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Blizzard, the game company that owns and runs WoW, kicks people out of the game for buying or selling gold for real currency. They've taken steps to make many of the tools used in the process no longer function in game. That hasn't stopped the activity, but it does put a different light on the exploitation angle, although it shouldn't take much effort to see other historical analogs...
I always get a laugh when WoW goes mainstream. But I do find the economic, psychological, and sociological aspects of MMORPGs fascinating.
I do have one word of caution, beyond the talk of sweatshops versus employment and damage to in-game economies: there is a seedy(seedier?) underbelly to gold farming. Many of these budding capitalists are more aptly described as "gold hunters", as they rely on phishing scams to hack users' accounts and steal all their gold ... only to sell it back to someone who was likely defrauded the week before.
I just went from gold farming to salmagundi (pirate stew? blech) on over to Solomon Grundy, Superman and ended up humming 'Superman's Song' by the Crash Test Dummies.
What goes around, really goes around.
As for the constant global drive for new and inventive ways to get someone else to do the heavy lifting for cheap--I don't really think we'll ever be free of that.
I understand the emerging phrase for this phenomenon is now "RMTs", or Real Money Traders, since not all games use "gold" as the name for the currency. But I think at this point all MMO's are infested with RMTs.
You may be interested to know that there is a short story written about this very subject. Cory Doctorow wrote "Anda's Game" to explore the economics and ethics of gold farming, and of other people's responses thereto. It's a good little read. The story is downloadable in a variety of free formats at http://craphound.com/overclocked/download/. Don't worry--the author himself put them there for free download.
A brief comment on those who go around killing gold farmers because it diminishes their game experience: People doing this for less than $150 per month in poor countries need that money. Gold farming can be excruciatingly boring. Obviously, it is the best way available to them to earn money, and just as obviously, the people who buy gold from the farmers don't really need the money they spend. As some gold farmers might be subsistence gold farmers, it seems pretty coldhearted to kill their characters and thereby hurt their means of earning a little much-needed income just because you don't like the effect it has on your gameplay. What do you think?
I knew two friends who farmed on the old Star Wars Galaxies MMO, and made a decent amount of money.
The big problem not mentioned is that many of the gold farmers are not actual players, but "bots" that are scripted. It is mostly these that players rail against for artificially inflating the economy.
I put down the "crack pipe" of World of Warcraft some time ago. I question whether gold-farming is as widespread as the articles indicate.
First off, I'm not certain there are "5-10 million consumers" of gold-sellers. Blizzard (World of Warcraft's manufacturer) claims that 10 million people play World of Warcraft worldwide, but that claim is doubtful: it's generally accepted that it's closer to "10 million people have ever had an account"--i.e., 10 million at any time, not at present. Anecdotally, it seems that over the past 12 months a lot of people have stopped playing, and not very many have started. The other active MMOs might not have a million active players put together.
So at the very most there are 5-10 million potential consumers (and probably not that). The excellent article by Nick Yee of the Daedelus project estimates that only 20% of MMO players purchase gold. My sense, though, tells me it's probably even fewer than that. Good as Nick Yee's research is, his survey was necessarily a self-selecting one. Now, who's likely to fill out a computer-game survey? Serious (aka "hardcore") computer game players. Who's more likely to buy gold? Again, serious computer game players.
My experience with playing MMOs was that not only gold farmers but gold buyers were shunned. More than once I heard people say, "Don't group with/trade with/join the guild of X, he's a gold buyer (or bought his account). People who bought gold were looked at with pity, especially on World of Warcraft, whose intentional inflation of the game economy apparently looked to Zimbabwe for inspiration. Gold bought 18 months ago for $100 might be worth $5 now. I did know of one guy who spent over $2,000 to buy 5,000 gold. When I quit it was possible to "farm" 1,000 gold a night.
Before you write off the WoW players versus gold farmers into a West exploits East scenario, keep in mind that a lot of what players object to is not who is farming the gold, but that it is being done. Think of it as people who do their own laundry for fun, and maybe a little bit of their friend's laundry for a few dollars, suddenly having their laundry resources--water, soap--used up by crazy zealous laundry do-ers. And they look at the next town over, aka Everquest, where no one can even do laundry anymore, because the economy is so messed up and inflated that you literally (/end ineffective comparison) cannot, as a new(er) player, join in the game without spending at least $75 on platinum (no one will group with you unless you can buy a horse, gear, buffs. . ..)
I'm not saying it's right, but I think it's more a matter of ametaurs not wanting to have to compete with professionals than it is Americans slaughtering Chinese. (You can't just kill anyone, anyway: they have to be the opposing faction, ie, humans and trolls can kill each other, but trolls and orcs are allies, and to be honest, people don't just kill gold farmers, they pretty much kill everyone they can, of the opposing side. It's part of the point of the game.)
Also, I keep flashing back to an article I read on gold farming maybe a year ago. Upon interviewing Chinese gold farmers, who lived in dormitories, they found that most of them, in their free time, played their own personal WoW account.
(Also, Anda's Game? About the gold industry, yes, but. . . not very good.)