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The latest patch 5.4 newsThe Lawbringer: The lessons of globalization and gold farming
by Mathew McCurley 
Jan 21st 2011 at 1:00PM
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.
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
Reader Comments (Page 3 of 4)
DarkWalker Jan 21st 2011 9:55PM
"One thing I've never quite figured out: why doesn't Blizzard just region lock IP addresses? In other words, if your IP is coming from China, those are the only servers you can log in to."
First, as said above, it's easy to circumvent. There are lots of free open proxies that can work with WoW, and a huge number of paid for proxies. In fact, some such proxies are quite popular already for players outside the US, since they use different configurations that can in some cases reduce the high latency foreign players experience (for players that experience latency over 500, most of them claim to be able to cut such latency by half).
Second, there are plenty of US citizens living in (or traveling through) Asia, and those that are WoW players would be blocked from playing together with the Chinese. There are also plenty foreigners that bought the US version of WoW instead of the local version (which, specially for China, is easy to understand; they get a late and censored version of the game). Unless Blizzard is prepared to deal with the bad PR that will arise from blocking all those players, they simply can't suddenly start IP filtering WoW.
Kardinal Jan 21st 2011 2:16PM
Something to consider...
What if Blizz countered Gold transactions within the "legal system" of Azeroth. For example prevent the exchange of gold between players by either mail or trade unless particular criteria were met: 1) the characters involved in the transaction are from the same account (ie - you can mail gold to your alts). 2) the characters were from the same guild. (I don't know too many guilds which would harbor gold farmers, at the risk of exposing their guild bank) 3) currency exchanges between non-guild players would have to be exchanged through a vendor in a capital city and you could even create a minimum level requirement for the use of said money "exchanger". I would recommend level 10 for such a marker, as most toons are level 10 before they reach a capital anyway.
It is not the exchange of large sums of gold cannot be tracked in the programming code of the game, but rather to make players and gold farmers aware that Blizz is watching. Of course (as stated in other comments) this would require Blizz to actually watch, and take action.
Jason Ralph Jan 21st 2011 2:34PM
I'm about to violate a unsaid rule and that is bring up politics.
I view Blizzard in some regards the way I view the Federal Government of the US.
I view Gold Sellers like I do the mob. Really doesn't matter which one, pick your favorite.
I view players the way I do citizens in the US.
I look at the economy in the World of Warcraft the way I view the economy in the US, or other nations.
It comes down to at what event do I want Blizzard to intervene to catch the bad guys? I know Blizzard owns WoW, and can whatever they want & when they want. It just comes down to: is it worth it?
All in a week's work Jan 21st 2011 11:19PM
I couldn't have said it better myself. This needs to change, in the real world and (less importantly, but still) in WoW. Putting a stop to those who do wrong shouldn't be based on whether it heeds a reward. It shouldn't be based on anything; those who break the law need to be arrested and gold farmers need to be banned, whether or not it gives the guy under control a bit more cash in his pocket.
Imagine, if everyone who commited murder that wasn't in self-defense was arrested whether or not the mob boss or whoever offered to secretly bribe the jury. If not for all of this corruption and lust for money, we wouldn't have problems like these.
Bumblebee Jan 21st 2011 2:42PM
Something that has lessened my personal annoyance of the whole Gold Selling problem is using SpamMeNot. That addon filters spam and trash messages in chat, and then proceeds to report the ones that are clearly gold sellers. It has some kind of rating system, and anything over a certain rating will be filtered and reported.
As for the actual problem here, most gold in the market is acquired from hacked accounts. So, that gold you just bought, well, your guild friend who got hacked, you just stole it from him. Think about it and stop being a douche. If people weren't buying there wouldn't be anyone selling.
People, get an authenticator. It not only secures your account to a very good degree, but it's also one less way for gold sellers to make a profit.
Ez Jan 21st 2011 7:06PM
Ya i use BadBoy and it works like a charm.
Zanthexter Jan 23rd 2011 10:49PM
The spam is annoying, but it's what all the farmed gold does to the game economy, and through that to the game as a whole, that bugs the heck out of me.
Because there are gold farmers, the value of mats gets driven down.
Because there are gold farmers, there's a lot of gold in the economy, so the cost of items that are rare/limited goes up. (Pets, drops, Maelstrom crystals, etc.)
So, the result is that for most players are stuck with choosing between evils: spending huge amounts of time grinding mats, doing without, or buying gold (Cheating).
For a lot of folks, it makes more sense to spend an hours worth of real world earnings, than 20 hours worth of in game earnings. In a real sense, the gold farmers actually create the demand for their wares.
matt Jan 21st 2011 3:13PM
wouldn't it make sense to not allow connections to a WoW server from an out of region IP address? Such that you can't sell gold in the North America unless you are IN North America. Even if a Chinese gold operation proxies out to a regional IP, the owner of the local proxy could be made liable for the legal damages. That would solve the jurisdiction problem as well as cut off the source of cheap labor.
that seems too easy, must be something wrong with that idea.
Craig Knighton Jan 21st 2011 3:57PM
Not everyone outside the US who plays on US servers is a gold seller, so you would penalise quite a few innocents, and still not stop the selling or spamming.
If you give something a value, then there will always be people who try to take a piece. It isn't just buyers who make gold selling viable, it's also Blizzard by creating high value items which need lots of gold, and players selling items on the auction house for lots of gold.
You then have the cash grind which every MMO company implements to keep the subs rolling in, so people who are impatient buy rather than grind.
