Centre for Development Informatics Gold Farming: Real-World Production in Developing Countries for the Virtual Economies of Online Games Richard Heeks.

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Presentation transcript:

Centre for Development Informatics Gold Farming: Real-World Production in Developing Countries for the Virtual Economies of Online Games Richard Heeks Centre for Development Informatics, IDPM University of Manchester, UK Centre for Development Informatics

Background to Gold Farming Production for real-world trade of virtual goods and services within online games MMORPGs: massively-multiplayer online role-playing game (World of Warcraft, Runescape, Eve Online, Lineage)

Centre for Development Informatics

Understanding Gold Farming Gold farming: making and selling virtual currency Power-levelling: playing avatar from low to high level

Centre for Development Informatics The Development of Gold Farming: Phase 1 Subsistence Production: from late 1970s Barter: from early 1980s – commoditisation of virtual items with both use value and exchange value Monetisation: from late 1980s – sale of items for real money; specialisation in gold market gardening

Centre for Development Informatics The Development of Gold Farming: Phase 2 Three events of 1997: Ultima Online; eBay; Asian currency crisis From petty to capitalist commodity production: wage labour Globalisation and offshoring: from 2002

Centre for Development Informatics Why Study Gold Farming? 50m players; 50% growth per year; US$50bn market World of Warcraft as a financial and cultural phenomenon; 11m subscribers Real-money trading market size: baseline 20m x US$10 = US$200m BUT excludes Asia and F2P gaming Employment estimate: 0.5m x US$150 x 12 x 2 = US$1.8bn Most-recent estimates: 1m jobs; US$5bn trade

Centre for Development Informatics Global Gold Farming Sites

Centre for Development Informatics Gold Farming Locations in China

Centre for Development Informatics Why China: Competitive Advantage Analysis Firm Strategy, Structure and Rivalry Factor Conditions Demand Conditions Related and Supporting Industries Chance Government - ICT Infrastructure - Low Cost Skills - Global Demand Growth - Local Game Players - Cybercafes - Local Games Industry - Post-1992 Enterprise Growth - Low Concentration, High Competition - Infrastructure - Laissez Faire - Koreas Proximity

Centre for Development Informatics Gold Farming: The Internal Value Chain

Centre for Development Informatics Gold Farming: The External Value Chain Gold Farmer Gold Farming Firm Exchanges Player- Buyers Other Players Game Company Power Chart Local ICT Suppliers Governments and Other Local and Global Institutions Services / Virtual Items Money Fansites Brokers ProducersIntermediariesConsumersOthers Other Inter- mediaries

Centre for Development Informatics Anti-Gold Farming Actions Account banning: hundreds per week Patching: including nerfing Game redesign: e.g. Jagex and Runescape IP banning Channel blocking Legal action

Centre for Development Informatics Developmental Impact of Gold Farming Economic: job creation; foreign exchange inflow; poverty reduction Social: jobs for a problem social group The virtual sweatshop label: c.US$150 per month; 10-/12-hours x 7 days per week; no holiday/sick pay; basic food and accommodation included Views of the gold farmers

Centre for Development Informatics The Future Gold-Farming Research Agenda Fieldwork on the basics Further research e.g. livelihoods analysis; enterprise strategies Illustrative of: Cybersourcing Liminal ICT work Key questions: current status; future growth; development impact and strategies

Centre for Development Informatics Gold-Farming Research Report Paper no. 32 in IDPM Development Informatics working paper series: publications/wp/di/index.htmhttp:// publications/wp/di/index.htm