Return to Nerdville - or - Once More into the Breach

Well, I jumped with both digital feet back into World of Warcraft. New server, because the old one had an Alliance / Horde ratio of 4 to 1. That means that every PVP and raid situation (all of which you get bonuses for if you win/control/dominate) were hopelessly lost even before they began, and no amount of cheering, rallying, shaming would get enough Horde to even care anymore about trying to mount an effective attack. Conversely, if I tried to take objectives myself (I can hold my own in a one-on-one) there were always a dearth of 70s and even T4's to just show up cuz they got the alarm and an attack by the Horde was so rare. Only in the digital world can you pick better odds.

I tried to convince a local paper that not only could I produce, design, typeset, photograph, do web and ads.... I could also write. So I submitted the following no-spec article with the thought that I could also do a video gamer section on top of everything else. All for the aristocratic sum of $7.50 an hour no benefits no vacay for the privilege of working there. I didn't get the job. At illegal immigrant pay. WTF man. Am I that despised? What do I have to do?
So since no other human will ever publish this paper, I reprint it here for posterity. Enjoy. Or don't.


Hording Gold
Virtual economies in real-life markets

When I started playing World of Warcraft, I was impressed how complex the game was. When I got into dealing with the in-game economy, I was impressed again how it worked and what people did to use it to their advantage. I then began to realize how much virtual money impacted real markets here on this plane of existence.
Blizzard Entertainment is a billion-dollar company. With previous popular titles like Diablo, Starcraft and the single-player Warcraft franchise, the company was making good money in the 90's with the constant increase in video game popularity and technology. That technology soon included on-line gaming.
In November 2004, the online subscription based World of Warcraft was launched. Although hampered early on by problems due to such complexity and unanticipated popularity, it broke records in company profits, becoming the best-selling PC game of '05 and '06.
World of Warcraft is just what it says: an entire world populated by Avatars that are projections of real-world people. As of January '08, World of Warcraft boasts a world-wide 10 million strong subscriber base and counting. At a $15 monthly subscription fee for use of U.S. servers, plus $20 for the initial game, another $30 for the expansion pack "The Burning Crusade" and soon to be released new expansion, that's real-world billions for Blizzard Entertainment. It also means increased shareholder value, good wages and taxes from a source that did not exist 10 years ago.
There is an extensive World of Warcraft, or "WOW," economy. Gold is the monetary standard in the Warcraft universe.... and its all virtual. It's a number on a screen. There isn't even a 3D representation of it displayed in the game, but that number is increasingly affecting more than just what you can buy in a virtual game.
A WOW character can make gold many different ways: kill monsters, do "quests", employ a profession and sell virtual items to NPC (non-player-character) vendors. There's also an auction house where subscribers can put up items for sale to the highest bidder. Leveling up some important attributes requires specific materials, which are found in "drops" which are items dropped by defeated monsters. The higher level to be achieved, the more difficult the materials are to find. Since it's much easier to buy mats than to find them, the WOW economy takes over. If the availability of a certain high-demand material is low, then the bid price can rise dramatically. This has been manipulated by a mass-purchase of every available piece of a certain material, creating a shortage. When the time is right, the items are then put up for bid, kept careful in control of how much is made available, keeping the price high and ensuring a healthy, if virtual profit.
It can take a considerable amount of time and work for a player to gather gold in sufficient quantities. This has led people to sell virtual gold for real money. There is no shortage of spammers outside places where subscribers gather. Banks and auction houses usually have low-level characters just outside the door advertising websites where gold can be purchased for real money. It has been advertised recently at an exchange rate of one U.S. dollar to one hundred gold, although market forces change this figure frequently. The exchange can easily be made with credit cards or paypal accounts. The risk is high, as identity theft and malware from these sites are real possibilities. The practice of acquiring gold for the exchange of real money is called "Gold FArming" and is expressly forbidden by Blizzard. While not illegal (with the possible exception of Korea), it's consequences are subject to possible ejection from the game and suspension of the offending account. New accounts, especially when using disreputable tactics, can be easily set up within a few minutes.
Gold farming has proven so lucrative that companies have been set up to exploit the value of online economies. These companies, located mostly in China where there is a plentiful source of labor, have created sweatshops where they employ people to gold farm Warcraft and other MMORPGs as much as 12 hours a day. For the "employee," the monetary compensation is little, as reportedly some sweatshop workers play for lodging and meals alone, but farming can provide up to $200 a month. The companies employing the gold farmers, however, can make serious money and even provide an increase in the local economy, filling jobs that would not exist without a virtual workplace. Although there are no official records in exchanging virtual money for real cash, the chronic prevalence of the spammers suggests that there is no shortage of gold farmers. Attempts by Blizzard are being made to curb gold farming, including frequent game changes to make it less lucrative, but the problem remains as long as it can be profitable.
With the popularity of online gaming rising, the money made from virtual worlds can only become more prevalent... and more of a problem. It's effects on the actual economies of the world remains largely unknown, and unstudied.