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Unraveling Gold Farming: Real-world Production for Virtual Economies

Explore the intricate world of gold farming in online games, tracing its evolution from subsistence production to a global market phenomenon. Discover its economic and social impacts, and gain insights into future research areas.

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Unraveling Gold Farming: Real-world Production for Virtual Economies

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  1. Gold Farming:Real-World Production in Developing Countries for the Virtual Economies of Online Games Richard Heeks Centre for Development Informatics, IDPM University of Manchester, UK http://www.manchester.ac.uk/cdi Centre for Development Informatics

  2. Background to Gold Farming Production for real-world trade of virtual goods and services within online games MMORPGs: massively-multiplayer online role-playing game (World of Warcraft, Runescape, Eve Online, Lineage)

  3. Understanding Gold Farming Gold farming: making and selling virtual currency Power-levelling: playing avatar from low to high level

  4. The Development of Gold Farming: Phase 1 Subsistence Production: from late 1970s Barter: from early 1980s – commoditisation of virtual items with both use value and exchange value Monetisation: from late 1980s – sale of items for real money; specialisation in “gold market gardening”

  5. The Development of Gold Farming: Phase 2 Three events of 1997: Ultima Online; eBay; Asian currency crisis From petty to capitalist commodity production: wage labour Globalisation and offshoring: from 2002

  6. Why Study Gold Farming? 50m players; 50% growth per year; US$50bn market World of Warcraft as a financial and cultural phenomenon; 11m subscribers Real-money trading market size: baseline 20m x US$10 = US$200m BUT excludes Asia and F2P gaming Employment estimate: 0.5m x US$150 x 12 x 2 = US$1.8bn Most-recent estimates: 1m jobs; US$5bn trade

  7. Global Gold Farming Sites

  8. Gold Farming Locations in China

  9. Chance Firm Strategy, Structure and Rivalry Factor Conditions Demand Conditions Related and Supporting Industries Government Why China: Competitive Advantage Analysis - Korea’s Proximity - Post-1992 Enterprise Growth - Low Concentration, High Competition - ICT Infrastructure - Low Cost Skills - Global Demand Growth - Local Game Players - Cybercafes - Local Games Industry - Infrastructure - Laissez Faire

  10. Gold Farming: The Internal Value Chain

  11. Gold Farmer Governments and Other Local and Global Institutions Gold Farmer Other Inter-mediaries Gold Farmer Gold Farming Firm Player-Buyers Game Company Exchanges Local ICT Suppliers Brokers Gold Farmer Fansites Other Players Services / Virtual Items Money Power Chart Producers Intermediaries Consumers Others Gold Farming: The External Value Chain

  12. Anti-Gold Farming Actions Account banning: hundreds per week Patching: including nerfing Game redesign: e.g. Jagex and Runescape IP banning Channel blocking Legal action

  13. Developmental Impact of Gold Farming Economic: job creation; foreign exchange inflow; poverty reduction Social: jobs for a “problem” social group The “virtual sweatshop” label: c.US$150 per month; 10-/12-hours x 7 days per week; no holiday/sick pay; basic food and accommodation included Views of the gold farmers

  14. The Future Gold-Farming Research Agenda Fieldwork on the basics Further research e.g. livelihoods analysis; enterprise strategies Illustrative of: Cybersourcing Liminal ICT work Key questions: current status; future growth; development impact and strategies

  15. Gold-Farming Research Report Paper no. 32 in IDPM Development Informatics working paper series: http://www.sed.manchester.ac.uk/idpm/research/publications/wp/di/index.htm

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