Poor earning virtual gaming gold

posted on 20 Sep 2008 16:18 by technologynews
Screenshot from Runescape, Jagex
Many online games have tried to tackle the trade in game gold

Nearly 500,000 people in developing nations earn a wage making virtual goods in online games to sell to players, a study has found.

Research by Manchester University shows that the practice, known as gold-farming, is growing rapidly.

The industry, about 80% based in China, employs about 400,000 people who earn £77 per month on average.

The practice is flourishing despite efforts by games companies to crack down on the trade in virtual goods.

Big industry

Professor Richard Heeks, head of the development informatics group at Manchester who wrote the report, said gold farming had become a significant economic sector in many developing nations.

"I initially became aware of gold farming through my own games-playing but assumed it was just a cottage industry," said Professor Richard Heeks from the University of Manchester who wrote the report.

"In a way that is still true. It's just that instead of a few dozen cottages, there turn out to be tens of thousands."

In many online games virtual cash remains rare and many people turn to suppliers such as gold farmers to get money to outfit avatars with better gear, weapons or a mount.

Screenshot from Wrath of the Lich King, Blizzard
Many gold farmers focus on World of Warcraft

Some gold-farming operations offer other services such as "power levelling" in which they assume control of a player's character and turn it into a high-powered hero far faster than the original owner could manage themselves.

Prof Heeks said very accurate figures for the size of the gold farming sector were hard to come by but his work suggested that in 2008 it employs 400,000 people who earn an average of $145 (£77) per month creating a global market worth about $500m.

But, he said, the true size of the sector was hard to estimate - it could easily be twice as big.

The quasi-criminal nature of gold-farming made it hard to truly gauge its extent, said Prof Heeks.

In most online games all the activities associated with gold farming - gathering in-game cash to items to sell, buying game gold or sharing accounts - are a violation of the terms governing that title.

Anyone caught engaging in any of these activities is likely to be banned from the game and have their account shut down.

"I was drawn to write about gold farming due to my perception that it's a significant phenomenon that academics and development organisations are unaware of," he told the BBC.

Already, he said, gold farming was comparable in size to India's outsourcing industry.

You could get rid of it, but you would get rid of one of the most fundamental parts of player-to-player interaction.
Steve Davis, Secure Play

"The Indian software employment figure probably crossed the 400,000 mark in 2004 and is now closer to 900,000," said Prof Heeks. "Nonetheless, the two are still comparable in employment size, yet not at all in terms of profile."

Prof Heeks suspects gold-farming might be an early example of the "virtual offshoring" likely to become more prevalent as people spend more time working and playing in cyberspace.

"It is also a glimpse into the digital underworld," he said. "Or at least the edges of a digital underworld populated by scammers and hackers and pornographers and which has spread to the "Third World" far more than we typically realise."

Cashing out

Steven Davis, chief of game security firm Secure Play, said gold farming had been around since the earliest days of online gaming but had mushroomed along with the popularity of gaming. The trade was clearly meeting a real need, he said.

Screenshot from Eve Online, CCP
Economic depth in games such as Eve Online means it is not as prone to gold farming

"When you get people with more money than time and time than money the two will find a way to meet," he said.

While exchanges of goods and gold take place inside game worlds the deals are typically done via one of many hundreds of online market places and shops. Some gold farming sites employ just a handful of people but many were large businesses with hundreds of people on their books.

A hierarchy of gold farmers arranged by where wages were lowest was starting to emerge, said Mr Davis. For instance, the low wages gold farmers in Vietnam will accept means they now do for Chinese gamers what many in China do for those in the West.

"It's moving down the chain," he said.

Gold-farming was proving so lucrative that criminal gangs were cashing in on it, said Mr Davis. These pay for their accounts with stolen credit cards, take money from players and do not hand over gold or goods in return and fill chat channels with adverts for websites hawking game gold.

There were also significant problems in tracking down and prosecuting those behind the gold-farming, he said.

Games makers had tried to limit the amount of trade in game gold and gear, few had reported significant success, said Mr Davis.

"You could get rid of it," he said, "but you would get rid of one of the most fundamental parts of player-to-player interaction."