1. 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 http://www.manchester.ac.uk/cdi Centre for Development Informatics

2. 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)

3. Centre for Development Informatics

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

8. 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

9. 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

10. 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

11. Centre for Development Informatics Global Gold Farming Sites

12. Centre for Development Informatics Gold Farming Locations in China

13. 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

14. Centre for Development Informatics Gold Farming: The Internal Value Chain

15. 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

16. 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

17. 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

18. 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

19. Centre for Development Informatics Gold-Farming Research Report Paper no. 32 in IDPM Development Informatics working paper series: http://www.sed.manchester.ac.uk/idpm/research/ publications/wp/di/index.htmhttp://www.sed.manchester.ac.uk/idpm/research/ publications/wp/di/index.htm