There’s a pretty great New York Times Magazine article about Chinese World of Warcraft “gold farmers” out today. If you don’t know what that means, you really have to read the piece, though everyone should check it out. This made me wonder:
At the end of each shift, Li reports the night’s haul to his supervisor, and at the end of the week, he, like his nine co-workers, will be paid in full. For every 100 gold coins he gathers, Li makes 10 yuan, or about $1.25, earning an effective wage of 30 cents an hour, more or less. The boss, in turn, receives $3 or more when he sells those same coins to an online retailer, who will sell them to the final customer (an American or European player) for as much as $20.
One interesting thing is that as best I can tell the only reason the online retailer is making so much money is that the gold farming is against the rules of the game. If you’re able to sell gold at $20 then it would make sense to offer more than $3 for the sake of increasing your volume; the retailers should be competing against each other and bidding the price up. But since the farmers need to be wary of drawing too much attention to themselves, they have a limited ability to switch retailers. At the intersection of this reality and cheap Chinese labor, the most valuable commodity in the whole process is knowledge of the supply chain, rather than the gold itself.
Incidentally, a good friend of mine is working this from a different angle — a basement full of computer playing the game automatically according to some kind of program he’s written, rather than relying on outsourced labor.