Is WoW gold farming bad? If so, why? Lets reveal the very real economy in virtual world online games like the World of Warcraft.

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The exchange of goods has existed for about as long as people wanted things they didn’t have. So it should come as no surprise that even when it comes to games like World of Warcraft, players will sometimes go to great lengths to get just what they want. With single player games, this is usually satisfied through the use of cheats, hacks, or editors, where players can literally modify the game world to give their character almost anything. There’s also the realm of exploits: that is, taking advantage of a bug or flaw in the game code or design to achieve some unexpected or unintended goal.

For example, in the original Diablo, a bug in the item retrieval code would allow you to pick up an object on the ground and, if you timed it just right, pick up and object out of your quick-belt or inventory. The object you pulled out of your belt, maybe a cheap potion, would become the object you picked up from the ground, such as a stack of 5000 gold coins or perhaps a rare and valuable magical item. It became common practice to ‘clone’ objects that your friends had so you could have them too. Keep in mind, however, that Diablo was primarily a single player game and that the players controlled both their character (it existed on your computer so you could back it up, hack it, etc) and the multiplayer environment (you could host a game, or chose who’s game you were going to join). This meant that players could ultimately decide to never play multiplayer, or only play with friends, and the virtual world existed solely for them: no one else could join the game or ruin the experience.

Now enter MMORPGs with persistent virtual worlds like Wow’s Wrath of the Lich King, servers that are controlled by the publisher (Blizzard), and WoW characters that exist beyond the player’s reach. Although you can choose which World of Warcraft server to play on, you have no power over which other people also play there. Gone is the host button and password box. These online games are also intrinsically a multiplayer experience: much of the game can only be explored with a group of players, many quests require groups to complete, and many challenges require cooperation to overcome. Add in a dash of randomly generated equipment, a robust player-driven crafting system, and plenty of coin and you’ve got yourself a recipe for an economy based on that primal human drive: the desire for stuff you don’t have.

Let’s cut this back to the basics for a moment; back to the single-player economy. Let’s say you’re playing a game like World of Warcraft all alone and you’re not cheating. You can get gear three ways: buy it from a vendor at a fixed price, get it from a quest as a fixed reward, or find it as random treasure. To buy it from the vendor, you’ll need some virtual currency, (gold, gold, gold….) and here’s where the economy gets wonky. See, when you start the game penniless, no wealth exists in the world; at all. Once you start killing monsters, however, coin and loot is generated into existence just for you. If you just keep getting coin and loot faster than you spend it, then the wealth of the World of Warcraft will steadily increase and you’ll own all of it. Many players in single-player games will understand this phenomenon: by the end of the game, you often have more money than you can possibly spend, maybe even if you tried to buy everything for sale. Because, ultimately, what you have isn’t a currency, so much as it is a fixed point system. 10 gold will buy you that sword, no matter how much or how little gold actually exists, or how many swords actually exist, because the sword is simply ‘generated’ when you buy it and the 10 gold simply ‘destroyed.’

Now compare that to a real world economy. The basic concept of a currency is that it represents the issuing nation’s wealth. In theory, at least, each dollar is supposed to represent the entire wealth of the united states divided by however many dollars there are. So if there were only 100 dollars, you should be able to trade each for 1% of the entire country. That’s why there are trillions upon trillions of dollars, making each one worth a whole lot less and letting you spend one on something as trivial as a bag of chips. But if the government were to suddenly print more money, each dollar would become worth less and less until there were so many of them that everyone had millions and no one wanted any more. That’s what has happened in many countries and why you can buy 535 Malian francs for just one US dollar. The real meat and potatoes of an economy comes from the exchange of already existing dollars, however. You have your dollar, the store has the bag of chips, and you make an exchange. Unlike buying from a vendor in a game, the chips aren’t just magically generated and the dollar doesn’t just disappear from the world every time someone buys one. There are a limited number of bags of chips, and if someone was so inclined, they could buy them all and no one else could get any.

But that’s not very fun, is it? Look at how people lined up to get an Xbox 360, and then didn’t get one because stores ran out. You wouldn’t want to pay a monthly fee to play a game where you had to line up outside a store only to not get what you wanted because it was sold out, would you? (If not, don’t play Final Fantasy XI) So on one hand, players want that single-player experience of having fair and equal access to stuff bought from vendors, but also want to experience that economic thrill of buying and selling goods. This leaves online games in a precarious position, because they have to maintain a valuable currency while simultaneously producing money on corpses of monsters so everyone can have a fair grab at it.

