Last week, we kicked off our four-part weekly feature series on gold trading - the grey market for in-game currencies, services and items in MMOs - with an introduction to a shady business that's outwardly condemned by players whilst being supported by 30 per cent of them.
Future instalments will look at real-money trading from the perspectives of MMO players and developers, but this week, Nick Ryan talks to the the farmers, spammers and website entrepreneurs who fuel this trade. Are they evil hackers and credit card fraudsters, downtrodden workers, or neither? And what do they have to say for themselves?
What do "gold sellers" actually do? Sit in a den somewhere, plotting crimes and flogging victims' credit card details, in order to fund their drugs and prostitution empires ... or is the picture of the hard-pressed Chinese worker on the edge of starvation wages more accurate? The truth is, probably, a mixture of both, with many "legitimate" gold farming and selling businesses keen to distance themselves from the criminal element in the industry. No-one knows for sure, because that industry is so fragmented and located in distant cultures like China.
Gold sellers, or real money traders (RMT), make their cash in three main ways:
One: selling in-game currency. This is similar to buying foreign currency in the "real world". You buy via a gold seller's website at a clearly stated real-to-virtual currency exchange rate, with payment typically made via PayPal or credit card. You sometimes get the cash sent via in-game mail, but since MMO companies tightened up their procedures you often get a message and are told to meet one of the gold farmers in-game. The money is then delivered. According to just one estimate, in mid-2008, you could buy five million RuneScape gold for around USD 20.
Two: power-levelling. Payment is again made via a web site but this time you give the gold-farming firm your username and password. Their staff then play your character, levelling it up. Once the character has reached the agreed level, it is handed back. This is where many MMO firms contend that hacking comes into play: you're trusting a virtual stranger with all your details.
Three: selling accounts. "Want to play an MMO but don't want to start at Level 1?" says 'Extreme Gamer', who runs the WoW Gold Facts review site. "You can purchase MMO accounts that have characters at high levels, with coveted items, mounts and what-have-you. Alternatively, if you want to sell your account to another player, the RMT site can act as your middle man. Price will depend on what level the character is plus the items and gold in its inventory. I'd say the range could be anywhere from USD 100 for a so-so account to USD 1500 for the cream of the crop."
Amidst a crop of hackers, cheats and scammers, are there any which are running a reputable business? E.G. claims that "they're usually the old-timers of the industry like IGE and MySuperSales. I reviewed both sites in the past for my site and both did not fail. They weren't perfect, but they delivered, and I didn't have to go through the agony of following up and threatening a chargeback. As for the nature of the business being illegal or not, I am not aware of any ruling by any court that states that it is illegal. We're talking about corporate EULAs [End User Licence Agreements]. In my opinion, their current terms and conditions makes the publishers look greedy."
Gold farming versus gold selling
Gold farming companies are what you might call the sweatshops of the MMO world. Farmers don't sell direct - they run their high-level accounts and grind long shifts to acquire gold, currency, items, etc.
The gold-farming firm (workshop) which employs the gold farmers has a relationship to a gold seller (the broker), usually the website that the player ends up dealing with. Gold selling companies are borderline legit, or sometimes borderline criminal, depending on your definitions and their actions (and geographical locations and laws in those countries).
They buy the gold from the farming companies, put on a markup (see table, end) and they are the ones you see spamming in-game. A game account to them is far less valuable than to a farmer, who needs a high-end character in order to farm most efficiently. Gold farmers very much fit the profile suggested in this recent Guardian article.
However, not every gold farmer is Chinese. Nor a hardcore hacker. I spoke with "Paul", a long-time British gamer now in his 40s who had engaged in RMT for many years.
"I've played online games for quite a while now, starting with the text-based MUDs [Multi-User-Dungeons] in the late Eighties, then moving on to Meridian 59, the first graphical MORPG, in 1996. At that time there really wasn't any trade in virtual items or cash, basically because there weren't enough players. However, the situation changed when Ultima Online was launched a year later," he says.
