Virtual gold broker "sells" for $10 million

My MMO Inc., has purchased for $10,000,000 — MyMMOShop being a company that buys and sells virtual gold, prestige items, and other virtual wealth. My MMO is a privately held company, so it's impossible to say whether 10 million actual dollars left one bank account and entered another (as opposed to a stock swap or other "sale"), but this is still pretty whacky news. I'm working on a novel about gold farming and I spent most of the last year talking to farmers, brokers, players, academics, game-runners, moderators and others who follow the field, and I've concluded that it's possibly the weirdest grey market in the world.

For one thing, a lot of games seem to have successfully ended the practice of gold farming by changing their level designs to make it uneconomical, even at the pitiful wages earned by farmers. In response, at least one group of gold brokers is now deploying keyloggers that rip off your Warcraft passwords and turn your character over to a hacker who strips it naked, cleans out its guild bank, sells everything, and turns the money over to another player (often another compromised account), who then launders it into the gold-brokers' coffers. Weirdest of all, these ripoffs never seem to go beyond mere virtual gold theft — one researcher I spoke to had interviewed 800 victims of virtual WoW robberies and not one of them reported any further intrusions, not into bank accounts, PayPal email, nothing. It's like breaking into someone's house, walking past the mountain of money on the coffee-table, and stealing the prized hockey-card from its frame over the mantel. The leading theory is that if victims show up at the FBI (or local equivalent) and say, "My virtual gold was stolen, help!" that they'll be patted on the head and sent away — whereas, "My bank-account was hacked" is more apt to get a response.

In China, gold farming has reportedly moved out of the big cities in the Pearl River Delta and out to the countryside, where it has a reputation for being a low-capital way of getting rich: just buy some PCs, find some local boys who want to play games all day, and alienate them from the product of their labor. Talk about capitalism with Chinese characteristics! However, the crashing prices of gold and the increased concentration at the brokerage houses (who have reportedly frozen out much of the East European and other non-Chinese firms by conducting all trades on IM in Chinese), this turns out to be a source of shattered dreams more often than not. But there's movement on the international front: some Chinese farm-runners are squeezing more profits out of their investment by outsourcing the labor to Vietnam.

There don't appear to be many female gold-farmers to speak of at present: partly this seems due to the outstanding opportunities that loomed for young women in China (until recently at least). When you're the cream of the workforce in the richest part of the most populous nation on earth, there's not much reason to get into gold farming for a living.

So I don't know what actually happened with this buyout. Everything the target company sells is illegal, in the sense that gold-farming violates every major game's EULA. But the big brokerages have accomplished the near-impossible: concentrating buy/sell power in a marketplace that requires virtually no capital to enter and no skill to undertake. Maybe these guys have some important part of the market sewn up — or maybe it's just noise in a deeply turbulent system.

Hunter Crowell, media relations agent for My MMO Inc., says his company purchased the site in reaction to the tumultuous economic climate. Virtual goods, he says, are one of the few investment vectors that have not become wildly devalued as part of the massive market fluctuations of the past few months.

As Kotaku points out, the real question here is how much of the $10 million will see its way into the hands of those doing the actual gold farming. As the enterprise is inherently a gray market, I wonder what, if any, incentive exists for the higher ups at these firms to not simply pocket all the cash in the continued exploitation of the grunts in their employ.

Gold Farming Site Sold for $10 Million