China Bans Gold Farming
InformationWeek is reporting that the Chinese government has declared a ban on the sale of virtual goods for real currency. This move is poised to shut down a several billion yuan a year business that has been growing by leaps and bounds every year. "The trading of virtual currency for real cash employs hundreds of thousands of people worldwide and generates between $200 million and $1 billion annually, according to a 2008 survey conducted by Richard Heeks at the University of Manchester. He estimates that between 80% and 85% of gold farmers are based in China. [...] Game companies typically forbid gold farming but committed virtual currency traders find ways around such rules. Some game companies have recognized the futility of trying to ban the practice and have built virtual commerce into their game infrastructure."
The trading of virtual currency for real cash employs hundreds of thousands of people worldwide and generates between $200 million and $1 billion annually, according to a 2008 survey conducted by Richard Heeks at the University of Manchester. He estimates that between 80% and 85% of gold farmers are based in China.
Dear god! Eight tenths of one billion dollars is a lot of cash!
The Chinese government estimates that trade in virtual currency exceeded several billion yuan last year, a figure that it claims has been growing at a rate of 20% annually. One billion yuan is currently equal to about $146,000.
So what is it, hundreds of millions or hundreds of thousands? Because one is a nice chunk of change while the other is, across China's population, laughable.
These numbers just aren't adding up here. There seems to be a large disparity between what the Chinese government reports and what Heeks' study finds. It's entirely possible that Heeks' is stretching stats to make his research sound more important and news worthy. It's also possible China is understating the impact their ban will have so they can "cure you of your illnesses." The reality is probably both a little of column A and a little of column B.
Some game companies have recognized the futility of trying to ban the practice and have built virtual commerce into their game infrastructure.
And now China will realize that futility. One would think that China would enjoy the tax on those who report this income but now it's just going to all go under-the-table. Hell, I'd say tax it but I'm certain China wants to look like the caring government attempting to heal the afflicted youth.
My work here is dung.
Wow! China seems to really want to enhance its image, any other reason for that move that anybody can envision ? After all, it will be less money going straight into to China... Of course I may be missing something ;-)
I watched a program on TV where they visited a company working in this field. They basically employ 30+ people who play the game all day, we saw the player pool on TV while they were playing. They are based in countries where they can pay people very small wages, they take the points earned by those people and resell them with a margin on what they paid the players. Well at least this seems like a simple to understand business model ;-)
Just for fun, if you could get paid a decent wage, say same as you are earning now, how many of you would be interested in such a position ? ;-) Is it a dream job (playing all day !) or more like a hell job? Note that this could be similar to people getting paid to play all day to find bugs in new games but the qualifications required to get the job may vary a bit...
Everything I write is lies, read between the lines.
How are they going to get their World of Warcraft gold! China is putting their World of Warcraft citizens in jeopardy of becoming weak.
Just because you are wrong and I called you out on it doesn't mean I am a Troll.
Would that include things like an online book or some online services?
It's certainly an interesting development, and one that I think will slightly curb the growth of gold farming, gold spam, wacky in-game currency trends, and so forth, but I think the real question here is, why would this be in China's interest to do this, and shut down a blossoming home-grown (if gray-market) industry?
The IW article notes that "The government justifies its ban on virtual currency trading as a way to curtail gambling and other illegal online activities." It just seems this isn't the real or whole story, though. Control? International reputation? Deals with Chinese MMO devs?
So let me get this right, China bans a highly profitable industry from operating in China that no doubt brings in lots of revenue in the Chinese government or at the very least prevents people from having to work directly for the Chinese government. Sound really smart. While your at it why not ban the production of shoes, hard drives and cheap kids toys, it would have about the same effect.
Taxation is legalized theft, no more, no less.
subscriptions are intangible, are they going to prevent retailers from selling those too? FTA: "prepaid cards of cyber-games"....so they're not going to let people buy world of warcraft subscriptions or something?
So, China just fobade anyone who does any work on the inernet from receiving payment of any kind for their services.
Wow.
No, seriously, I'm impressed.
What will this do to the gold market? Will the guy on the Cash4Gold commercials become even more annoying and have larger graphs to show just how much he profits from buying gold from people at prices well below market price then selling it when the prices go up?
