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China Bans Gold Farming 293

Posted by ScuttleMonkey
from the shooting-yourself-in-the-foot dept.
InformationWeek is reporting that the Chinese government has declared a ban on the sale of virtual goods for real currency. This move is poised to shut down a several billion yuan a year business that has been growing by leaps and bounds every year. "The trading of virtual currency for real cash employs hundreds of thousands of people worldwide and generates between $200 million and $1 billion annually, according to a 2008 survey conducted by Richard Heeks at the University of Manchester. He estimates that between 80% and 85% of gold farmers are based in China. [...] Game companies typically forbid gold farming but committed virtual currency traders find ways around such rules. Some game companies have recognized the futility of trying to ban the practice and have built virtual commerce into their game infrastructure."
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China Bans Gold Farming

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  • The trading of virtual currency for real cash employs hundreds of thousands of people worldwide and generates between $200 million and $1 billion annually, according to a 2008 survey conducted by Richard Heeks at the University of Manchester. He estimates that between 80% and 85% of gold farmers are based in China.

    Dear god! Eight tenths of one billion dollars is a lot of cash!

    The Chinese government estimates that trade in virtual currency exceeded several billion yuan last year, a figure that it claims has been growing at a rate of 20% annually. One billion yuan is currently equal to about $146,000.

    So what is it, hundreds of millions or hundreds of thousands? Because one is a nice chunk of change while the other is, across China's population, laughable.

    These numbers just aren't adding up here. There seems to be a large disparity between what the Chinese government reports and what Heeks' study finds. It's entirely possible that Heeks' is stretching stats to make his research sound more important and news worthy. It's also possible China is understating the impact their ban will have so they can "cure you of your illnesses." The reality is probably both a little of column A and a little of column B.

    Some game companies have recognized the futility of trying to ban the practice and have built virtual commerce into their game infrastructure.

    And now China will realize that futility. One would think that China would enjoy the tax on those who report this income [worldwide-tax.com] but now it's just going to all go under-the-table. Hell, I'd say tax it but I'm certain China wants to look like the caring government attempting to heal the afflicted youth [slashdot.org].

    • by Hojima (1228978) on Monday June 29, 2009 @02:22PM (#28518107)

      Personally, I'm quite happy when oppressive people with power tighten their grip. It follows the law of tension: the harder it's wound, the more likely it is to snap. Organizations such as companies that bully, to massive governments, make stupid decisions to maintain and ascertain their power, when all they do is jeopardize it more. I can't wait till they make a huge mistake on civil liberties and practically give their citizens no choice but to revolt.

      • Re: (Score:2, Funny)

        by htwf_and_ip (1248696)
        the harder it's wound, the more likely it is to snap.

        I thought it was "The more you tighten your' grip, the more Star Systems will slip through your' fingers."
        • by Achoi77 (669484) on Monday June 29, 2009 @04:13PM (#28519941)

          Rebel Farmer: The more you tighten your' grip, the more Star Systems will slip through your' fingers

          Chinese Govt: Not after we demonstrate the power of this station. In a way, you have determined the choice of the planet that will be destroyed first. Since you are reluctant to provide us with the location of the rebel base, I have chosen to test this station's destructive power on the World of Warcraft.

          Rebel Farmer: No! Warcraft is peaceful, we have no weapons you can't possibly-

          Chinese Govt: You will provide another target - a military target? The name the system! I grow tired of asking this, so it will be the last time. Where is the rebel base?

          Rebel Farmer: ...Runescape. They're on Runescape.

          Chinese Govt: There! You see Lord British she can be reasonable. Continue with the operation, you may fire when ready.

          Rebel Farmer: WHAT?!

          Chinese Govt: You're far too trusting. Runescape is too remote to make an effective demonstration but don't worry - we will deal with your rebel friends soon enough.

          Rebel Farmer: noo..
      • Personally, I'm quite happy when oppressive people with power tighten their grip. It follows the law of tension: the harder it's wound, the more likely it is to snap.

        Normally I would agree with you. But as a kid I watched tanks clear a square [wikipedia.org] in China. As a result of this, the Red Cross would later report twenty five hundred people dead with seven to ten thousand wounded. The same government that dealt with those protests in that way is still in power today, twenty years later.

        If that didn't do it, I don't see banning gold farming and regulating the internet doing it. The Chinese government is a new kind of oppression that has survived many attempts to move in the opposite direction. It must be a decision made simultaneously by billions of people to change this. If you're sitting their waiting for that tension to snap, you may be waiting a lot longer than you think.

