China Bans Gold Farming!! … Er … But In Fact It Hasn’t

The blogosphere has been awash with reports of the demise of gold farming (production and real-money sale of virtual currencies, items and accounts in online games), which is big business in China; worth US$1bn per year and perhaps more.  (Click here for the full analytical report on the history, size and trends in gold farming.)

A deep breath and a read of what was actually announced suggests otherwise.

This is a government restriction on the use of the quasi-Paypal-like currencies (mainly QQ coins) that are used extensively in China to pay for virtual game stuff.  As announced they can now only be used to pay for virtual stuff, and you can’t buy real things with them as game companies were allowing to happen, nor can you gamble.  This therefore is not about what gold farming clients do: use real money to buy these virtual currencies; it’s the mirror image.  And it’s not about the major trade in gold farming such as World of Warcraft, which relates to other types of virtual currency.  And it’s not about buying/selling in-game items.  And it’s not about the power-levelling of avatars.  Bottom line: it’s not about gold farming.

Two other things to say.  The Chinese government appears to be this very odd mixture of fantastically effective (think Olympic Games) and fantastically ineffective (think rules on piracy and intellectual property) when it comes to implementation.

Second, this mirrors quite closely something that happened in Korea around 2006 based around a game called “Sea Story”.  A huge amount of gambling and then illicit political payoffs arose around use of the Sea Story currency.  Government then banned trade in virtual currencies.  I’m not aware of any reports about damage to gold farming that resulted and – as might be the case in China – the legislation in Korea may have been as much about political posturing and being seen to be doing something (i.e spin) rather than an implemented reality.

Both these points remind us that announcement is not implementation.  If this regulation does come to fruition, it will relate to finance and defence of the RNB yuan.  Yes, it may affect some types of games in China but, no, it as yet appears unlikely to have much of an impact on gold farming.


4 thoughts on “China Bans Gold Farming!! … Er … But In Fact It Hasn’t

  1. In an old blogpost (, I question the slavish commitment to traditional forms of money, used traditionally by repressive regimes (and increasingly, regimes that claim democracy) as one more means of surveillance and control. While ‘gold farms’ may not be the perfect answer (far from it, actually), they are a pointer to achieving the ‘holy grail’ of frictionless transactions, in the connected world. But frictionless transactions send shivers up the spines of those who profiteer from keeping things complex.

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