Chinese government bans gold farming

By Games Industry.biz Published 30 June, 2009

Millions of pounds will be lost.

The Chinese government has put an outright ban on gold farming, outlawing all trading of virtual currency for real money.

Since between 80 - 85 per cent of gold farmers are estimated to be based in China, the ban could have a massive impact on a trade which currently employs hundreds of thousands of people and is thought to generate between USD 200 million and USD 1 billion annually worldwide.

It's estimated that trade in virtual currency in China alone exceeded several billion yuan last year, a figure claimed to be growing at a rate of 20 per cent annually. One billion yuan is currently equal to about USD 146 million.

"The virtual currency, which is converted into real money at a certain exchange rate, will only be allowed to trade in virtual goods and services provided by its issuer, not real goods and service," China's Ministry of Culture and Ministry of Commerce conveyed in a statement, published by Information Week. The government justifies the ban by saying it's there to stop gambling and other illegal online activities.

The new ruling is likely to impact on many of China's 300 million internet users, in particular players of RPGs like World of Warcraft. The extent to which it will enforced though remains to be seen - some reports say that in-game gear isn't considered virtual currency and that selling virtual items for money may be allowed to continue.

Many online games have developed a virtual economy. In-game currency and gold farmers typically make virtual currency in the game then sell it on via PayPal to other players of the game.

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Comments (30) Latest comment 3 years ago

Comments threads automatically close after 30 days, but please feel free to continue chatting on the forum!

  • mingster #1 3 years ago

    damn where will i get my glod from now?

  • El-Dev #2 3 years ago

    Shotgun not telling Mr. T.

  • AphoticCosmos #3 3 years ago

    As part of the UK govt's new games-friendly [supposedly] stance, maybe they could employ the young unemployed in grinding gold. Brown did say yesterday that he wants to have everyone under 25 in a job if they can't find one after a year, so it's ideal. Recession-beating gold farming.

  • UncleLou #4 3 years ago

    I wonder why they did this. It's not as if it's something important in the grand scheme of things that a governement would have to worry about, and it certainly helps their economy. Weird.

    Still, good for MMOs.

  • wayn3h #5 3 years ago

    This has been sorely needed for a long time now. Good move.

  • Byzanite #6 3 years ago

    World economies collapse... :p

  • Vice.Destroyer #7 3 years ago

    You almost wish that chinese MP's had scandals like expenses to occupy their time. If it makes WOW a fairer experience worldwide, that's a positive, I suppose. I'd love to see how this would impact illegal online activity though. And why stop there? The world could learn from China and make it illegal to quit out of games like Street Fighter 4 when you're losing.
    :)

  • sneetch #8 3 years ago

    @UncleLou
    I wonder why they did this. It's not as if it's something important in the grand scheme of things that a governement would have to worry about, and it certainly helps their economy. Weird.

    Still, good for MMOs.

    I'm unsure if this applies to the companies running the on-line services or games (can I still buy Station Cash from Sony in China, for example?) or if it's just to prohibit third-party traders.

    If it doesn't apply to the companies that run those free-to-play MMOs, only to the gold-farmers then they possibly just want to crack down on black market activity: I'm not sure if and where http://www.eazywowgoldz. com files their tax returns, for example. :)

  • kangarootoo #9 3 years ago

    I always get confused whenever this subject comes around. Could someone please explain to me in small words why gold selling is a Bad Thing?

    I understand the whole "its cheating" thing, but who is it cheating exactly? If one player plays legitimately and another player buys gold, how is the first player losing out? I just don't see why honest-to-goodness grinding players would care either way what anyone else does with their time or money.

  • Entity #10 3 years ago

    Gold buyers will rush out and spend their gold (some) for overpriced items, thus sending the prices up for others(since the seller now has extra gold to play with). I'm not anti-gold buying, so I expect this comment to be thumbed down by a bunch of numpty-noreal-mates.
    Edited by 1 at 30/06/09 @ 13:22

  • kangarootoo #11 3 years ago

    @Entity

    Thanks for responding with a decent explanation, rather than just flaming me :)


    "Gold buyers will rush out and spend their gold (some) for overpriced items, thus sending the prices up for others."

    Does that really happen on a significant scale though? Terms like "rush out" are pretty emotive, but I suspect its not quite as dramatic as it sounds.

    I tend to see the average gold buyer as someone who simply doesn't have 6 hours a day to smack up badgers in a forest somewhere. They want to make progress, so they buy gold instead of earning it. Elsewhere is another player who spends 10+ hours a day playing, and at the end of the week both players have accrued the same amount of wealth by whatever means.

    At the end of the week they both "rush out" and spend their gold. Why is one having a negative effect on the economy but the other isn't?

