World of Developmentcraft: academic paper on gold farming as a development activity in poor countries

On Salon, Andrew Leonard ruminates on a new paper that tries to analyze gold farming (doing repetitive in-game tasks to earn money that is sold to players) with international development. Richard Heeks's (University of Manchester) new paper "Current Analysis and Future Research Agenda on "Gold Farming": Real-World Production in Developing Countries for the Virtual Economies of Online Games" is the first paper to explore gold farming from a development perspective, and as the title suggests, it is mostly a literature review and an attempt to define the areas for future research on the topic.

This was a pure-gold find for me, as I'm working on a young adult novel called For the Win that expands my story Anda's Game (about union organizers who sign up gold farmers in the developing world), and I've been reading everything I can get my hands on about gold farming. Heeks's paper is absolutely enthralling (for me, at least), a very broad and thorough survey of what we know, what we think we know and what we definitely don't know about gold farming -- it was even worth putting up with the world's least readable typeface (though it gave me a splitting headache). (Coincidentally, Andrew Leonard is the Salon editor who bought and published Anda's Game in the first place).

Continuing survival of the sub-sector also relies on overcoming some severe information failures – absence, uncertainty, asymmetry, and communication problems. These have produced many examples of both opportunism and adverse selection, with trading bringing uncertainty, risk and negative consequences. As expected, these seem likely to have suppressed real-money trading well below its "natural" level, and to have induced sellers into (potentially-hollow) assertions about their trustworthiness. Because of its virtuality, though, real-money trading has seen only a little of the localisation and intermediation one might otherwise expect in the presence of such information failures.

Thirdly, continuing survival of gold farming relies on dealing with the many threats it faces. Some of these are business-generic such as ease of entry intensifying competition, or rising labour costs. Others are business-specific but just a low-level nuisance such as character killing or account and IP banning or fraud. Others still – patching, game redesign and marketing channel blocks – require constant innovation to stay one step ahead. And a final category is much more serious such as game company substitution or legal action by governments or game companies. Game companies probably take such action through a mix of economic, moral and personal in-game experience rationales. But one must recognise that gold farming bringsa benefits to these companies, while action against gold farming brings both anticipated and perhaps unanticipated costs.

World of development economics Warcraft, Current Analysis and Future Research Agenda on "Gold Farming": Real-World Production in Developing Countries for the Virtual Economies of Online Games (PDF) (Thanks, Patrick!)


  1. How about an academic paper about teaching the poor how to become doctors to save people’s lives. GOLD FARMING? That’s a way to keep the poor slaves forever.

  2. The ire that people have for gold farmers has always amused me, particularly since it’s mostly driven by Blizzard’s historical design errors (competition for certain spawns – now largely irrelevant) and marketing spiel (their claims about inflation are strongly disputed by real economists).

    It’s worth realising that this situation has been deliberately engineered by the game companies for legal reasons. If in-game items are tradeable for real-world money, then they have real-world value. If in-game items have real-world value, then no matter what claims they make in their EULA or TOS, real-world law applies to them, and the game company can be sued for their screwups, or ordered by a court to make changes to the game state as part of a lawsuit between players. This would cut into their profit margins, so they try to block it by pretending that in-game items don’t have real-world value (whether or not this would actually stand up in court is unknown). A PR campaign against real-money trading is a necessary element of this pretence.

    They will probably lose this battle. Governments are starting to take an interest in this economy, due to its scale. No government can resist taxing something, so it’s just a matter of figuring out how to do it. Once it’s being taxed, it’s real-world value, period. At that point the gold farmers are instantly transformed from evil game-destroying villains into capitalist heroes living the American Dream. They’re doing nothing that isn’t done by every other large corporation.

    I look forward with great amusement to the game companies flip-flopping on this issue and trying to get in on the taxing action themselves.

  3. #2: The ire towards gold farmers is largely based on the fact that they’re not “farmers”. They’re scammers that steal peoples accounts then sell the gold.

  4. This is what happens when an economy needs constant expansion to survive. after you already manufacture the things you really need you start making products that are imaginary. In addition to the obvious examples of frivolous consumer items and vanity products for which demand is artificially produced, We also have imaginary health products, imaginary political causes, and imaginary Technology

    It was only a matter of time before we have an imaginary economy demanding its own imaginary businesses, because there is absolutely nothing in life worse than not having a job.

