell seemed troubled by gold farming, I could not agree less with that assessment. From the perspective of demonstrating how free markets work, how reassuring it is that the exact same forces that lead us to import clothes and Thomas the Tank Engine toys from China also work when the good is virtual doubloons?

In addition, is playing these games all day such a bad job? My assistant Amber would love it if I paid her to do that instead of her current duties. My sister-in-law “Saint” Theresa Ewing willingly breaks virtual rocks for hours at a time online, just so that her son Scott can acquire the latest weaponry. She says she finds it relaxing. All of this made me think of the recent New York Times column that Dubner and I wrote, in which we pondered what turned something from a hobby into a chore. Our answer, more or less, was that it is a job if someone else makes you to do it.


daemous

Warcraft isn't an economy in any real sense. And I'd posit that one needs to play the game for a few _months_ to understand it. Additionally, the EULA forbids external transactions like this. Second Life is of course a very different situation.

Takshaka

Long ago I actually did play these games quite a bit, so I think that I have a decent perspective on the matter.
I agree with Levitt very much on this issue that Chinese gold farmers are not a negative. Some people who play these games in the US do nothing but play them which gives them plenty of time to both amass wealth in the game and enjoy the other more fun aspects of it. For the many who have other jobs, family responsibilities, etc. they simply do not have enough time to do the menial tasks which may seem like barriers to the more "endgame" activities.

There may be no "real economy" in Warcraft, but the players are simply exchanging one "real life" commodity for another in our "real world" economy. Of course you have to consider time to be a commodity for this to work.

I do not see how paying Chinese golf farmers for gold in a video game any different than paying someone to mow your lawn for you. In both situations you are paying someone money to save you time.

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egretman

The more I think about this the more I realize that Ron Paul may be in trouble. If virtual gold is worth something, then why have a real gold standard?

Oh no....my whole campaign to get Ron Paul elected is crumbling before my ego.

Skipjack

Long time reader, somewhat disbeliever that I registered expressly for this story but here goes.

The Warcraft economy, like all of these games, is subject to inflation that is one of the chief enemies of enjoying the interaction with other players. "New money" is created all the time by monsters that reappear after having been killed but having left their loot for a previous player. The gold farmers are responsible for a lot of inflation. This makes people have to work harder to keep up their enjoyment in a competitive environment. It's work and not play if someone else is making you do it right? Inflation, and by extension the farming phenomenon, makes you do it.

Rather than look at the farmers as just an example of economics at work, please remember that it is a game where in these guys are helping people cheat. The rules of a game stress equity, not efficiency. These are the rules for everyone in the game, and a controlled economy directed by the company making the game is preferred by the vast majority of players, in contrast to the real world.

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Deviant

Wish I'd jumped into playing virtual economies. How long until there's a virtual stock market for you to invest your virtual gold, and when it's all lost a virtual finance agency reposes your virtual house?

frankenduf

sounds like exploitation to me- yeah, it's a kinder and gentler exploitation, but it's not really any different (or ethical) than the other labor 'markets' between the US and China

Tzal

The gold-farming phenomenon is troublesome for a lot of reasons. The fact that it violates the EULA is probably the least of these.

Gold farmers are not just some guy at a computer in China playing for 12 hours a day. These companies use various means to get access to players' accounts and then log into those accounts, steal the players' stuff and then delete the accounts. This may not sound traumatic to someone who does not play WoW, but when you consider that a lot of players devote several months of their lives to this game, this can be devastating. (Please set aside the debate about whether playing WoW that much is healthy or not for now).

There are other reasons, but I'm running out of room to list them.

bkw

Yes, because it's better than people not have jobs at all, than be paid to play video games all day.

/sarcasm.

There is a direct correlation between time and money -- the more time something can save me from having to do something I don't want to do, the more money I am willing to pay for it.

Some people /like/ farming gold. Some people prefer to do other things, and are willing to pay people to do the mundane junk so they can go be heroes instead.