    There seems to be this assumption that people that buy gold pour hundreds of real pounds/euros into it, when my guess would be they actually spend a few quid a month or something. I would be surprised if there wasn't a fairly level balance between value of gold earned and value of gold bought over the same time period.

    What this discussion needs is NUMBERS :)

  • Macross #12 3 years ago

    kangaroo - it can have quite a large effect and has done in the past causing hyperinflation making the game tough for regular players.

    gold farmers are also known for monopolising high yield activities / areas of the game so normal players cannoy effectively use them and also in a few extreme cases practice the art of stealing people's accounts.

  • Entity #13 3 years ago

    @Kanga
    The average gold buyer who wants to keep up with his/her fellows (may) have/has a certain reason to buy the gold in the first place. When they've bought said item, they may have gold left over which they use to level (for example) first aid. They buy up linen cloth, which with auctioneer, they buy all the cheapest leaving only the expensive stuff.

    People then pay over the odds for these items and try to make it up elsewhere by raising their prices, but that item may not sell this time.

    Also what Macross said about farming areas.
    Edited by 4 at 30/06/09 @ 13:35

  • Canyarion #14 3 years ago

    Wow, this is big news. BIG news. It will have a huge impact on both the Chinese and the virtual economies.

  • Lemming81 #15 3 years ago

    Heh, there goes WoW's subs. :D

  • kangarootoo #16 3 years ago

    @Macross

    Ok, if it can have a significant effect on the economy than I concede, that is a bad thing.


    "gold farmers are also known for monopolising high yield activities / areas of the game so normal players cannoy effectively use them and also in a few extreme cases practice the art of stealing people's accounts"

    This reminds me a bit of a pro/con drug debate. It could be suggested that if gold farming were a legitimate activity, the people running the farms would be honest businesspeople instead of sneaky criminals. Instead it is the prohibition of gold farming that drives it into the hands of dodgy individuals (much like prohibition has always done).


    The farming areas thing I'm not so clear on. Do you mean that gold farmers can literally clear all of the gold out of certain areas of the game? That does sounds a bit crap, but again I might suggest it is a result of the lack of regulation. A legitimate activity can be regulated, an illegitimate activity cannot.

  • Sunyavadin #17 3 years ago

    Interesting. It'll be nice not to get horrendously spelt spam messages, fifty per minute, selling credits. AO, they recently blocked players below a certain level from using the main chat channels in order to cut down on this.

  • Entity #18 3 years ago

    @Kanga
    To use FFXI as an example:
    Goldsellers would camp certain NM's(Notorious Monsters), only logging in when the spawn time was almost up. They would employ underhanded tactics to get the pull first, this created a situation where a thief's knife would cost millions of Gil to buy.

    Since SE changed that drop system for that particular item, you could now pick it up for around 80-100k (big big difference)

  • kangarootoo #19 3 years ago

    Ok, fair enough. Lesson learned :)

    I think it would make for an interesting experiement if Blizzard were to run a server where gold farming was legitimate and regulated. Don't ask me how you would regulate it, though I imagine an in-built gold trading app would allow you to manage quotas somehow... obviously I'm not sure of the details, but it would be interesting to see it tried.


    I am just generally of the mind that if you can't effectively police something, you should probably legitamise it so you are part of the process and can exert some control.

  • optimusprym8 #20 3 years ago

    Expecting a number of subscription / concurrency rates to nose-dive. But also it's good business sense to ban gold-farmers as they will go out and buy / register new accounts

    /cynic


    Have seen a number of MMOs practically ruined by the number of gold farming bots in some areas making it impossible to play as a normal player therefore completely destroying the experience

  • Kerome #21 3 years ago

    Since there was a request for numbers, I can relate my experiences on a wow server at the point where WoW came out in China... one week, prices for blue items were in the 80-120g range, then within two weeks, they pretty much tripled on all the highly desireable items. So yes, it very definitely has a significant effect.

    But really, gold farming's main effect is on the other side: farmers farming mobs means often players couldn't get quests done, prices for common mats on the AH were hugely low because there was a glut of farmers chasing little income, there were lots of players kicking around who refused to group or even speak and basically were a drain on the social experience, and so on.

  • sneetch #22 3 years ago

    @kangarootoo
    Thanks for responding with a decent explanation, rather than just flaming me :)

    LOL OMG learn stuff about things NOOB! LOLOL!

    Was that more what you were expecting? ;)

    The thing about gold farming is that it adds so much more gold to the economy that it does - as everyone else says - screw it up hugely inflating prices in WoWs Auction Houses, for example.

