Guest Post: Gold Farming in the Gaming Business

The following interesting post on gold farming in online games was contributed by Roger Bohn, a professor of management at University of California, San Diego:

In MMOs, “gold
farming” has become a big issue. It’s way beyond real-world
markets on eBay; now there are companies dedicated to selling game
gold for real $. (See here for a heated discussion.)
I find this interesting because (IMO) in  economies like
ours, leisure/entertainment are the growth sectors for the next 50
years. The only sector that comes close is health care, but that is
almost  a zero sum game.  Increased healthcare spending is
not actually improving health much.   MMOs are a leading
look at virtualized leisure activity.
I have not studied gold farming deeply (yet), but there are at
least 3 issues:
1) Inflation. This is built into the structure of many MMOs,
because players create new money when they go on quests and earn
rewards from NPCs.  Apparently, companies like Blizard have not
figured this out. It has very little to do with Gold Farming per se,
but I suspect that GF speeds up inflation.
2) “It spoils the game when a newbie can buy good equipment
just because they have real world money to throw around.” 
All of these games are play balanced to bring newcomers along at a
certain rate. Too slow and they get bored (and stop playing); too fast
and they find little challenge, and perhaps get to the top too fast.
This play balance is thrown off when players can buy their way in at
higher levels, but I’m not convinced that is a problem.
3) The gold farmers themselves engage in anti-social behavior in
order to make money faster.  (eg kill stealing.)  For them,
this is a job, with serious real-world consequences. So the ethos of a
game is altered when there are a number of such players.  Think
of this as the emergence of parasites in an ecosystem of
herbivores.
Clearly, the MMO developers could do a better job of fixing at
least problem 1, and probably problem 3.  Can the problems be
solved at a fundamental level?  If they are not solved,
will they affect the uptake of these games? I suppose the answers can
be found best in Korea.

Related posts:

  1. Not Gaming, But Exer-Gaming
  2. Game Sales, Box-Office Receipts, & Mobile Gaming
  3. Do Business Incubators Work?
  4. Richard Posner Guest Blogs for Lessig
  5. VCs and the Post Ranch Inn

Comments

  1. Franklin Stubbs says:

    Great (and extensive) article on that whole virtual economy scene: http://tinyurl.com/ag3eg
    Or just do a search on “walrus magazine castronova”