        • Re: (Score:2, Redundant)

          by Hojima (1228978)

          Seeing as that was a move that the government regretted so much that it's practically purged from their history, and that it was one of the major events that contributed to their economical reforms, I'd say it might be sooner than later. Obviously the little hundred million dollar dent that this law made isn't going to do the trick, but the more the middle class gets bolstered, the more filled bellies with higher ambitions will appear. And once that number gets high enough, who knows what little events will

          • Re: (Score:2, Insightful)

            by eldavojohn (898314) *

            Seeing as that was a move that the government regretted so much that it's practically purged from their history ...

            You live in a pretty fucked up world where sweeping a mistake under the rug is a sign of regret. I don't know about you but I was raised that if you fuck up, you admit it and then you apologize for it. If that's me asserting my Occidental values on the Orient, I'm sorry. That's just how things should be. The survivors of those killed deserve it and the dead should be honored and memorialized. They died for reform and they should not be forgotten. I think that is a fundamental respect that underlies a

        • by fizzup (788545) on Monday June 29, 2009 @03:21PM (#28519011)

          I was having breakfast in Idaho City, Idaho around the time the Chinese government put down the Tianenmen Square protests. I overheard a guy at a nearby table say, "This wouldn't have happened if the Chinese were armed, I tell ya." I nearly laughed out loud, but I took a moment to really think about what he said. For the first time in my life, I understood the Second Amendment to the US Constitution.

          The First Amendment is the first line of defense; the Second Amendment is the last.

          • Re: (Score:3, Insightful)

            by Anonymous Coward

            You do realized that the Chinese government used tanks right? Small arms (the kind of guns allowed in the US) cannot stop a tank.

            • by DrgnDancer (137700) on Monday June 29, 2009 @04:03PM (#28519765) Homepage

              Indeed practically nothing short of another tank can stop a tank. A perfectly positioned and deployed shape charge can, but I doubt many civilians in any country have the training necessary to use such a thing even if they were legal. I don't disagree with the second amendment per se, but implying that it holds the government in check has always seemed silly to me. What holds the government in check is a combination of the rule of law and a culture in the military that makes them nearly unusable in domestic situations. You'd never see a Tienanmen Square in this country because the military would simply refuse the order.

              If politicians and (more importantly) the military ever totally abandon the Constitution and impose some sort of martial law, no amount of small arms is going to stop them. As it stands right now, small arms can only kill dismounted infantry if it is extremely well aimed, let alone anyone in any sort of vehicle. Modern body armor doesn't make soldiers invulnerable robo-cops, but it protects most of their vitals from even assault weapons. Put the armored soldiers in an even a lightly armored vehicle and nothing short of high explosives can do much damage to them.

              • Re: (Score:3, Informative)

                by ovu (1410823)
                I dig the logic, but there are several people in Iraq and Afghanistan who might disagree with how unstoppable armed troops are against motivated citizens...
              • by CrimsonAvenger (580665) on Monday June 29, 2009 @04:54PM (#28520567)

                Modern body armor doesn't make soldiers invulnerable robo-cops, but it protects most of their vitals from even assault weapons.

                Lucky thing most hunting rifles are more powerful than any "assault weapon".

                A .30-06 will go through any body armour worn today with no difficulty at all. And it's far from the most powerful hunting round in use in the USA.

              • by shutdown -p now (807394) on Monday June 29, 2009 @07:09PM (#28522113) Journal

                Indeed practically nothing short of another tank can stop a tank.

                That's patently wrong. Things like RPGs [wikipedia.org] are still quite effective, even against modern tanks. Yes, there are countermeasures, but they can be defeated, too.

                A good example of how vulnerable tanks actually are against infantry is the first Battle of Grozny [wikipedia.org]. Chechen fighters had set up people with RPGs in basements along the main routes which Russian tank columns used to advance towards the city center. They would wait till the column is entirely within reach, and then 4-5 people would hit the first tank in the column, and the same number for the last - thus virtually guaranteeing that tanks would be disabled at the very least, trapping the rest of the column - which would then be destroyed methodically in a similar fashion. And basements were used over roofs because tank gun simply cannot depress low enough to make an aimed shot into a basement.

                Two things to keep in mind: it's much easier to increase armor penetration than it is to increase armor strength (mostly because you have to increase armor strength along the entire surface of the tank, while e.g. a shaped charge only has to punch through a specific point). And also, tanks have very limited visibility and maneuverability in urban environment, especially compared to infantry.

                This sort of thing is why, in modern urban warfare, tanks are always supported by infantry, which defends them against enemy anti-tank infantry.

              • by greyhueofdoubt (1159527) on Monday June 29, 2009 @10:51PM (#28523987) Homepage Journal

                As a veteran of Iraq and someone who would be happy to post pics of the Humvee/APC graveyards if my site was still up let me just say:

                NO. You are wrong. If the U.S. military decided to invade the U.S., for real, not just "security" around a natural disaster area, the war would be over in days or weeks. And the people would win. Do you have any idea how large the U.S. is compared to our military? How vulnerable our forces really are? All of our retirees and guardsmen who would know all our weaknesses and S.O.P... They all LIVE HERE. My base could be effectively shut down by one person doing one thing (yeah, probably dying in the process), and it would be easy. Dead easy.

