Monday, August 25, 2008
Gold Farming $500 Million Business in Game Worlds
I've been playing console games since 1982, but I didn't really get into the business of computer games until 2002 when John and I were working on our book about virtual worlds. Since then, I've been continually fascinated by the business of games -- particularly the economies that naturally spring up.
Edward Castronova, a professor at Indiana University, has done a series of studies on the in-game economies of virtual worlds which have surpassed some of the largest economies on the planet.
Let me be clear: when I am talking about economies…I mean actual money. Not virtual money. Players are generated actual revenues in a completely virtual environment to the tune of $500 million a year in gold farming alone.
Well, it's not exactly players who are creating all the revenue. Gold farming works basically like this: a company hires low-wage employees to continually create easily obtainable wares -- in this case gold -- 24-hours a day. The company then sells the gold on an actual market, charging a set price -- say $20 -- for a set amount of gold.
Players who need the wares to advance in the game are willing to shell out cash in order to save time and jump levels, where oftentimes the fun stuff happens.
Much of the gold farming happens in China, according to a recent study, and game makers are none too happy about it because it subverts the idea of the game. Like any other government, game makers have tried to regulate the trading of commodities through stock markets while others have flat out banned the practice.
In other words, just like a developing economy game companies are each struggling with how to handle a population hell-bent on doing their own thing.
Posted By Brad at 10:20 PM
Permanent Link: Gold Farming $500 Million Business in Game Worlds
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