December 7, 2012

Gold Farming

Mankwin in his very famous text book, the Principle of Economics, defines economics as "the study of how individuals, firms and government make decisions to manage scarce resources." This points out that it is because of limited resources that people are facing trade offs and thus begins a virtual economy.

However, this scarcity maybe lessened through virtual economy.


A major issue within the virtual economy is gold farming. By gold farming, I mean the boring bits, like killing monsters over and over and mining or collecting herbs to get gold (the currency in on-line games). This hurts the scarcity of currency. With so many "farmers" earning golds, the economy structure in the game is damaged and sometimes even ruined. The farming actions earn much more gold than the normal playing actions and can create an inflation within the game society experience. Because of the inflation, the gaming company trying to balance the virtual economy would increase the charges of services within the game and decrease the total production of golds. For example, the companies would choose to increase the price of fixing gears from 1 gold 50 silvers to 3 golds and they might drop the award of killing one monster from 89 silvers to 49 silvers.  Because of this, players will need to kill more monsters or do more boring collecting jobs to balance their accounts while other players would seek the easier way and buy some golds from the gold farmers to save time; this increases the demand of golds, causes more gold farming, and establishes a vicious cycle which ruins the game's economy in the end.


What is more, this action hurt the fair gaming environment. For instance,  Blizzard believes that what game is trying to provide players is a equal situation that cannot be reached in normal life. Gold farming action in this way is an action of cheating. It related the virtual character directly to the real wealth of players. However, this action is not getting enough attention right now. A lot of people purchase golds from gold farmers and this secondary market (which usually sell golds) is extremely big. It is very difficult for the gaming companies to fight against this action without harming themselves in the process. Even if these companies did take action, the gold farming studios would only return later on when gaming companies have turned their attention elsewhere. In order for this problem to be regulated, criminal action may need to be taken in order to prevent the harming of the health of virtual economy.


Some researches and reports have been published talking about this issue. We introduce some of them here:





The Life of the Chinese Gold Farmer

By Julian DibbelThis article talks about the life of the Chinese gold farmers in good detail. Also, it introduces the development of gold farming, the reactions of gaming companies, and the problems caused by their actions.
"It was an hour before midnight, three hours into the night shift with nine more to go. At his workstation in a small, fluorescent-lighted office space in Nanjing, China, Li Qiwen sat shirtless and chain-smoking, gazing purposefully at the online computer game in front of him. The screen showed a lightly wooded mountain terrain, studded with castle ruins and grazing deer, in which warrior monks milled about. Li, or rather his staff-wielding wizard character, had been slaying the enemy monks since 8 p.m., mouse-clicking on one corpse after another, each time gathering a few dozen virtual coins — and maybe a magic weapon or two — into an increasingly laden backpack...."


Current Analysis and Future Research Agenda on "Gold Farming": 
Real-World Production in Developing Countries for the Virtual Economies of Online Games

By Richard Heeks
This is an academic paper that discusses gold farming. It is divided into five sections: the economics analysis of gold farming, the analysis of gold farming from the perspective of industrial sociology, the enterprise analysis of gold farming, the development analysis of gold farming, and some other sociological analysis of gold farming.
"This paper reviews what we know so far about gold farming, seeking to provide the first systematic analysis of the sub-sector.  It assembles available data at the sectoral, enterprise and worker level.  Five main analytical lenses are then applied.  Economic analysis shows how exchange rate variations and scale economies do and do not impact gold farming; and the strong influence of information failure in the purchase of virtual items: known as 'real-money trading'."


The Business End of Playing Games

By Richard ScottThis is an article about gold farming actions, particularly in the World of Warcraft. It talks about Blizzard's (the company produces the World of Warcraft) attitude towards game farming: a cheating action that needs to be banned.
"...'It's like in the real world - in the real world there are people that try to cheat and last month alone we banned 100,000 accounts for illegal gold trading or cheating in the game, and it's very important for us to keep a fair gaming environment,' said Itzik Ben Bassat, from Blizzard, the company which created the game...."





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