Friday, August 23, 2013

World of Craft, 2 - Esteem-Based Transactions

While researching World of Craft for our latest release, one of our junior associates noticed that the post had received 4,283 views, replacing our previous all-time record high of 706. He called blogger to verify the data, sent a full report to his division manager, and, after the report had been reviewed by the Networking Success Committee, it made its way to my desk.

Unfortunately, I was unable to summon the same level of enthusiasm for the figures as my staff. After the associate had been disciplined and his manager dismissed, I called some of the remaining division heads in the Boston area together for a lecture on World of Warcraft's economic structuring. I explained that the power of the virtual economy created by WoW had generated substantial real-world business opportunities for even non-players, which explained the high numbers as well as helping the creative team to formulate what became our next post. It turned out to be an even better post than originally expected (see below), casting light on numerous aspects of esteem-based transactions.

A personal note--once lunch had broken, I had my EAA place a call to the terminated manager, offering him the chance to return to his position. As it turned out, however, he had already found a much higher-paying position at one of Arthur Silber's donations processing units in the greater Los Angeles area, and was unwilling to return to his old post.

Enough of that, though. Here follows the post itself.

World of Summaries

The first post in this series offered summaries of:

1) The game WoW, and its official creator Blizzard;

2) The game's virtual currency;

3) The virtual products created to give the virtual currency worth;

4) The manipulation of currency value and product releases in order to keep players chasing an uncatchable goal, e.g., playing;

5) The formal institutions Blizzard created to enforce desired standards of behavior; and

6) The ways that players independently and creatively furthered these formal institutions, and built institutions of their own, to reinforce the company's standards.

Taking all of that into consideration, we began to see direct similarities between those who create, manipulate, and participate in economies, countries, companies, and other associations--similarities in behavior that were not only metaphorical, but also wholly literal, such as in price-fixing, quantitative easing, and crass, mutually-harmful tribalism. We began to see that it is not actually money or survival that fully explain (or perhaps even partly explain) human behavior within and without modern economies, nation-states, and interpersonal relationships. Instead, there seems to be a less "trackable" factor at work, which could explain such seemingly-ridiculous behavior as a disabled, unemployed, overweight WoW player leading in the social ostracism of a group of real-world-successful players.

We'll get there, but first we'll look at some of the even sillier things Blizzard has done with WoW over the years, the wacky ways players have responded, and discover therein an even stronger connection between real-world and virtual-world behavior: reaffirming the inference of a variable other than those used to explain traditional economic statecraft.

Illegal Currency

The benevolent Blizzard created its world, and released players into it. In their freedom, though, players did things that Blizzard didn't like, and so laws began to spring up. One of the oldest of those is the prohibition against "buying gold." As you'll see if you click here, this retains an effect on the real-world economy.

What is "buying gold"? Buying gold is paying real world money to someone else in exchange for their character giving your character virtual gold in the game world. Why in the world would anyone buy make-believe gold with real currency, though? Consider two example people: Jacob and Sing. Jacob is a rich white dude from America (northeastern seaboard, urban, and he played a night elf female rogue for the first few years) who loves it when his character has all the nice trinkets that exist in WoW. However, he also likes to party, and his parents have been pressuring him to do something with his life ever since he hit 30. So, he sends $50 to Sing.

Sing lives in rural China, and recently discovered a good job opportunity: if he sits in a warehouse with a few dozen other people, spending 16 hours a day playing several WoW characters at once, he can earn virtual gold, then have his characters give that gold to Jacob's characters in exchange for some real-world money.

Despite Jacob's unsavoriness, and the economic imbalances of the real world that made Sing's time "worth" so little, this still seems like a fair transaction: Jacob had dollars, Sing had WoW gold, and they traded one for the other.

Many WoW players didn't like this, though--they realized that Jacob, by buying gold, could use his real-world advantages to give him an unfair leg-up in the game-world. Poorer players, or players who appreciated that the gold was only worth something if the virtual economy was governed by virtually-realistic elements, felt cheated when their own characters' hours of hard work slaying trolls and saving gold were devalued by Jacob's real-world dollars.

