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Gold farmers are the application developers of World of Warcraft June 18, 2007

Posted by jeremyliew in gaming, mmorpg, platforms.

This weekend the NY Times does a color piece on the life of a chinese gold farmer. Gold farming is a topic that the BBC also covered recently, and that is the subject of an emerging documentary.

This an area which conjures up strong emotions. The “Chinese Goldfarmers must die” crowd has many adherents. The arguments that they make are that “It’s cheating” and that “They make it harder for ‘real players’ to get ahead by increasing competition”. As PC Gamer magazine said when they banned advertising by gold farmers:

For the record, PC Gamer’s official stance on these types of companies is that they are despicable: not only do they brazenly break many MMOs’ End-User License Agreements, but they all-too-often ruin legitimate players’ fun.

Opposing reactions have ranged from “You’re racist” to “Don’t blame the suppliers, blame the buyers”.

Blizzard and other game publishers have largely come down against goldfarmers for economic reasons, frequently banning accounts that they suspect to be used for gold farming. Quoting from the the NY Times article:

As Mark Jacobs, vice president at Electronic Arts and creator of the classic M.M.O. Dark Age of Camelot, put it: “Are you going to get more sympathy from busting 50,000 Chinese farmers or from busting 10,000 Americans that are buying? It’s not a racial thing at all. If you bust the buyers, you’re busting the guys who are paying to play your game, who you want to keep as customers and who will then go on the forums and say really nasty things about your company and your game.”

Interestingly enough, Gamerprice.com and the University of Sheffield did some research earlier this year that shows that this “hard line” on policing against gold farming is enforced far more on US servers than on EU servers, resulting in much higher prices for gold on US servers:

Real world prices of Gold on WoW US vs EU servers

Coincidentally, this weekend GigaOm reports that World of Warcraft has stopped growing (see chart below, originally sourced from Warcraft Realms, showing player activity at peak hours declining from a peak in January when the Burning Crusade expansion pack was released.)

WoW peak hours player activity

One wonders whether these two facts are related.

I posted last week about the Facebook platform where I quoted Brad Silverberg on the three elements needed to make a platform successful:

* wide distribution
* application developers making money
* good tools

Blizzard is clearly taking a stand on the second of these elements – it appears NOT to want “application developers” to make money. Second Life, vastly smaller, has taken the opposite approach.

Companies like IGE and Sparter will hope that Blizzard and other MMORPG publishers change their minds over time. While its always possible to live in the grey market, its much easier to do so out in the open.


1. Gold farmers are the application developers of World of Warcraft  »Technology News | Venture Capital, Startups, Silicon Valley, Web 2.0 Tech - June 18, 2007

[…] farmers are the application developers of World of WarcraftSource:Lightspeed Venture Partners Blog2007-06-18 […]

2. Adam - June 18, 2007

I don’t think the gold farmer should be forbidden. It’s the normal position, it’s the market, someone buy and someone sell.

3. Leon - June 18, 2007

Second Life and WoW have nothing in common other than the physical presentation. WoW is a game, with lore, story, and objectives for members, Second Life is platform for people to build content in and for. Blizzard sees themselves as having a responsibility to keep the game and the environment as fair and balanced as possible for its players and confining in-game success and progress to be the results of in-game efforts. One of the important aspects of this is keeping real-world imbalances of money from impacting the in-game play. That’s the point of the anti-gold farming stance.

As for the leveling off in peak-time popultions, it is in no way surprizing. There was an expected huge increase in time invested as experienced players rush to level 70. Now that many of them are there, weekly time investment is back to a more reasonable growth rate, and still growing over pre-expansion time in game. When those numbers start to dip below pre-expansion pack numbers, then its time to look to other game populations to see where those players went. But even when that porcess starts, the hardcore players will likley hang on for months or even years. EverQuest still has a considerable number of players.

WoW is not without threats as new games with new social models and interaction models (LoTR, Age of Connan, etc.) come online, but the threat won’t come from their dealings with gold farmers. It will come from the political and social impact of various technology changes, most notably the end-game raiding requirements, new dungeon attunement processes, and their impact on the casual player (who plays almost as much as the hardcore player, but keeps a diferent perspective.) The initial evaluation seems to be that the new content and rules make the game better for hardcore players but more difficult to succeed in for casual players. Only time will tell.

4. Beelzebud - June 22, 2007

Spoken like a greedy pig. WoW is successful because it’s a good game, not because vultures like you want to exploit it.

Go create your own good game, and you’ll make all the money you could ever want…

5. Thaum - June 22, 2007

I’m afraid you’ve entirely missed the real reason why gold selling is avoided like the plague in the US. If you can buy and sell in game gold, it then has a real world and tangible value. Any and all trade in the United States that has real world value is legally taxable.

Simple truth: if virtual gold has a real world dollar value, you are liable for real world tax on in-game income. If a US business is making profit off of the generation of virtual cash, then this profit is taxable. By extension, the INDIVIDUAL PLAYERS can be considered to be generating income by amassing in-game gold and you actually end up in the bizarre position of owing significant amounts of money to the IRS because you play a virtual video game.

It sounds absurd. It is absurd. At the same time, it’s the real world ramification of IRS interaction with this.

6. Jeff Clavier - June 22, 2007

You made it on WoWInsider Jeremy, grats for that :-).

I agree with your statement regarding the importance of the 3rd party application developers to a platform play, but I would not bring the gold farmers in that perspective. Mod developers (visual addons) are delivering value to users by leveraging LUA (the Wow scripting language) and are making (trivial amounts of) money through donations – very much like shareware/freeware developers do in the PC world.

