I was listening to a bit on NPR yesterday about gold farming in China, 
and was struck by the casual certainty with which the owner of one Chinese operation asserted that multiple publishers are engaging in RMT on the side. In other words, the fellow was claiming that publishers are secretly selling gold to, presumably, middle-men like IGE. Why would a publisher do this? Revenue, and importantly, revenue that has very little incremental cost to it.
What are the downsides to a publisher simply selling gold to IGE (or someone similar) on the side?
1. Potential negative reaction from playerbase if they’re discovered.
2. Potential damage to player experience from possible inflation.
I would argue that #1 is a real risk but that #2 is not a particularly real risk. I think the potential negative reaction from the playerbase is an obvious one. I know of two serious surveys that have been conducted showing that about 1/3 of players strongly objected to RMT, 1/3 of players liked the opportunity to buy virtual items, and 1/3 didn’t care. I suspect that this would verge much more strongly negative were players to find out that the publisher/developer is disguising its gold sales. This may or may not be a rational reaction, but I think player discontent over this kind of action is an inescapable conclusion.
The second risk I listed was possible inflation from the introduction of a new gold source (the publisher creating it out of thin air irrespective of the rate at which players can produce gold by bashing or crafting or whatever else). I don’t, however, think this is actually a large risk, assuming the publisher doesn’t go hog-wild. World of Warcraft, for instance, is absolutely plagued by gold farmers and while those gold farmers do have to exert effort to produce the gold they produce, there can be little doubt that they are inflating the supply of gold beyond what would exist were RMT not an option. If it’s hurt WoW, then one has to wonder what its player population would be like without the farmers. It’s fairly hard for me to credit the idea that it would be significantly larger.
None of this is an accusation against any specific publisher, nor is it a claim that any publishers are actually engaging in this. The ease of generating revenue without incremental cost that doing this would present, however, is a strong argument that someone is doing it, somewhere. Companies like Blizzard are owned by public companies who are under incredible pressure to meet their quarterly numbers. Given that I can’t see that it’d be at all illegal for a publisher to do this, and given that it’s hardly unheard of for companies to push and sometimes cross legal boundaries to meet their numbers, is it difficult to believe that a company that’s going to come up short on its numbers (or who is just greedy), might engage in this kind of implicit deception in the name of exceptionally easy money? How about a publisher/developer who is having trouble just making payroll, and is faced with laying valued employees off? I’m not even sure I could bring myself to condemn a publisher for selling gold under the table in order to avoid firing its employees.
Once again, this is a pure hypothetical. I have no ‘inside’ information leading me to believe that any specific publisher engages in this, but I’d be willing to lay money down on the theory that it’s happening somewhere. I also, obviously, have no objection to selling digital assets in games, but even the idea of this feels wrong somehow. It feels like deceiving your players, and I’m not down with that.
So what do you think? Are publishers engaging in this? Think it’s more likely to happen in the East, the West, or in both markets?
14 comments
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June 27th, 2006 at 6:46 am
Kris L
I do see some risk from the inflation aspect, but you are right in saying the first one is more real. The inflation aspect comes along in games like WoW where there is some sort of place to purchase items from other players in an auction system. With more gold available to players, some will be more willing to purchase an item they want at an inflated rate. When someone does this, it begins moving the typical median price for the item up, as sellers now will believe that someone will pay the hire value. Does it get out of control? No, but along with point number 1, it becomes a drag on those who can’t spend all their time farming their own gold and some decide to stop playing.
The main problem I’ve ever had with gold farmers is that many of the ones on the North American servers are not from North America. Hence why ‘chinese farmer’ is becoming a derrogatory term. Last thing people want to deal with is someone who can speak no more than five words of english hitting all the good gold earning spots and seemingly never going off line because their co-worker steps in for them.
June 27th, 2006 at 6:47 am
Kris L
Oops, cut myself off early.
I can only assume that some pulbishers are doing this. Heck, CCP supports the online selling of their ingame ‘gold’. I don’t believe it is based in any one area.
June 27th, 2006 at 8:05 am
Zell
I have yet to see any evidence that the gold selling that takes place on WoW really hurts the economy at all. Yes, there’s obviously more in circulation than there would be otherwise, and presumably that fact does inflate prices. But as far as I can tell, it does so in ways that helps us as much as it hurts us. The price of commodities — that I can go acquire — is just as high as the price of nice gear. Thus my income, and the income of anybody who cares enough to have one — has gone up just as much as prices have gone up.
So perhaps there’s inflation, but the value of an hour’s “work” in the game has not dropped to sweat shop levels. I don’t know how to explain that; perhaps Blizzard plays a complicated and subtle game to keep gold farming just risky and expensive enough? Perhaps there’s collusion among the gold sellers to keep prices at a certain level?
Perhaps the soul-bound nature of items in WoW has really worked out to be a dynamic sink that scales with people’s wealth? I know a lot of wealthy players who see no reason not to use their gold to buy a new fancy weapon and enchantments for their alts every few levels and they pretty much just toss the old ones.
June 27th, 2006 at 2:22 pm
Pentharian
What does Grand Moff Tarkin have to do with the price of gold in China?
June 27th, 2006 at 2:24 pm
Pentharian
Correction, Admiral Piett.
