Gold Farming Academic Analysis

Found a 87 pages academic analysis of gold farming in virtual worlds from Richard Heeks from University of Manchester, and I've done a 'points' form summary of the conclusion. This summary is very long, and I do think the paper is worth a detailed read.

General Statistics:

• rough guess is that 400,000 gold farmers in 2008 earn an average US$145 per month produced a global market worth US$500m;
• there are probably 5-10m consumers of gold farming services. The main uncertainty of estimation relates to the gold-farming market in East Asia, which appears much larger than that in the US/EU;
• guesstimated 80-85% of gold farming takes place in China;

Historical Development:

• "pre-history" of gold farming dates from the 1980s, and we can structure it in terms of capitalist development, starting with "subsistence" production and moving through barter, commoditisation and monetisation until it reach the petty commodity production of the 21st century;
  
• gold farming proper started in earnest in 2001-2002, really took off in 2003-2004, and entered something of a black hole phase in data terms during 2007-2008. This can be structured as a move from petty to capitalist commodity production involving wage labour, automation, and globalisation/offshoring, particularly to Asia;
• From mid-2005 to mid-2008, however, in-game currencies devalued an average of 75% against the US dollar. The continuing survival of the sub-sector probably relies on a disappearance of those super-profits, increased productivity, and disintermediation so that many firms now sell direct to consumers. As a result of these plus new entrants and the anti-gold-farming actions of game companies, power within the gold-farming value chain has in recent years become more dispersed, and has shifted somewhat away from brokers and somewhat towards game companies.
• Thirdly, continuing survival of gold farming relies on dealing with the many threats it faces and an important threat that is much more serious such as game company substitution or legal action by governments or game companies. Continuing survival of the sub-sector also relies on overcoming some severe information failures – absence, uncertainty, asymmetry, and communication problems.
• gold farming helps reduce unemployment and poverty, and improve national balance of trade and income equity. It may help reduce crime and provide a model for telecentre and cybercafé financial sustainability;
• gold farming seems to represent an efficient use of capital in job-creation terms
  

Market Structure of Gold Farming:

• entrepreneurs (almost all men) who start up gold farms are pulled into the sub-sector by some mix of existing game- and/or gold-farming-knowledge plus the lure of profits. They have created tens of thousands of enterprises, principally micro-enterprises employing less than 10 staff, and they are informally-financed.
  
• gold farmers typically work alongside managers, researchers, technical support and customer relations staff. The apparent lack of domination by medium- and large-scale firms means, though, there must also be scale diseconomies, such as the costs of "being noticed" by government and game companies. These two stakeholders, alongside ICT suppliers, fansites and regular players, sit outside the main gold farming value chain.
• The sub-sector has taken off because a demand with more money than time met a supply with more time than money.

Social Perceptions:

• Perception outranks reality in the discourse on gold farming, and – at least in the West – those perceptions have been largely negative, serving to homogenise, alienise, criminalise and moralise about gold farmers. That this has happened supports the idea that racial stereotypes and views about immigrant labour are remapped into cyberspace. It also supports the structuralist argument that institutional forces in the real world are reproduced in new, virtual fields like gold farming.
  
• There is some contra-flow, suggesting the sub-sector's virtuality has produced new outcomes; for example in relation to intermediaries. While this falls short of an argument that technology has transformed social structures and behaviours, it means the mix of technology, structure and agency is unpredictable.