Gold farmers are parasites of the game, and I don’t see peeps leaving/limiting their use of the game because of their inability of buying gold. The Burning Cruisade brought a slew of new content that made Wow interesting to play again for players who had sat on the sidelines for a while. Once these have reached lvl 70 and wrapped up quest lines, running instances, pvp, and daily reputation quests are pretty much the only things that are left to do, and that led people to go back to the sidelines. Until the next major extension. And once you have acquired your epic flying mount, and enchanted your gear, there is not much to spend money on.

7. MMODump.com » Are gold sellers the key to WoW’s continued success? - June 23, 2007

[…] out there. But a columnist at the Lightspeed Ventures site has a different take: he proposes that gold sellers are actually the independent application developers that are integral to the success of any online […]

8. PJ - June 26, 2007

The number of gold farmers in the game can be a determinant of the game’s success as well. Many gold farmers I know said that they would not want to farm in less popular titles.

9. Are WoW Gold sellers a key element for the continued success of World of Warcraft? « Comparing WoW Gold sellers and World of Warcraft gold sites - June 30, 2007

[…] focused on supporting technology companies) has an interesting thesis: he has the opinion that gold sellers are actually the independent application developers that are very important for successful online ventures, hence they fill a need the developers […]

10. Ken Marks - August 24, 2007

There are a number of questions..! let’s look at gold-farming for a sec…! A player buys a license; goes out and farms gold – then gives that gold to another player online. Is that illegal? Ok, 2nd scenario: guy buys a license, farms gold and then swaps gold for say, netherweave cloth… is this illegal? Now, there seems to be an interpretation of exchanging gold betweens separate “accounts”. OK, now we have the auction house – again a real life analogy of what happens when we want to sell something? Ok, next scenario, someone wants to “buy” gold from another person – only this time wants to pay for it in ‘real” money rather than WOW gold…! Slight shift in thought here – but, never-the-less, not much different than someone farming gold or, for that matter, faming netherweave. Get my drift here…!

Blizzard says that this messes with the overall economy of the game – nothing could be farther from the truth – after all, it IS WOW gold that’s at stake – with real life players out farming gold – just as I mine mithril ore. Am I a “bad” guy for whacking away at a file of ore with the idea in mind of selling it or exchanging it for goods. Prolly not…!

Another issue that bugs me a bit – is this “power-leveling” thing. According to Blizzard, only you (the license owner) can play the game. It isn’t computer specific – it’s “person” specific. Again, all this is is hiring someone to go out and “play” the game – while you’re taking a break. In the context of the game itself, someone, yes, is playing on your account. Which is THE issue. I want to let my 22 year old son play my game in my house on my machine – doing “my” work for me – and I have to tell him – “Sorry, that’s illegal. Blizzard is going to cancel my account.” hey, maybe I want to ket Karin, my daughter play and pay her $4.00/hour for doing drudge work.

Which brings up another issue – who’s reponsible for the account? I assume the only person who can play WOW is someone of legal age – as the license doesn’t allow for teenagers to sign the legal document. (The EULA and the TOU)… So, it seems that we have a whole lot of kids playing the game illegally.

This sounds a little ridiculous until you look at it from a larger perspective – that is, 6,000,000 players x $13.99/14.99 per month.

Fundamentally, the Blizzard gameplayers are know as a “class” – that is a group of similar interest. So, all rules have to be applied equally to that “class”.

The real bottom line is that if the “gold” farmed is, in fact, the property of Blizzard – then the “farmers” are stealing an asset of Blizzard for real cash. This is theft. And, by buying gold, you are now an accomplice to theft. *Right Blizzard!!!???* Not onl;y can they shut your account down – the can also take you to court for stealing their property and selling it for real cash… Extreme, yes – and still, the truth…

Bliizard’s issue has to do with the “spirit” of the game. That of good old work ethics – get out and do the work yourself. And, they’re trying to regulate the spirit of the game. But, is the game about money or is it about whacking the hell out of each other in battle?

In that we now have real money being traded for game artifacts, I can guarantee you, the goverment WILL step in eventually and require some sort of “override” on virtual transactions. Problem is Blizzard needs to get ahead of the curve and make it palatable for all rather than creating resistance and controversy. In the long run, we’d all be better off if we let the entrepreneurial market dynamics work here – as we have for eons. Otherwise, this is going to end being another regulated facet of the American economy.

With the advent of the Internet and the subsequent technologies that allow global interaction – we need to learn how to expand our thinking to include new ideas; after all, it’s much harder to regulate and control “exclusion” than it is to handle “inclusion”… We need to adapt to the way of the future – not fight it…

Take care…

11. Vince - October 3, 2007

Leon and Jeff are on the money, and Thaum makes a very interesting point worthy of serious consideration.

But Ken Marks: you’ve missed the mark. Regular, in-game, trade is a part of the game system and that is what is you’ve describe, what you failed to recognize is the point of the article.

The point about “gold-farmers” is that they then export the in-game profits to the external, real world; where it is traded for REAL money. And recycled back into the game system – this creates a massive and artificial inflation (as far as the game system is concerned).

In game inflation is the result of two factors – 1. the size and “age” or the population, and by age I mean the percentage of players in a realm with a lvl 70 character, and 2. Gold-farming for sale on websites. The first is to be expected and forms a part of the universe of the game system. The second is outside the game system, and thus Blizzard does it’s best to prevent it from interfering.

As to, the statement that gold-farmers are developers? I’ve never heard a more ridiculous assertion. They develop nothing but their own real world pocket-linings and the in-game inflation – there’s no value in that to the game system or the average gamer.

12. ige - November 28, 2008

It’s interesting just due to how big the market is. The recent wired article about the founder of IGE (brock pierce) said that IGE was pulling in nearly 250 million dollars a year at it’s prime. WoW…. (in more ways than one)

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