This is the fundamental challenge at the core of online games like the World of Warcraft: the money-in-money-out (MIMO) problem. If more money is generated by the game than is eaten up by the game, then the value of the money goes down. At the same time, sufficient money has to be infused into an economy that starts out with no money, and also has to accommodate new players that will need a share of currency and old players that might cancel their WoW accounts and cause chunks of the virtual economy to vanish. Consider some examples of both ends of the MIMO calculation from World of Warcraft: you can get money from monsters, and you can lose money on repairs. But things get more confusing when you measure up two different types of expenditures: required and optional. In general, you are required to repair in World of Warcraft, therefore the cost of repairing cannot exceed the production of money or players would go bankrupt and be unable to continue playing. This is why online games need optional expenditures that do exceed the production of gold, something that can siphon off spare gold from the pockets of the wealthy players who have nothing else to buy. Something that WoW lacks.

There are various solutions to this problem. They all center around the purchase of consumables or services that will be charged and re-charged over and over again. Some games like Asheron’s Call and Everquest II introduced housing that would cost players monthly fees and, depending on the extravagance of the house, might exceed one player’s production capacity. So a player could build up a big wealthy nest egg, and then bust it all on a pricy house for a while. But more likely, they would supplement their income with the income of other players: through trade. And finally, we get back to the whole multiplayer economy thing.

A healthy MMO economy is going to have the MIMO problem wrapped up with a steady, if meager, supply of raw coin for all players, and a selection of sink holes to suck it back up from the wealthiest players. Consider World of Warcraft again. There are many one-time expenses that will eat money out of the economy: players must pay to train skills and buy mounts, for example. However, once you are level 80, have trained all your skills, and have bought all your mounts, you are not paying out much money into the game system: a few gold here and there for repairs, ammunition, and flights, but certainly not enough to counter an hour of farming gold each month. Consider, on the flip side, a game like Final Fantasy XI, which is currently experiencing a decline in world currency as high level players shell out a million gil to gain access to the end-game instances… for each trip. WoW-ians, imagine having to pay 50 gold every time you wanted to get into Molten Core or the Black Temple, and you’ll understand the huge impact that has on the economy.

Ultimately, however, the purpose of the MIMO is to get players into a comfortable wealth zone where they have competing expenses between trading with other players or dumping money out of the game world. IE: I want a house for a month and that 50g charge, but I also want this magical sword in the AH for 100g. Without these sorts of expenditures that cause money to leave the system, the economy will crash because the wealthy will not want money. What good is gold if it can’t buy you anything you want, except from other players who already have more gold than they need? For a while, in a game without the output equation locked down, the currency will still be used to exchange goods, however as the value of the currency drops, prices will balloon out of proportion and soon the newer players will be left in the dust as the rich players trade increasingly large sums of money for the same objects. The money bounces back and forth between players who are still generating more money, and the total amount of money simply grows and grows.

Then the economy crashes. What happens when players no longer want currency is a dramatic decline into a simple bartering system. Players will have no interest in selling their rare treasure, rather they’ll hawk their goods and hope that someone else wants this rare thing and has some other rare thing to offer in exchange. A very interesting case study of a currency crash occurred in Turbine’s Asheron’s Call. Because the pyreal became worthless due to no money-outs, players began trading items for items directly. However, distributed item quests gave certain items an almost currency-like value. Motes, tradable quest items used to manufacture a unique weapon for each player, became a pseudo-currency because players could spend them, almost like money, on their unique weapon. Also, because of the unique vassalage system, wealthy players had an incentive to procure the sixteen motes required for this weapon for their vassals, in the hopes that their vassals would remain loyal and generate plenty of bonus XP for them. Similarly, there were crystal shards gathered to fabricate special armor sets. Elaborate trading economies formed around motes and shards, with website forums tracking exchanges and forming a virtual ‘currency exchange rate’ between motes and shards. The long-forgotten pyreal only regained its status as currency after the introduction of expensive player housing which required coin to maintain.

So, let’s say we do have a healthy MIMO economy where players are happily getting money, trading money, and spending money, and all is well. Let’s finally take a close look at the problem of gold farmers and gold sellers. As I have said before, players will want what they cannot have and are going to trade what they have for it, and if you have nothing in game but have something in real life, it’s no giant leap of faith to imagine players trading one real good for a virtual one. At first, gold selling was considered ‘dishonest’ but was not a crucial problem to the economy: you were getting the 100 gold in exchange for 10 dollars rather than a magical hammer, but the basic exchange remained the same. The problem was when people turned selling gold from a casual exchange into a lucrative business. There are two major problems from this: inflation and exploitation. I’ll deal with the latter first.