"UO had few of the restrictions that World of Warcraft has. Anyone could use any item. There were no levels or quest rewards. Anyone could kill anyone else and items could be looted off your body or stolen from your pockets. Also, you could build your own housing or buy houses for cash. There was no restriction. You could own lots of houses or buy huge castles, but there was a land shortage. All the good land for housing was taken, so the prices of housing in prime locations rocketed. Location, Location, Location. UO housing was not just for vanity. The bigger your house, the more stuff you could store in it. And you could place your own vendors."
"So, I bought a house off eBay. It was in a prime location, with a nice vendor area, and it cost me GBP 300. I set up my vendors, and filled it up with goodies for the discerning passer-by. I sold out in a day. I needed more stock, so I turned to automation. I automated my miner, and left him bouncing around to the best mining locations. He mined day and night. When I was actually playing, I went out with my tamer, a dozen dragons in tow, and killed monsters like there was no tomorrow. I sold ore and magic items and the money rolled in."
Paul then smiles. "In fact, so much money rolled in that I started selling it on eBay. It wasn't much in real terms. I was making maybe GBP 100 a month, and had two boxes running macros."
After Ultima Online waned and he had a baby, and less time to play, Paul moved to EVE Online, the space simulator from CCP which has a highly-developed economy (CCP even has an official company economist). As he explains: "I wasn't getting very far in EVE, which is a harsh game for newbies, so I spent GBP 50 to buy a few hundred million ISK [the in-game currency], and bought myself some decent ships.
"Now, in EVE, the best ships, Tech 2, were the most desirable and expensive. However they could only be built by people who had the appropriate Tech 2 blueprints. These could then be rented out to other players for serious money. I went into blueprints in a big way. The only way to get Tech 2 blueprints, aside of buying them - and no-one was selling - was to win them in a kind of lottery. This depended on the number of research agents you had, so I bought all the lottery tickets I possibly could by setting up loads of research agents.
"Then I waited. Over the course of a few months I accumulated a number of Tech 2 modules, until finally I got one of the coveted ship blueprints. I was in business. Since I still didn't have much time, I rented my blueprints out to another concern who actually made, and sold, the ships. They gave me a share of the profit, and I sold it on eBay. Life was sweet."
Paul admits that he never made as much from EVE as he did from Ultima Online, probably because the subscriber base was lower, "plus the Chinese 'macroers' had moved in to mine vast quantities of ore and flood the market. This pushed the currency price lower. I reckon I made GBP 50 a month or so for a couple of years, but the advantage was that it took me no time at all."
As he reflects, all this came to an end when eBay stopped selling virtual items of any sort. "Plus my manufacturers decided to go into business on their own. Time to go. I sold my ships and my blueprints and liquidated the profits."
It was the end of Paul's story - and that of many enterprising gamers like him - but the start of a genuinely big business. But what about these 'real' Chinese gold farmers? Who are they? A fellow WOW player told me how his Chinese flatmate got chatting to some other Chinese players on his realm. One of them turned out to be a young man who farmed, professionally, for gold. My friend and his flatmate both chatted to him for many weeks. Mr Li said he had an eye illness and found it very difficult to get a real job. Gold farming was a way that he could contribute money to his family. His account was frequently banned by Blizzard and he had to keep buying new accounts and levelling up a new character to keep farming.
"I met him in-game many times," says our mutual contact. "Even though he had quotas to reach every day, he often took time to help us in a dungeon and never asked anything in return. And he is by far the most skillful player, with several different character classes, that I have ever met."
Eventually he hooked me up with Mr Li, 23, who was living with his parents in an unnamed Chinese city. We spoke via a translator over Skype during two different sessions.
"When I finished high school and wanted to find a job I went with friends to a gold farming workshop," explains Li, the gold farmer. "I found out about it from an advert in a newspaper. After a short interview [where he had to pass some basic computer tests] I was given the job."
I asked him why he wanted such a role in the first place. "It's hard to find a job here and this job is easier to get. Also when I got the job I was quite young and I liked to play games."