  5. #3 — EXACTLY!

    if in-game stuff gets treated like real-world stuff, let’s see how goldfarmers like being charged with grand theft, or identity theft. if they were out there in azeroth “living the american dream,” they would be killing 200 yetis in winterspring to get those 12 damn pelts, like i had to do. goldfarmers are scum, and deserve every hinderance possible.

  6. Despite how much illegality is placed on goldfarming or the like, the fact that there can be real world value on gold and items makes the aquisition of them to some people a worthwhile venue for commerce. If I am willing to spend money on something, there will be someone who WILL procure it for me to buy, as long as the money is worthwhile (look at the drug trade, the sex trade). If this means getting a group of kids together stuffing them in some warehouse to play videogames 16-20 hours a day and handing the gold over, and then sell that gold to people who will buy it, then damn its worth while, its even cheaper at least in the short term, to hack accounts of people with lots of gold and sell that. The fact these things can get reasonable amounts of money for people, means its not likely to go away anytime soon. It doesn’t matter the environment this happens in, just that commerce can be derived from it. Governments see this too… and they like all people interested in making an easy buck want a piece of the pie. Studies of how emergent economics arise are always interesting… and how they reflect the actions of people and the world around it.

  7. As someone who occasionally plays MMORPGs, I can definitely say gold sellers do not make the game more enjoyable. Many of them are scammers, and even if they are dealing in “honest” transactions, selling items for money is explicitly against the game rules for many very good reasons. The article ignores both of these things.

    Yes, people in Asia and Africa need jobs. Gold farming, spamming fake viagra, and Nigerian 419 scams are not good solutions for employment in either the short or the long term.

  8. Academic study of gold farming is a good thing, just as academic study of diseases is a good thing, but gold farming really needs to be eradicated. It’s damaging to the integrity of the game. Supposing we played Monopoly, and I offered someone $20 *real money* for a property; regardless of the wisdom of this offer (and that depends what, if anything, is riding on the game), if it can be seriously made and seriously contemplated, the “reality bubble” of the game is popped. It would no longer be Monopoly as such.

    Even in games such as Poker, played with real money, the “ludography” is maintained by requiring players to pony up a set amount of money to play, and leave the game once that amount of money is exhausted; otherwise, a player with $100,000 to spend has absolutely no meaningful chance to lose against a player with $1,000 to spend.

    And the consequences of that, are that the game will not be *fun*. If you can’t lose, you can’t win. “Quality of game experience” is a distinct ludological question: “how good was that game?” In general, the answer is – the game is better for having allowed us to exercise greater skill, for us having exercised greater skill, and for the margin of victory between myself and my opponent being as narrow as possible, because that means that *every decision counts*.

    If you win Scrabble 356:150, it pretty much wouldn’t have mattered if you let your cat choose your tiles for the last half of the game. The skill and luck gap implied by that score distribution renders the game moot. It’s a pounding, which, unless you are a bully, is boring. But if you win 356:340, that’s a hell of an exciting, closely-fought game. Every placement counted. The game *mattered*. A close game is a good game.

    Allowing external factors like real-world money into the game environment can only compromise the game integrity. Factors such as lag have an undesirable level of influence already, to let anything else in only makes matters worse.

    (On the other hand, and perhaps to partially defeat my own argument, in many MMOs such as WoW, players have advantages over each other by virtue of real-world friendships: when my friends join the game, I will give them small gifts (a set of 14-slot bags, usually), and invite them to a well-established guild.

    Also, I will often escort their low-level characters through instances. Even if I take an alt character of a similar level with them on an instance run, they get a major advantage over, say, a completely inexperienced group. But this seems more acceptable to me, and I’m not completely sure why, than paying real-world money for gold and items. Perhaps because *I* put in the time in the game to earn levels.

  9. Yeah anyone who has played WOW can tell you that there arent any gold farmers. People just hack your account and sell your stuff, trade your gold and delete your characters.

    These arent entrepreneurs, they are hackers.

    People arent running around gathering mats and selling them to others on the AH, the farms that have previously been reported on are 20% people doing dailies (an easy way to get around 300 gold a day) and 80% hacking accounts.

  10. Gold farmers are “scum”, “scammers”, “hackers”?

    Has anyone who says this actually, in real life, met a gold farmer?

    This is a) vitriolic opinionation most likely based on little or no objective evidence; b) a form of virtual racism. Think of the real-world equivalent – giving damning verdicts on whole groups whom you’ve never met. That’s how wars get started.

    As for gold farmers bursting virtual bubbles; yes, that could be a problem for those who play with an immersion motivation, but it’s not for those who play for social or for achievement motivations.

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