October 6th, 2005

World of Warcraft Economy

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wow-epic-mount.jpgLet me introduce my World of Warcraft character. As you can see, I just spend 1000 gold pieces (900 after discount) on an Epic Mount (the mechnical bird) which allows me to travel twice as fast. 1000 gps is really a lot of money which tooks me several months to accumlate so I am pretty proud of my bird. (no pun intended :-)

How much is 1000 gps? Well, according to Game USD, a site that keeps track of online game currency “exchange rate” to USD, based on transaction on ebay and other site like IGE, 1 gp = 0.1 USD. In other words, I actually just spend 100USD on this virtual bird!

The fact there exists a mechanism for me to convert my WoW gold pieces in real cash and vice versa via the likes of IGE (they buy/sell games currency and probably making a decent profit) has far more implications then the 100USD I spend on my bird - like money laundering or currency control. I know a 14 years old kid who has more then 5,000gps…and I am pretty certain he does not have 500 USD in his saving bank account. (Does that makes WoW a bank?)

Or how about thief? Can you report to the police if someone steal your sword? What if the sword is worth 8000gps (some do) which is nearly 800USD? Apparently, someone in China did but the police shoove him off…and he went back and killed his friend who stole his sword (and sold it). Yes, thats a real story that happen a few months ago.More interestingly, a whole industry has come out of nowhere around trading these virtual money and goods. There are numerous companies who offer MMORPG game services like power leveling to even virtual “farming” - typically known as “Chinese farmers” by gamers as a lot of them are from China.

There are a few models of “Chinese farmers” ranging from free lancing for a company, getting paid only for the gold they farm to full-time employed by the company with “quotas” they need to meet everyday.

But is virtual farming viable? Let see, a level 60 rogue can easily “farm” 50-60 gps an hour..that is about 5 USD/hour. Not a lot of money but Macdonalds in Singapore don’t even pays that well! So I am certain these “Chinese farmers” are making a pretty decent living in China.

So next time, don’t send your kids to work for Macdonalds during their holidays; Get them started on World of Warcraft ;-)

ps: I am having a lot of fun joining Joi Ito playing WoW in his clan We Orc last weekend. Looking forward to the next session…but I miss my mount ;-(

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