There are gold farmers or gold farms in other countries as well, such as the Philippines, Indonesia, and Mexico. However, they do not approach the scope and scale of the Chinese farm industry.
Ge Jin, a 30-year-old Shanghai native, has made a documentary on "gold farms" in China as part of his doctoral research at the University of California, San Diego. He is one of the many researchers who have investigated how farm owners manage their production and distribution of virtual commodities across the border between the virtual and the real as well as the borders between nations. His main aim in his research was also to delve into the background and lives of these workers: "I also tried to find out what this job, combining work and play, means to Chinese gold farmers and how it feels like to live at this peculiar intersection of the virtual and the real."
Ge Jin's research is documented in his periodical online news articles, which can be found at Consumer Studies Research Network
South Korea is also notable for its level of gold farming, so much so that South Korea is currently considering legislation to regulate the exchange of virtual currency.
The common perception by the community is that gold farming is damaging to the economy as a whole. For those interested in farming gold via solo activity (or when purchasing top-end items), this can be true. On the other hand, some in-game activities can be specifically tailored to take advantage of such situations, and tend to be more profitable as a result of farming activity (for example, the decreased cost of farmed items is counterbalanced, to a degree, by the subsequent increase in demand for those items).
Many companies have attempted to block the use of gold-farming services by specifically stating in their End User License Agreements ("EULAs") and Terms of Service that any and all game assets (from the player's characters themselves, to any items that they may be carrying) remain the sole property of the company itself, and taking aggressive action to close the accounts of any that are found to be using gold-farming (or similar) services. The true impact of such measures is unknown, although it is not uncommon to see a major game publisher announce the closure of accounts numbering in the tens of thousands.
There is a growing backlash against gold-farming services. Many game-related sites exclude advertisements from gold-selling services. An organization has even been established as a resource for webmasters who wish to avoid gold-seller advertisements. Other sites sell information on how to make gold quickly in-game, teaching gamers the secrets of gold-farmers. In addition, many fansites that use the Google Ad service to pay costs ask users to report gold-farming ads shown in these adverts. This short-cuts the farmers, while keeping players aligned with the EULA.
Ultimately, total money supply in the game is controlled by three factors:
What gold farming ultimately does to the games economy is cause "economic growth." More players are playing more often, which generates more currency and more items and creates value added services. This can add to the volatility of the markets but because the economy is ultimately balanced by a computer algorithm it does not necessarily result in spiraling inflation. It is more likely to cause a combination of inflation/deflation by redistributing wealth.
The most prominent effect of gold farming on the game is probably the way that it redistributes wealth. When players can buy gold with real-world cash a concentration of wealth occurs where more of the wealth is controlled by fewer players who can afford it.
Because "it takes money to make money," players with extra gold can use that gold to become still more wealthy. It's not unlike the real world where the more investable cash someone has, the more money they can make with it by investing it for a return. In economic circles this phenomenon is related to differential accumulation theory.
The pool of wealthy players will also tend bid up the prices of the rarest items, because those are the items whose supply players have the least control over. They're generated at fixed low rates in the game (e.g. "drop-rates"). At the same time the prices of more common items will drop because their supply rises.
Players trying to work their way up through the ranks by producing their own goods and services run into deflation, often dumping items for little or no profit or even sometimes for less than they cost to produce. It takes those players longer to acquire the rarest and most powerful items.
These strategies are effective because players are bypassing the currency system. Shared and bartered goods are unavailable to those who have purchased gold. The reason that sharing cash also helps is that more cash is in circulation at any given time because people will save less. It's comparable to the effect of a central bank that lowers interest rates and expands credit. The total money supply has not changed, but more of the money is being exchanged.
In order to prevent legal entanglements and EULA violations, eBay has recently delisted all virtual property auctions. Items and property related to Linden Lab's Second Life are exempt from this policy. eBay spokesman Hani Durzy explained the logic behind the apparent double standard: "If someone participates in Second Life and wants to sell something they own, we are not at this point proactively pulling those listings off the site...We think there is an open question about whether Second Life should be regarded as a game."
It is possible to attack the gold-farming problem by data mining transaction logs for suspicious activity. This forces gold farmers to obfuscate their activities by moving gold through many different accounts on its way to the paying client. However, it is always possible to trace the movement of objects in an MMORPG, so all clients can be identified whenever a gold farmer is found. Currently not every MMORPGs appears to be banning clients just for buying items from gold farmers in exchange for real-world items or money. However some MMOs such as Rohan:Blood Feud, RuneScape and Guild Wars actively ban accounts. Similarly Final Fantasy has also begun banning large numbers of accounts for Real Money Trading (RMT).
In response to on-going customer complaints World of Warcraft has recently banned in-game advertisements for gold farming, as well as applying a patch to minimize in-game spam. Blizzard has now also taking legal action actively pursuing cases in court to those who do, and has been banning large numbers of accounts for farming virtual items for exchange with real world money. On May 30th, 2007 players of the game launched a class-action suit against IGE for breaking WoW's EULA and damaging the game for 'honest players'. These actions are reflected in Blizzard's Terms of Service, 'Ownership/Selling of the Account or Virtual Items' which clearly disallow sale of transfer of Virtual Items in the "real world IGE, however, counterclaim that since player data is owned and held by the MMO company players have no legal ownership of their own characters - or possessions - and therefore cannot demonstrate material harm or damages, and therefore have no standing to sue..