If you’re earning money by the gold you get in game, then you’re going to take every step possible to maximize the gold you get for the time you spend getting it. This leads to exploitation of the game, and is the most obvious and reviled thing about gold farming. For example, using macros to repeatedly kill monsters and gather gold while the player is not even at the computer, which can escalate to the Nth degree by having many accounts running on many computers all generating money for the same player which only has to occasionally check on each. These ‘bots’ can also be placed in areas that actual players might want to visit, thus depriving them of the opportunity to kill some monsters. There’s no ‘wait your turn’ when a turn goes on 24/7. However, macro-bots are relatively easy to discover and disarm, as they have predictable behavior patterns and GMs have methods of dealing with them.

What’s far more insidious is the exploitation of loopholes in the game code to illicitly generate gold. Now that gold-selling operations have reached million-dollar industry size, gold seller tactics have become more and more aggressive. Sellers will spend months scrutinizing every detail of a game to find a bug in the code that can be exploited to generate money faster than a normal player could. These elaborate schemes can often involve a great many different players coordinating their efforts to exert undesirable behavior on the game code, such as the frequent exploits of Everquest II’s store-front system. This system, which allows players to sell goods from their homes, has been repeatedly abused to generate money by making faulty purchases that both gave money to the seller and returned it to the buyer. These practices can often go long undetected and, by the time they are found out, the harm is usually long done.

Even without exploits, gold farmers can damage a virtual market by flooding it with vastly overpriced rare items or by buying out all the cheaper items and re-listing them at higher prices thereby abusing player perspective on auction house listings. For example, players will often go to the auction house and see what an item is selling for. If it remains at that price for several periods (days, weeks, depending on the game) players will simply assume that the listed price is a fair price for that item. Any World of Warcraft player will understand this phenomenon when they hear someone selling something that seems expensive on the trade channel, only to hear them say “Oh yeah? Well check the prices on the AH!” and, sure enough, everything there is even pricier.

As the prices go higher, players look for ways to actually buy the things they want. One obvious way to turn is to the gold sellers, who will happily provide players with the 1000 gold they need for an epic axe. The problem is that the gold is sold to the player, then used to buy the axe sold by the gold farmer, and now the gold farmer has their gold back and ready to sell it again! The player takes their axe and equips it, soul-binds it to themselves, and permanently takes it off the market. Because the gold farmers have such a large quantity of gold from which to make purchases, and because inflated auction prices drive their business, they will happily buy items listed at reasonable prices by other players and re-list them at higher prices.

What players don’t realize is that the prices they see on the auction houses are not the prices that other people will pay; rather, these are the prices that other players have refused to pay. Think about it. If they were willing to pay that price, then they would have bough it and it wouldn’t be on the AH anymore, would it? This is why some games, such as Final Fantasy XI, show lists of ‘last sold at’ prices on their auction houses. You don’t just see that a person wants to sell an axe for 1000 gold, but you also see that the last dozen sales of this axe have been for 500 gold. You also see the list of sellers and buyers. So you can see if one person has bought six axes for 500 gold, sold back three at 1000, and you have a good idea of the scam he’s pulling. But, remember that gold selling operations are driven by very large groups. Gold sellers can hide their nature by having many different characters engage in all the transactions; moreover, they can counter this previous listing service by generating artificial transactions between their characters, making it seem like a dozen unrelated players sold an axe to another dozen unrelated players all at 1000 gold, when in fact all these transactions were within the gold seller team and the money (and the one repeatedly sold axe!) never left their possession.

The problem of gold farming and selling has driven some players away from open markets into private trading arenas or intra-guild storage banks and point systems and some players away from the game entirely. But there is still some hope for legitimate consumers to survive within these confused and abused virtual economies.

First of all, remember the golden rule: the prices listed on the World of Warcraft auction house are not the prices people will pay for Wow items; they’re the prices people have not paid for the items. Don’t glance at the AH and watch items sit there for weeks and assume that the listed price is the fair market value because its been like that for so long. No one else has paid 1000 gold for the axe, and neither should you.

Secondly, avoid buying from anonymous sources. The World of Warcraft auction house is, sadly, a terrible place to make regular purchases. Browse it often and find deals, certainly, but don’t expect to rely on it as a place to get your goods. If at all possible, get it yourself.

Point three: use the World of Warcraft trade channel and be direct. Tell people what you want and what you’re willing to pay up front, right away. Yes, this means that you have the difficult job of trying to ascertain the price of the thing you want, but as any economics 101 will tell you, it’s the buyer that ultimately determines the sale price. You might get mocked, you might get ignored, you might go days without a reply. But you will get offers, and eventually, you will get a fair deal.

Finally, never pay real money for WoW gold. Seriously pal, it’s just a game. You might think that the added enjoyment of a surge of coin is worth the extra dollars, but I assure you it isn’t. Remember that these are multiplayer games, so try to find some people with which to enjoy the game of World of Warcraft. Maybe some of them have more free time and more spare World of Warcraft gold; and in exchange for a good solid friendship, you can find other ways to earn that World of Warcraft gold.