Gold farming is the act of playing a Massively Multiplayer Online Role-Playing Game(MMORPG) in order to acquire in-game currency that is then sold to other players for real-world money. Gold farming is most prevalent in Asia, where an estimated 400,000 workers are employed as gold farmers in a US $1.1 billion industry.
Gold farmers acquire in-game currency by completing quests, looting defeated enemies, or selling items and raw materials that can be found in the game world. In some games, such as EVE Online, players can even form businesses, recruit employees, and provide services to other players for profit. A successful business can be sold for in-game currency, or sold on an online marketplace for real-life money.
The gold farming industry is known for squalid work conditions, where farmers, known as "playbourers" often spend 10-hours a day gold farming for very little pay. Some countries, such as China, have enacted legislation to discourage the practice of gold farming.
The origin of gold farming can be traced back to 3 events of the mid-1990's:
- The creation of Ultima Online, the largest MMORPG of its time and the first game to reach over 100,000 players.
- The emergence of eBay as an online marketplace.
- The 1997 Asian Financial Crisis, which left many Asian workers unemployed. In order to pull themselves out of the depression, China invested heavily in broadband infrastructure.
Players of Ultima Online who did not wish to acquire gold/items by playing the game became the first demand for the gold farming industry. Unemployed Chinese workers would meet this demand using abundant broadband access and eBay as a medium for exchanges.
Virtual Assets and Game Economies
Club NEVERDIE is an online nightclub from the Entropia Universe game. It was originally an asteroid purchased by Jon "Neverdie" Jacobs in 2005 for $100,000 USD. Jacobs turned the virtual asteroid into a business by constructing a night club on it, complete with hunting domes, a disco, and a shopping mall. He was making $200,000 USD per year off sales from the club when he sold it for $635,000 USD in 2010, making it the most expensive virtual good ever purchased.
The economic activity that goes on in Club NEVERDIE can be related to the real world. Just as people shop in a shopping mall for real goods, players in Entropia use Club NEVERDIE to purchase virtual goods for their characters. Also, the sale of the club showed the weight of the virtual goods market; a virtual product can be worth a very real fortune.
Blizzard and the RMAH
Blizzard Entertainment is one of the "most popular and well-respected makers of computer games". It is famous for creating game franchises such as Warcraft, Starcraft, and Diablo. After battling with gold farming issues in its most popular game, World of Warcraft, Blizzard came up with a solution, the Real Money Auction House (RMAH), that permitted gold farming while profiting the company.
World of Warcraft
World of Warcraft (WoW) is the most popular MMORPG of all time. At 10 million subscribers, it provides the largest MMORPG market for gold farming. However, Blizzard publicly discouraged players from gold farming, and have even filed lawsuits against gold farming companies. From an article posted on their website in 2008, Blizzard expressed disdain for gold farmers.
What many people don't realize when buying gold is the large impact it has on the game economy, and also how the companies selling gold obtain it. Our developers, in-game support, and anti-hack teams work diligently to stop the exploits these companies use and help players who have become victims of their services. We regularly track the source of the gold these companies sell, and find that an alarmingly high amount comes from hacked accounts. These are the friends, relatives, and guildmates you may know who have gone through the experience of having characters, gold, and items stripped from them after visiting a website or opening a file containing a trojan virus. Our teams work to educate players and assist them in avoiding account compromise, but the fact remains that the players themselves are often these companies' largest target as a source for gold, which the companies then turn around and sell to other players.
This is a glimpse of the struggle between developers, gamers, and farmers. Developers at Blizzard tried to limit gold farming through legal action and propaganda, but this did not have much effect. Gold farming continued to grow after 2008.
Diablo III, released in 2012, set a record for selling 6.7 million copies in one week. It was also the first Blizzard game to have a RMAH. The RMAH provided an official, legal way for players to sell their virtual items for real money. Blizzard Entertainment also profited from the RMAH by keeping a fee of "$1.00 USD per item" or "15% of final sale price", depending on the item. This solution was unique because it took a different perspective on the gold farming problem. Blizzard decided that eradicating all gold farming was costly, and that indirectly working with gold farmers was a better solution. They were able to turn a problem into a profit.
Although Blizzard has turned a blind eye to some gold farming in Diablo III, they remain against botting. Since the game was released in May of 2012, Blizzard has successfully sued a German software development company that developed bots for players. According to Diablo III's official forums, many gamers were happy about the lawsuit. In Diablo III, all players can sell items, therefore all players are in direct competition with botters. With the RMAH, developers at Blizzard have successfully turned gamers against rule-breaking gold farmers.
Social and Economic Impacts of Gold Farming and Virtual Trade
Game Sweatshops and Working Conditions
The industry of gold farming has created "game sweatshops" where companies will outsource work to foreign countries for cheap labor. Gold farming companies, in order to maximize profit, will attempt to put as many computers and farmers as possible into a small office, referred to as a "game sweatshop". The gold farming offices are often cramped, and farmers receive little pay. However, some gold farmers do not mind the conditions, and believe that the pay is adequate for unskilled labor. Sometimes playbourers are given food and living accommodations as well. Although the work is grueling and the wages are low, the gold farming industry has created hundreds of thousands of jobs for those who would otherwise be unemployed.