Incidentally -- with regards to the EULA: the new gimmick is if you're buying gold from me, you're paying me for /my time/. The gold I'm giving you for free -- hence, not in violation. The cash exchange is for my labor, which Blizz does not own any IP rights on.

I don't really consider buying gold in WoW "cheating." None of the best stuff in the game can be directly purchased. Having mounds of gold helps, but without a solid support structure (guilds) and some ability to play the game (else said guild would probably not want you), being King Midas is pretty pointless.

And is it really possible to "cheat" in a game you can't win anyway? I don't recall there being any kind of "win" condition in WoW. Perhaps the PvP ranking system -- but all the gold in the world isn't going to help you there.

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bkw

@tzal : some companies steal accounts. Therefore all gold farming companies are evil? Sorry, I don't buy that generalization. The only way accounts can be stolen is if you install malware (which anti-virus and non-stupid computing practices will prevent), or if you give away your account information. If you do either of these, then, frankly, you deserve what you get.

I've played WoW for years; my entire family does, and we have a great time. My son is out in California with the grandparents for part of his summer break, but my wife and I still spend time with him every few days on-line.

We've invited a couple Chinese farmers at different times over the years, so I've known a couple of these folks directly, as opposed to just reading about them in an article.

One guy was a "professional" who eventually quit to go to some advanced institute of study, where he was going to study engineering.

One girl was eventually driven out of the game when Blizzard kept closing her accounts. The game was her sole source of income -- she'd play for hours and sell her gold to resellers. She said she made more money than any of her friends who had normal office jobs.

Her English tended to be a bit fragmented, and I've forgotten most of my childhood Chinese, but we could still communicate.

So yeah. It's work. If you turn your head and squint just right, you can call /any/ kind of paid labor exploitation. But I think that denegrates true, hard cases of exploitation and trivializes the word.

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bkw

The above should be "We've invited a couple Chinese farmers into the guild" ...

wtb edit button.

alltoomuch

beyond the idea of whether gold farming is ok or not, is it really ok that these people get paid 30 cents an hour?

Tzal

Well, since the NYT article was about an industry, and the post is an analysis of that industry from an economics perspective, I think it is okay to discuss it in terms of generalizations.

At any rate, the argument that there is nothing inherently wrong with gold farming from a pure free-market economics perspective is correct in a vacuum. The truth is that the industry hurts the game for people who do not want to buy gold. Either through accounts being hacked or because of the constant, annoying, spam advertisements.

And people who are robbed do not deserve to be robbed, be it at gunpoint or via malware.

egretman

How do people know that there is even a game on the other side of their internet connection? Maybe the Chinese players are the game. You are just talking to a Chinese player when you play the game and they just make up the play anyway they wish.

Sort of like internet poker.

sjk

I have not played WoW, but have played EQ and EQ2. The gold farmers (plat farmers in EQ jargon since platinum is the highest denomination of currency in these games) do cause inflation and they can harm the game playing experience.

They hurt the game playing experience by contesting for game resources. If I want to kill monster x to get item y, I can't do that if every time I have a chance to play, the engagement is being camped by plat farmers. Of course, the plat farmers are happy to sell me item y after they kill the monster. But, I have no in-game currency with which to buy it since all the best money making objectives are camped. My only solution then is to pay real world money to buy in-game currency from the plat farmers. I can then use the in-game currency to buy the item I want, thus giving the in-game currency back to the plat farmers for them to resell. It is a nice little economy, but it hurts the entertainment value of the game.

Yeah, that is a bit of an exaggeration, but it is not untrue. The game makers have gotten better at identifying behavior that violates the EULA and banning those users. It has also gotten better (in EQ2 at least) at minimizing the impact of plat farmers camping objectives. Still, farmers are annoying for the inflation they create.

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egretman

Holy crapatoid, people take this stuff seriously.

Tzal

Yes egret, we do.

And if an entry discussing MMO's on such an esteemed blog as this is not evidence that they are the proper subject of serious analysis, here's a study of MMO's by no less than a Stanford Ph.D. that you may find interesting: http://www.nickyee.com/

It doesn't get much more respectable than that.

