Gold Farming & Cutting out the Middleman in Virtual Worlds
There's an interesting Times article today on the latest form of outsourcing, and Greg Lastowka, who has written neat scholarship on the law of virtual worlds, blogs about it here. Essentially, large numbers of Chinese workers are employed playing videogames in virtual worlds for twelve hours a day, earning gold, weapons, and armor, which they then sell to Westerners who want virtual gold, weapons, and armor but have more real-world income than time or skill for gaming. If the Times has it right, then this has become a major industry in China.
All of this raises something of a puzzle: Why don't software developers cut out the middleman?
There is a sizeable revenue stream here that the developers are ceding to third parties. Moreover, the software developers have an enormous comparative advantage over the Chinese sweatshop gamers in that the developers can create gold, weapons, and armor with a few keystrokes, whereas the sweatshop gamers have to go out and earn the stuff by slaying dragons and the like. I understand that the spectacle of game developers selling armor to their customers might demoralize some customers with less disposable income, but the existence of a widely publicized black market for virtual currency should have much the same effect. Moreover, it's always been the case that kids with many quarters in their pockets could reach higher levels than poorer kids with better reflexes. (Gauntlet was the classic video arcade rich-kid quarter-sponge when I was a kid.) If the concern is rampant "gold inflation," then a developer could always credibly promise to limit the amount of manufactured gold made available via sale to its customers. I don't know a ton about this stuff, so I'll just pose a few questions to savvier readers: 1. The Times notes that Sony has tried to become the middleman in Everquest, by matching willing buyers and willing sellers, but are there software developers that have done a better job of tapping into this revenue stream directly by creating and selling gold, weapons, and armor?; 2. If so, how have consumers responded to this business method?; 3. If not, why hasn't some developer pursued this strategy more aggressively?