Worse than that, CGFs--"Chinese gold farmers," who weren't actually all or even mostly Chinese, but that was the term popularized by Blizzard's cleverly-worded blaming of the problem on "some Asian players" early on--were motivated to play in "unnatural ways." How so? Well, gold farmers had no loyalty to a character or to the world at large. They would "steal" items from players on the servers where they were doing their farming. For example, if an ice dragon were guarding a pile of silver, a party of adventurers might band together to defeat the ice dragon and gain the silver. While they were fighting the dragon, a gold farmer would sneak around the fight, grab the silver, and leave. Any player could, theoretically, engage in this kind of behavior, but a player invested in his or her character would do it at a substantially reduced rate, because the theft would be reported to others, and the community would respond with distrust of the thief. Gold farmers, though, had loyalties only to gold, rather than to their character, so any behavior that produced gold was not only acceptable to them, but required.

From that example, we're reminded of one of the negative consequences of using money in the first place: money is laundering, because any medium of exchange which divorces itself from its users (i.e., which has value regardless of who possesses it or how it was gained) encourages antisocial behavior. Money is a wonderful tool, and could work as part of an ideal society, provided that it is linked to its creators in other ways. Gold farmers in WoW, though, being affected by real-world money, could disregard the values of the world in which their character operated, spurning all potential consequences and hurting those who had anything invested in the server or its players.

After "ignoring" the problem for a while, Blizzard sprang into action. The company announced that buying gold in exchange for real world currency was wrong, and that any player who did so would be punished by having the gold confiscated and temporarily losing playing privileges. Like all prohibited transactions in the real world--alcohol, cigarettes, narcotics, flesh--that policy instantly ran into some hypocrisies, some being that it was not against game rules to:

1) Pay someone real-world money to play the game on your behalf, accumulating gold for you to later spend;

2) Pay five different people real-world money to play five different characters full-time on your behalf, and to transfer all their characters' gold and/or other earnings to your character for you to spend;

3) Lie to, cheat, and steal from other players;

4) Cyborz other players in exchange for gold.

Again like real-world economies, all of Blizzard's strictures for economic management were "hypocritical"--that is, they appeared hypocritical at first glance, but actually had very reasonable justifications. If we ask, "Why did Dubya invade Iraq and spark a civil war that was so damaging?" the answer is not "Because he believed in freedom." Nor was Dubya a hypocrite for invading Iraq. He didn't believe in freedom; he just said he did to lead stupid people into approving of his invasion.

Blizzard's justifications for manipulating their virtual economy by preventing certain transactions was that it was "unfair" to allow players to use real-world money, rather than playing skill or effort, to advance in the game. That justification, of course, breaks down--in a complete and total way--against the first two of the "hypocrisies" above.

The Real WoW Gold Company

But it gets deeper. Most of the companies selling "WoW gold" were/are, actually, East Asian, and if Blizzard had wanted to actually stop the supply of "illegal gold," it could have done so almost instantly. How? Well, in order to play WoW, you have to have an account registered with Blizzard using a real-world, trackable method of payment (e.g., not cash). In order for your character to attain enough power to earn gold which could be "sold" by transferring it to other players' characters for real-world money, your character had to be sufficiently leveled (sufficiently powerful enough in the in-game world) to earn that gold. And, it took a lot of time to level characters, when the game was played fairly: to economically produce enough WoW gold to trade for real-world dollars, a gold farmer would have to spend at least a dozen relatively worthless hours building up a character, before that character would even be able to begin to accumulate anything approaching the quantity of gold worth a single tiny sale.

If that sale were then tracked--say, by Blizzard's servers automatically registering whenever two characters who had never spoken before suddenly met up, and one gave the other a thousand gold pieces in exchange for nothing--Blizzard could shut down the account of the gold farmer, voiding their future ability to sell gold. That farmer would then not even be able to play anymore, because her or his credit card information, mailing address, et cetera, would be red-flagged as those of a gold-seller.

Naturally, Blizzard didn't do this. In fact, Blizzard took careful steps to ensure that gold farming would remain a viable profession in East Asia. Blizzard began allowing East Asian players to register new accounts using only phone cards, rather than credit cards or bank accounts. No problem, though, right? Because even a faceless account can be closed, and its' characters' associated "experience" lost, on the basis of an identified sale--then, the gold farmer would have to start back over again, "leveling" a new character until it was strong enough to be able to farm gold.

