Gold farming is the practice of playing a massively multiplayer online game (MMO) to acquire in-game currency, later selling it for real-world money.[1][2][3]

Gold farming is distinct from other practices in online multiplayer games, such as power leveling, as gold farming refers specifically to harvesting in-game currency, not rank or experience points. The actual labor mechanics of these practices may be similar, and those who hold employment as gold farmers may also work as power levelers.

While most game operators 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 much time is needed to earn in-game currency.[4] Rich players from developed countries, wishing to save many hours of playing time, are willing to pay substantial sums to gold farmers from developing countries.[5] Gold farming has also been linked to credit card fraud, with game accounts used for gold farming being paid for with stolen credit cards.[6][7]

The term has also been used to describe the wait times and chore-like activities players may perform in some freemium mobile phone games, allowing them to play without paying fees.[8]

History

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.[9]

While in the past players used eBay and PayPal to sell each other items and gold from games like Ultima Online[10] and Lineage,[11] 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.[11] This model, with full-time gold farmers working long hours in cybercafes, was outsourced to China and initially served demand from Korean players.[5] Gold farming in China was experiencing swift growth c. 2004.[11] Cheap labor from inland provinces had washed into more cosmopolitan cities, and these real-life farmers were promptly pressed into service farming gold.[12] In 2011, The Guardian reported that prisoners in some Chinese re-education camps were forced to engage in gold farming for the benefit of prison authorities.[13]

Gold farming has also been linked to credit card fraud. According to the developers of World of Warcraft and Runescape, most gold-farming and botting accounts in those games were paid for using stolen credit card numbers. Dealing with these fraudulent accounts incurs costs for the game companies not only in terms of employee time, but also monetarily in the form of chargeback fees from credit card companies.[6][7] In addition, this large-scale fraud can risk a developer's transactions being refused by credit card companies and banks, posing an existential risk to game studios.[14][6][15]

Academic studies of gold farming have revealed that the social networks of gold farmers are similar to those of drug dealers.[16]

Similar to gold farming, people may be hired to level up in-game avatars by harvesting experience points. The term elo boosting may refer to a similar activity in games that features Elo rating system or some other competitive ladder system.[17]

Figures

While reliable figures for gold farming are hard to come by,[18] there are some estimates of the market for in-game currency.[19]

In 2005, The New York Times estimated that there were over 100,000 full-time gold farmers in China alone, and by 2009 the number had increased to one million.[20][5] And in 2006–2007, the market for such virtual goods was thought to amount to somewhere between US$300 million[21] and US$900 million.[4]

Another estimate, drawn from 2005/2006 data, valued the market at not less than US$200 million per year[22] and suggested that over 150,000 people were employed as gold farmers with average monthly earnings of US$145.[22] This same report estimated that 80-85% of all gold farmers were from China,[18] a fact which has led to prejudice towards Chinese players.[23] 2008 figures from China valued the Chinese trade in virtual currency at over several billion yuan, nearly US$300 million.[24]

Rules and enforcement

Many game developers expressly ban gold farming in their game's EULA or terms of service.[25] 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.[26][27] 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.[28]

Secondary effects on in-game economy

Gold farming and power leveling can affect a game's economy by causing inflation.[29] They may degrade the game experience for users as was noted in a legal case against IGE.[30] It is often a source of annoyance for players who can find themselves being "spammed" by sellers via the game's messaging system.

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.[31]

During the crisis in Venezuela, Venezuelans became gold-farmers and could be seen playing online video games such as RuneScape to sell in-game currency or characters for real currency. In many cases, these gamers made more money than salaried workers in Venezuela even though they were earning just a few dollars per day. So many Venezuelans began this practice that it increased inflation with multiple game currencies.[32]

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.

Australia

In 2006, a spokesperson for the Australian Government stated normal earned income rules also apply to income from the sale of virtual goods.[33]

China

Gold farming in China is more pervasive than in any other country, as 80% of all gold farmers are in mainland China,[34] with a total of 100,000 full-time gold farmers in the country as of 2005.[35] Gold farming in China is done in Internet cafes, abandoned warehouses, small offices, private homes and even "re-education through labor" camps.[35] When organized as an actual informal business, they are known as "gaming workshops" (Simplified Chinese: 游戏工作室; Pinyin: Yóuxì gōngzuòshì)[36] or "play-money workshops" (打钱工作室 Dǎqián gōngzuò shì). The abbreviation is 打G, where the G stands for "gold". Prisoners in Laogai camps have been forced to engage in gold farming for the financial benefit of prison authorities.[34] A popular massively multiplayer online role-playing game subject to gold farming in China is World of Warcraft.[36] The Chinese government banned using virtual currency to buy real-world items in 2009 but not the reverse.[37]

