Outsourcing gaming – and more

No – it’s not about the growth of the video-gaming industry in China. It is about the growth of the paying-others-to-play industry, and how the Chinese are cashing in on it.
Ogre to Slay? Outsource It to Chinese – New York Times:

One of China’s newest factories operates here in the basement of an old warehouse. Posters of World of Warcraft and Magic Land hang above a corps of young people glued to their computer screens, pounding away at their keyboards in the latest hustle for money.
The people working at this clandestine locale are “gold farmers.” Every day, in 12-hour shifts, they “play” computer games by killing onscreen monsters and winning battles, harvesting artificial gold coins and other virtual goods as rewards that, as it turns out, can be transformed into real cash.
That is because, from Seoul to San Francisco, affluent online gamers who lack the time and patience to work their way up to the higher levels of gamedom are willing to pay the young Chinese here to play the early rounds for them.

This phenomenon is part of a growing trend where “professionals” play on-line games to collect a virtual currency (similar to the bonus points of early games).

The games allow players to trade currency to other players, who can then use it to buy better armor, amulets, magic spells and other accoutrements to climb to higher levels or create more powerful characters.
The Internet is now filled with classified advertisements from small companies – many of them here in China – auctioning for real money their powerful figures, called avatars. These ventures join individual gamers who started marketing such virtual weapons and wares a few years ago to help support their hobby.
. . .
This virtual economy is blurring the line between fantasy and reality. A few years ago, online subscribers started competing with other players from around the world. And before long, many casual gamers started asking other people to baby-sit for their accounts, or play while they were away.
That has spawned the creation of hundreds – perhaps thousands – of online gaming factories here in China. By some estimates, there are well over 100,000 young people working in China as full-time gamers, toiling away in dark Internet cafes, abandoned warehouses, small offices and private homes.

And where are the US professional gamers who are making money? Not there, apparently.

“They’re exploiting the wage difference between the U.S. and China for unskilled labor,” says Edward Castronova, a professor of telecommunications at Indiana University and the author of “Synthetic Worlds,” a study of the economy of online games. “The cost of someone’s time is much bigger in America than in China.”

There are some attempts to crack down on this so-called “gold farming.” At the same time, companies have set up their own trading exchanges.
Even if these gold farming factories are shut down, the operators have learned a valuable lesson:

“My ultimate goal is to do Internet-based foreign trade,” [Mr. Yu, the Fuzhou factory operator] says, sitting in a bare office with a solid steel safe under his desk. “Online games are just my first step into the business.”

Just wait until these guys hit the financial exchanges!

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