Is gold farming a $1 billion market?

What do we know for sure about gold farming? Not nearly enough, according to University of Manchester professor Richard Heeks. In a recently released 87-page analysis, Heeks calls for more research on the massively multiplayer online game practice, noting that he couldn't find a single journal...

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What do we know for sure about gold farming? Not nearly enough, according to University of Manchester professor Richard Heeks.

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In a recently released 87-page analysis, Heeks calls for more research on the massively multiplayer online game practice, noting that he couldn't find a single journal article on the subject. On the other hand, informal real-world gold mining in Ghana employs as many people as gold farming, Heeks says, and has been the subject of dozens of articles.

With a dearth of scientific research to work from, the report references a variety of sources, including scraps of online gaming research that happens to mention gold farming, mainstream media coverage (like NPR or CBS News), MMO-focused blogs (TerraNova and Play No Evil), Wikipedia, and even an individual poster on the GameSpot forums.

Despite that, Heeks cobbles together best guesses based on the information at hand. For 2008, he suggests that 400,000 worldwide farmers are earning an average of $145 a month to serve between 5 million and 10 million customers. He pegs the total revenue of the sector at $500 million, but adds that number could easily be more than $1 billion.

"The main uncertainty of estimation relates to the gold-farming market in East Asia, which appears much larger than that in the US/EU," Heeks said. "That uncertainty in part arises because gold farming operates at four levels – local, national, regional, and global. We should encompass all four but, to date, the focus has been almost entirely on the global trade."

Heeks draws parallels between gold farming and activities of varying legality, from actual farming to the drug trade. He also casts doubt on some conventional wisdom surrounding gold farming, specifically that it leads to in-game inflation. While he acknowledges short-term inflation happens, Heeks said there are few long-term examples of it, noting that games like Eve Online and Runescape have actually experienced deflation over multiple years.

The issue of publishers trying to crack down on gold farming is also called into question. "Put economically, gold farming is utility-maximizing for both parties--gold farmer and player-buyer--otherwise, of course, it would not take place," Heeks said. "Doing nothing about gold farming also costs nothing, whereas doing something costs money in staff time and other resources."

As for future research, the first thing Heeks calls for is a set of basic, reliable facts about gold-farming pay, locations, ownership, working conditions, and the like. With that taken care of, he wants to find out about the impact the work has on the individuals doing the farming, what its impact is on unemployment and poverty reduction, and whether it's something that should be supported as a socioeconomic strategy for developing countries.

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