According to recent posts on its forums Blizzard now views gold-farming as a bannable offence and will be seeking to remove all such accounts that sell WoW content for real money from the game.
Some MMOs also take action against the buyers of farmed goods, with varying measures being taken. Members of the Eve Online GM team have expressed a preference to simply remove any purchased game currency from the buyer.
Awakening to this widespread practice in many online games governments are now investigating these practices. In Australia the ATO has already stated it views all such income, whether from the real economy, or virtual, as taxable income. The U.S. Congress, too, in a turn-around on its views in 2006 is now contemplating once again applying a tax on virtual goods which are traded for real world money, similar in a sense to the tax applied to goods traded online. MMO Companies that wish to allow any legitimate trade may then be required to build in systems to track all such trades.. For the IRS in the United States taxation of virtual assets has become not a matter of if they will be taxing them, but when taxation will begin.
Law Enforcement Agencies have also begun to take an interest in investigating and tracking these activities, not only because of fraud and money laundering opportunities , but because these agencies will be required to take a view since public policy has shifted to include virtual assets as real world income revenue for many governments. Internet Security Company Symantec recently made predictions that that "These transactions can be conducted worldwide without the oversight that typically accompanies international bank remittances." They then gave the example of how the China Central bank & finance agencies has called upon companies to stop trading in QQ coin "presumably to curb the unregulated exchange of currency.. Apparently a lot of the activity so far has been targeted at Second Life and World of Warcraft known to be popular targets for trading in game gold & items. Further according to Symantec increasing use of tools claiming to enhance player's gaming is being used to illegally install software on players computers to steal players accounts, "Gamers will also use cracked software that allows them to run games without having the disc in the machine. These all make it much easier for cyber criminals.
The Korean government recently has enacted legislation that has banned the exchange of virtual goods for real money. Though websites who conducted this trade banded together to mediate with the legislators which eventually resulted in the bill only outlawing use of game exploits, prosecution for which could result in a $50,000 dollar fine and jail for up to 5 years.
In more significant development for gold farming operators throughout China, the authorities' concern over recent fraud cases has led, according to its news agency, to "growing calls for virtual property to be defined and bound by laws that will protect it from theft and plagiarism". Wang Xiaodong, a lawyer on intellectual property rights (IPR) from C&I Partners (Guangdong), told China Daily yesterday believes a specific law crafted by the Supreme Court of the People"to protect virtual property in the future.
In a recent move the British Government is now seeking "firmer hand in policing activities within virtual worlds":
Issues such as child pornography, identity fraud, money laundering and copyright infringement in virtual worlds are all "causes for concern" that need to be controlled, a government minister said. ...
Lord Triesman refused to be drawn on whether specific legislation was planned, and also declined to comment on one of the issues most keenly debated by observers of virtual worlds, namely whether money made in such worlds should be taxed. That was a matter for the Treasury, he said.
Moves by governments to further involve law enforcement in virtual worlds could conceivably have a direct impact upon 'gold farming' especially where the trade in currency or items is unlicensed and therefore illicit in the of income revenue agencies.
Further pushes to regulate 'virtual currency' now are being argued for in online law services, such as Internet Business and Law Centre:
From the perspective of law enforcement, it is important to know the location of servers which provide virtual money services, especially since they may be located in a different country.
Law enforcement needs to influence legislators when drafting future legislation. This is important as law enforcement will need powers to recover data which is stored in a different jurisdiction from where the offence is being investigated.
Barriers need to be broken down and trust built up between industry and law enforcement to make service providers more accountable for data crossing their networks.
Making MMOs accountable for data-exchange tracking virtual items & currency will likely require a very different approach towards gold farming, both in games where sale of items of permitted by the terms of service such as Second Life, and where item trade is prohibited by a virtual world's Terms of Service. Whatever the outcome of these changes it's likely that what goes on in virtual worlds will be of greater interest to governments and law enforcement alike.
As far as gamers farming items for themselves goes, in China, gamers under the age of 18 will have difficulty playing online for the long hours required to farm any significant amounts. According to a CNBC news report, a new mandate by the Chinese government requires online games to have monitoring software for users younger than 18 with built-in warnings to stop and exercise after three continuous hours of play, and to stop playing after five hours. Gamers must wait a minimum of five hours before returning to gameplay, or the system will not reset. Minors who violate this new mandate may be required to attend an Internet Addiction Clinic if they don't reform. Also, to play online, gamers will be required "to register with a real name and ID card number so that the system knows if they are under 18 or not.
Growing for Gold; FARMING, Fishing and Oil Used to Dominate the North East Economy. but Now the Region Is Doing the Business across a Range of Sectors, Finds Craig Cowbrough
Jun 13, 2002; Byline: CRAIG COWBROUGH GRAMPIAN truly is a land of contrasts, with the traditional industries of farming and fishing thriving...