The Financial Life (and Death) of an East European Gold Farm

Thanks to the kindness and openness of “Goran Podolski”, I’ve been allowed to see the balance sheet of an East European gold farm, selling virtual currency for the online game World of Warcraft (WoW).  A summary of its operations follows, but gold farming is a complex and unusual process, and more details on it can be found in the online report: Current Analysis and Future Research Agenda on Gold Farming.

What and Who: this is an informal (i.e. unregistered) micro-enterprise run by Goran, who is a student living in a major city in Eastern Europe.  He has been playing in-game himself to make gold and he also paid two other people, whom he knows via personal connections, to play characters on his account.  He has taught them how to play.

Making Virtual Gold: because WoW players have their characters on a specific European-based server, they can only buy gold that has been produced by a gold farmer on that server.  Goran has therefore placed his gold-farming accounts on two (out of a possible c.250) servers he thinks are particularly “high-yield”, i.e. active and popular with players.  His high-level characters have particular in-game “professions” – abilities – that are used to make or gather items (e.g. gathering herbs using high-level Herbalism and then making items with high-level Alchemy, or making items with Inscription).  These items can then be sold in-game, typically via the game’s auction system, thus producing in-game gold.  (He has chosen this method as more productive than what he sees as the approach used by many Chinese gold farms of fighting non-player characters, picking up items dropped when the NPCs are killed, and then selling these for gold.)

Selling Virtual Gold: most of the virtual gold has been sold to merchant-portals – the Web sites through which the great majority of players buy gold.  The two key portals used in this case are and (OGM).  Players who wish to obtain in-game gold will buy from these merchants via their Web portals.

OGM are Malaysia-based and the sales process is undertaken via chat on their portal or via mobile phone calls.  When a customer indicates through the Web site that they are ready to buy, Goran is sent the in-game name of their character by OGM, and OGM calls the customer on their mobile.  Goran and the customer log into the game and the gold is transferred from Goran’s to the customer’s character: Goran sends screenshots to OGM as confirmation for his payment.  If Goran is late, OGM will call him on his mobile, so this is not quite the anonymous process it might appear.  OGM outsource some parts of their sales work (e.g. customer chat) to China.  Likewise Pusada – who are US-based – outsource to sub-contractors in other countries.  Unlike OGM, Pusada headquarters staff never go in-game but only broker the sale via IM chat.

Speaking English is thus a key part of Goran’s added value.  His sub-contractors do not speak English and so, for example, are unable to sell the items they produce in the WoW auction houses to make the in-game currency; Goran has to do that himself.  Likewise, thanks to his English, Goran is able to make money in a different way – by acting as the broker for a local gold farming workshop, selling their gold to the portals above and also to and (now defunct)  He charges the local workshop a commission of about 12% for this service.

Financials: Revenues are affected by two main forces.  First, the price that merchants charge to the final consumers.  This has been steadily falling as virtual gold continually devalues against real-world currencies.  For example, from March 2009 to January 2010 the US buy price of 1,000 WoW gold depreciated from US$14.50 to US$7.00.  Second, merchants price and pay in US dollars (even though the virtual gold is sold in euros to the European player-buyers).  During periods when the dollar appreciates against Goran’s national currency, this further erodes revenue.  From March 2009 to January 2010, the US$ rose by around 10%.  The result was a fall in Goran’s revenue from US$7.10 per 1,000 WoW gold in March 2009 to US$3.37 in January 2010.

Costs are made up of three elements: the cost of the World of Warcraft game accounts; game cards which cover the cost of a certain amount of in-game play; and the wages paid to his ‘sub-contractors’.

Nominally, Goran’s payments to those who farm the gold for him are paid on the basis of the amount of time they spend in-game with his characters rather than, for example, on the basis of what they produce in terms of either items or gold.  (He tried the item-based approach but it became too complex due to the variety of items produced and different prices earned; pay-per-gold is not possible since the players themselves are unable to sell their items in-game for gold.)  He paid just over US$7.00 per eight-hour working day, which was almost exactly the same as the minimum wage for a young person in this country.  However, as noted, this is nominal – over time, the pay would be more akin to a certain percentage of the overall profits made during a month.

The figures can also be used to get a sense of the mark-up being charged by the merchant-portals.  In March 2009, Goran was paid an average of US$7.10 per 1,000 WoW gold, and the average sale price from portals was around US$14.50: a roughly 100% mark-up.  This was very similar in January 2010, when Goran was paid an average of US$3.37 per 1,000 WoW gold by the portals, while their sell price was around US$7.00.

Balance Sheet

The balance sheet below shows a sample nine-day period in January 2010 during which ten sales were made: all but one via the merchant-portals.  Below the revenues earned from these sales, Goran’s calculations for total number of hours his sub-contractors spent in-game are shown.  Hours are converted to days and paid at just over US$7 per day with account and game card expenditure then added.  The balance is shown at the end, indicating a daily profit for Goran just greater than the national minimum wage.

East European Gold Farm Balance Sheet: 9 Days in January 2010 (for World of Warcraft)
Date Quantity sold Price per 1,000 gold Total Price Buyer Overall  
Day 1 20000 g $3.00 $60.00 Average Prices $3.37
Day 1 2000 g $3.73 $7.45 Total sales in gold (thousands) 66.80 k, gold
Day 2 3000 g $3.73 $11.18 Total Sales in USD $224.85
Day 2 3000 g $3.73 $11.18    
Day 3 2300 g $3.73 $8.57    
Day 4 10500 g $3.25 $34.13    
Day 5 5000 g $4.20 $21.00 Individual player via MSN    
Day 7 14500 g $3.25 $47.13    
Day 8 3000 g $3.73 $11.18    
Day 9 3500 g $3.73 $13.04    
Character Level 80 Alt        
  Days Hours Mins Character Time-play Recorded  
Start Date 9 8 9 224.15    
End Date 11 20 26 284.43    
      Time played 60.28    
Character Level 65 Main        
  Days Hours Mins Character Time-play Recorded  
Start Date 6 2 29 146.48    
End Date 6 17 9 161.15    
      Deductions 2.67    
      Time played 12.00    
Character Level 80 Main        
  Days Hours Mins Character Time-play Recorded  
Start Date 10 7 6 247.10    
End Date 12 2 22 290.37    
      Time played 43.27    
      Total hours worked 115.55    
      Total days worked 14.44    
      Pay per day $7.14    
      Wages paid $103.13    
      Gamecard $28.57    
      Game account $16.95    
      Total expenditure $148.65    
      Total Sales $224.85    
      Total Expenditure $148.65    
      Net Profit $76.20    
      Average Daily Net Profit $8.47    


Postscript: By March 2010, Goran had expanded his gold farming business to employ nine farming sub-contractors and a business manager to oversee them all, helping to pay his way through university.  By March 2011, though, Goran has – at least for the moment – stepped out of the gold farming business; in part to focus on his studies, but also because profitability is increasingly difficult.  At the time of writing, the advertised buy price on was US$1.00 per 1,000 WoW gold (i.e. less than one-third what it had been a little over a year previously); the advertised sell price was US$1.54.  This means the sub-contractor model would no longer work well.  Goran has been making some money by renting his WoW game accounts and a GatherBuddy bot (for automating in-game activity: like gold farming, this is also against game rules) license on a monthly basis to his former sub-contractor who was doing some gold farming himself, though finding it ever-harder to make a profit and, at the time of writing, likely to drop out because prices were so low.  Goran is currently offering his full support to US calls for revaluation of the renminbi!