Nope! Blizzard decided to focus only on "domestic repression," devoting resources to interrogating real players about buying gold, putting temporary holds on the accounts of players who transferred money between each others' characters in suspicious ways ("suspicious" pursuant to the classified criterion of Blizzard's virtual economy intelligence services), while utterly "neglecting" the supply side of the equation. Player accounts in several countries were de-linked from real-world identities, linked only to phone cards and account numbers, so that any number of faceless gold farmers could transact any quantity of business, changing identities as fast as a phone card in order to keep the supply of illegal gold moving. Player accounts in primarily western countries remained connected to credit cards, mailing addresses, and the names of real people, though, so that real players could be heavily punished for buying gold from shadowy, untouchable underworld figures.

What does this sound like, now? The drug war, of course. Which brings us to the necessary next conclusion: because it would be so absurdly easy to terminate the supply of "illegal gold," the only real seller of illegal gold could be Blizzard itself. The telecommunications networks of entire nations passes information through Blizzard checkpoints in order to produce and transfer this phantasmal "illegal gold," and any reputable economics agent analyzing gold transfer patterns could tell which IP addresses were (theoretically) doing nothing but producing a lot of raw gold and transferring it to western accounts. The "war on illegal gold" was a charade, designed to destabilize the economy, entrap the powerless, create a climate of economic fear, and put players at the mercy of authorities.

Just some selections:
After a thorough investigation, we have found that a player of the account listed above participated in activities designed to gain an unfair advantage in the World of Warcraft economy. These activities violate the World of Warcraft Terms of Use. We ask that you take a moment to review these terms at

And from the verbally challenged:
Many World of Warcraft players today likes to buy WoW gold, items, accounts and power leveling sessions, but blizzard along with other players consider this an act of cheating. Well, you have the ability to enhance your character to a much higher level or better quality items, weapons, armors and other equipment with real money. It’s unfair for those players who does not have the extra cash to spare or would prefer to play it the old fashion way. So that is one conclusion as to why players and Blizzard does not approve of selling or buying gold.

And, almost as painful:
You know, 'your friend' is lucky, normally when you buy gold, you also buy a nice hack. Tell him to suck it up for trying to go around Blizzard, and accept his stupidity.

Notice how all the same players are present as in the "war on illegal drugs": the staunch, responsible government, mysteriously powerless against a great threat that isn't really all that harmful anyway; the patriotic citizen, hooting in support of something only vaguely understood; the foreign supplier who operates semi-openly despite the massive government apparatus arrayed against's a story you can believe in if you're gullible, but one that only adds up one way behind the scenes.

What makes the similarity to the "real world" so striking is that this is not a life or death situation. The people buying bulk foreign illegal gold are not doing it because they need to street-sell smaller quantities in order to keep a roof over their head. Blizzard's spy network of software analysts are not defending their communities from gang wars or ruin; they're just penalizing players for trying to afford a special new Diamantite Gryphon. Even though Blizzard does not "put a stop to" the gold sales, it does make a huge show of it. Like USG fighting crack-cocaine, Blizzard puts out press releases to its players, warning them of the "account security compromises" they will suffer if they rub shoulders with spooky foreigners and buy gold. Blizzard puts educational posts up on its forums explaining to people why gold piracy is bad; how it hurts the in-game economy and devalues everything they have played so hard for.

...and at the same time, just like the USG, Blizzard adjusts its worldwide account policies in order to ensure that big-time suppliers can stay in business as reliable sources of illegal gold, while using its formal apparatus to shut down small-time suppliers and enforce the rule of kingpins. Like the USG and narcotics suppliers, the coordinated behavior of Blizzard and illegal gold sellers is only explicable if the coordination is formal, occurring at the highest levels while leaving street agents, beat cops, and game support specialists in the dark. The "warehouses filled with Chinese people playing video games all day to sell gold" are a lie; a fantasy used to explain to westerners where the gold is coming from. The reason that Blizzard can only punish "some" gold buyers is the reason the USG can only punish "some" drug dealers and end-users: because ridiculous laws are created in the first place, enforced only selectively, in order to provide an excuse for (1) punishing the undesirable and (2) creating a climate of fear and deference to authority, rather than to protect some fanciful economic order from unfair disturbance. The game is so big, and so deep, that it could only have been created by the owners.