                And "small arms" is a wide category. My .22-250, a smallish varminting cartridge, can penetrate 3/8+" mild steel, and that's just a plain-jane hollowpoint hunting round. You load a decent penetrator and maybe a little more pep in the powder charge and you're talking about something that could penetrate armored glass, humvee tires, building walls... And then you can move up to the bigger hunting rounds, the .308, the .30-'06, the 7mm-'06, the .338. Insurgents using measly 7.62x39 have taken out APC's in Iraq with horrific consequences- I have firsthand experience here, a human being hell-bent on causing death and damage will typically be very successful.

                >>Put the armored soldiers in an even a lightly armored vehicle and nothing short of high explosives can do much damage to them.

                Nor can they do much to the environment around them, short of yelling through loudspeakers. The turret gunner will be the first target, and his guns can only point in one direction at a time.

                >>Indeed practically nothing short of another tank can stop a tank.

                You know what can stop tanks? Tank barriers. You put your bomb next to the tank barrier and you set it off when the tank is over it figuring out what to do. And when the tankers figure out that trick and call in EOD, you shoot EOD. And when they figure that out and just barrage the barricade from the next corner, you put your bomb under the logical place for the tank to be. Underground fighters and insurgents have known this for decades. Americans are bright enough to figure this stuff out.

                >>You'd never see a Tienanmen Square in this country because the military would simply refuse the order.

                Kent state. Different order of magnitude, but it's the thought that counts. Don't count on units simply refusing orders. There are enough assholes in the military to keep a civil war moving until everything falls apart.

                -b

            • by couchslug (175151) on Monday June 29, 2009 @07:48PM (#28522573)

              "You do realized that the Chinese government used tanks right? Small arms (the kind of guns allowed in the US) cannot stop a tank."

              They can force it to button up so it can be killed with incendiaries, have a track disabled by inserted objects for a mobility kill etc.

              Small arms dispersed among the people facilitate revolutionary capability, and NO country has enough tanks for them to be everywhere at once. No country, possibly excepting North Korea,has enough domestic military power to destroy widespread armed revolt, though it may contain outbreaks. Tanks can't be everywhere, and can be killed by infantry with expedient weapons. Widespread ownership of weapons means that if enough people choose to unite,they will outnumber any force their government can field. Partisan warfare with a determined base can be very hard to put down,and can turn into civil war where the government forces are divided.

              The amount of asspain a few thousand lightly armed Iraqis and Afghans have been inflicting on Coalition forces is an example of what can happen with small arms as basic weapons.

          • Chinese guns can take out tanks can they?

          • by gad_zuki! (70830) on Monday June 29, 2009 @03:51PM (#28519555)

            Guns didnt help Jews, Poles, Gypsies, in WWII. An AK in every home didnt stop Sadaam from oppressing his own people. Its funny how people think a handgun or rifle works against a mechanized division.

            • Re: (Score:3, Informative)

              by Rewind (138843)

              I can't speak on Iraq, but WWII isn't a good example. A lot of disarming / gun control did occur there. I am not saying it would have made a difference, but I will say that is a bad example because "They gunna take our guns and then they gonna come fer us!" did sort of go on there.

              Also WWII leaders like Hitler change things. For example Ghandi style non-violent civil disobedience can work in many situations, but I don't think it would have been even remotely effective against a leader who has a goal of g

            • by dan_sdot (721837) on Monday June 29, 2009 @04:21PM (#28520077)
              Hitler's first move was to confiscate firearms from the Jews. Here is something I just googled up on the subject: http://www.stephenhalbrook.com/article-nazilaw.pdf [stephenhalbrook.com]

              The first step of every modern tyrant is to confiscate firearms. (Note, this is not to say that everyone who wants to confiscate weapons is a tyrant). Mao, Stalin, Hitler, Castro, etc.

              The point is not that a guy with a handgun is going to stop a tank. There are 2 points to make:

              1) A crowd the size of the protests currently happening in Iran actually is something to be feared if they are armed.

              2) A complete reliance on the state for one's protection creates a complacency and an orwellian love for "big brother". This point is more subtle than the first, but the more I study the issue, the more I realize how important it is. If a person is forced to rely entirely on the state (usually a police force) for his/her protection, this is not a good thing. Responsible gun ownership reminds one that even though good police protection is a wonderful thing, if there were no police, one would still be able to get along with one's life. This autonomy from the state is a good thing.
        • The Chinese government is a new kind of oppression that has survived many attempts to move in the opposite direction.

          I'd say that the Chinese government is the product of the oldest, longest running civilized society on the face of the planet - they've taken oppression from an art to a science, they may not have it completely down yet, but they're much further along than the "Wild West" upstarts in America.

