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Market for Virtual Game Goodies Growing

Posted on: Tuesday, 26 August 2008, 07:05 CDT

A study found half a million people make money in poor countries by selling virtual goods to players in online games.

The growing practice is known as gold-farming; researchers from Manchester University studied the practice.

The industry employs about 400,000 people who earn $145 per month on average. Eighty-percent of workers are based in China.

Researchers said the practice is flourishing despite efforts by game companies to crack down on the virtual good trade.

Professor Richard Heeks, head of the development informatics group at Manchester who led the report, said gold-farming had grown to a major economic sector in many developing nations.

"I initially became aware of gold-farming through my own game-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 turned out to be tens of thousands."

In several online games virtual cash is hard to find, so many players turn to gold farmers to get money to outfit avatars with better gear, weapons or a mount.

Gold-farming operations even offer other services like "power leveling" in which they assume control of a player's character . They are then able to turn it into a high-powered hero quicker than the original owner could manage.

Heeks believes the sector could be larger.

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.

Any one player caught engaging in gold-farming 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 organizations are unaware of," he said.

Heeks said gold-farming was comparable in size to India's outsourcing industry.

"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 said gold-farming is a form of "virtual offshoring".

"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 which has spread to the "Third World" far more than we typically realize."

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 in the marketplace.

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

Gold-farming is so lucrative that criminal gangs were cashing in on it, said Mr. Davis. There were also major problems in tracking down and prosecuting those behind the gold-farming, he said.

Davis said, game makers are trying to limit the amount of trade in game gold and gear, but few are having success.

"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."


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On The Net:

Development Informatics Group

Prof Richard Heeks

Gold Farming Report

Source: redOrbit staff

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