China Bans Gold Farming

Farming gold is expected to become a big enough problem that China has banned gold farming. What? Who farms gold?

For those unfamiliar with this hidden economy, “gold farming” is a term that refers to performing tasks that allow you to level up in games. Such “farming” includes actually digging for gold, building characters for sale, lurking to kill players who regenerate in the same place, and other actions which may save time and effort for would be game players.

There is a sizable business in MMORPGs for gold farming especially in World of Warcraft. One report suggests gold farming is worth between $200M and $1B in real money. Yes, it’s a virtual good story, and there are hundreds of companies, mostly in poor areas and third-world countries, who “farm gold” to sell to buyers in the US and other western countries.

While this may sound enterprising, the buying and selling of characters, goods, and services in the real world for virtual world benefit, could have dire consequences – at least the Chinese government believes so.  From the official press release:

“Since 2007, virtual money trading has drawn official attention, with the government demanding tighter controls as such trading became an avenue for gambling and illicit trade.”

Can these virtual economies with virtual goods be such a big deal? Is there really that much criminal behavior around it?

The Chinese government thinks so and is attempting regulation through their Ministry of Commerce. From my own experiences I agree there is a high potential for illicit activity. Back in 2004, I personally saw enough fraudulent activity attempts at buying, selling, and trading virtual currency vehicles, my employer at the time, BitPass, put a high security watch and filter on one of the retailers of the Lineage MMORPG cards for one overseas partner who was using BitPass as a micropayment instrument. To them, at the time, micropayments really did add up to a genuine source of income.

I recommend you read the press release and the earlier discussion on virtual goods, if you have the chance. There’s a potentially enormous volume of transactions in China alone for virtual goods and online payments, big enough that the Chinese government has noticed and taken action.

About Duane Kuroda

Business ninja, deal hunter, Internet marketer, and technology fiddler obsessed about growing companies and launching products. Currently at Peerspin, Duane’s past lives include Vice President of Marketing roles at companies leading micropayments, Internet video, and online communities as well as research and consulting for mobile advertising. Duane has spoken at conferences including Digital Hollywood and Digital Video Expo on topics covering monetizing online content and online video, has appeared on TechNowTV and KNTV, and has been quoted in various magazines. Follow Duane on Twitter: @dkuroda.

2 Responses to China Bans Gold Farming

  1. […] News Sources wrote an interesting post today onHere’s a quick excerptFarming gold is expected to become a big enough problem that China has banned gold farming. What? Who farms gold? For those unfamiliar with this hidden economy, “ gold farming ” is a term that refers to performing tasks that allow you to level up in games. Such “farming” includes actually digging for gold, building characters for sale, lurking to kill players who regenerate in the same place, and other actions which may save time and effort for would be game players. There is a sizable busin […]

  2. The Chinese government thinks so.Once a gold farmer or workshop has created a stockpile of currency, they will try to sell it.

    Thanks for share this article.