      • Re: (Score:2, Interesting)

        by GreatAntibob (1549139)

        Why would the people revolt? I'd be willing to bet most Chinese citizens think these restrictions are reasonable.

        It's one of those "common sense" type ideas in Western nations that everybody wants a democracy and that everybody wants nearly unlimited personal freedom. It's simply not true. Many (maybe most) Chinese people not only approve of some limits on speech and civil liberties but think the government may not be going far enough. Many of my co-workers are Chinese citizens, and they are just as happ

    • by Anonymous Coward on Monday June 29, 2009 @02:28PM (#28518189)

      The numbers aren't adding up because the exchange rate for Chinese currency to U.S. Dollars is incorrect and the author dropped some zeroes. One Dollar is equal to ~7 Renminbi, so one billion Renminbi should be $146,000,000.

    • Re: (Score:3, Insightful)

      by dintlu (1171159)

      China may enjoy the tax generated from gold farming, but virtual commerce cannot be regulated and controlled like real commerce. Ignoring the interaction between Real and Virtual economies is headstrong and foolish, so from my vantage point it appears that China is letting some other country pave the way for virtual regulation rather than saddle itself with unique problems caused by this novel form of earning money.

      Think of it this way, if gold farming really is worth $1b USD per year, this is equivalent t

      • Re: (Score:3, Insightful)

        by lgw (121541)

        So, wait, are you seriously arguing that the Chinese government was smart to destroy the livelihood of 400K people to prevent the possible future destruction of the livelihood of 400K people? I take it you also support the death penalty for failure to wear a seatbelt?

        BTW, the sale of virtual goods is "outlawed" in most of the games in which it occurs (without much effect) and gold farmers often move from game to game as popularity shifts, so thee are non-issues. "Gold Farming" is a legitimate industry - i

        • by dintlu (1171159)

          400k times 20% per year.

          I was only speculating on China's rationale, that what may not be a problem now becomes problematic as it grows over time.

          Examining potential interactions between virtual economies and real economies is more productive than dismissing them outright and failing into your old, familiar free-market-versus-communism-death-penalty-war-on-drugs-blah-blah-blah argumentative schema.

    • by Danathar (267989)

      The thing with China....just because the west says it's not possible (censoring the internet, cracking down on dissidents, outlawing stuff) does not mean they don't try anyhow. And if they try they give it their complete attention because they actually think they CAN do it.

      Remember the saying...

      Just because you believe in something does not mean it's true

    • by kenp2002 (545495)

      As far as I read it they are talking money EARNED not neccesarily exchanged. So both could be accurate depending on which end they are on. Also who knows how much dissapears into pockets so to speak.

    • by StikyPad (445176) on Monday June 29, 2009 @03:24PM (#28519053) Homepage

      It's a pretty safe bet that the figure is in the millions USD, but beyond that it's hard to say.

      While my sample size is very small, 3 out of the 4 people I know IRL who play WoW have each dropped $200 on such services. If we assume that 1% of the WoW population [warcraftrealms.com] spends half that, and that each 8 characters represent 1 account, that gives us $772k by itself. And that's just a very conservative estimate for one game, since some self-reported figures are much higher [pollhost.com]. If we expand our assumptions to say that each 4 characters represents 1 account, and that 15% of those accounts have purchased $100 worth of gold or other services, we end up around $23M -- a number which I still suspect is conservative.

    • I won't attempt to make the numbers add up here. I only wish to point out that it depends on who is working the numbers, how big they get. If you play online games, you certainly know that gold mining is a pretty big problem for the gaming industry. The manner in which they deal with it varies from one company to the next. But, it is easy to imagine that the practice probably nets a billion dollars per year for the Chinese people. It IS a huge industry!!

      The hundreds of thousands of dollars mentioned ab

  • Wow! China seems to really want to enhance its image, any other reason for that move that anybody can envision ? After all, it will be less money going straight into to China... Of course I may be missing something ;-)

    I watched a program on TV where they visited a company working in this field. They basically employ 30+ people who play the game all day, we saw the player pool on TV while they were playing. They are based in countries where they can pay people very small wages, they take the points earned by

    • by Spy Handler (822350) on Monday June 29, 2009 @02:20PM (#28518061) Homepage Journal
      It would not be a pleasant job, even if you got the same wage you do now. Your bosses will constantly be pushing you to maximize your per hourly gold yield. And most likely you would be running several computers at once and using various hacks, working like a dog. Any semblance of it being a fun game would be completely gone, replaced by simple drudgery.

      I'd rather do straight data entry typing than be a gold farmer...
      • Re: (Score:3, Funny)

        by jockeys (753885)

        And most likely you would be running several computers at once and using various hacks, working like a dog. Any semblance of it being a fun game would be completely gone, replaced by simple drudgery.

        how is that ANY different than your average MMO player?