"The Y chromosome is genetic. The odds are very good that if you are male then your father was too." -Internet Commenter
Isn't virtual currency just a microcosm of a "real" currency system? Perhaps they should also start cracking down on retail gift cards and "point" systems, too.
"InformationWeek is reporting that the Chinese government has declared a ban on the sale of virtual goods for real currency." If worded exactly like that, does that mean that there will be no Korean MMOGs there? Those game companies themselves make their entire business model to sell virtual goods for real cash...
China is also moving away from the sale of real goods for virtual currency.
The government justifies its ban on virtual currency trading as a way to curtail gambling and other illegal online activities.
Will the other illegal online activities include, dissent against the govt or telling the world about human rights violations? Looks like its another way to pass a law to restrict their populace.
Tech Support: "No, sir...clicking on 'Remember Password' will NOT help you remember your password."
If this is just another instance where the farmers just have to bribe the cops to look the other way, this "ban" will amount to nothing more than a PR stunt.
SJW: Someone who has run out of real oppression, and has to fake it.
And suddenly thousands of Indian techies have opened Warcraft accounts.
It is by the juice of the coffee bean that thoughts acquire speed, the teeth acquire stains. The stains become a warning
Wouldn't that make loyalty programs (such as Air Miles) illegal? They also trade virtual currency (points) for cash and goods.
That makes me wonder who greased who's palms to get this passed into law...
It's not illegal to make Gold.
It's not illegal to Give Gold.
It's not illegal to Give real Money to someone else.
But somewhere along the way, selling Gold online becomes illegal. Wheras stating the transaction as a two-way donation easily bypasses the law.
Also - the big question - why would this become illegal? People do what they want with their money. If Blizzard was smart - they'd offer Gold at a price matching the market and get a cut on this. They've already ruined WoW four times over. Anyone who's played since the beginning can tell you how much more enjoyable it used to be.
Gold farmers also increase the amount of subscriptions that the game has, more money going into the developers... I don't get why they fight it so much.
To me - its the worst business logic I've ever come across, and games that have these microtransactions already involved will be the ones who come out on top.
Where do I buy gold seeds so I can start gold farming?
I've heard that money doesn't grow on trees, yet I didn't know that I could farm gold.
Bond: Do you expect me to talk? ... play World of Warcraft.
Auric Goldfarmer: No Mr. Bond, I expect you to
[Insert pithy quote here]
we have to pay the chinese to have fun for us now? What's next, do we pay them to have sex for us, eat for us, pee for us...
but gold farming has a real negative impact for legitimate gamers. I'm sick of having to compete with professional, hack-using gold farmers for in-game resources, I'm sick of having to hear badly worded spam every time I enter a major virtual city, and I'm sick of what they do to in-game economies. It could be argued that some games (e.g. Final Fantasy XII) were damaged by gold farmers, or at least made a lot less money than they could have because gamers quit over the antics of gold farmers.
The gold farmers have years of experience hiding from the game developers, so I doubt this law will have much impact on their operations, but it's nice to know those @$#% will have one more shoulder to have to look over.
Assuming the companies that were actually making the profits selling the gold were inside China they could just relocate elsewhere and continue to employ Chinese to farm their gold. Even if the Chinese government cracks down on those employees, there are still plenty of impoverished nations whose citizens would be happy to work for 16 hours a day for $.20 a day. It just means that instead I'll need to brush up on insulting phrases in languages other than Mandarin. Does anyone know the Somali for "Go stick your head in a goat"?
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
In full disclosure: I work in the financial industry currently.
This ban has nothing to do with gaming, gambling, or local economy.
This is likely a direct response to MASSIVE money laundering.
Joe has $100,000 worth of illicit cash.
Joe strikes a deal to buy $100,000 worth of virtual currency in WoW. Joe smuggles the money. (Many times Joe can even hire the kid down the street and pay him cash...)
Joe turns around and over several months sells the gold BACK to the gold farmers and claims the sales as legitimate income. Selling it at a 50% loss he can convert $100,000 into $50,000 of legitimate funds. Even more so when he acts as a virtual broker (IGN anyone?).
While this is a simplified scenario but we are talking BILLIONS of dollars a year are now going through these kinds of channels.
I've seen locally here in the US $300,000 attempts and laundering money this way (through a combination of FF Online, LOTRO, and Maple).
