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Report: Gold farming is a $500m industry

Comments [0] | 22 August 2008

A report from the development informatics group at Manchester University, led by Prof Richard Heeks, offers some insight into the shady practice of gold farming, endemic in MMOs. The desire to progress in an MMO, whether by earning more of the in-game currency with which to purchase extras, or moving up levels, has fuelled the industry. A user pays real money to a firm which uses workers in third world countries, an estimated 80-85% in China, to generate progress in the game on the user's behalf.

The paper reveals some fascinating facts about an industry which remains secretive, mostly because its work is usually in breach of the terms of service of the games. Most surprising of all is the scale: "In basic terms, gold-farming is a sizeable phenomenon. The rather wobbly-legged best guesses for 2008 are that 400,000 gold farmers earning an average US$145 per month produced a global market worth US$500m; but we could easily more than double the latter to over US$1bn. There are probably 5-10m consumers of gold farming services."

Previous coverage of gold farming has focussed on poor conditions which the workers face: paid an average of $145/month and expected to work 12 hour shifts, these standards fall far below what is considered acceptable of the west. Nevertheless, Heeks points to the sad reality that these are often better conditions than might be found in alternate employment: "Pay and conditions are poor by Western standards but as good or better than the alternatives that gold farmers face: in wage, in work content, and in other ways. We may not know how gold farmers' careers progress but we can say that most enjoy their work and that the oft-applied "virtual sweatshop" label is at best partial and at worst inappropriate."

I thoroughly recommend reading some of the report, available online. Realistically, gold farming is here to stay; MMOs create an artificial scarcity of virtual goods, which must be earned, and build in the need for 'grind' to progress to the higher levels. All that is good because it makes the games addictive, but for many, money spent on advancing online will be money well spent.

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