June 27th, 2006 at 2:58 pm
Scott
RMT farming hurts WoW in that Azshara (a popular farming destination) is well-nigh unusable on some servers. Thankfully instancing helps defray what could be a far worse problem.
As for publishers spawning gold and selling it under the table to IGE? I rate the likelihood of this (at least in the West) as zero. For this to happen the sysadmins and lead GMs of the game would have to be in on it, at a bare minimum. At this point you’re talking about, literally, a criminal conspiracy which while theoretically possible, I haven’t heard of ever happening (aside from the early misadventures of UO GMs that freelanced spawning gold and property and selling it; the publicity from which helped ensure checks against this behavior made it into all MMOs).
June 27th, 2006 at 3:14 pm
Matt
Yes, Admiral Piett. I don’t know what he has to do with the idea of a publisher selling under the table, but I always admired Piett for his spunky nature and optimistic-yet-tempered outlook on life. He is reputedly quite the gourmand as well.
June 27th, 2006 at 3:16 pm
Mike Rozak
“I don’t, however, think this is actually a large risk, assuming the publisher doesn’t go hog-wild”
And they won’t go hog wild? Real governments that are in financial distress (aka: banana republics) have a habit of printing extra money, and it almost always leads to spiraling inflation. Money is only money so long as people (and the government) treat it like money by restricting its supply and accepting it as currency. If either of these is broken, money is only so many bits on a computer database.
Another random thought: How long until the first pyramid-scheme MMORPG happens?
June 27th, 2006 at 3:17 pm
Matt
Scott wrote:
I rate the likelihood of this (at least in the West) as zero. For this to happen the sysadmins and lead GMs of the game would have to be in on it, at a bare minimum.
Why would a sysadmin or lead GM have to be in on it? They have access to the tools they are given, and those tools report what they’re told to report.
At this point you’re talking about, literally, a criminal conspiracy which while theoretically possible, I haven’t heard of ever happening (aside from the early misadventures of UO GMs that freelanced spawning gold and property and selling it; the publicity from which helped ensure checks against this behavior made it into all MMOs).
What laws do you believe would be broken by doing this? I can’t see that doing this would be at all illegal.
June 27th, 2006 at 3:24 pm
Matt
Mike Rozak wrote:
And they won’t go hog wild? Real governments that are in financial distress (aka: banana republics) have a habit of printing extra money, and it almost always leads to spiraling inflation.
Sure, but then, banana republics are not exactly led by the brightest cookies in the bunch. Besides, if you’re only concern is yourself-the-leader (as appears to be the case in most said countries), what do you care about inflation? You can always stay ahead of it by printing more for yourself.
A publisher must care about the end-user experience much more than a banana republic leader is forced to as it’s a lot easier to leave a virtual world than a war-torn African nation.
Gold farming produces, apparently, quite a lot of extra gold and WoW is doing fine in spite of it.
June 29th, 2006 at 8:31 am
magicback (frank)
Gold farmers who asset that publishers are engaging in RMT on the side (beyond their official policy or business practice not to do so) is just trying to rationalize their activities. It’s saying “if pubishers are doing it on the side, so should we”.
In China and Korea there are many accusations of such, which have some truth to them. However, I think the probability is low in the west. The risks cited are substantial enough for large companies in the west not to engage in it unofficially. However, like Enron, who knows?
June 29th, 2006 at 9:49 am
Matt
Again though, this would be nothing like Enron. A publisher selling gold on the side wouldn’t appear to violate any laws, unlike what Enron did.
July 5th, 2006 at 12:41 pm
Boon
I have always liked what Brad McQuaid said about MMORPG’s in that it is a game that does not matter on your station in real life. Lawyers and High School kids should be on the same playing field in these worlds and they should achieve their station in the world, and not have their real world station affect that.
When you introduce these third party sales of gold, you begin to erode this distinction and those with the money will begin to prosper much more in these worlds than those without the real world money to waste on a game they most likely will drop when the next ‘big thing’ comes along.
Companies, I would not put it past them in selling gold to these third party sites like IGE. Video Games is a business and in business the number 1 rule is to make money and lots of it. Also when you really look at it, its free money for the company, since creating gold in a game is not something you have to spend money yourself to do, and then you sell it off to the third party sites at a reasonable price. Then those third party sites turn around and sell it for a profit in return to the end users.
I have noticed a few times that some of these third party sites where selling gold and quite a bit of it in the initial week, the games were released. While I too, cannot confirm that the developers were actively pumping gold in to their accounts, its not too hard to believe otherwise in a capitalistic market.
July 6th, 2006 at 3:03 am
Ronald
I wouldnt be surprised if it happened, especially if the company is hard pressed to meet its figures.
Would a company actually do it, that kinda depends how much they expect it to make in income against what it might cost them in reputation and ofcourse how big the chance is that it would be found it by the general public.
It’s not that it would be against the law, they aint selling something that doesnt belong to them. Its debatable if its fair to their playerbase.
I think it could be summed up like this.
- Its more likely to happen if the game isnt as succesful (financially) as expected.
- Its more likely to happen if there are no substantial long term effects.
- And its more likely to happen if there is a small chance that anyone would ever find out and/or proof it.
Besides the tabloids will much quicker pick up a story about a gamer dieing because he got so into the game that he forgot to eat (and most readers would have a hard time believing that anyway) than a story about a company (legally) selling virtual items or gold.