As he went on to outline, the company boss (he didn't reveal the name of the outfit, "a very big company") rented computers in an internet cafe. "The computers that he rents are set up to only play WOW. The first gold farming company I was in was really big; I guess that this company owned at least 10,000 gold farming accounts. In my workshop there were 40 people who took turns to farm, some in the daytime, some at night. So the accounts are used for farming non-stop for 24 hours a day, 7 days a week."
Most of his fellow players were young: the oldest was about 35. The company was so big they never even met their boss.
Mr Li says when he was farming WOW pre-Burning Crusade, he used two level 60 mages to work the back door part of the Stratholme dungeon. "I did this instance again and again to get gold and loot. Other people used rogues to do herbalism, mining or finding rare monsters to kill. But I only used mages for farming."
Although he started playing in the internet cafe, later he bought his own computer so that he could play at home. "I could play half of the time and do farming half of the time," he says. "That way it is more comfortable and more convenient." His parents knew what he did and had even given him his own room "to do this work to help me earn money for our family."
When asked about his pay, he says there was no hourly wage in China. "I was paid by the day. Every day the workshop set a minimum amount of gold that we must deliver. If I can reach this target every day then I get the standard salary. If you get more gold then you get more pay. But it's so hard to get more gold and you will be so tired."
Could he make a decent living from all this farming? "Yes, but every day I feel very tired. You can imagine, every day I need to do at least 10 hours farming. I'm always looking at the computer screen and always seeing the same instance and the same mobs. So I feel very tired," he repeats.
Nor did he much like the job in the end. "The thing I like is playing the game. Some people are happy when they get new gear from an instance. It's the same thing for me: I'm happy to get gold in the game. But I don't think it's worth the hassle. This is only a game. I always feel that I'm wasting my time doing this job."
He believes that this boss was rich, though, and earned a lot of money from the business. "They must have the capital to rent the computers and advertise in the newspaper and rent a room for people to stay in. The boss must be rich to have the business relationship with the top people in the company who organise the business, run the website and sell the gold to European customers."
Li denied they were using hacked accounts, as often contended by players and MMO companies alike. "All our business was done by cash. We never dealt with credit cards. On Chinese realms, customers pay by cash, not credit card," he reveals.
When his European WOW account was banned by Blizzard, he switched to these Chinese servers, playing on his own and no longer with 40 colleagues. There, he says, he saw a very different attitude from the MMO company. "In Chinese realms you won't get your account banned for gold farming. It's treated as a very common thing in the game. In European realms, at the beginning it was fine and they didn't ban accounts. But later Blizzard banned so many accounts of Chinese gold farmers."
Now he sees the price of MMO gold plummeting, just like the real world, and says he wants to do something different with his life. "I don't want to do this for ever. I'd like to find a job that I really like and is suitable for me, so that every day I will have a real sense of achievement."
The Big Business
After speaking with Mr Li, I spent some time hunting down a gold selling company that would talk to me direct. It wasn't easy, but in the end one, SwagVault, agreed to talk.
"Sophia", a Chinese graduate in English who specialises in marketing (and doesn't play MMOs herself), told me something about the company's background. She says it was set up in April 2004 in Washington, USA, with branches in both China and Europe. It started out by selling WOW gold on eBay, later expanding into a "full featured website covering virtual currency [as well as power levelling, game guides and other services] for all the major MMOs in order to serve the US and European customers".
It is now the largest gold seller in China. Sophia's colleague, Benjamin, then explains that the company doesn't "farm" the gold itself, it "sells" it.
"We purchase the gold from tens of thousands of farmers. And we resell it via retail platforms like SwagVault. So to some extent we are an exporter," he claims. "The only difference is that the goods are virtual and the procedures are operated in an digital environment."
He confirms that "gold farming" has become a huge, almost-invisible industry in China. "Besides the North American and the European markets, there are also a lot of gaming workshops supplying in-game currency to the Japanese and Koreans, too. The yearly turnover for all these enterprises combined is estimated at over 10 billion US dollars. World of Warcraft players make up 70 per cent of this RMT activity. So Blizzard really creates a miracle! I really can't believe that a game can generate such a large market."
