Virtual gold broker "sells" for $10 million

My MMO Inc., has purchased MyMMOShop.com for $10,000,000 -- MyMMOShop being a company that buys and sells virtual gold, prestige items, and other virtual wealth. My MMO is a privately held company, so it's impossible to say whether 10 million actual dollars left one bank account and entered another (as opposed to a stock swap or other "sale"), but this is still pretty whacky news. I'm working on a novel about gold farming and I spent most of the last year talking to farmers, brokers, players, academics, game-runners, moderators and others who follow the field, and I've concluded that it's possibly the weirdest grey market in the world.

For one thing, a lot of games seem to have successfully ended the practice of gold farming by changing their level designs to make it uneconomical, even at the pitiful wages earned by farmers. In response, at least one group of gold brokers is now deploying keyloggers that rip off your Warcraft passwords and turn your character over to a hacker who strips it naked, cleans out its guild bank, sells everything, and turns the money over to another player (often another compromised account), who then launders it into the gold-brokers' coffers. Weirdest of all, these ripoffs never seem to go beyond mere virtual gold theft -- one researcher I spoke to had interviewed 800 victims of virtual WoW robberies and not one of them reported any further intrusions, not into bank accounts, PayPal email, nothing. It's like breaking into someone's house, walking past the mountain of money on the coffee-table, and stealing the prized hockey-card from its frame over the mantel. The leading theory is that if victims show up at the FBI (or local equivalent) and say, "My virtual gold was stolen, help!" that they'll be patted on the head and sent away -- whereas, "My bank-account was hacked" is more apt to get a response.

In China, gold farming has reportedly moved out of the big cities in the Pearl River Delta and out to the countryside, where it has a reputation for being a low-capital way of getting rich: just buy some PCs, find some local boys who want to play games all day, and alienate them from the product of their labor. Talk about capitalism with Chinese characteristics! However, the crashing prices of gold and the increased concentration at the brokerage houses (who have reportedly frozen out much of the East European and other non-Chinese firms by conducting all trades on IM in Chinese), this turns out to be a source of shattered dreams more often than not. But there's movement on the international front: some Chinese farm-runners are squeezing more profits out of their investment by outsourcing the labor to Vietnam.

There don't appear to be many female gold-farmers to speak of at present: partly this seems due to the outstanding opportunities that loomed for young women in China (until recently at least). When you're the cream of the workforce in the richest part of the most populous nation on earth, there's not much reason to get into gold farming for a living.

So I don't know what actually happened with this buyout. Everything the target company sells is illegal, in the sense that gold-farming violates every major game's EULA. But the big brokerages have accomplished the near-impossible: concentrating buy/sell power in a marketplace that requires virtually no capital to enter and no skill to undertake. Maybe these guys have some important part of the market sewn up -- or maybe it's just noise in a deeply turbulent system.

Hunter Crowell, media relations agent for My MMO Inc., says his company purchased the site in reaction to the tumultuous economic climate. Virtual goods, he says, are one of the few investment vectors that have not become wildly devalued as part of the massive market fluctuations of the past few months.

As Kotaku points out, the real question here is how much of the $10 million will see its way into the hands of those doing the actual gold farming. As the enterprise is inherently a gray market, I wonder what, if any, incentive exists for the higher ups at these firms to not simply pocket all the cash in the continued exploitation of the grunts in their employ.

Gold Farming Site Sold for $10 Million

[#1 posted by Takuan , February 2, 2009 12:18 AM]

I really enjoyed Halting State

[#2 posted by ridl , February 2, 2009 1:25 AM]

Beloved:

I would like to offer you now super exclusive deal of 10 Million bOING bOING credit points for only US $5 million (OBO LOL!).

The credit points are available in either .txt, .rtf .doc, .pdf, or .odf denominations.

I would also like to request that no international mafia hurt me for this offer as I will retract it immediately upon any sort of physical threat.

Thank you.

Phone lines are open.

[#3 posted by nnguyen , February 2, 2009 6:16 AM]

I chuckled at "some Chinese farm-runners are squeezing more profits out of their investment by outsourcing the labor to Vietnam" because even Chinese gold-farming can be outsourced, and then facepalmed because it's Vietnam getting exploited by China, again.

[#4 posted by franko , February 2, 2009 6:42 AM]

aha, so THIS explains your recent post about your WoW-playing, cory! it's not just relaxing gameplay, it's *research*. brilliant!

[#5 posted by historyman68 , February 2, 2009 8:50 AM]

Better give me some .txts - .rtfs lose value after a while

[#6 posted by Boba Fett Diop , February 2, 2009 9:01 AM]

"Virtual goods, he says, are one of the few investment vectors that have not become wildly devalued as part of the massive market fluctuations of the past few months."

Mind boggling. Massive fluctuations in markets based on overvalued instruments and magical thinking? Invest in completely unreal goods! And tulips!

[#7 posted by arkizzle , February 2, 2009 9:08 AM]

historyman68

Yeh, txt isn't worth a whole lot, but it's a steady investment and really holds its value.

Doc and rtf have plummetted recently, while pdf seems to be slowly becoming something even the man on the street wants a piece of.

[#8 posted by Anonymous , February 2, 2009 9:12 AM]

This topic is endlessly fascinating to me. It's just so bizarre! Can't wait to see what Cory's book will be like.

[#9 posted by Halloween Jack , February 2, 2009 9:50 AM]

Looks like there's still someone out there with a lot more money than sense.

[#10 posted by JoshuaZ , February 2, 2009 9:51 AM]

I'm a little disturbed that the sort of crimes envisioned by Charles Stross are already coming to pass. And agree with Takuan. If anyone here hasn't read Halting State they should do so quick before the plot becomes so close to reality to be boring.

[#11 posted by Ian70 , February 2, 2009 9:57 AM]

People pay for in-game items because they're LAZY, too lazy to go out and find/earn the damn things themselves, and GREEDY. The fact that there's some kind of an economy that revolves around the inherent laziness and greed of humans should be of no great surprise.

[#12 posted by Brainspore , February 2, 2009 10:18 AM]

In my opinion if there are aspects of a game that are so boring that people will outsource them to others then it isn't a very well designed game.

[#13 posted by InsertFingerHere , February 2, 2009 2:28 PM]

I'm sorry... I don't know what I just read.

[#14 posted by Anonymous , February 2, 2009 9:49 PM]

Ah, what a cool idea for a Cory Doctorow novel! Can't wait. Really liked Little Brother and Someone Comes to Town, Someone Leaves Town.

[#15 posted by Anonymous , February 2, 2009 10:23 PM]

So say the underpants gnomes:

Phase Three: PROFIT

[#16 posted by historyman68 , February 4, 2009 7:24 AM]

@12 - As the Penny Arcade guys (and I'm sure others as well) said, why would you want to spend your leisure hours doing something that feels like work?

[#17 posted by arkizzle , February 4, 2009 10:03 AM]

Did you all read Cory's Anda's Game? Sounds like some of you missed it. Check it out, it's a great tale and deals with essentially the same topic as this thread..

[#18 posted by arkizzle , February 4, 2009 10:04 AM]

"essentially the same" -ish :)