        • by dave562 (969951) on Monday June 29, 2009 @03:01PM (#28518657) Journal

          Your average MMO player has a choice of activities. To use WoW as an example, you can do quests, you can run instances, you can do battle grounds, do some world PVP, level an alt, do silly seasonal quests, etc. As a gold farmer, you do one and only one thing... farm the most valuable items out there. You don't have the opportunity to do anything else, because doing anything else is a waste of time and isn't what you are getting paid for.

        • by Endo13 (1000782)

          how is that ANY different than your average MMO player?

          how is that ANY different than your average lame troll post?

          See the difference between our two questions is that mine is an actual rhetorical question, while yours is simply a troll masquerading as rhetoric.

      • by Red Flayer (890720) on Monday June 29, 2009 @02:35PM (#28518261) Journal

        Your bosses will constantly be pushing you to maximize your per hourly gold yield.

        My understanding is that most of the gold farmer "workers" work on a quota system. Of course the quota will get moved up depending on possible performance. It's not about maximizing yields, it's about hitting the quota dependably.

        When labor is that cheap, it's probably more effective to hire additional workers than it is to squeeze every last drop out of the ones you have.

        Anecdotally, back when I played MMOs, I was once asked to hold onto some surplus in-game cash for a farmer. He wanted to set it aside so if he had a bad day, he could use it to get over quota and avoid punishment.

        I recall reading an article about this somewhere (Gamasutra?)... the gold farmers didn't want to make too much gold for their bosses, or their coworkers would get mad. Excess earnings in a session were hidden to (1) save for a bad day (2) sell independently for income or (3) play the game themselves. It was a really interesting look inside gold farming at the basest level.

        • by lgw (121541) on Monday June 29, 2009 @03:22PM (#28519029) Journal

          I've done buisness with gold farmers in the past, and they were quick to contact me directly to solicity my next sale - to them, not to their employers. I think this is all a bit less Charles Dickens than people are making it out to be. Certainly it's better than typical jobs for kids in the West's industrial revolution.

        • by jeko (179919) on Monday June 29, 2009 @03:55PM (#28519611)

          When labor is that cheap, it's probably more effective to hire additional workers than it is to squeeze every last drop out of the ones you have.

          Spoken like a man who's never had a truly crappy job. Squeezing every last drop out of your workers is its own reward. I knew a restaurant manager once who stole tips off the servers' tables "just to remind everyone who the big dog is." I knew a lawyer who refused to pay his staff a living wage or work them less than 60 hours a week "so they won't have time to go find another job." Hell, even John McCain refused to honor our commitment to pay for our soldier's college expenses because, and I'm paraphrasing correctly, if our soldiers knew they could come home and go to college, no one would want to stay in Iraq.

          Sometimes treating your employees like crap is more about shoring up your own inferiority complex than it is smart business decision. If you haven't experienced it directly, go reread Thomas More and George Orwell to get the gist of it.

      • by Anonymous Coward on Monday June 29, 2009 @02:41PM (#28518385)

        This is still a hundred times better than working on a farm for a living. Life is hard in rural areas, and making any kind of living outside of farming is a huge step up from what your parents likely did. Even if the work is hard and demanding by our standards, people in the 'first world' live decadent soft lives that don't know what a real lifetime of work would look like if it slapped us in the face.

      • How is that different from actually playing the game?

      • It would not be a pleasant job, even if you got the same wage you do now. [...] I'd rather do straight data entry typing than be a gold farmer...

        Data entry isn't even an option for these people. They get to choose from farming (real) fields for pennies or playing video games for the same number of pennies. Most of them who play video games for pennies are at least guaranteed to have a roof over their head because computers are expensive to replace even when the people aren't.

      • Ever do straight data entry typing? It has lots of guises, most of them resembling Dante's 4th and 5th levels...
    • Re: (Score:3, Insightful)

      On the plus side, aside from RSI risk and lack of exercise during working hours, it is a largely harmless and physically undemanding job. No heavy machinery macerating your digits, no toxic exposures, no baking in the fields for 10 hours, no swabbing out other people's toilets.

      It would certainly be a job, not a game; but not a substantially grimmer one than a nontrivial number of first world service jobs, much less third world peasant/sweatshop stuff.
      • by lgw (121541)

        I used to work next to a QA group for a major game company. Their QA folks did 12-hour shiftwork, in conditions not all that different from a Chinese gold farmers, other than the pay. Anyone looking down on this job as some third-world thing needs to check their arrogance. As you say, this is a Hell of a lot better than working on a farm (or industrial revolution-era factory).

