Virtual Sweatshops Or A Digital Solution for People in Developing Nations?

Warning: To read all of this, you may need to pack a lunch. The links referred to are quite relevant. Grab a cup of coffee.

Tailing on Anshe Chung's becoming a millionaire comes a bit of interest related to what is known as farming in virtual worlds. Because of the context of SecondLife, I don't see Anshe Chung's business as a farming business, but it certainly is in China and dealing with virtual items - namely, virtual land. With over $1 million US in net worth in virtual assets at market prices, her company is doing quite well from China. Real money from a virtual economy is an interesting thing for many - interesting enough to have made SL a media darling to the press.

She's part of a greater industry. Take a look at the video on the right. Consider 'Inside World of Warcraft Gold Farm, Future of Work'. Here's a few more articles; I don't necessarily agree with the contents of some of them, but for there to be context I tried to provide different perspectives:

• Spot On: Virtual economies break out of cyberspace
• From sweatshops to stateside corporations, some people are profiting off of MMO gold.
• Chinese WOW players speak out
• Yi-Shan-Guan
• Life at the gamers farm
• NY Times: Ogre to Slay? Outsource It to Chinese

There's a second video below you can watch as well. This is to give you context to form your own opinions; mine is pretty clear and is something I'll get into at the conclusion.

If you look at the videos, you might be surprised to see that the group doesn't look too different from any other group of hard core gamers. The difference is that these people are making money, and the fact that video was allowed into these places:

...Some gold farms refused my visit because they don’t want to pay tax and choose to operate underground, or they are worried that their labor practice is problematic...

So these are the better places; we have no way of knowing what the worse places look like. These are the legitimate places - the places which the local government is aware of. They say that there is less unemployed youth, less crime, and perhaps even a better life for some. They exist because people want the items which they can get; in some virtual worlds they are supposedly illegitimate because they break the license agreement. Some gamers see it as 'cheating' by buying items which are part of the game. In all, it's hard to judge without context.

What it is, too, is a way for a developing nation to make foreign exchange. I'd lay odds that Anshe Chung isn't the first business in China to do so well. In a virtual economy, there are things that people want. Why do they want them? Basically to make their virtual lives easier. To provide it at a cost to people willing to buy it is exactly what is happening, and the lower cost of living in developing nations makes it possible.

Outsourcing is nothing new. Software development and support centers regularly outsource work to other countries - I believe the public outcry in the U.S. has died down over that, but I'm not sure. However, in those cases, the legitimacy of the companies providing the work is counted upon by the people handing out the work. In the case of a virtual economy, it's not that simple. Most people don't care where their special items come from, they just care that they have it.

Differences

I've seen it in Asheron's Call, Everquest and SecondLife. World of Warcraft doesn't appeal to me, but it appeals to many others.

SecondLife is different in some ways - for example, all the virtual items aside from land are created by users; they are not quest items since there really aren't any quests except people's personal quests. The land is leased from Linden Lab at a cost and a recurring monthly cost. You can't just sit there and repetitively do something to sell items - it involves money. It involves investment and reinvestment. It requires something else, too: risk.

So is 'farming' something that is good or bad? Judging from the economic success that farmers enjoy, it would have to be good. On the other hand, we don't know the conditions under which farmers work. The videos show what look to be normal people doing something which they enjoy; it's difficult to imagine it otherwise but it is possible.

Personal Conclusion

In the context of games like Asheron's Call, Everquest and WoW - I'm sorry. I think that buying things instead of questing for items is cheesy and beneath a good gamer. If social standing can be bought through virtual items being bought, it's not in the range of something I consider to be fair. I appreciate knowing that the person who is wearing the special item actually earned it through a quest, not by forking over some cash. I've done it myself - trading items for cash - but not as a regular thing. Looking back, I sold the items because I had already gotten them and they had no value for me - I could always get another. This is not different from the businesses doing farming. They can't sell it unless they can get it.

The buyer, though, was never someone I had much respect for in those instances. I knew that if they couldn't get one item, the next harder item would be something they probably wouldn't get either. So you get a return customer, you power up some levels, and you sell it to them. Why didn't I keep doing it? At the time I was making money programming and later, writing. It was incredible to me that people would want to buy the components to a 'hollow sword' or other things.

In the context of SecondLife, well - it's different. I respect the people who do more from nothing rather than the people who buy an island to start, and Anshe Chung fits that quite well. The business of hers has lower costs in China, I imagine. I doubt she wanders around and raps people on the knuckles if they are asleep at the keyboard, but I can't say for sure. Her business is different, though - and yet with certain guidelines to follow, it's easy to see how a business can expand. The right decisions made, buy at price x and sell at price y; rent at price z. The thought goes into the pricing, the effort goes into the actual footwork. It's real estate with teleports.

To me, it's about context. On another level, it's about a creative use of ICT to derive income from computer literacy and training. It's about people wanting things and people providing them. The last sentence makes a case for everything from virtual items to prostitution, which brings us to virtual services as well.

It's a brave new world with increasing foreign exchange. The flow is moving out of the developed nations and into the developing nations at an increasing rate. There are no trade agreements. There's no need to register a business. It's really hard for me to say it's a bad thing.

Recommended reading: Synthetic Worlds: The Business and Culture of Online Games