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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.
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.
It would not be a pleasant job, even if you got the same wage you do now. Your bosses will constantly be pushing you to maximize your per hourly gold yield. And most likely you would be running several computers at once and using various hacks, working like a dog. Any semblance of it being a fun game would be completely gone, replaced by simple drudgery.
I'd rather do straight data entry typing than be a gold farmer...
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
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.
My understanding is that most of the gold farmer "workers" work on a quota system. Of course the quota will get moved up depending on possible performance. It's not about maximizing yields, it's about hitting the quota dependably.
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.
Anecdotally, back when I played MMOs, I was once asked to hold onto some surplus in-game cash for a farmer. He wanted to set it aside so if he had a bad day, he could use it to get over quota and avoid punishment.
I recall reading an article about this somewhere (Gamasutra?)... the gold farmers didn't want to make too much gold for their bosses, or their coworkers would get mad. Excess earnings in a session were hidden to (1) save for a bad day (2) sell independently for income or (3) play the game themselves. It was a really interesting look inside gold farming at the basest level.
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
This is still a hundred times better than working on a farm for a living. Life is hard in rural areas, and making any kind of living outside of farming is a huge step up from what your parents likely did. Even if the work is hard and demanding by our standards, people in the 'first world' live decadent soft lives that don't know what a real lifetime of work would look like if it slapped us in the face.
One reason might be that building an industry that is entirely reliant on the whims of a foreign company could leave them holding the bag for thousands of idiots who thought they had a job.
Nerd rage is the funniest rage.
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? ]=-
Farming gold isn't what most players find fun about MMO's, hence peoples willingness to pay for it.
Your average MMO player has a choice of activities. To use WoW as an example, you can do quests, you can run instances, you can do battle grounds, do some world PVP, level an alt, do silly seasonal quests, etc. As a gold farmer, you do one and only one thing... farm the most valuable items out there. You don't have the opportunity to do anything else, because doing anything else is a waste of time and isn't what you are getting paid for.
I suspect that the article is actually blowing out of proportion the MMO currency trading side of things. A quick googling shows that evidently gambling is illegal in china and the government has gone to lengths to crack down on it:
http://en.wikinews.org/wiki/China_steps_up_anti-gambling_campaign
If :
A) MMO currency trading is not a notable contributor to China's GDP
B) Virtual currency makes bypassing gambling restrictions easier
C) China is genuinely interested in curbing gambling
It sounds to me like banning on-line currency trading is a no-brainer as it will criminalize the entry point people would use to get around local gambling restrictions. Any problem with MMO currency trading is purely incidental.
And I doubt China cares about the cost the rest of the world pays for [Titansteel Bar]s on the auction house..
I've done buisness with gold farmers in the past, and they were quick to contact me directly to solicity my next sale - to them, not to their employers. I think this is all a bit less Charles Dickens than people are making it out to be. Certainly it's better than typical jobs for kids in the West's industrial revolution.
Socialism: a lie told by totalitarians and believed by fools.
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."
We pay the Chinese to do the grunt work so that we can focus on having fun.
Which just illustrates why these games are b0rked. If people are willing to pay to avoid an integral part of the game, maybe you've done something wrong.
Last year, I went through a marital separation, moved into a new place with roommates, and was laid off from my job within the same week. It took me a month, but I eventually found a full-time job, and a weekend job. The damage had been done though, I was behind on bills and struggling to keep up. I had a WoW subscription going and was considering cancelling it, but the through of selling gold occurred to me as a way to help make ends meet while I wasn't work at either job. So, in order to help get out of debt and pay the bills, I started selling gold to individuals just through word of mouth, and to gold farmers when there wasn't a demand from the people I knew. Let me tell you, it was not very fun at all and really killed the game for me. For those not familiar with the game, you can do up to a certain number of "daily quests" (quests that are repeatable every 24 hours). I would do the maximum allowed and use my tradeskills (both gathering skills) and sell the goods for in-game gold, then turn around and sell the gold to whoever would buy it. I was playing probably 5 hours a day, just farming. I could make around 5-7k gold per week (Before the Lich King) and sell the gold for $10-20 per 1K. Typically I made between $3-500 per month from playing a video game. I bought the Lich King (expansion), leveled my character to level 80 and started gearing him up to farm efficiently at that level, but I was so burned out from playing every day (and finally out of debt). that I no longer saw a reason to play and cancelled my subscription. It sure as hell helped pay the bills, but the constant headaches from farming for hours at a time, killing my social life, and sucking up all my free time to do meaningful things, killed the drive to play the game. I can't imagine gold farmers (who play far more hours than I did) enjoy this at all. It's not as bad as working in a sweat shop and/or doing real labor, but it's kind of rough and really wears on you after awhile. Even so, I don't see why their government would outright ban the buying and selling of game currency. A lot of these people are really depending on that income. :(