    • Re: (Score:3, Interesting)

      by Chriscim (830119)
      Last year, I went through a marital separation, moved into a new place with roommates, and was laid off from my job within the same week. It took me a month, but I eventually found a full-time job, and a weekend job. The damage had been done though, I was behind on bills and struggling to keep up. I had a WoW subscription going and was considering cancelling it, but the through of selling gold occurred to me as a way to help make ends meet while I wasn't work at either job. So, in order to help get out
  • by gubers33 (1302099)
    How are they going to get their World of Warcraft gold! China is putting their World of Warcraft citizens in jeopardy of becoming weak.
  • It's certainly an interesting development, and one that I think will slightly curb the growth of gold farming, gold spam, wacky in-game currency trends, and so forth, but I think the real question here is, why would this be in China's interest to do this, and shut down a blossoming home-grown (if gray-market) industry?

    The IW article notes that "The government justifies its ban on virtual currency trading as a way to curtail gambling and other illegal online activities." It just seems this isn't the real or

    • by maxume (22995) on Monday June 29, 2009 @02:42PM (#28518391)

      One reason might be that building an industry that is entirely reliant on the whims of a foreign company could leave them holding the bag for thousands of idiots who thought they had a job.

      • by pmontra (738736)

        One reason might be that building an industry that is entirely reliant on the whims of a foreign company could leave them holding the bag for thousands of idiots who thought they had a job.

        Only a few countries build cars but every country service them. Local car service industries are at the mercy of manufacturers which, for example, make fully electronic cars that can be serviced only with expensive tools, but no country ever banned cars for that reason AFAIK.
        I really wonder what the reason for the gold farming ban is.

        • The problem with the analogy is that repair services are different from currency exchange. The former does need to adapt to new technologies (and potential jerk moves on the part of manufacturers). The latter isn't supposed to print money, simply trade it. Gold farmers are more akin to counterfeiters, producing currency against the best interests of the economy that otherwise wouldn't be a part of the system.

    • Re: (Score:3, Interesting)

      by vlm (69642)

      It just seems this isn't the real or whole story, though.

      Encrypting the client-server protocols, makes it harder to hack the "game". Sort of.

      That also makes it a great tool for secret communication about counter-revolutionary activities ranging from simple gossip about Tienanmen square, to money laundering.

      Its an interesting public admission that a video game company can make a government-proof encryption/authentication/communication system.

    • by Apache (14188) <foonix@yahoo. c o m> on Monday June 29, 2009 @03:20PM (#28518993)

      I suspect that the article is actually blowing out of proportion the MMO currency trading side of things. A quick googling shows that evidently gambling is illegal in china and the government has gone to lengths to crack down on it:

      http://en.wikinews.org/wiki/China_steps_up_anti-gambling_campaign [wikinews.org]

      If :
        A) MMO currency trading is not a notable contributor to China's GDP
        B) Virtual currency makes bypassing gambling restrictions easier
        C) China is genuinely interested in curbing gambling
      It sounds to me like banning on-line currency trading is a no-brainer as it will criminalize the entry point people would use to get around local gambling restrictions. Any problem with MMO currency trading is purely incidental.

      And I doubt China cares about the cost the rest of the world pays for [Titansteel Bar]s on the auction house..

  • So... (Score:4, Insightful)

    by Darkness404 (1287218) on Monday June 29, 2009 @02:14PM (#28517969)
    So let me get this right, China bans a highly profitable industry from operating in China that no doubt brings in lots of revenue in the Chinese government or at the very least prevents people from having to work directly for the Chinese government. Sound really smart. While your at it why not ban the production of shoes, hard drives and cheap kids toys, it would have about the same effect.
    • by wjousts (1529427)

      FTA:

      The government justifies its ban on virtual currency trading as a way to curtail gambling and other illegal online activities.

      But it's probably more about control. In a tightly controlled economy, the Chinese government doesn't want a parallel and uncontrolled economy popping up.

      • But China of all governments should know that whenever they start to control something it just leads to an underground movement of people who do it but they get no money from it and a communist/fascist/socialist government needs all the money they can get if they don't want to go the way of Soviet Russia. At some point they have to realize that even if the game currency is used to trade across multiple games, it will eventually surface as taxable cash.
    • Re:So... (Score:5, Interesting)

      by Pollardito (781263) on Monday June 29, 2009 @02:59PM (#28518613)
      It might be related to their attempts to limit the time that people spend playing games online [gamespot.com]. After all it would seem strange to limit people from playing more than 3 hours in their private life, while still allowing people to play 4 times that long at work.
      • Not really, if you are a socialist or communist state and rely on people making exportable goods to be taxed heavily in order to support your larger needs to "help" your citizen so anything that hampers your productivity should be eliminated or reduced in order to get more tax revenue. So if you are selling something that leads to more tax revenue it would be a good thing for the government on the other hand if you are doing nothing productive it costs money in a communist or socialist society.
  • subscriptions are intangible, are they going to prevent retailers from selling those too? FTA: "prepaid cards of cyber-games"....so they're not going to let people buy world of warcraft subscriptions or something?

