Gold Farming Banned in China…or Not

goldfarmers01Yesterday the internet was filled with the news China had banned gold farming. Just in case you live under a rock and don’t know what gold farming is, it’s the gathering of virtual currency in a game (usually an MMO), which is them sold to other players in exchange for real currency.

According to an article at InformationWeek, “the Chinese government has declared that virtual currency cannot be traded for real goods or services.”

Obviously, this was enormous news. Since it’s been estimated that 80-85% of the world’s gold farmers are located in China, this would have likely meant a huge drop in the amount of available virtual currency.

Unfortunately, there’s news today that the law being referenced actually does not reference gold farmers at all.


This morning I read that this ruling doesn’t apply to gold farmers at all. Over at ICTs for Development, Richard Heeks had the following to say,

This is a government restriction on the use of the quasi-Paypal-like currencies (mainly QQ coins) that are used extensively in China to pay for virtual game stuff. As announced they can now only be used to pay for virtual stuff, and you can’t buy real things with them as game companies were allowing to happen, nor can you gamble. This therefore is not about what gold farming clients do: use real money to buy these virtual currencies; it’s the mirror image. And it’s not about the major trade in gold farming such as World of Warcraft, which relates to other types of virtual currency. And it’s not about buying/selling in-game items. And it’s not about the power-levelling of avatars. Bottom line: it’s not about gold farming.

Thus it appears that all the furor and uproar over the last 24 hours was in vain. Apparently the Chinese government had no intention of stopping gold farming, which should come as no surprise. After all, it’s an industry that employs a lot of people and brings a lot of money into the country.

All this did get me thinking…who actually buys gold anymore? I mean with the current gold distribution in World of Warcraft rivaling our national debt, is there really a need for it anymore? Obviously some people think so, since the gold farmers are still in business. Personally, I’ve never understood the reasoning behind paying real money for pretend money.

Sure, you can argue that it’s just an extension of the concept of paying a monthly fee to play a game, but that a fallacious argument. After all, when you buy gold, you’re paying so you don’t have to play, and that whole concept just seems ridiculous to me.

Have you ever bought gold? Do you think it’s a defensible thing to do, or do you despise those who do it?

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6 Comments on Gold Farming Banned in China…or Not

Zoulz

On July 2, 2009 at 4:47 am

Aww, if it seems to good to be true, it usually is. :( I don’t understand it either. I would never in my wildest fantasies buy virtual currency for real money.

A Nony Mouse

On July 2, 2009 at 6:44 pm

In advance please excuse an typing or grammatical erros: I have just finished a very long work day and my brain does not feel like it is functioning correctly:

Honestly… I have purchased gold. It doesn’t come down to paying so you don’t have to pay. It comes down more to “Here is a little bit of RL money, now I can play the parts of the game I enjoy” I have limited time, and 5 hours or 2 days of farming gold is not equal to 5 hours or two days of working. Ie. I pick up some extra shifts and make more money. or I menotonously farm gold. Instead I just pay what usually amounts to maybe an hours salary to get the gold it would have taken me 2 days to get in game.

Now in the current market I do not buy gold… just stating that I have in the past and my reasoning behind it then. Now I have a little more time available and can think of much better things to do with my money.

Eric

On July 3, 2009 at 5:05 pm

Business is just a matter of cause and effect. These farmers will not exist if there weren’t an enormous amount of demand from players who are just too lazy to get to point F without going through the ABC’s. So until the buyers are absolutely obliterated, there will always be some group somewhere who will sell wow gold.

b0b_r0cks

On July 3, 2009 at 9:28 pm

whats even more funny about this is that there’s an add for goldfarming underneath it all lmao

Hugh Walters

On July 4, 2009 at 9:59 am

Remember the “Real Money” you talk about is a Fiat Currency, in other words pieces of worthless paper with numbers on that is declared as valid tender by government Dictat or “Fiat”; hence the term Fiat currency.

Money is simply a store of your work, after the government has finished ripping the taxes from it, you have so much of your stored work that you can exchange for someone else’s stored work. Currency is just the medium of exchange.

The numbers in the database at your bank (“fiat money”), what you refer to as real money, is exchanged for some other numbers in the database of the MMO game (what you refer to as pretend money). In reality what is happening is you are both making an exchange of your time.

In a free economy I should be free to choose how I exchange my store of work (in this case represented by fiat currency). You’re argument about paying not to play the game is fallacious, they are paying so that they can enjoy aspects of the game that they like, and not the boring ones. Is paying a golf caddie real money in exchange for him doing boring things a bad thing?

In addition, gold farmers greatly enhance online economies by making *more* capital goods, in this case, rare herbs, and iron bars etc. available to the overall economy. In no way can the increase of available goods be seen to be bad for the economy. Neither is it inflationary, it is clearly counter inflationary. Iron bars etc are sold to other players, this results in a *transfer* of gold already existing within the economy typically via an auction house system, and not the creation of new currency (which is inflationary).

Contrast this with “real” money where the Congress has authorized “quantitative easing”, in other words the typing in of fiat currency in order to purchase government and other securities.

Incidentally the prices of everything in EVE online has skyrocketed since this announcement and a number of bannings. The tirade against “evil” farmers is propaganda put out by MMO companies to keep people in time sinks.

I can suggest reading some books on Austrian Economics which provide an interesting viewpoint on money.

Rinko

On July 7, 2009 at 10:03 am

Since this news was released, it didn’t failed to make the gamers concern when it comes to farming currency on the MMO’s they are playing specially for those who played WoW. I’ve read an article (http://www.wowgoldfacts.com/2009/07/06/the-story-behind-the-chinese-brouhaha-lost-in-translation-indeed/) that enlightened me about the real score about the banning of gold farming in China which explained that it’s not about WoW but about QQ coins that China is concerned about.