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The Lawbringer: The lessons of globalization and gold farming

Pop law abounds in The Lawbringer, your weekly dose of WoW, the law, video games and the MMO genre. Running parallel to the games we love and enjoy is a world full of rules, regulations, pitfalls and traps. How about you hang out with us as we discuss some of the more esoteric aspects of the games we love to play?

Back in 2008, I wrote an article for The Escapist titled Crossing Boundaries, a piece all about globalization as the greatest issue facing video game developers and producers at the time. Guess what, ladies and gentlemen? It's 2011, and globalization still takes the top spot as the prime issue challenging video game development and production.

Rather than rewrite an article on the effects of globalization and the problems the phenomenon causes for the video game industry at large, I thought it might be fun to use globalization as a rubric for discussing the very global industry of gold farming, especially when it comes to the legal nature of things, whatever things may be. We will talk about the lack of predictability in the global market, gold farming as globalization, and the problems with fighting the good fight against the grey market. Won't you join me?

The issue of globalization

As technology pushes forward, the world gets smaller. From tweets during revolutions to global events being recorded on YouTube, the world travels at the speed of light rather than the speed of a clipper ship bringing news from far away lands. With globalization comes partnerships and relationships that would have never been experienced in the old world. Markets open, products cross unheard-of borders, and the world becomes porous. That's all well and good for the big-picture thinkers, but we're here to talk about a very small subset of industry and commerce that deals with our world, MMOs.

WoW, and MMOs in general, provide us with many interesting issues surrounding globalization. Censorship, competition, cultural acceptance -- all of these things are global issues that might not have ever occurred to you as issues a video game company has to deal with on such a broad basis. Every market you want to release your game in has rules, regulations, and sensitivities that have to be heeded before you make a dime from those players. The uncertainty and risk involved is astounding. What happens if that $80 million you raised to create a Chinese-specific MMO is suddenly worthless because the Ministry of Culture says no to your game?

That was a trick question, actually, since you can't even create or run an MMO in China if you aren't a Chinese national corporation (or cleverly fake-partnered/licensed with one). Ah, globalization.

Gold farming is a global industry

I think I've said this before, but it bears repeating: Gold farming is bigger than you think it is. A lot bigger. Someone once told me gold farming is now in the billions of dollars a year all across the world, and I wasn't hesitant to believe that in the least. Back in 2006, that number was potentially just under a billion. Now, with the number of MMOs and the huge increase in WoW players alone, the numbers must be astronomical.

A lot of people email me with statements or questions that sound like this: Why can't Blizzard just sue these guys and stop them? Sure, Blizzard could probably sue on some basic contract claims or, as it often tries, sue on a copyright infringement claim of some kind. The problem is jurisdiction. You can't sue someone you don't have jurisdiction over, meaning the rules have to apply to them as well for there to be any recourse, or the acts have to have their nexus where jurisdiction would be applicable.

Take China, for example. Our rules and regulations have no holding in Chinese courts because they aren't Chinese rules and regulations. Chinese courts are also famous for ignoring default judgments in U.S. courts. We may live in a global village, yadda yadda, but the rules we deal with are more separated than you could possible imagine. The real answer is you'd have to sue in China for a judgment in China, and that's not the simplest thing in the world to do.

Gold farming as global

After choosing this topic to elaborate on, I went and drew a little picture of the transactions that take place to illustrate a point to myself: Gold farming and the transactions that occur from the practice are heavily in favor of continuing those practices with little to no recourse available by foreign game companies.

What struck me about all of these transactions was that none of this happens within one country. All of these transactions are done over the internet, across borders, where the actual facilitation of the transaction only happens in any particular country because the server farm is there. None of these transactions amount to anything more than changing the numbers in a database spreadsheet.

Despite being a global phenomenon, the left side of the transactions never see or understand the right side of the transaction. The income from gold farming goes to a lot more than employment, obviously, but you get the point. And with a workforce that is so easy to assemble and easy to pay, the profit margins on gold farming must be immense, not even counting volume.

Lessons from a global, virtual industry

What can we learn from gold farming as a global industry that permeates almost every MMO on the planet? A lot, actually. Virtual worlds are still very much the domain of games, but one day they won't be. Recourse, therefore, is the issue we must begin to truly dissect. As the world gets smaller and virtual worlds become more popular and more pervasive, finding recourse to our problems will become the real issue, as the means and mechanics to creating and dealing in virtual currency may or may not have evolved to the point of real currency in our laws and in our minds.

Greg Boyd once asked me if Facebook was a virtual world, and I didn't have an answer. I probably mumbled something like "of course not," followed by "well, maybe," then weaseled into an "aah you got me and I learned something." The truth is, Facebook is a virtual world, and one day you might sign a contract with Facebook connect. You might buy actual real estate in Second Life and pay for consideration in Linden dollars. We have no idea.

Will our laws hold up when the very real-world grounding that our systems are set up to deal with slips out from under us? We can tack on new ideas to existing laws, sure, but creating something fresh lets us operate under a new paradigm. Maybe gold farming is a step in understanding virtual currency and the potential recourses available to companies affected by it.

Something that has always bothered me about the global village concept is that we all play by different rules. Sure, it's a product of cultural, religious, and idealistic differences, as well as those that govern us, but in the case of MMOs and the grey market, I don't think it's fair to say that we're all on the same page yet. The communication is there, yes, but the recourse, for the most part, is not.

This column is for entertainment only; if you need legal advice, contact a lawyer. For comments or general questions about law or for The Lawbringer, contact Mat at mat@wowinsider.com.

Filed under: Analysis / Opinion, The Lawbringer

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