Buncha Stupid Video Games

How can the behavior of the government authorities, the foreign suppliers, and the players of the game be so similar in an environment where there is no narcotic addiction, no powerful chemical high, no gunshots or retribution killings, and no 20-year retirement benefit programs for Blizzard's tracking engineers? And again, why is it worth it, anyway, considering this stupid video game in the context of the real world?

The similarities were produced, and continue to be fostered by, the real reason people play Blizzard's and America's separate games, and the reason that certain vile, powerful people manipulate and control those games: people are seeking to be a part of something; to be thought well of; to share experiences and belonging; to distinguish themselves, and to be recognized for achievement. They are not seeking money. They are not, in so many ways, even seeking survival.

All modern economic models (and the governments who offer us protection from them) have been precipitated by the idea that the resource scarcity of This Cruel World (tm) requires us to design elite-regulated, currency-based trading systems, into which we pour our hopes and dreams. Money is a "necessary evil" because it allows us to denominate intangible things--things far too powerful and complex foh awuh widdle minds to understand--like the respect, caring, and trust of other people.

That's what we're playing at in WoW, and the rest of the gold-and-loot-based MMOs, real-life included: a way to make permanent the idea that we matter. People pursue status symbols in MMOs and real life because they're after something actually meaningful, which is the regard of other people. If other people think you have a cool car, and are willing to go to the movies with you, or if they think you have a cool Gilded Steed, and are willing to battle a dragon with you, you feel less ostracized, and more likely to thrive/survive. This principle holds whether or not the dragon actually exists, and whether or not the gold you earn from killing the dragon actually provides your real body with nourishment, because mere survival is not the issue, here. Connection is. Elites never have enough money or power because, trapped inside the illusion their greatfathers created to control the masses, they will never find what they seek in trinkets, and the people who pretend to seek their attention are only, really, after their trinkets. (Movie stars marry movie stars because then they can pretend, at least for a little bit longer, that the other person isn't "after" something.)

Players cling to Blizzard--and to the USG--because they have been stripped of the idea that they have worth, and are thereby terrified of losing all of the worth-vested items defined by the government. The government is a Great Definer, assigning value to the valuable and valueless alike. To lose those definitions, even if you have definitions of your own, can be to lose everything--particularly in a world where almost everyone else has forgotten that there are any other definitions, or that other definitions are even possible. A large part of the more-intelligent observer's mystification at the self-loathing behavior of citizen-voters and citizen-buyers is tied up in this. If you analyze that behavior inside the illusion, though, you are doomed to fail, even though you'll be able to make some really funny, really poignant observations about How Stupid Americans Are.

The next part of this series will go into this further, with even more uncanny resemblances between Blizzard/WoW players and the USG/Americans, even more wacko police-state effects, and what a better transactional model would look like.

Just as a preview, ask yourself: why do so many people get PhDs when they know, and have known for years, that it won't get them a good job, any job, or even popular social respect? Against the wishes of their family, they spent another $80K not working for four years so that they can stock shelves at the local bookstore once they're done. They do it because they're seeking a form of attainable social rank which will (theoretically, if you must) acknowledge their intelligence or experience. Other than joining the army or buying graduate degrees, there are no ways left to gather those things. Soldiers die in the attempt to earn ranks and medals, the specifics of which even zealous citizens are unaware of, and which medals will even end up gathering dust in a little frame on the basement wall someday, barely even worth small talk except with others who have the same medals.

In Arka, we started by ranking so very many things. We all had something meaningful to aspire to. For so many years before the Tithes, it kept us working harder than we did to feed ourselves. It almost wholly eliminated the free rider problem, which we only began noticing after the Tithes.

Continued in Part 3, Secret Police.


  1. I'm not sure it is quite so simple - I have a PhD, and even a tenure-track, soon to be tenured, job. Nevertheless I can't fool myself even for 1 second that I don't suck.
    In fact, a new suit may be bringing me same or marginally higher satisfaction than getting yet another banal article published (looking crisp for a fleeting moment more tangible indication of significance than a fleeting peer reviewed brain fart?)

    1. You're experienced enough to realize that the institution is thoroughly devalued, and you don't appreciate the mild respect you might get from certain uninformed people over said degree. Suckers, though, still think that having "Dr." in front of their name might impress the rental management office, waiter, etc. ;)