Lemurkiller

@egretman.

Yes, some people do take this stuff seriously. I played WoW for a year, took a year off from the game and started playing again a few months ago.

I will reiterate what some people have already said:
Chinese gold farmers are annoying for 2 main reasons:
1. They come in and "ninja" monsters, herbs/ore, etc, so that people who want to be able loot to make in game money to buy stuff.
2. They cause inflation. If you want to skill up a profession, say blacksmithing. You need a lot of "ore" to do this. People get lazy and just buy their gold online and then will pay ridiculous prices to buy anything. The people who want to play the game and either can't afford to buy the gold, or just want to play the game it was meant to be played are the being screwed by overinflated prices for items.

This causes people to stop playing the game (I know several who have already quit because of this). That is something Blizzard doesn't like (no monthly fee). They have a geniune economic purpose to want these farmers out of the game.

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steelndirt

You know, everyone keeps saying that gold farmers are the true cause of inflation in WoW, but I'm not convinced. The problem seems to be based on the fact that the value of comparable products in WoW goes up exponentially with your level. Killing an NPC (non player character) at level 3 only nets a few copper pieces, while killing an NPC of comparable difficlutly at level 53 will yield you the equivalent of a few thousand copper pieces. So, as play time increases, player gain a noticeably larger income.

Now, lets say that you want to start an alternate character on the same server. When you do this, you can transfer money from your richer character to your poorer character. The money that could buy one skill at level 40 can buy all the skills for your beginning character up to level 14. Should you choose a profession that makes things instead of harvesting them, then you can also buy the necessary materials rather than having to find them yourself. This means that the cost in time per necessary material is less for your alternate character than another's main character at the same level. Since you can bear a greater monetary burden for the good, you bid higher and the cost of that material rises.

So now, this process can go on internally for one player. It can also happen within a guild. Should you join a guild at a low level, the well-off members could either give or loan the necessary gold to you. Since the two limiting factors in leveling is experience and gold, having an infinite gold supply helps you level faster, making you more valuable as a guild member faster. Again, gold is used to buy time independent of any real life monetary exchange.

All gold farmers do is jump from that last step where a player you know gives you gold to when a player you don't know gives you gold. They don't cause inflation, they just provide a market answer to it.

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richgilchrest

World of Warcraft and other MMO's are not free markets; they're games. The presence of gold farmers damages the game for other players. They unfairly monopolize limited resources. They flood the market with items that should be rare, but are not because their presence is unbalancing. The drive up prices of common goods by artificially increasing the monetary supply.

Imagine playing in a poker tournament against an opponent who was allowed to buy more chips every time he lost a hand. Doing so is against the rules, but on the rare occasion he gets caught and is disqualified, he re-joins on the next hand and continues playing. You could try buying chips, but if you got caught and were disqualified, you wouldn't be able to re-join the table for a month.

Does that sound like a fun tournament?

Gold farmers wreck the game for those of us who enjoy the economic features of MMO's. They can, at least temporarily, wreck the game for anyone who needs a contested resource.

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cdicker

The farmers don't provide clear cut inflation among all products, it's quite an interesting affect they have on the ingame economy. They have access to basic goods and flood the market with them at often low prices to turn them into gold so they can get paid quickly and not waste anytime trying to sell them. This actually deflates the value of the goods. The people inflating the price are the people that know the farmers and resell their goods. In essence, it creates a business model that looks more like what the real world produces; cheap labor sells to a middle man that marks up the price to sell to the consumer.

I happened to know one of the heads of a gold selling company, he was involved in almost every MMO out there. I met him in Star Wars and kept playing with him in WoW. He used no Asian farmers, most were Canadian or Americans, many were friends of his that wanted to turn ingame gold to a little spending cash. It was harder to trace him because he used such a wide array of people who all spoke English and did not have a pattern of login times and money grinding. He did make quite a bit of money from this, he told me he had to stop using eBay and use his own website after the eBay charges amassed to $5000+ a month.

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