While it is getting easier to deal with this now that the gaming companies are willing to share some data I can only imagine how hard is must be in Asian markets where channeling cash to chinese gold farmers is easier with the shorter phsyical distances. Oddly though, in my experience, I have seen more Korean and Indian gold farmers then Chinese.
Never had a problem with gold farmers, never will, but I have serious doubts that this ban has anything to do with gameplay.
I think this is in response to the forged bonds that were intercepted in Italy. They are worried about organized crime shifting large sums of money (which require laundering) through the virtual economy.
If I am an evil overlord and I have to get 4 billion to my agents around the world the easiest thing to do is buy a billion dollars worth of WoW gold, have all my agents log in with characters. Divvy up the gold then have them sell it off locally or back to the gold farmers at a loss.
No quicker way to distributed that much real world money then through a network of games.
-=[ Who Is John Galt? ]=-
It's a pretense for nationalization of gold farming companies! (Obama is only sorry he didn't think of it first, LOL.)
Screenshots or it didn't happen!
Arguing about vi versus Emacs is like arguing whether it's better to make fire by rubbing sticks or banging rocks.
While they have expressly forbidden the exchange of virtual currency/services for real cash, it does not forbid the exchange of their time (services) for a player's cash. This does not prevent them from offering powerlevelling, honor farming, or item grinding. (Change the term for whatever your MMO of choice terms these services.) These services are normally quoted as a function of time. Anyone who uses a bit of creative wording/pricing can still continue to sell virtual currency. So long as they refer to it as a service, then in theory they should be able to skirt this new ban. Quite a few sites list a time frame in which they can get gold to you. Up to 2 days for larger orders. Let's say someone wants to buy 10,000g. With a 2 day turn around time, that's about ~210g per hour. (Most players with a bit of a clue can easily bang out that much if not more per hour.) Thus, they have sold the player their playing time for a specific goal. I honestly don't think this solves anything. It'll either create an underground market, or sites will start to use more creative wording.
ummm one billion RMB is actually one hundred and 46 million dollars as there are almost 7 yuan in one dollar.
Live rates at 2009.06.29 19:56:54 UTC
1,000,000,000.00 CNY = 146,318,619.51 USD
China Yuan Renminbi United States Dollars
1 CNY = 0.146319 USD 1 USD = 6.83440 CNY
The demand won't disappear, so they'll have to outsource their gold farming to Americans.
IANAL, but my dad was an accountant for this N. Ron guy, so I know what I'm talking about.
built virtual commerce into their game infrastructure
So you can go to work in a virtual world, selling virtual services for virtual gold.
You can then sell that gold to a 12 year old idiot who got his mom's credit card.
Thats kinda funny.
I have a roommate who is adicted to FarmTown on Facebook. He is constantly farming other people's crops to get money to buy stuff for his own farm.
Imagine a farmer in China getting a computer, and farming in a virtual world, selling his virtual income for actual income and that being more than he made farming in real life.
Crazy!
Something makes me think that the Chinese government helped some of you.
Not that I like the idea but - I can be pragmatic.
Je me souviens.
China is a totalitarian capitalist. Yay state and corporate oppression. Best possible combination.
I like WOW and I have liked many other games before that.
The problem WOW faces is that gold has to be used to buy one particular feature from a NPC no player can substitute for, epic flying. While "normal" flying and such gets you there, epic flying is so many times as fast that it not only becomes a status symbol it has become a requirement for many people. If they had put the effort into making it obtainable by quests that people could do during the course of their play or even a few group quests they could eliminate much of the gold need.
I know of nothing that causes more "gold strife" than mount costs. Blizzard likes to state that epic flight skill isn't needed, but it is required to fly special mounts that attract a lot of interest from players, specifically dragons. Sorry, they can claim not needed all the want, if that were so they can't justify the price. After all if its just fluff then why is is so expensive compared to other forms of movement.
Throw in rare drops that can be sold and therein comes another source of outside gold. People play these games to have, some play to prove competitiveness, but I don't know of people paying to work again. Consider the time it takes to accrue the required gold just for in game NPC purchases and it makes sense that a market formed to sell it. I cannot make the money at a rate competitive in time to what I could buy it for. Even at $20 per 1000 gold (it spams much lower than that in game - seen 7 to 8 dollars per 1000 gold) it is dirt cheap compared to the time I would have to take away from game play : read enjoyment.
