On Chinese gold-farming operations

Not everything originating from China is toxic or dangerous to your health but the economic dependency is under scrutiny more than ever. (In retrospect, James Fallows seems to have picked a particularly bad time for his July/August article in the Atlantic Monthly titled Why China’s Rise Is Good For Us.) On the virtual side of the trade, New York Times Sunday magazine published an article about gold-farming operations. These are the contemporary equivalent of sweat-shops where employees are paid to play online games. Specifically massively multi-player online role-playing games, or MMORPGs such as World of Warcraft. These games all share one key trait: users get to build “characters” over time, sometimes years. Characters gain experience and skill based on their exploits, and the newly acqui pred power open the door to more interesting aspects of the game.

Intended to approximate the competitive nature of real life, where hard work and persistence over time leads to results, or so the children are counseled endlessly, this naturally leads to a black market in developed game characters. While the idea of trading virtual characters did not originate in China (and eBay provided the early marketplace) the gold-farmers have industrialized the practice, churning out fully developed avatars in 80-hour work weeks around the clock.

This issue is full of interesting risk and business trade offs. First the buyer needs to trust the seller– and this is why established online websites with a history of delivering the goods has a competitive advantage over the one-off eBay auction. A virtual world meeting and perhaps a mock battle can prove that the character in question has the right magic spell but there is no element of escrow. After payment exchanges hands, the seller must release the credentials to the online account and this is where he/she can defect. Buyer has no recourse other than hoping to recover the payment by filing a dispute. In principle a trusted 3rd party can solve this system by temporarily holding on to the character until payment clears, in the same way exchange of valuable physical goods are facilitated by escrow agents.

Sellers face a different problem, namely that gaming companies have started cracking down on gold-farming operations. Large number of different characters played by same IP address in China is likely a dead giveaway of something sketchy. But farmers have come up with responses: instead of creating and developing characters from scratch, they agree to take over existing characters. Gaming enterprises have no problem targeting the farmed avatars but shutting down legitimate US customers’ characters is bad for business. (The author compares this to the drug problem: going after producers/suppliers/traffickers is far more politically wise than going after users.) Then there is the problem that some experiences can not be traded; the author cites WoW where groups of elite players get to raid dungeons in groups to recover loot which can’t be given away. But the farms responded by creating bands of mercenaries, 40 people playing at once, for hire by a novice seeking to storm the virtual castle, no battle experience required. Spoils go to the payer.

It turns out that gaming companies are not the only ones with missile lock on gold-farmers. Vigilante players have also banded together to opportunistically kill farmed characters. (Virtual death however is not particularly fatal to the economic well being of a farming operation, because the character can be resurrected with most if not all powers intact in a matter of minutes. But when you are punching the clock and getting paid in virtual-coins, that’s a dent in revenue.)

At the end of the day, gold-farming brings up the question of fairness. Games are not about skill alone; luck and circumstances often factor into it. But it offends people’s sense of equity when other players can get ahead by simply paying more. This is where games are supposed to be distinct from real life, where $$$ can be converted into advantage in almost any other arena. Influence of money in sports is undeniable: and the manufacturer of that expensive titanium driver would like to emphasize that. But the competitive spirit remains alive to the extent that correlation between budget and success remains low. Nothing delights the sports fan more than seeing the scrappy Oakland Athletics edging out the Yankees, or the dedicated rider on his ancient bike dropping a youngster pedaling away on a cutting edge carbon fiber frame during an intimidating climb. Even Barry Bonds owes his steroid inflated home-run total to the ufair advantage of better chemistry, not the unfair advantage of better venture capitalism. From that point of view, gold farming represents an unashamed attempt at buying one’s way into success. Not surprisingly some players are offendedp, others jump at the opportunity, meanwhile entrepreneurs in China find another way to increase US the trading deficit.

Why do the gaming companies care? They are conflicted. Farming operations do pay the online gaming fee after all. But lower customer satisfaction (from perceived inbalance) is one reason to act, and probably correct PR response. In reality they are probably more offended that there is money left on the table. After all the number of virtual coins and healing power of spells is nothing more than a bunch of numbers stored in a database that Blizzard Entertainment, the parent company, runs. If anybody should be getting paid to fudge those numbers, it is Blizzard.


Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s