World of Warcraft and the Quest for Virtual Gold
Anne and her boyfriend lead a more than 250-person team into battle every week. Technically, not of all the team members are people. They're also gnomes, night elves and dwarves - avatars for humans in the real world. But the battlefield is real to them, although their adversaries include dragons and the field is a pixelated place in the game called "World of Warcraft." Anne, a second-year nursing student at the University, manages to balance a full course load, a job, and 12 to 25 hours of WoW into every week. She is one of more than 5 million people worldwide who logged into WoW in 2005.
Although things are going smoothly now, they weren't moving as fast as she wanted last summer. Anne had just started playing the game but couldn't devote enough time to make any progress. She needed money - specifically WoW gold, which helps a player advance through the game. Instead of spending hours scrounging for gold, she and her boyfriend decided to speed things up by purchasing it with U.S. dollars. Because purchasing virtual currency remains a controversial topic among gamers and game companies, Anne preferred not to have her last name published.
While the idea of buying virtual currency with real money may seem strange to non-gamers, businessmen who sell virtual gold forecast their total sales might one day be more than the amount of money gaming companies make, which would be quite a lot given current estimates. In 2005, computer-gaming industry analysts calculated that subscription fees alone - about $15 per month - for such games totalled to roughly $500 million. In 2006, users will probably spend $600 million on massively multiplayer online role-playing games, more commonly known as MMORPGs, said Alexis Madrigal, a research expert with the gaming analysis company DFC Intelligence. 2005 was the year of WoW, and it's highly unlikely that another game as lucrative as WoW will be released this year, he said.
Roughly 20 percent of all MMORPG players spend an average of $135 over an entire gaming career, according to Stanford University doctoral candidate Nick Yee, who has spent five years surveying more than 35,000 gamers for his Daedalus Project. The project examines multiple facets of MMORPGs, and Yee started the project as an undergraduate at Haverford College.
According to his results, online game players spend an average of about 20 hours per week in a game. As a result of the time that's required to make progress in the virtual worlds, many players are invested heavily in the games emotionally and driven to buy progress in games, Yee said.
"For them, time is expensive in real life. They can't afford to play 20 to 40 hours per week, but they would like to enjoy some of the high-end benefits like special armor or weapons," he said. "They trade their virtual time for real money so they can perform better in the virtual world."
'Farmers' and buyers
As WoW gained popularity in 2005, the number of people who bought WoW's virtual currency with real money also increased. This business, known as the MMORPG secondary market, has lead to the creation of many Web sites that specialize in the sale of virtual currency, whether it be WoW's gold, EverQuest's platinum or Final Fantasy XI's Gils. According gameusd.com, a site that tracks the worth of virtual currency, one WoW gold piece is worth six U.S. cents.
Roger Kipe, the owner of several such Web sites, said he left a six-figure consulting income for his MMORPG service business, which works with about $40,000 per day.
"Didn't think it was that big, did you?" Kipe asked with a laugh.
Kipe's company, yourvirtualseller.com, and competitors such as ige.com, the "leading MMORPG services company" in the world, act as middlemen between MMORPG users who want to buy the currencies or other virtual items, and 'farmers' who want to sell the gold or other virtual items. Most of the currency that Kipe's company accumulates is from farmers in China, he said. Sometimes Kipe will buy from MMORPG users with excess money, but the bulk comes from people whose main purpose is getting gold to sell.
To build up excess currency, farmers will repeatedly slay virtual foes such as game boss to earn money. Often, the farmers are located in developing countries. Edward Castronova, a University of Indiana at Bloomington professor and an economist who has done ground-breaking work in virtual economies, said that the average farmer earns $1.70 per hour using the lowest transaction rates from Web sites who buy virtual currency. Some places claim that they pay much better than that.
The head of yourvirtualseller.com's customer service, who goes by his game name, Kender, said his company pays Chinese workers at least $5 dollars an hour for the gaming.
"They also get air-conditioning," Kender said.
