Three Phases of Gold Farming: Scientific American Article

The January 2010 issue of Scientific American carries an article (by me!) that divides the development of gold farming into three phases (pre-history; golden age; and “backlash and beyond”), and examines the phenomenon particularly from a developing country perspective.

The article has been available online at: http://www.scientificamerican.com/article.cfm?id=real-money-from-virtual-worlds, though may get closed off behind a subscription firewall.

The text can also be found at: http://themonetaryfuture.blogspot.com/2010/01/gaming-for-profits-real-money-from.html

Virtual currency convertible to real money in Korea says Supreme court

In a case concerning two "gold farmers" doing mark-up trading with Lineage’s currency Aden, the Korean supreme court ruled that it is OK, because the profits were generated based on skill, not luck. The Korean Times says that this is a landmark ruling.

The virtual currency was obtained by buying it from websites (worth $200 000) and then re-selling it in form of goods and currency to players (profit ~$20 000).

It seems this activity was not gold farming per se, but typical buying and reselling. They did not have to actually play the game itself. To what degree the ruling applies to actual gold farming and earning virtual goods in a game-like setting is not clear.

It would also be rather difficult to determine how skill or luck based a game is? This paper by Falk, Bessemann and Bosson study the relationship between skill and luck in Entropia Universe.

Players using bots or macros are not allowed to trade their, perhaps, not so skillfully obtained goods. The use of these factors of production might be quite difficult to demonstrate. The borderline between "normal" play and assisted play is rather hazy as well.

Links:

PlayNoEvil

The Korean Times

JoongAngDaily

The price of eggs in World of Warcraft

In discussing the ease associated with having someone else do the work of gaming, more often than not large-scale services working to create offline profits like gold farming and power leveling operations are discussed. However, on a smaller scale the in-game economic systems of games like World of Warcraft can also provide players a way to avoid working for the things that they want, while simultaneously allowing other players the opportunity to profit from their in-world efforts. While noticeable year-round, these practices are especially visible during Warcraft’s in-world holidays, such as Winter Veil, which is currently being celebrated.

Buying in-game goods

Small eggs will set you back more than they normally would when bought through World of Warcraft’s auction house right now. Every year at Winter Veil (WoW’s thinly-disguised Christmas event), there is a drastic increase of small eggs on the auction house. Alongside this drastic increase in eggs also comes a drastic increase in price – an item that sells to vendors for 4 copper each will sell for upwards of 50 silver. Deeprock salt, also required for the holiday quests, sells on the auction house for one and a half to three gold each, but normally sells for 2 silver and 50 copper to vendors.

While small eggs are generally used for low-level cooking in Warcraft and are neither a common nor expensive item on the auction house. Winter Veil offers players a number of quests and achievements that require these materials for completion. For those willing to farm for these materials, the in-game economic system provides a quick and easy way to sell their goods. For those looking for an easy way to complete a holiday quest that may, if they’re a high-level player, have little value to them, buying eggs through this system is simpler than acquiring the materials themselves

While there are certainly profits to be made here – which may well be worthy of further consideration on their own – the practice of making easily accessible items available to other players through the auction house offers an interesting in-world example of having other players provide items and services. In this way, the economic system of the auction house – and, to a lesser extent, the trade channel – in World of Warcraft serves as a low-level, low-cost way of contracting out work to other players.

Virtual goods and services

The tendency to pay for rather than work for these items is visible in a lot of virtual goods in Warcraft, as is the potential for generating profits from items that other players cannot or will not require on their own. In some cases, doing so is a product of the fact that certain items made by players can only be made by certain in-game professions. Therefore, a leatherworker will need to pay a jewelcrafter for a particular gem, unless they wish to abandon their own profession, start a new one, and work their way through the long process of developing the skill.

This process is also seen in the case of relatively cheap yet somewhat difficult to find or access items. While pet snakes are fairly inexpensive to purchase at 40 silver each, they are only sold be a vendor in one city and routinely show up on the auction house for up to 12 gold. While anyone of a particular faction is able to get these items, the in-game economic system makes it possible to have the work of actually obtaining the item done by another player, who then makes a profit for their efforts.

Similarly, this tendency is also seen in seasonal activities, which tend to require very low level materials in areas that established players with currency reserves cannot be bothered returning to. Therefore, items like small eggs, which are typically found in outlying starting areas and low-level zones to which higher level players rarely have cause to travel, can be easily gathered by those willing to make a profit and sold through one of the in-game economic channels.

The key here is that most of these items are easy to acquire and are available to anyone with the time and knowledge of where to find them. In this sense, these goods are easier to get than those involved in crafting professions since they are available to anyone, and not just those who have selected particular professions. This type of good exists in contrast with other auction goods that are more limited, such as high-level weapons that can only be acquired by a large group of players in difficult dungeons, crafted items that require a particular profession with a high skill level, or items that are class specific, and that perhaps the seller is unable to use.

Generating profits

In some ways, this process is similar to those associated with game services such as power leveling and gold farming. Players who do not want to spend their time gathering eggs or deeprock salt or any other manner of farmable items simply pay for them at the auction house. However, the difference here lies in the fact that the profits in these services are likely to remain within the game.

In general, these are not big-ticket items. While there are profit margins, they are so small as to likely be of little interest to gold farmers with large quotas and others looking to make an offline profit. These activities are therefore more likely to be those of players looking to make a bit of extra money by picking up items, either from vendors or killing low level mobs, that are relatively accessible to them.

At the same time, the fact that these items can be acquired by any player brings too many variables into the sales process to guarantee a profit. Other players may simply elect to gather their own materials. Or, since they are not rare, there may be dozens of sellers offering the same item. As a result, while these selling practices are not likely to appeal to those looking to make large profits, it does provide a way for players to easily gain the items that they need and, for those who do the work, to generate a tidy in-world profit.