Gold farming may contribute to the economic growth of developing countries. Because the cost involved is small enough to first-world players that they are willing to pay for gold, while also being large enough to make a difference to the third-world laborer, there is a cash flow that contributes to the economy of the developing country. The positive cash flow promotes economic balance between the countries of the players and the farmers. However, the game sweatshops created by the economic imbalance between countries could be viewed as violations to human rights.
Online Scams and Hacking in MMO Games
Scammers and hackers have always been a part of massively multiplayer games, but as gold farming increases the net amount of money in the game economy of an MMO, the game becomes a bigger target for hackers and scammers. Gold farming is also responsible for setting the going trade rate between real-world and virtual currencies. The process blurs the line between virtual and real property, meaning that when a hacker or scam artist steals gold from another player, he may be stealing a commodity that the player paid real-life money for. Although most would see this as equivalent to theft, scammers can sometimes get away with it, because it is allowed in the rules of the game. Usually, game developers do what they can to prohibit players from scamming and hacking, although players can sometimes still get away with it. In one of the largest scams in MMO game history, a single player on EVE Online managed to steal a total of $700,000 from other people. The scammer was able to keep the money with no repercussions, since everything he did was explicitly allowed within the rules of the game. If the popularity of MMO games continues to increase in the future, the government may need to intervene to prevent players from getting hacked out of their hard earned money.
Developers are responsible for creating the content, designing methods of trading content, and hosting the game world where players interact. These components build a virtual economy within the game that gold farmers compromise by farming for in-game resources. The gold farming causes inflation of the in-game currency, which decreases the value of the player's virtual assets. Thus, developers employ countermeasures to discourage farming. Countermeasures include anti-bot software, introducing new content, and hiring economists for advice on recovering from an inflated economy. However, developers often benefit from gold farming, as in the case of Blizzard’s Diablo III(See Diablo III). As gold farmers increase the net resources in the market, prices go down, more transactions occur, and thus the developers earn more transaction fees. Therefore, Blizzard developers must maintain a balance of generating revenue and appeasing the public through undermining gold farmers.
Gamers view gold farming from two opposing perspectives. Some gamers view gold farming as a useful service that saves them time. Others see farming as a plague to the game's economy that degrades the experience for the gamer.
The first viewpoint is highlighted in this quote from Jamie el-Banna, a 24-year-old gamer from the UK.
You could spend time farming gold, say, 20 real-life hours. Or you could go to work for two hours and earn the money to buy the gold. If I'm playing I want to play, not do boring tasks. Go back some years, and a job involving a computer was a skilled job. Nowadays, keyboards and mice are the new ploughs and shears.
These gamers would rather pay money than put in the hours to acquire the content themselves. Jamie compares the gold farmers to a car washer, in that he is paying for a service that he does not want to do himself.
The second viewpoint is held by consumers who are affected by the economy of the game. Gold farming reduces the in-game value of legitimate players by making their items and resources more common. Users that try to make a profit by selling virtual content are being put out of work by gold farmers. Critics point out that running a legitimate virtual content business is difficult because of competition with gold farmers. 
Economists are hired by developers to manage the sprawling economies of game worlds. They help solve inflation issues that arise due to Gold Farmers through strategic planning. Strategies include releasing new content at particular times or creating resource sinks to lower content counts. Virtual economies are arguably very similar to real life economies, Ted Castronova of Indiana University Bloomington claims that
To this day, we haven’t seen anything in these virtual environments that violates fundamental economic theories
Economists flock to video game companies like Steam, CCP Games, and ArenaNet to run studies and perform experiments on these game worlds where the data is rich and there are few assumptions. Americans are set to spend $2.9 billion on virtual goods in 2012. In EVE Online alone, there are 400,000 participants in a game-wide economy. The constant growth of these virtual worlds provides a platform for economists to study. However, because developers hire economists, the economists must limit their experiments to preserve the game's "fun-factor".
Lessons from Gold Farming in MMO Games
Players of MMO's have invested time and money into the game they play, yet the rules have allowed con artists to orchestrate scams that take advantage of the hardworking player. The developers have the choice to prevent these scams, yet they do not always do so. They are the law-makers and law-enforcers of their game world, and they hold the ultimate power over what goes on in their game. As it stands, the developers are responsible for the hundreds of thousands of dollars circulating from player to player.
The economies of MMO’s teach us that if a virtual, tradable commodity has a high enough demand, people will pay actual money for what is made in cyberspace. Virtual commodities become real-life commodities, and as a result, the creator of the commodity becomes responsible for the rules that dictate the fair use of people’s virtual and real money.
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