The stereotype is the "Chinese gold farmer," but farmers are found wherever the labor is cheap.
Kipe boasted that he may soon acquire 150 employees in Romania.
"I've even bought from Pakistan before," he says.
The company also sells power-leveling. In many MMORPGs, characters have different power levels, which designate how powerful they are and what kind of abilities they have. For example, a 60-level elf hunter will beat a 40-level elf hunter easily. To "level-up" a character, gamers must accumulate play time, go on missions and build experience, Kipe said. It takes about 18 days for his company to level-up a character from one to 60, he said.
Virtual property ownership
But not everyone approves of his business.
"The problem is that we're not liked by the gaming industry themselves - they're saying that they own the virtual property," Kipe said. He defended his business by saying that his MMORPG services Web site only helps to enhance a gamer's fun by helping them move quicker.
Property rights is one reason game creators oppose the MMORPG secondary market, but the biggest conflict comes from interfering with gamers' experiences, said David Swofford, spokesman for NCsoft Corporation in North America. The company makes Lineage 2, another popular MMORPG.
"The game is supposed to be played a certain way - from the ground up is the best experience," he said. Swofford said players who don't buy enhancements with purchased virtual gold may find it difficult to compete with those that have purchased.
Swofford also said that the secondary markets encourage the proliferation of farmers, who disrupt the normal game by hogging resources and making it impossible for normal players to find gold and other required tools.
Often, virtual currency is achieved through means that violate companies' terms of use agreements. NCsoft has banned several thousand farmers. Blizzard Entertainment, the company that created WoW, revealed that it banned more than 18,000 users over a three-month period last year for farming gold and reselling items in the real world.
"Such actions can severely impact the economy of a realm and the overall game enjoyment for all players," the company said on the official WoW site Dec. 21. Blizzard did not return repeated calls and e-mails.
The companies aren't the only ones complaining about secondary markets; gamers also side with them.
"About 20 percent of gamers are very vocal in their opposition to such practices," said Thomas Morelli, a company spokesman for ige.com.
Castronova is one such gamer opposed to the secondary market.
"The way to think of real money trade is that it's a lot like a pollution," he said.
Castronova, an avid gamer, calculated the GDP of a country in the EverQuest universe and found that one unit of EverQuest money was worth more than Japanese yen in 2001.
As an economist, he said he understands the forces that drive people to create a secondary market. As a gamer, however, he disapproves of the practice.
"It bugs me to no end that someone's at the same level as me, because they spent a lot of money to get there - that's not the games I signed up to play," Castronova said. The excess of currency also creates massive inflation. According to gameusd.com, a unit of WoW gold was worth 60 cents in 2005. Today, it is only worth one-tenth of its former amount.
But for those who are quitting the game, selling gold is one way to get back the hours they spent on WoW.
Yeon Kim, a 26-year-old Baylor alumnus living in Houston, started selling gold a few weeks ago on eBay.com. Kim, who is a self-proclaimed "hardcore gamer," is liquidating his WoW gold because he might quit the game to study for the Certified Public Accountant test.
He has 12,000 gold to sell, which comes mostly from his girlfriend. Her character - a level-60 priest - is also a blacksmith.
"She made epic gauntlets, and everyone on the whole server had to buy them from her," he said.
At first he sold 1,000 gold for $40, not realizing that the average price ranges from $50 to $80. It was immediately bought. Since then he's increased his prices but hasn't been as successful.
Jessica Bui, Kim's girlfriend, is a pharmacy student at the University of Houston. Although she didn't play as many games as Kim, she introduced him to WoW and was just as, if not more, enthusiastic.
"I was on all the time, from the time I woke up to the time I fell asleep," she said.
As for Anne, she said she hasn't sold any gold or bought it since the first time, although she doesn't regret her purchase.
"I would rather spend an hour of my time at work than sit at my computer for five or six hours to make the same amount of gold," Anne explained. "If you buy massive amounts of gold because you're too lazy to get it, that's a different story."
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