Japan

In response to increases in gold farming, in 2006 the Japanese Government urged the computer game industry to self-regulate as well as vowing to investigate this species of fraud.[38]

South Korea

A Korean high court's 2010 ruling meant that exchanging virtual currency for real money was legal in this country although subject to taxation.[39] 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.[40]

United States

A United States Congressional committee investigated taxation of virtual assets and incomes derived from them in 2006,[41] 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.[42]

Venezuela

Due to hyperinflation in Venezuela and the devalued Venezuelan currency, popular MMOs like Runescape and Tibia have been subject to mass gold mining. In Reddit, a user published a racially abusive guide on how to kill Venezuelans in the “player-v-player” places where the gold farming takes place; the guide was followed by intemperate comments. The moderators removed the post and the comments afterwards.[43] Considering many gold farmers utilize Bitcoin as an intermediate currency,[44] regulation or taxation isn't feasible at the moment. During the 2019 Venezuelan blackouts, RuneScape's trading market suffered a "economic crisis" due to the reduced number of goods, as Venezuelans could not access the game.[45][43]

Lawsuits by game companies

Zynga, the makers of FarmVille, filed a lawsuit to stop online sales of its in-game currency. The lawsuit never went to trial.[46]

Jagex, the makers of RuneScape, have engaged in legal actions against several gold farmers and bot programmers.[47]

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.[48]

Game sweatshop

A business producing avatars and in-game currency in MMORPGs is sometimes labelled a game sweatshop.[49] Workers employed by these companies either collect in-game currency (known as gold farming) or generate high-level avatars (known as power leveling).[49] Such organizations are referred to as sweatshops because the gold farmers are usually paid very low wages.[29][50]

Development potential

Gold farming has been discussed as a tool for socioeconomic development by the United Kingdom's Department for International Development[51] and University of Manchester professor Richard Heeks.[52] 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.[53]

In the media

Neal Stephenson's 2011 novel Reamde has a plot centered on an online game that encourages gold farming.

Cory Doctorow's 2004 short story Anda's Game,[54] 2010 novel For The Win,[55] and 2014 graphic novel In Real Life[56] (based on his short story, Anda's Game, and illustrated by Jen Wang) include references to gold farming.

Alan Harris's radio play The Gold Farmer was broadcast on BBC Radio 3 as part of The Wire series on February 6, 2010.[57] 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.[58]

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 so much virtual money playing online games that he could quit his day job.