Make gold trivial or strive to eliminate penalties, and the cost is just that. Recently blizzard introduced the ability for players to have two complete talent specifications per character. Cost 1000g! Hence something which has no lore backing, is nothing more than a convenience, yet considered "required" by any serious players again asserts the need to have lots of gold.
Not smart.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
It would not be a pleasant job, even if you got the same wage you do now. [...] I'd rather do straight data entry typing than be a gold farmer...
Data entry isn't even an option for these people. They get to choose from farming (real) fields for pennies or playing video games for the same number of pennies. Most of them who play video games for pennies are at least guaranteed to have a roof over their head because computers are expensive to replace even when the people aren't.
I went to eat some animal crackers and the box said, "Do not eat if seal is broken." I opened the box and sure enough..
This only applies to Chinese citizens regarding Chinese virtual commerce. China isn't banning bringing in money from outside countries. They are just cracking down on what they can't tax. All those rich USA lawyers who don't wanna spend time on WoW leveling up, and want to buy a pre-made character, China has NO problem accepting that money.
So the price of game gold is about to sky rocket and those who don't care about being cought doing something illegal will make tons of more money just like ilegal drugs and other things.
by TheSpoom (715771) Uncaring Linux user here. I have nothing to add to this but please continue. *munches popcorn*
When labor is that cheap, it's probably more effective to hire additional workers than it is to squeeze every last drop out of the ones you have.
Spoken like a man who's never had a truly crappy job. Squeezing every last drop out of your workers is its own reward. I knew a restaurant manager once who stole tips off the servers' tables "just to remind everyone who the big dog is." I knew a lawyer who refused to pay his staff a living wage or work them less than 60 hours a week "so they won't have time to go find another job." Hell, even John McCain refused to honor our commitment to pay for our soldier's college expenses because, and I'm paraphrasing correctly, if our soldiers knew they could come home and go to college, no one would want to stay in Iraq.
Sometimes treating your employees like crap is more about shoring up your own inferiority complex than it is smart business decision. If you haven't experienced it directly, go reread Thomas More and George Orwell to get the gist of it.
He put his boots up on the table and made a face. "The sig," he smirked. "You can waste your life in search of the sig."
I have not read the press release in the original Chinese.
The article here states: http://english.mofcom.gov.cn/aarticle/newsrelease/commonnews/200906/20090606364208.html
"The virtual currency, which is converted into real money at a certain exchange rate, will only be allowed to trade in virtual goods and services provided by its issuer, not real goods and services."
The article also specifically mentions a virtual currency called "QQ coins". It does not mention MMO's or gold farming.
All this article means is that you can not use your vast WoW bank account or your EVE Online ISK play time cards to buy real goods and services in China. It does not mean that that Chinese companies can't turn your real money into virtual currency or goods.
God, that word makes me want to kill myself.
But the real trick here is that the world financial markets are getting gripped tighter every day, especially due to terrorism legislation, and new regulations from the shattering of the foundations of our financial system.
If Guido lives in Sicily, and has a few hundred kids on his payroll, he can give the gold in game to whomever he wants, let's say Freddie Crinkle Fingers. Freddie can sell the gold, and how would the police prove that Freddie hadn't been killing dwarves or whatever for six months, or made a good deal buying the account from some stupid kid?
Similarly, if you had those same hundred kids write a letter and drop $200 worth of cashier's checks in the mail, it's a novel way to move $20k. But it's highly traceable, and the final destination is somewhat out of Guido's control.
> China Bans Gold Farming
Looks like someone didn't pay their local mafia bill!
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
... they announced that they bought 3Drealms and will be releasing Duke Nukem Forever by Fall 2009
The Wise adapts himself to the world. The Fool adapts the world to himself. Therefore, all progress depends on the Fool.
Blizzard likes to state that epic flight skill isn't needed, but it is required to fly special mounts that attract a lot of interest from players, specifically dragons.
Epic flying isn't required, though it's very useful. I'm not sure what's "needed" about dragon mounts. My main rides a nether ray. Those were rarely seen even in TBC days. I like the uniqueness aspect.