    During The Burning Crusade in WoW a friend of mine bought gold to get his epic flying mount (and this is a genuine friend of mine not me: at the time I was one of two alchemists on the server with a great raiding flask recipe, I didn't need to buy gold and I was enjoying being a trader :) ) he reasoned that it wouldn't really have an effect on the economy because it was being dumped into an in-game vendor and so was being taken out of circulation immediately but those gold farmers had made that gold in the auction houses so they had affected the economy before it got to him.

    As for legalising or legitimising gold-farming, there's no real need, if Blizzard wanted to then they could just sell the gold themselves then they don't need to farm anything: they can just create gold like some sort of magical gold-making fairy creatures. With a keyboard.

    I think you're right though, your choices are prohibit it and make it a lucrative black market activity or legitimise it and hopefully regulate it a bit better.

  • kangarootoo #23 3 years ago

    @sneetch

    I just figure that people don't like questions about this sort of thing. I was expecting some daft strawman response like "so you are saying all gold sellers should be able to shag my sister are you?!?"


    Ok, here is something that still doesn't make sense to me.

    "The thing about gold farming is that it adds so much more gold to the economy"

    It might be adding it to the economy, but its not adding it to the world. Gold famers are FARMING the gold, they aren't creating it out of dust and ashes.

    If it were a true economy gold would not be created per encounter, it would be limited and finite and the same gold would bundle its way aorund the world. My assumption is that if you go smack a gobbo in the head and find 3 gold in its pocket, that gold was CREATED so that you could find it. That there is the problem, and its of Blizzard's own creating. If there was only ever 1billion gold in the world, the economy could take a bit of farming.

    And another idea occurs to me (I'm on a roll). WHat is wrong with item trading and bartering. If gold starts to become valueless because of the effects of GF on inflation, people could just trade items and work out their own exchange rates. THAT would be a real economy.

    I suppose what I am suggesting is that the problem of gold farming exists in part because Blizzard have not actually created a real economy.

    Does Eve Online have gold farming? I don't play any mmos, but from what I glean I believe that Eve has a much more detailed and "real" economy. Does it suffer from the same issues, or do normal market forces keep things in check?

  • Macross #24 3 years ago

    eve does have gold farming, u can find belts full of macro miners and systems full of mission bots if you know where to look for them, while they drive the costs of low grade minerals and items down heavily (much to the irritation of many industrialists in game) these guys have a more limited impact though for 3 reasons:

    1) the server is much much bigger in population than in other games diluting the effect a little
    2) ccp will actually remove any "gold" you have bought as well as banning the seller taking much of the transferred currency out of the game again
    3) you can legally already exchange real money for "gold" in the game by selling subscription time you have paid for (know as a pilots license extension or game time code).

  • kangarootoo #25 3 years ago

    "the server is much much bigger in population than in other games diluting the effect a little"

    That assumes that the number of gold sellers and buyers is likely to stay fixed across several games. Rather, I would have expected the number to be a ratio of the total population. I.e. the more people there are in the world, the more buyers of gold there are and the more sellers there are to cater for them.

    E.g. if your population doubles, you would (all else being equal) expect the numbers of murderers, tax evaders and litter bugs to roughly double as well. Just as you would expect the number of charity workers and raffle winners to increase.


    Point 3 is interesting. I wonder how much that legitimising of the notion of gold buying has helped them manage the effects.

  • AphoticCosmos #26 3 years ago

    @ Kangarootoo

    It's certainly popular with EVE players, lots of people I knew when I played used to buy Time Codes and sell them on legitimately to fund their PvP or Industrial activities, which, like most things in EVE, come with a risk and price to pay should you get blown up.

    Lots of the larger alliances will pad their wallets with a mixture of Time Codes and illegitimate ISK [currency] though. CCP generally doesn't crack down on them because the alliances represent a significant minority of players who not only generate sub-grabbing headlines on occasion, but also pay a lot for multiple subscriptions, tickets to FanFest. Still, in general CCP does a good job at offering players alternatives as well as cracking down on gold sellers and buyers.
    Edited by 1 at 30/06/09 @ 16:26

  • Palmada #27 3 years ago

    "Millions of pounds will be lost."

    Brilliant.

  • bionutz #28 3 years ago

    Well EG should document better this article :( - what's with the sensationalist line here? Nothing will prevent dealing of virtual gold, but the use of virtual currency to buy real-life services and objects. Have a look on http://www .theregister.co.uk/2009/06/30/china_bans_virtual_money_to_bu y_real_world_goods_and_services/ for the full story. It's about another big (telco?) company issuing chips as a customer fidelity program which became so wide-used that it started to have an impact on the economy.
    Edited by 1 at 30/06/09 @ 17:22

  • stevetuck #29 3 years ago

    i would quite happily spend my days grinding gold for minimum wage :)

  • dylman #30 3 years ago

    I think we're all missing the big picture here.

    Where am I going to get all my cheap saronite ore from now?