See also

References

  1. 1 2 The business end of playing games bbc.com, Wednesday, 25 April 2007, 14:55 GMT
  2. ↑ Heeks (2008). p. 2.
  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. 1 2 China's full-time computer gamers bbc.com, Friday, 13 October 2006, 19:20 GMT
  5. 1 2 3 Ogre to Slay? Outsource It to Chinese nytimes.com, December 9, 2005
  6. 1 2 3 Ryan, Nick (April 9, 2009). "Gold Trading Exposed: The Developers". Eurogamer. Retrieved 19 October 2023.
  7. 1 2 Purchese, Robert (29 April 2015). "World of Warcraft and the battle against black market gold". Eurogamer. Archived from the original on 3 October 2022. Retrieved 19 October 2023.
  8. ↑ 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.
  9. ↑ Gold Trading Exposed: Introduction eurogamer.net, 19 March 2009
  10. ↑ Heeks (2008). p. 4.
  11. 1 2 3 Heeks (2008). p. 5.
  12. ↑ Dyer-Witheford, Nick (2009). Games of Empire: Global Capitalism and Video Games. University of Minnesota Press. p. 133.
  13. ↑ Vincent, Danny (25 May 2011). "China used prisoners in lucrative internet gaming work". The Guardian. Retrieved 25 May 2011.
  14. ↑ "The RuneScape Documentary - 15 Years of Adventure". YouTube. Jagex. 9 April 2017. Retrieved 19 October 2023. It was getting to the stage where the credit card companies themselves were saying "We're not gonna accept your credit cards 'cause you're getting so many people charging back 'cause of stolen credit cards
  15. ↑ Leyden, John (15 February 2008). "UK bank blames fraudsters for World of Warcraft ban". The Register. Situation Publishing. Retrieved 19 October 2023.
  16. ↑ "Gold Farming Research Digs Up Similarities With Drug Dealers". Kotaku Daily. Retrieved July 23, 2010.
  17. ↑ LeJacq, Yannick (July 22, 2015). "League Of Legends Pro Suspended For Allegedly Leveling Accounts For Cash". Kotaku. Retrieved October 29, 2015.
  18. 1 2 Poor earning virtual gaming gold bbc.com, 22 August 2008
  19. ↑ "The Decline and Fall of an Ultra Rich Online Gaming Empire". Wired. 2008-11-24.
  20. ↑ Dyer-Witheford, Nick (2009). Games of Empire: Global Capitalism and Video Games. Minneapolis: University of Minnesota Press. p. 142. ISBN 9780816666102.
  21. ↑ The high cost of playing Warcraft bbc.com, 24 September 2007
  22. 1 2 Heeks (2008), p. 10.
  23. ↑ Chinese WOW players speak out eurogamer.net, 17 January 2006
  24. ↑ China Limits Use Of Virtual Currency informationweek.com, June 29, 2009
  25. ↑ Gold Trading Exposed: The Developers eurogamer.net, 9 April 2009
  26. ↑ Auction House Services Diablo III us.battle.net 12 June 2012
  27. ↑ Mike O'Brien on Microtransactions in Guild Wars 2 arena.net, 3 March 2012
  28. ↑ WoW Token Archived April 13, 2016, at the Wayback Machine us.battle.net 12 April 2016
  29. 1 2 Jin, Ge (May 2006). "Chinese Gold Farmers in the Game World". Consumers, Commodities & Consumption. Consumers Studies Research Network. 7 (2). Retrieved March 10, 2012.
  30. ↑ Chalk, Andy (1 June 2007). "IGE Sued By World Of Warcraft Player". The Escapis. Themis Media. Retrieved March 10, 2012.
  31. ↑ Kelion, Leo (18 September 2013). "Diablo 3 auction houses are doomed by developer Blizzard". BBC News. BBC. Retrieved 21 September 2013.
  32. ↑ Rosati, Andrew (5 December 2017). "Desperate Venezuelans Turn to Video Games to Survive". Bloomberg. Retrieved 6 December 2017.
  33. ↑ Virtual world: tax man cometh theage.com.au, October 31, 2006
  34. 1 2 Vincent, Danny (25 May 2011). "China used prisoners in lucrative internet gaming work". The Guardian. Retrieved 25 May 2011.
  35. 1 2 BARBOZA, DAVID (December 9, 2005). "Ogre to Slay? Outsource It to Chinese". The New York Times. Retrieved 13 September 2016.
  36. 1 2 Dibbell, Julian (June 17, 2007). "The Life of the Chinese Gold Farmer". The New York Times. Retrieved 13 September 2016.
  37. ↑ China bars use of virtual money for trading in real goods PRC Ministry of Commerce, Monday, June 29, 2009 2100 GMT
  38. ↑ Japanese gov't looks into gold farming Archived 2007-09-29 at the Wayback Machine gamespot.com, Jul 19, 2006 5:48 am AEST
  39. ↑ Play money is real money, says high court Archived 2012-12-16 at archive.today moremoney.blogs.money.cnn.com, January 22, 2010
  40. ↑ Rose, Mike (15 June 2012). "Virtual item trading to be banned in South Korea". gamasutra.com. UBM. Retrieved 13 April 2016.
  41. ↑
  42. ↑ IRS Getting Closer to a Virtual Goods Tax insidesocialgames.com, January 20th, 2009
  43. 1 2 "Venezuela's paper currency is worthless, so its people seek virtual gold". The Economist. 21 November 2019. ISSN 0013-0613. Retrieved 2019-11-26.
  44. ↑ "Una Entrevista Con Un anónimo Venezolano Utilizando Runescape y Bitcoin Para Alimentar a Su Familia". Archived from the original on 2019-04-11. Retrieved 2019-04-11.
  45. ↑ "Power Outage In Venezuela Causes Economic Crisis In RuneScape". Gamebyte. 2019-03-11. Retrieved 2019-11-26.
  46. ↑ http://dockets.justia.com/docket/california/cacdce/2:2010cv02576/469538/
  47. ↑ Bot-Busting Update: Legal Proceedings Runescape.com, November 9, 2011
  48. ↑ http://virtuallyblind.com/2008/02/01/peons4hire-blizzard-injunction/ Virtuallyblind.com, February 1, 2008
  49. 1 2 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.
  50. ↑ Dibbell, Julian (17 June 2007). "Video Games - China - Money - Online Games". The New York Times.
  51. ↑ "Converting the Virtual Economy into Development Potential". infodev.org. infoDev. 7 April 2011. Retrieved 13 April 2016.
  52. ↑ Heeks (2008).
  53. ↑ Fair Trade Gold arstechnica.com
  54. ↑ Doctorow, Cory (2004-11-16). "Anda's Game". Salon. Retrieved 2014-04-01.
  55. ↑ Cory Doctorow’s “For The Win” creativecommons.org, May 11th, 2010
  56. ↑ A Comic That Explores the Dark Side of Gold Farming
  57. ↑ The Gold Farmer bbc.co.uk
  58. ↑ Space Invaders artists and works Netherlands Media Art Institute

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