  • So, China just fobade anyone who does any work on the inernet from receiving payment of any kind for their services.

    Wow.

    No, seriously, I'm impressed.

    • Re: (Score:3, Informative)

      by blueg3 (192743)

      All of the non-gold-selling Internet business that comes to mind involves either selling a real good (although that real good consists of data) or performing a service, not selling a virtual good.

      You seem to be confusing real goods on the Internet that consist of data with virtual goods. (Note that a real good consisting of data -- like the contents of a website -- can easily, though perhaps inconveniently, rendered into data in a more "physical" form. I cannot give you WoW gold via any physical means.)

  • Isn't virtual currency just a microcosm of a "real" currency system? Perhaps they should also start cracking down on retail gift cards and "point" systems, too.

  • by elrous0 (869638) * on Monday June 29, 2009 @02:23PM (#28518113)
    If this is just another instance where the farmers just have to bribe the cops to look the other way, this "ban" will amount to nothing more than a PR stunt.
  • by Hoi Polloi (522990) on Monday June 29, 2009 @02:25PM (#28518133) Journal

    And suddenly thousands of Indian techies have opened Warcraft accounts.

    • So now when I call tech support I will have to wait twice as long as I usually have to because the support people are out busy on a guild dungeon run?
  • by Monkeedude1212 (1560403) on Monday June 29, 2009 @02:32PM (#28518231) Journal

    It's not illegal to make Gold.
    It's not illegal to Give Gold.
    It's not illegal to Give real Money to someone else.

    But somewhere along the way, selling Gold online becomes illegal. Wheras stating the transaction as a two-way donation easily bypasses the law.

    Also - the big question - why would this become illegal? People do what they want with their money. If Blizzard was smart - they'd offer Gold at a price matching the market and get a cut on this. They've already ruined WoW four times over. Anyone who's played since the beginning can tell you how much more enjoyable it used to be.

    Gold farmers also increase the amount of subscriptions that the game has, more money going into the developers... I don't get why they fight it so much.

    To me - its the worst business logic I've ever come across, and games that have these microtransactions already involved will be the ones who come out on top.

    • by rainmaestro (996549) on Monday June 29, 2009 @02:40PM (#28518357)

      This reminds me of the old Carlin skit on prostitution:

      "Selling is legal, ****ing is legal. So why isn't selling ****ing legal?"

      • Re: (Score:3, Insightful)

        by gujo-odori (473191)

        George Carlin had a lot of insight into bogosity, and phrased it in memorable ways.

        While I'm not particularly in favor of prostitution, the court long ago ruled that sex acts between consenting adults are legal.

        That being the case, it seems - at least to this layman - that the law is on shaky ground in dictating how said consent may be achieved. Whether it's by flowers, dinner, and clever small talk, or whatever the going rate in cash is, consent is consent.

        To make matters even cloudier, the court has also

    • by Chad Birch (1222564) on Monday June 29, 2009 @02:41PM (#28518367)
      It's not illegal to have sex.
      It's not illegal to give money to someone else.

      It's not illegal to drive.
      It's not illegal to drink.

      Things aren't always just the sum of their parts.
    • Also - the big question - why would this become illegal? People do what they want with their money. If Blizzard was smart - they'd offer Gold at a price matching the market and get a cut on this.

      Once they start doing this, then they run afoul of banking regulations. Suddenly they are running an currency exchange board using a 'phony' currency... lots of countries would have issues with this.

      China is trying to clean up its image regarding currencies, and one of the things necessary is that they limit certa

    • If you give to someone else with the expectation of something in return, you are no longer talking about a donation, but either a financial transaction or barter. You can play the word game as much as you like, but if your character donates 100,000 gold to another player's character, and that character's player--out of the goodness of his or her heart--decides to find out who you are and send you cash, then a de facto transaction has taken place.

      If your logic had any legal merit, you'd find cadres of hook
    • by Nathrael (1251426)
      If Blizzard was nice, they'd just remove the necessity to farm gold and let players actually enjoy the game.
      • Farming takes time though, which means blizzard gets more payment before you max out and get bored. Actually enjoying the game wouldn't be good for their bottom line.

    • I like WOW and I have liked many other games before that.

      The problem WOW faces is that gold has to be used to buy one particular feature from a NPC no player can substitute for, epic flying. While "normal" flying and such gets you there, epic flying is so many times as fast that it not only becomes a status symbol it has become a requirement for many people. If they had put the effort into making it obtainable by quests that people could do during the course of their play or even a few group quests they c

    • Re: (Score:3, Insightful)

      by seebs (15766)

      It's not illegal to report truthfully about embarassing facts.
      It's not illegal to give someone money.
      It's illegal to blackmail people.

