Undercover Economist

Game on for the virtual sweatshop

I’m a board game fan myself, but I know that millions of people spent their Christmas exploring the underwater realm of Vashj’ir, thanks to the online computer game, World of Warcraft, which launched a new version, Cataclysm, in December.

Loyal readers will know why economists find such games interesting: they are virtual worlds in which millions of people spend many hours interacting, creating experiences and goods that other players value, and even spending real money on virtual items. (Crazy? No more crazy than paying to watch a movie.)

Facebook applications such as FarmVille have many more users. But it is the great online role-playing games – and none is bigger than World of Warcraft, with 12 million users paying a monthly subscription – which hold an enduring fascination for the way that they blur the line between virtual life and real life.

One notable feature is “gold farming”, in which time-rich, cash-poor players carry out boring in-game tasks – “grinding” – and then sell the results to time-poor, cash-rich players. Julian Dibbell, author of Play Money, spent a year trying to live only off his earnings in virtual worlds – which eventually reached $3,000-$4,000 a month.

Gold farmers might sell virtual gold, or they might take a low-level “character” and spend the many hours required to bring it to a high level, before selling it on. This is very roughly equivalent to promoting the player who buys that character from bit-part to star turn.

The logical next step, of course, was “virtual sweatshops”. And so World of Warcraft has become an unwilling conduit for globalisation, as thousands – perhaps hundreds of thousands – of Chinese and Indian players earn a living carrying out the “grind” for busy westerners wanting to keep up with their friends.

Blizzard Entertainment, the owner of World of Warcraft, tries to discourage gold farming. But, says Dibbell, “they do reap the benefits of the gold farmers, who make it interesting for a large portion of their customers to stay in the game. So they’re in an ambiguous moral relationship with the gold farmers.”

The dynamic, then, is fascinating. Tom Chatfield, author of Fun Inc., enthuses that the new Cataclysm expansion has made World of Warcraft more fun, with less grinding and more exploration and interaction. It doesn’t take a genius to figure out the possible result: less work for the gold farmers. With a stroke, a computer game company can put thousands of poor people out of business. Is that OK? Do gold farmers have rights?

Cory Doctorow, co-editor of the über-blog “Boing Boing”, thinks they do, but points out that Blizzard regards gold farmers the way Louis Vuitton regards counterfeiters: as parasites who are spoiling things for … well, not everyone, since gold farmers have customers and many people want knock-off handbags.

If Cataclysm is simply an improvement to the game, well, you can’t stop progress. And yet gold farmers are people too – and, insist Doctorow and Dibbell, they are also players, genuine fans of the games which provide them with a living.

It’s hard to imagine that Blizzard will ever face the same labour rights campaigns as, for instance, Nike – partly because Blizzard is not hiring the gold farmers, but mostly because the whole situation is simply too mind-boggling to explain.

But who knows? Cory Doctorow’s novel, For the Win, describes young gold farmers fighting to unionise against oppression from sweatshop bosses. The online trade union even serves as a way to organise more conventional unions across national boundaries. (The book is also a fantastic economics primer – and an antidote to free-market scribblings.)

It’s only a novel, of course – and only a game. But the sweatshops are real and so is the money. We’re just scratching the surface of what virtual economies might mean for politics, society and commerce.

Also published at ft.com.