Is gold selling like pornography: something more of us do than admit? A shameful secret, something indulged alone and at night, in front of the screen; or during a lunchbreak, safely away from a partner, when a quick credit card or PayPal transaction will go unnoticed by others in-game?

Secret or not, we all hate 'gold sellers'. Apparently. Despise them, even. Ask your friends or colleagues: how many will openly admit to buying services from a gold farmer? Yeah, that's right. Not many. And the ones that do probably harp on just as loudly against them as the next man or woman.

But just who are these scourges of the gaming world? You probably know them as the anonymous figures plaguing your trade chat, offering great deals for game currency, power-levelling services or purchase of rare items and plans. In games such as World of Warcraft the infamous random whisper from a level 1: "Hello, are you there?" quickly leads into a macroed advert if you bother to reply. What with the well-known 'grind' present in most massively multiplayer online games (MMOs) these days, how many of us have been tempted to take that short cut?

The received wisdom, as we'll see later from the major games companies, is that such outfits are as good as organised crime: they support and promote hacking and stolen accounts and credit cards. They are not merely a nuisance and headache, but a plague to be stamped out which costs us all millions of greenbacks.

Yet this is the thing: if there was no demand, there'd be no market. And no gold sellers. Right? Yet gold selling – or 'real money trading' (RMT) to give it its emasculated, industry name (the real-world sale of virtual goods and services produced in online games) – is now worth an estimated US $2 billion annually. And that figure is growing.

Jacobs' Rant

So is it that more of us are secretly buying gold, power levelling services and so on … or not? Certainly when Mythic (Warhammer) boss Mark Jacobs posted on the topic back in autumn last year, he stirred up a huge response.

"I hate gold sellers/spammers. No, that’s not strong enough, let me try again. I HATE GOLD SELLERS WITH EVERY FIBER OF MY BEING. Ah, that’s better. Now, why do I hate them you may ask? I hate them for a number of reasons, most of which have been detailed in various interviews I’ve done over the years. And now that they have taken their obnoxiousness to new levels with gold service spamming, I HATE GOLD SPAMMERS EVEN MORE NOW THAN EVER BEFORE."

He went on, in a highly-personal tirade, to claim that "we have been banning these jerks like crazy."

"We don’t wait and let them stay in the game and ban them en-masse, my guys ban their useless, time-consuming butts right away. We have a strike team whose sole job it is to get these guys off our servers as quickly as possible." He even introduced a public ban message every time a spammer was kicked. Messages like “Tchar’zanek has ordered the slaughter of [Spammer] and all others of his kind who weaken the Raven Host by providing wealth and power to the unworthy” became commonplace.

Jacobs finished by saying: "We are in for a real fight against these bottom feeders and it will be a long and costly battle but it’s one we are going to take to them and this is only the first step. After all, this is WAR…"

There followed hundreds, if not thousands, of messages in support of his post.

"ALL BOW TO MARK JACOBS!" screamed one exultant fan. "God I love you guys. I really can’t say that enough," gushed another. "Big cheer. They’re roaches, and as hard to get rid of, and will probably survive when everything else on the planet is extinct," said yet another.

Meanwhile, speaking exclusively to Eurogamer last year, RuneScape content boss Imre Jele said that those buying MMO currency were effectively funding digital organised crime, not to mention cheating and ruining the experience for everyone else.

"The biggest concern about illegal real-world trading is – sorry for this example as I know it's not politically correct – it's a bit like prostitution," he said. "It's not necessarily the prostitution which is a problem, although you might have moral problems with it. The real problem is the organised crime that's built around prostitution; the human trafficking, the drugs, etc.

"And that's the same with illegal real-world trading. The problem comes in when they start doing other illegal activities [such as] the use of stolen credit cards."

And yet the RMT market keeps growing. Why?

Stereotypes

We all know the stereotype bandied around. The gold seller we think we "see" is a Chinese or Korean gold farmer, visualised in endless rows in some developing world sweatshop, working 12-hour shifts for a miserly few Euros whilst their evil bosses cream the profits and the innocent gamers' lives are made a 'misery' by spamming, botting and – as Jele claims – stealing credit cards and hacking accounts, selling back items from those same accounts to their fellow players.

But if you look into MMO history, it seems gold selling and related services have been with us since the genre first surfaced in the late 1980s within graphics-based multi-user dungeons. It then progressed through the likes of Ultima Online, et al, in the late 1990s to the more sophisticated forms it's seen in today. "Whenever a new online game was launched, items would be available for sale on eBay within a few weeks," said Richard Heeks of Manchester University, who has studied the phenomenon.

According to Vili Lehdonvirta, of the Helsinki Institute for Information Technology, the global market for virtual items, characters and currencies already exceeded US $2.1 billion by 2007. Meanwhile Heeks claimed that the gold selling 'industry' now employed hundreds of thousands of people across the developing world.