      It's not illegal to get drunk.
      It's not illegal to drive.
      It's illegal to drive drunk.

      Some combinations of legal things are illegal.

      I really don't object to them banning this -- I think the harm done to the rest of the community is significant, and would not miss these people at all.

    • by _Sprocket_ (42527) on Monday June 29, 2009 @04:08PM (#28519863)

      Also - the big question - why would this become illegal? People do what they want with their money. If Blizzard was smart - they'd offer Gold at a price matching the market and get a cut on this. They've already ruined WoW four times over. Anyone who's played since the beginning can tell you how much more enjoyable it used to be.

      I've played the game from the beginning. And the only reason I'd even consider calling WoW more enjoyable back then is because it was new. It's still fun today. I don't buy in on the idea that they've ruined the game four times over.

      However, I do believe they'd gut the game following your advice. Who wants to play a game where you just buy a win? You do, apparently.

      Granted - Activision / Blizzard seems to be toying with the idea. The collectible game loot cards, website advertisements, and Pepsi advertising campaign shows where they really want to go. Microtransactions are likely just a matter of time. And then you'll have your wish - WoW ruined.

  • by stabiesoft (733417) on Monday June 29, 2009 @02:38PM (#28518309) Homepage

    we have to pay the chinese to have fun for us now? What's next, do we pay them to have sex for us, eat for us, pee for us...

  • Assuming the companies that were actually making the profits selling the gold were inside China they could just relocate elsewhere and continue to employ Chinese to farm their gold. Even if the Chinese government cracks down on those employees, there are still plenty of impoverished nations whose citizens would be happy to work for 16 hours a day for $.20 a day. It just means that instead I'll need to brush up on insulting phrases in languages other than Mandarin. Does anyone know the Somali for "Go stick y
  • by kenp2002 (545495) on Monday June 29, 2009 @02:45PM (#28518425) Homepage Journal

    In full disclosure: I work in the financial industry currently.

    This ban has nothing to do with gaming, gambling, or local economy.

    This is likely a direct response to MASSIVE money laundering.

    Joe has $100,000 worth of illicit cash.
    Joe strikes a deal to buy $100,000 worth of virtual currency in WoW. Joe smuggles the money. (Many times Joe can even hire the kid down the street and pay him cash...)

    Joe turns around and over several months sells the gold BACK to the gold farmers and claims the sales as legitimate income. Selling it at a 50% loss he can convert $100,000 into $50,000 of legitimate funds. Even more so when he acts as a virtual broker (IGN anyone?).

    While this is a simplified scenario but we are talking BILLIONS of dollars a year are now going through these kinds of channels.

    I've seen locally here in the US $300,000 attempts and laundering money this way (through a combination of FF Online, LOTRO, and Maple).

    While it is getting easier to deal with this now that the gaming companies are willing to share some data I can only imagine how hard is must be in Asian markets where channeling cash to chinese gold farmers is easier with the shorter phsyical distances. Oddly though, in my experience, I have seen more Korean and Indian gold farmers then Chinese.

    Never had a problem with gold farmers, never will, but I have serious doubts that this ban has anything to do with gameplay.

    I think this is in response to the forged bonds that were intercepted in Italy. They are worried about organized crime shifting large sums of money (which require laundering) through the virtual economy.

    If I am an evil overlord and I have to get 4 billion to my agents around the world the easiest thing to do is buy a billion dollars worth of WoW gold, have all my agents log in with characters. Divvy up the gold then have them sell it off locally or back to the gold farmers at a loss.

    No quicker way to distributed that much real world money then through a network of games.

  • Screenshots or it didn't happen!

  • While they have expressly forbidden the exchange of virtual currency/services for real cash, it does not forbid the exchange of their time (services) for a player's cash. This does not prevent them from offering powerlevelling, honor farming, or item grinding. (Change the term for whatever your MMO of choice terms these services.) These services are normally quoted as a function of time. Anyone who uses a bit of creative wording/pricing can still continue to sell virtual currency. So long as they refer
  • built virtual commerce into their game infrastructure

    So you can go to work in a virtual world, selling virtual services for virtual gold.
    You can then sell that gold to a 12 year old idiot who got his mom's credit card.

    Thats kinda funny.
    I have a roommate who is adicted to FarmTown on Facebook. He is constantly farming other people's crops to get money to buy stuff for his own farm.


    Imagine a farmer in China getting a computer, and farming in a virtual world, selling his virtual income for actual income and that being more than he made farming in real li

  • Something makes me think that the Chinese government helped some of you.

    Not that I like the idea but - I can be pragmatic.

  • So the price of game gold is about to sky rocket and those who don't care about being cought doing something illegal will make tons of more money just like ilegal drugs and other things.

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