Could Blizzard remove the grind to earn gold, without making the game even more easy-mode - I can't see how personally.
matt Jan 21st 2011 4:26PM
fair enough. Though I imagine that playing on an EU server from north america (etc.) would present an un-playable amount of lag. I am not able to select an EU or Asian server when I log on to my account. Given that, I question how many legit cross region players really exist 100s or 1000s out of 12+ million is a rounding error.
Even so, your point still stands. So long as you need a lot of gold, somebody is going to find a way to get it on the marketplace. It still seems to me that mandatory authenticators and blocking out of region IP addresses would remove the economic viability of gold selling as it exists today.
Cyrus Jan 21st 2011 4:58PM
I've logged into my account from a cyber café in France before - I was on vacation and just wanted to check up on stuff in-game, maybe do a few dailies. (It was hard at first, but lag had nothing to do with it; by default the program will try to connect to a different server or something like that depending on regional settings on the computer's installation of WoW, but that's something even an idiot like me managed to fix eventually. I'm pretty sure lag wasn't bad once I finally figured it out.) I'm sure vacationers are a tiny part of the market, but people in the military stationed overseas are a much bigger part.
totemdeath Jan 21st 2011 5:12PM
Heres the situation in a nutshell:
1. Blizzard wants in on the 1billion plus people China has to offer to a MMO developer and the money that market has to offer
2. The Chinese wants to keep those 1 billion plus people employed to prevent the death, destruction and meyhem a revolution tends to produce once they realize their lives suck under Communism
3. Blizzard and the Chinese government both turns a blind eye to the prevasive problem of gold farming because it solves more problems than it creates
4. Both entities makes a ton of money both in game revenue and taxes on the game and the income of the gold farmers
Welcome to the 2st century
mcdesmet Jan 21st 2011 6:13PM
How much revenue does Blizz make off of the monthly fees that gold farmers pay? Does the income from those monthly memberships exceed the payroll cost of the blizz employees that have to spend time fixing the accounts of people who are hacked?
and... (subset question), how many players continue to pay their monthly fees simply because they were able to buy gold and experience "more" by way of that gold they didn't have to spends weeks or months farming themselves, thereby allowing Blizz to maintain monthly fees from a player that would have gotten bored and quit otherwise.
Hmmm... more questions than answers, but I have no doubt that the Blizz accountants have the answers to these and many more.
Ez Jan 21st 2011 7:11PM
Oh i also want to point out those 'oh so convincing!' emails saying your account has been hacked, please follow the link to confirm your password etc etc. That is a major source of phishing and tons of people fall for it. You can send them to hacks@blizzard.com . People who fall for that always get their gear and gold wiped out. I just wonder what they do with soulbound gear? lol
jordanmcguigan Jan 21st 2011 7:58PM
World of Warcraft is illegal in China right? (they've gone back and forth on this issue). It'd be trivial to block Chinese IP addresses from accessing World of Warcraft. I'd imagine it's illegal because privacy is illegal, and World of Warcraft is encrypted.
For Goldfarming outside China, the legal option (and not just banning the accounts) will probably be used more and more often after the Glider case is resolved.
What's the legal status of World of Warcraft in Japan anyway? I've noticed theirs not a Japanese localization.
Michael Jan 21st 2011 9:06PM
You all need to read the book, For the Win by Cory Doctorow. It is about this very topic but written as a piece of fiction....or is it.
Roddythew Jan 21st 2011 9:26PM
Well, I haven't seen body-spamming by the SW AH in months, from before Cata dropped, so maybe they have been able to change some things in regard to hacks and such.
Meerkatx Jan 22nd 2011 12:31AM
Very simply it comes down to the players to stop gold farming; and not Blizzard. If the players don't buy gold, items or leveling services, there is no market. The only thing broken is the playerbase who thinks it's okay to abuse various systems in game.
reganator5000 Jan 22nd 2011 1:00AM
its worth remembering a few things about foreign culture laws etc. (i right culture as i have no real knowledge of the legal systems etc., ask an actual lawyer for that).
first that in some countries, copyright infringement, patents and the like are a foreign concept. as in, westerners say that your not supposed to copy this stuff when it does well? why? are they just being selfish?
in many Asian countries, there is quite easy access to tailored or otherwise small scale/home produced products (e.g. in india, clothes shops often advertise selling ready made garments, due to textile and tailors shops being just as, if not more, common). it leads to a situation where buring a designer dress or whatever mainly just means that you need to find a shop and bring a picture of what you want it to look like.
its not treated as stealing or anything as most of the things that we might have under copyright are quite likely to have been made by someone else before us anyway, so what right do we have to it. so the general philosophy is that you aren't actually stealing an idea or design, unless you literally nicked someones blueprints by breaking into their house with a crowbar.
the problem comes when this is applied to the work of a major enterprise, like WoW, which took immense sums of money and years of hard work to produce, and is actually on a physical level pretty unique (e.g. the code, spcific animation and graphics, not the concept of orcs and elves). its perfectly justifiable for blizzard to want to enforce copyright laws in foreign countries, but in some cases those laws are unlikely to be even recognizable to what we have in western countries.
as for china, apparently the reason WoW was banned, according to china, is that displaying bones in a games is taken about as well casually cutting to pictures of a yob stabbing your gran every time you level up would be here. that and even after that, they got caught in an internal legal dispute about which government department polices video games anyway. to be fair blizzard isn't exactly sticking to the spirit of the law that bans foreign companies marketing games there anyway, and you can't blame china for there being a problems with you marketing a game that you can only legally market due to a loophole in the first place (barring objecting to the original law, but even in a democratic system a foreign company should have no say whatsoever in somewhere else 's laws).
tarocash Jan 22nd 2011 1:13AM
As long as gold farmers keep paying their subscription, I can't see Blizzard giving them anything more than a slap on the wrist.