Do people with the oversized mounts (mammoths and dragons) who routinely block mailboxes, etc., whether they are trying to or not, really think they're impressing other players?
You have to have a willy first don't you, douche.
... musta been designed by the same slabbering fool who designed the new /. [login]
Play the feckin-A game ... cue the feckin-A login_button. WTF
For once China has done a good thing. I totaly agree with this.
I made 10$/hr playing Asheron's Call. I tried hiring my friends, but no one wanted to give me a cut of their ebay gold. You can't hire Americans to play video games for .50$ an hour, but Chinese will. So I was honestly considering opening a gold farming business for the next big MMORPG. I guess since China banned them, I will forget about starting my own business.
God spoke to me.
Doesn't really sound like that one, but I assume that they are somewhat similar.
SotC deals with various "online jobs that anyone could do", from taking thousands of photos hoping some of them will be bought for photo stocks (and paid in pennies), through Amazon's mTurk (and their policy to only pay Americans and Indians in cash, while others get gift certificates) all the way to Chinese who build custom characters and farm gold (I only assume that they do gold farming part as well, though the film only shows what seems to be like character leveling).
Actual work is being done by kids coming in to the cities from provincial towns and villages for about 95 Euros a month (~135$).
Their daily lunch costs about 0.35 Euros, so in average they end up with about 60 Euros (~85$) earned each month.
Their employers try very hard to show in front of the camera how they only hire kids older than 18, but they don't really succeed in that as they hire the minors (right in front of the camera) for "a trial period".
Workload of such establishments where kids work their nearly entire waking day (in front of the camera we are shown that they work 12 hours a day) is bought off by a company situated in Shanghai.
Which is actually an outpost of ige (Internet Gaming Entertainment Ltd.) - an L.A. based MMORPG gold-selling company founded and run at the time by Brock Pierce - of Mighty Ducks and First Kid fame.
He has since sold the company - but kept the shares.
BTW, they have been failing to pay their employees in their gold-digging sweatshops for months.
And while "Find excuses first, attack and insult later" tactic works on some, others take a more aggressive approach when asking to be paid.
Namely - they come to their Shanghai HQ with guns.
The best part is, that while the local SWAT team arrives to handle the guy holding a gun to the secretary's face - journalists get a confirmation from another female employee that things like that happen all the time.
Oh, and once confronted with tale of their disgruntled subcontractor coming to their Shanghai offices with a gun, Brock Pierce and John Maffei used the same "Excuses, attacks and insults" combo.
One would think that someone in the MMORPG business would understand a practice of having secondary attack skills.
Mit der Dummheit kämpfen Götter selbst vergebens
people get killed in china over these things, it's time to shut these bunch of bandits down.
:)
IT'S A TRAP!
"Chinese government has declared a
ban on the sale of virtual goods for real currency."
I know software such as MS Office is a "virtual good" so what are they going to use to buy that? Will they have to work in the MMO's for online gold to buy software now?
That discrepancy may also provide a way for people to beat the rap on prostitution charges: don't solicit someone for sex, tell them you're making a porno flick and you want them to be in it.
So a hooker sells erotic videos, not sex, to the john. Sort of like a triple-X version of SuperStar Studios booths at amusement parks. Genius.
Almost. There are a few problems with the business model of selling copies of 1 Night in $hooker on DVD-R to johns, which a pimp will have to work through before beginning to offer the service through his "actresses":
1. Buy large amounts of gold that is going to be on sale because it might be banned soon.
2. Wait for the ban to take place and prices to skyrocket due to 80-85 percent of the gold supply being removed.
3. ??????
4. PROFIT!
The interpretation that the new regulation is about gold farming has spread like wildfire. Unfortunately, it is not correct â" the regulation is about the Chinese government staying in control of currency movements within the country; and probably more about gambling than money laundering. Itâ(TM)s not targetted at gold farming, and unlikely to have much of an impact on gold farming. More details at the ICTs for Development blog: http://ict4dblog.wordpress.com/2009/07/01/china-bans-gold-farming-er-but-in-fact-it-hasnt/
The reasons behind the ban is simple: China government cannot or have difficulties to collect tax from these virtual transactions. Regulation is not easy to have control over them. So, ban...