Bad news for professional orcs all across the Middle Kingdom. On Monday, the Chinese government announced a ban on the conversion of virtual money into real money for the purpose of buying actual goods and services. By allowing Chinese citizens to spend real money on virtual products, but not vice versa, the government has specifically targeted gold farming, an activity that employs hundreds of thousands of Chinese workers.
Gold farming, for those who don't know (those who have real friends and no vitamin D deficiency), is a job wherein you accumulate advanced character traits, elusive equipment, and in-game currency in online games, and then sell the traits and booty for actual money to players who'd rather spend real currency than the time needed to accumulate the items or character levels themselves. In China, many young people pursue gold farming as a profession, often in tightly controlled companies that have workers playing around the clock.
According to Juan Carlos Pineiro Escoriaza, director of a documentary about online gaming called Second Skin, China's attempt to curtail gold farming stems from a desire to tightly control the country's economy, and its exchange rate in particular.
The Chinese government pegs the value of the yuan to the price of the dollar, and carefully manipulates the exchange rate to ensure the large trade imbalance that has fueled China's astounding economic rise. Gold farming offers a way around those state-controlled exchange rates, and thus undermines the Chinese government's management of the national economy.
When Escoriaza made the movie, the exchange rate was US$50 (341.80 yuan in 2007) to 1000 World of Warcraft gold pieces. However, the proliferation of gold farms has significantly devalued online gold, which may have in turn led to fears that gold trading could spread that devaluation to real currency.
Escoriaza also added that a number of the gold farms he visited while making the movie were controlled by the mafia, so this measure might have a law-and-order dimension as well.
Whether this new law actually ends a practice that already exists in a realm outside both real-world and online laws remains to be seen. But the fact that government pays any attention at all to online gaming represents a watershed in the relationship between real and virtual economies.
"The fact that we have a currency in an online space that affects real currency enough to cause government action, that's intense," Escoriaza told Popsci.com. "As more and more people use online spaces for virtual trade, this will become more and more common."
Wow, that is kind of sad that people actually pay real money for online money. Wasn't even aware that this existed. I can see how it inflates the money in the games so that really screws over the average player trying to have fun.
bgres07 - it comes down to how you value your time. Do you want to spend time grinding out money (which is a prime theme in the MMOs) or do you want to spend more time playing the fun parts of the game? You have limited playing time - so you cant do both. There is also the case of where you have a person that can only play 2 hours a day versus someone who plays 6 hours a day. The person playing more is probably going to be far more geared out than the person who cannot commit the time. And in most games, the gear is a big advantage in player vs. player combat or getting around in the game (be it spaceships for Eve, or flying mounts for WOW). So, how do you bridge the time gap and keep close in gear and items to those who commit more time? You buy gold or you can spend more time in the game, spend more time in the game then your going to have to give up time that would be spent on something in real-life.
I agree with China's decision.
LOL we all agree gold farming devalues virtual gold, but in real life we'll still print out more cash when we're in a crunch.
Don't worry, Obama and his Congress will just print more money.
lnwolf41 If people are willing to shell out money to get a more powerful player, why doesn't the company sell premade
characters to download from their website?
50 bucks to play the game and 50 bucks to have a level 90
character with complete special armour and weapons?
There was actually a scare about a year ago where a prominant beaurocrat was talking about taxing virtual income from online games. The thinking was that because a real money value could be applied to the virtual money then the virtual money could be taxed based on that rate.
Imagine what that would do to your gaming experience!
Ok... This news really scared me but I just read a blog regarding this issue. It is not true. Yay!
An interesting unintended consequence of this is that virtual gold will regain its value. The last in-game advertisement I saw was 5000 gold for $80. It's highly possible that it will cost much more for people who decide to purchase virtual gold instead of grinding it.
The end result is that the USD value of the service will rise, production will fall, and demand will subsequently will rise.
It's also possible that the net amount of money flowing into China may rise as well.
Which, knowing how far into the future the Chinese like to plan, may have been their intention after all.
Blizzard (the company who owns and runs World of Warcraft)specifically prohibits buying gold for cash. It messes up their economy ,which is actually fairly involved. Keep in mind that it is difficult to track the cash part of the transaction so offenders are rarely ever caught. The main goal is to maintain some loose version balance.
I wonder if there is a link between this and a supposed loss of millions of subscribers as written in this artical?
Belay the last comment (Link broken)
wow china is too much into it
games are the life's oxygen