"From a development perspective, it is providing income, jobs and skills. It is thus offering one answer to the conundrum of how to create new livelihoods from the ICT infrastructure spreading throughout developing countries," said Heeks, raising a separate and very interesting angle to the usual arguments.

"Selling virtual goods for real money is an increasingly common revenue model not only for online games and virtual worlds, but for social networking sites and other mainstream online services as well," Lehdonvirta pointed out in his recent study of the sector, mentioning that Facebook and many other social media sites already had a healthy trade in virtual items.

History

"Extreme gamer", an anonymous young man based in the USA who runs the RMT review site, WoW Gold Facts, summarises from a more personal perspective how the gold selling market has evolved. And, more importantly, why so many of us (apparently) want to use these services – despite the frequent public protestations against them.

"As you would expect, the market for virtual items has evolved tremendously. In most online role-playing games, items (like swords/armor/game currency/potions/ and trade-skill resources) can be traded from player to player. Items are desirable in the game world. It wasn’t long after the launch of the first MMO that gamers were offering each other 'real world value' for items, as an inducement to trade. Perhaps they exchanged real money outside of the game, or perhaps the items were paid for with services, like power leveling."

He added: "The buying and selling of virtual items really took hold with the launch of eBay and online payment solutions like PayPal, which made it possible for gamers to 'build a market place' and expand the practice beyond family and friends. What began as a cottage industry (in the 1995 to 2000 timeframe) began to mature around 2002 with the introduction of professional sites like MySuperSales.com, which brought security (the fraud rate on eBay was reported to exceed 10% of all transactions), inventory volume, and 24-hour customer service into the mix. By 2006, it had evolved into a billion-dollar business."
 
In the early days, the inventory of virtual goods which fueled the growth of the industry came from game players and guilds. Beginning around 2005, he said, small companies in Third World countries began “farming” virtual items professionally. "Today, they dominate the supply of virtual items. Most of them are located in the Peoples Republic of China. On the one hand, it’s a really wonderful example of how the Internet allows people in Third World countries to participate in modern, Western markets (and make money they otherwise could not) despite language barriers, distance, import/export restrictions and other challenges. On the other hand, it’s really difficult to regulate these small businesses and dishonest business practices abound."

But there signs of another change, as we'll see in the following articles. The growth of the RMT market has increasingly been driven by game operators themselves selling goods directly to their players. According to Vili Lehdonvirta, in September 2005, 32% of titles surveyed by Nojima in Japan used virtual item sales as their main revenue model. In October 2006, the share had grown to 60%.

With virtual item sales gathering strength via social media sites, too, such as Facebook, Korean social networking site Cyworld or Chinese instant messaging service Tencent QQ, Lehdonvirta said: "This suggests that virtual item sales may in some cases be able to rival advertising as the primary revenue model for mainstream online services, which represents a major shift in consumer online business."

Yet RMT still has a bad name: why?

Bad company

Almost all commercial game publishers forbid unlicensed gold selling and other RMT activities in their end user license agreements (EULA). They claim to forbid it because it negatively affects game play (it gives players who participate in RMT an advantage over those who don’t); it causes inflation in the game economy; it disrupts the game balance, etc.

"I think these claims are spurious," argued Extreme Gamer. "I think every game player knows that there is no virtual item that can be purchased that will allow a weak player to succeed over a good and experienced player. There is no 'magic bullet' in the games."

"RMT has a bad name because of fraud, though," he admitted. "It’s an unregulated industry. And fraud is, unfortunately, rampant. That is why I launched WowGoldFacts, to shine a bright light on the industry."

'E.G.' as he called himself, said it was ironic that according to contacts he had at RMT sites, efforts by game publishers to stamp out the sector had made the fraud much worse.

"It has resulted in most RMT sites spawning in hard-to-prosecute locations like China. As publishers ban more aggressively, unscrupulous suppliers make every effort to reduce their losses: by using stolen credit cards, by farming with stolen game accounts which cost them very little, by acquiring inventory through hacking game code, etc.

"In my opinion, the industry would be better served if publishers would recognise that lots of gamers – I’ve heard it's 30% of the player base – like the benefits of RMT, and work with credible companies and allow it to happen. I don’t see why this is not possible. They could make a condition of involvement in RMT that players give them a complete release of all forms of liability."

As we'll see in the follow-up stories, at least two mainstream MMO firms have put such a toe in the water. The rest remain aggressively committed to tackling the situation, banning the spammers, hackers and bots; but what about the players, and the gold sellers themselves? We'll be hearing from them next.

Part I
Read: Part II
Part III
Part IV

This article first appeared on Eurogamer.net