Last week, Blizzard Entertainment announced that the forthcoming Diablo III (the sword-and-sorcery role-playing game’s first sequel in a decade) would include in-game auctions for converting virtual loot into actual cash, although denominated in dollars, not gold. Unlike Zynga’s monopolistic role in selling accessories to players of FarmVille and CityVille, Blizzard promised to let players set the market for enchanted weapons and ready-made characters while collecting just a flat listing fee on each transaction. Considering the Diablo franchise has sold 20 million copies to date and Blizzard also runs the enormously popular World of Warcraft and StarCraft massively multiplayer online role-playing game (MMORPG) franchises, the company had single-handedly legitimized virtual currencies in one fell swoop, an act which promises to transform gold farming into a growth industry for the bottom billion and inspire virtual heists rivaling anything in the real world.
Gold farming--a term covering the gray market sale of in-game gold, items or services for real currency--most likely started in South Korea a decade ago with the original incarnation of Lineage, only spreading beyond PC bangs when Asian players began migrating to American MMORPGs en masse. In 2007, the journalist and Play Money author Julian Dibbell estimated that China harbored 100,000 gold farmers alone, producing a black market GDP the size of Bolivia’s or Albania’s.
In April, a report by the World Bank pegged the revenues of “third-party gaming services” at approximately $3 billion in 2009. What’s more, gold farmed in China tends to stay in China--unlike, say, the profits from the global coffee trade, which is worth $70 billion worldwide and critical to many developing countries, although only $5.5 billion went to the countries actually growing beans. “This suggests that the virtual economy can have a significant impact on local economies despite its modest size,” the report noted approvingly. “It can also support the organic development of local ICT infrastructure by providing revenue models that maintain existing deployments and justify new private investments.” After weighing the pros and cons (mostly cons) of gold farming as a development tool, the report’s authors concluded that “one clearly positive thing about the gaming services industry is that it has activated thousands of young people from very modest backgrounds to create employment for themselves as digital entrepreneurs.”
Last week, five such “entrepreneurs”--four South Koreans and a Chinese-Korean--were arrested by Seoul police and charged with organizing a gang of 30 North Korean hackers to essentially print counterfeit virtual money. The gang, which was allegedly recruited from North Korea’s top engineering universities, breached the servers of Lineage and another popular MMORPG, Dungeon & Fighter, earning $6 million in less than two years via round-the-clock gold farming by bots, the gaming equivalent of printing presses. Some of that money was funneled to the hard currency slush fund North Korea’s Kim Jong-il uses to fund everything from his nuclear weapons program to his wine cellars.
Seoul police noted to The New York Times that Kim’s regime must be hard up for cash if they’re turning to gold farming, but as actual gold prices soar above $1,750 an ounce and the Swiss franc crushes both the U.S. dollar and Euro, are Diablo’s gold pieces are any less of a safe haven?
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[Image: Flickr user chanchan222]