Sophia dismisses any notion that what SwagVault is doing is in any way immoral, or linked to hacking and credit card fraud.
"SwagVault will strictly adhere to any recognised ethic moral criterions and related laws," she replies. "And our staff who provide these services are all professional online players with much gaming expertise, instead of hackers and villains. Our objective is to help those players who can not maximise their gaming experiences due to time shortage or other situations. We assure all our customers that we will not use any hack or other illegal actions in-game to break the gaming environment.
"Our products are virtual but our customers are real and we have no excuse to do illegal business with them. We have our own corporate culture," she claims, calling it "IPEC" (Integrity, Practicability, Efficiency and Creativity).
Whilst some smaller firms might try to scam their customers, Benjamin maintains the majority are doing their best to attract new customers and maintain their old ones. "To get a new customer, usually, they have to spend 30-50 US dollars on Google Adwords. Sometimes even higher. So the smaller sites can't afford the advertising cost, so they just spam in-game."
The much-publicised banning sprees from Mythic, or Blizzard, have only served to push gold sellers towards illegality, he suggests.
"Each time Blizzard massively bans the farming accounts and trading accounts, the gold sellers and farmers suffer great losses. They have paid for the Classic CD-Key, the Burnfing Crusade CD-Key, Wrath of the Lich King CD-key and 60 days Time Cards. The total cost is over 100 USD. In addition, they have to level up their farming accounts; they spend a lot of time farming gold; and time is money! I estimate that Blizzard itself has got millions of US dollars from the farmers. And to save the cost, some farmers might use stolen accounts or bots to farm gold, which is illegal and causes great harm to the game."
Sophia then adds that SwagVault is not your typical image of a gold farming workshop. "I want to confirm you that our staff are all mature and work eight hours every day, five days a week as well as enjoy all kinds of pensions, insurance or bonus that the labour law prescribes. Their salaries are no less than the labour provision. We are a legally-registered corporation, our site is a e-commerce platform. Except for some specific teams which serve customers directly and are professional gamers, most of the rest of the staff are talented in e-commerce."
Benjamin goes into further detail about the core workers. "Most of the [gold] farmers themselves are young people from rural areas ... they have no opportunity to receive university education or professional training. Currently, they can get a relatively decent salary compared to those who work in factories or construction sites. This salary consists of basic payment, plus bonus for each gold they farm. So the skillful farmers can get more money, ranging from USD 250 to USD 400 per month."
He estimates that there are over one million gold farmers in China today, all farming on North American and European online game servers. There are over 60,000 registered suppliers in what he calls "Chinese Purchase Platforms" [the brokers selling you the gold].
"The smaller farming workshops maybe only have five to ten staff, while the large ones employ more than 1,000 farmers. They work in shifts, 12 hours per day. Frankly, it's very tiring and boring to sit down before the computer to kill the monsters and grind gold day after day. But anyway, gold farming allows young people a job and able to afford the basic expenses for their family. Many farmers start their own farming workshop," he adds, "after accumulating a certain amount of funds and experience."
Most of these "staff" live in China, whilst some are in other developing countries. The biggest hurdle seems to be the account bans that are regularly handed out - thus causing customers "financial pain" if they had paid for gold via PayPal, and not then received it - but Sophia also mentions something quite curious, too.
"We have the same viewpoint as game operators like Blizzard, NCsoft etc: what we are doing is trying to establish a fair and equal gaming environment, instead of spoiling it." Was she affirming what Mr Li, above, had said: that there might be a different approach to gold selling on some realms [of WOW] than others? And that the MMO companies might one day shift their position on real money trading?
Sophia was circumspect: "Any market is based on need at first. As long as gamers or players demand virtual currency or other game value-added services, we will develop along with that. In my opinion, there is the possibility that the MMORPG operators will cooperate with RMT companies in future."
For now, business remains highly competitive. "Currently, the RMT industry is still in its babyhood. Since the threshold of inception is very low, as a result, the number of practitioners in this line is huge, and the competition is cut-throat."
Nick Ryan is a journalist and producer, author of Homeland: Into a World of Hate (Mainstream).